News

KB Home (NYSE:KBH) reported strong gross margins. Unfortunately, nothing else reported could be called “strong”. It was a comprehensive disappointment. Orders plummeted. Cancellations took off. Both dynamics largely reflected “the Company's proactive efforts to assure a backlog of qualified home buyers amid the unprecedented nationwide economic and employment disruptions resulting from the pandemic". In other words, people were less inclined to make a major purchase, and of those to whom that statement doesn’t apply, the company was less likely to work with them without more assurances of qualified credit standing. However, the company also failed to execute relative to peers according to our analysis.

Nike Inc (NYSE:NKE) ) was a shot across the bow for anyone who thought everything was destined to work out a bit better than expected. But it still has the obvious “out” – hey, there’s a pandemic! The company missed estimates by a wide margin as most of its stores were closed down during the quarter. So, anything goes, and this can’t really be all that surprising. The one thing you can be sure of right now is this: no expectations come with strong conviction. No one knows, and everyone knows that. In any case, it will take a couple of quarters to tailor inventory levels to the context, but results also showed the underlying strength in 80% ecommerce growth driving a 30% mix factor, which will now target a 50% mix while stores are growing double digits in North America since mid-May.

Oracle Corporation(NYSE:ORCL)beat the number once again. It always does. However, an astute observer will note that the company failed to truly reignite the flame of top line growth once again. Sure, the company hammered EPS targets (which it has only failed to do once in the past 15 quarters), sales dropped over 6%, falling short of a lowered analyst bar of $10.72 billion. This dive in sales was the worst ORCL has seen since midway through 2015. However, as you may have guessed, the author of this chapter of the Oracle story was COVID-19.

Chewy Inc (NYSE:CHWY) traded to the downside despite hitting the wires earlier this week with a nice beat-the-number result, and guidance pop that didn't seem to be embedded in the expectations. One might chalk it up a bit to the “reopening” theme, as pure-play e-commerce opportunities start to give back a taste of their extraordinary gains during the pandemic lockdown. In this case, we have the premier pet food e-commerce idea in the market. That said, the stock priced in quite a shift in behavior, reopening may start to shift that behavior, and the topline performance may represent an exaggerated sense of demand due to forward-pull demand through hoarding.

Elastic NV (NYSE:ESTC) has been one of the strongest names in the market since the March broad index “crash” lows, with shares of the data solutions name advancing as much as 125% in the past 3 months. Q1 data hit the wires on Thursday, and the stock took a small hit, dropping about 7% in immediate reaction following a strong quarter with mixed in-line guidance and what one might see as a FY21 sandbag job, lowering the bard to 25% top-line growth (from 57% in FY20)

Slack Technologies Inc (NYSE:WORK) may, in a way, have suffered from what we saw out of Zoom (ZM) a few days earlier, as expectations were ratcheted up in preparation for another pandemic technology blow-out. But the report failed to measure up, and shares of WORK cratered.

Pinterest Inc (NYSE:PINS) appears to have blown it, according to analyst reactions to its Q1 data. The company missed on the bottom line and came in around expectations on the top line earlier this month. We wanted to revisit the report now because the stock represents an interesting internet business example that failed to excite folks looking for somewhere non-covid-19-affected to channel investment dollars… The company decelerated more meaningfully than peers to down 8% y/y in April. more

LYFT Inc (NASDAQ:LYFT) hit Q1 earnings earlier this month with expectations in check. The COVID-19 pandemic has decimated the ride-sharing industry, understandably. Being bottled up in a chamber with a stranger who may have had exposure to a range of unknown other individuals in close quarters in a small enclosed space is not something that sells during a pandemic crisis. That goes for both riders and drivers. So, the market was understandably expecting the worst-case scenario here. However, contrary to expectations, the country's second largest ride-sharing company blew out Q1 2020 forecasts, delivering surprisingly impressive results. But shares have failed to hold onto reaction gains.

IBM (NYSE:IBM) reported revenue down yr/yr and missed estimates for the sixth time in seven quarters. The company withdrew its outlook but maintained its dividend (5.4% yield), removing language about dividend growth. The company faces uncertainty with its Consulting business. In software, IBM warned of a pause among clients amid changing priorities as the crisis played out in March. On the positive side, the company is committed to more M&A. more

Citigroup Inc (NYSE:C) has done a fantastic job, along with other major banks, at providing insight into their books during a remarkably difficult period for banking. The environment is impossible from a visibility standpoint, and Q1 data isn’t the driving issue that will define asset prices. So, the earnings report from a major bank right now is just about understanding to what extent they can provide credit in a temporarily collapsing economic context. more

Intuitive Surgical, Inc. (NASDAQ:ISRG) is likely to be one of the rare positive surprises for earnings data this quarter, beating on the top and bottom lines. But it is also an example of strong execution in an increasingly difficult context. The coronavirus has hit hard here because no one wants to be anywhere near a hospital right now unless they absolutely have to be. And procedures that aren’t emergencies are going to be put off until the ICU base of the developed world isn’t overrun with COVID-19 cases. But this will eventually translate into a pent-up demand driver for the company. more

Levi Strauss & Co. (NYSE:LEVI) hit the wires on Tuesday afternoon following the closing bell with the company's Q1 report card. The company reported a clear beat, with earnings of $0.40 per share, $0.05 better than the S&P Capital IQ Consensus of $0.35 on revenues growth of 4.9% year/year to $1.51 bln (which was versus the $1.46 bln S&P Capital IQ Consensus). Note, this was a quarter that closed for the company in February, so it was largely not impacted by the COVID-19 outbreak in the US and EU, and did include 2019 Black Friday and holiday season sales. more

Lululemon Athletica Inc (NASDAQ:LULU) right now is a pretty similar story to Nike (NKE) in the big picture. Growth is going to take a hit, but it represents a branding story that can actually strengthen through the fire of this contraction due to a strong online business and undeniable brand loyalty that translates into premium pricing. more

Nike Inc (NYSE:NKE) ripped higher after reporting Q3 (Feb) earnings this week that were much better than some feared. Rivals Adidas (ADDYY) and Puma both recently reported sharp declines in China. While Nike saw a big drop in sales in China, it was able to navigate the downturn better than expected, which is helping the stock jump higher. Nearly 80% of stores in China have now reopened, including its first store in the Wuhan area, which was ground zero for the outbreak. Nike said on the call it's seeing the other side in terms of the crisis in China. more

Crowdstrike Holdings Inc (NASDAQ:CRWD) boomed higher to close out last week with an earnings performance that may well change the narrative on this stock. It may start to be lumped in with that special group of stocks (WMT, ZM, AMZN, etc) that for one reason or another are deemed “pandemic-proof”. Web security clearly now has become essential, not discretionary. Remote collaboration during this period brings about more vulnerable endpoints that demand protection. CRWD launched a suite of new tools for working from home that are free to use as well. One big sign that boosts this overall view is the company’s willingness to give precisely stated guidance. more

Mongodb Inc (NASDAQ:MDB) reported another strong quarter on Tuesday afternoon, which was boosted by a large deal. Growth has slowed dramatically over the last year (+49% in Q4 vs. +85% growth peak in the fourth quarter of the prior year) but the company has now lapped a headwind from mLab customers in the Atlas business (which still grew 80% to a 40% mix). But the FY 2021 story is a sandbag in the air. more

Given all the crashing action we have been seeing, you might be surprised to learn that Oracle Corporation (NYSE:ORCL) once again beat the number last Thursday evening, when the company posted its Q3 numbers for the world to see, reporting and EPS beat ($0.97 vs. $0.96), ORCL has now topped or matched the Street's earnings expectations for fourteen straight quarters. But the real surprise was the beat on the top line ($9.8 bln vs. $9.75 bln) after coming up short in the two preceding quarters.

Vail Resorts, Inc. (NYSE:MTN)new link put out fiscal Q2 results on Monday afternoon, with inline results and no guidance. This last point is the important part: the fact that the company withdrew any attempt at predicting the near-term future tells you all you need to know about what they are seeing as the coronavirus takes a firm hold on consumer behavior in the US. more

The Beyond Meat(NASDAQ:BYND) bubble is deflating again after a strong quarter and in-linerevenue guidance. The valuation on this stock above $100 did not seemsustainable for a low margin and competitive business. Now, the syntheticchickens are coming home to roost.

Trade Desk Inc (NASDAQ:TTD) topped consensus for Q4 EPS and revs (+35% yr/yr to $215.94 mln) and issued upside revenue guidance for Q1 and FY20 on Thursday. Spend on company’s platform topped $1 bln for Q4, which it identified as the first time that it had ever crossed that threshold in a single quarter. Management expects gross spend on its platform to accelerate yr/yr to at least $4.24 bln.

It was another blow out quarter from Guardant (GH). FY20 revs were guided above estimates, but conservatively in our view. However, the stock suffered in reaction from a combination of a larger-than-expected net loss and very difficult market conditions. more

The big point here is that the strong Q4 and strong top-line guide was expected because of the Disney+ tailwind in effect. What wasn’t expected was the company’s EBITDA warning, which is really about higher than expected investments in incremental gross profit expansion through pushing for more security in market share. In other words, it’s becoming a little more expensive to maintain its place in the streaming market pecking order. more

The big picture narrative, as we see it for TSLA right now, is as follows: the stock was a darling for big shorts up until mid-2019 because it hadn’t figured out the puzzle of matching up margins and scalability in its signature niche. And lots of really smart well-capitalized folks (Jim Chanos, David Einhorn, etc) believed that this puzzle was impossible to solve. And they placed massive bets against the stock on that thesis. more