Early Look

Wednesday, August 9, 2023

Futures	Up/Down	%	Last
Dow	49.00	0.14%	35,444
S&P 500	9.25	0.20%	4,527
Nasdaq	32.50	0.21%	15,386

 

 

U.S. futures are extending the late rally from Tuesday, with major averages pointing to a higher open as deflation confirmation in China generates only muted reaction for equities after consumer and producer prices both decline for the first time since 2020, while Italy dials back the bank windfall profit tax. Oil prices hit the highest in almost nine months on supply issues and with traders also awaiting US stockpile data. In Asian markets, The Nikkei Index fell -172 points to 32,204, the Shanghai Index fell -16 points to 3,244, and he Hang Seng Index advanced 61 points to 19,246. In Europe, the German DAX is up 188 points or 1.2% to 15,963, while the FTSE 100 gains 69 points or +0.9% to 7,596. The strength in Europe comes after the Italian finance ministry on Tuesday night said it would cap the levy on net interest income at 0.1% of risk-weighted assets, in a bid to calm market concerns. Shares of BPER Banca, Banco BPM, Intesa Sanpaolo, Finecobank and UniCredit all fell sharply during Tuesday trading wiping out more than 9 billion euros from the market capitalization of the Italian banking sector. U.S. markets now eagerly await key CPI and PPI inflation data Thursday and Friday respectively. Note earnings season has slowly drawn to an end with 449 of the 500 companies in the S&P 500 have so far reported with a positive earnings surprise averaging 7.5%. By way of comparison, this quarter’s Q2 earnings season is stronger (in terms of upside surprise) than last quarter’s earnings season. The sales surprise has however been slightly lower.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -19.06 points, or 0.42%, to 4,499.38.

·     The Dow Jones Industrial Average fell -158.64 points, or 0.45%, to 35,314.49.

·     The Nasdaq Composite dropped -110.07 points, or 0.79%, to 13,884.32.

·     The Russell 2000 Index declined -11.52 points, or 0.59% to 1,947.42.

 

Economic Calendar for Today

·     7:00 AM ET             MBA Mortgage Applications Data

·     10:30 AM ET           Weekly DOE Inventory Data

·     1:00 PM ET              US Treasury to sell 10-year notes.

 

Earnings Calendar:

·     Earnings Before the Open: AGRX ANIP APRN AVNS BCO BERY BHG CCO CEVA CRL DCPH DDD EBIX EVRI FA FTCI GDRX GEO IONS JACK LL ODP OGE PENN RBLX REYN SKIN SSYS SWX SYNH TG TLS UP VERX VSH VTNR VVV WEN WRBY XMTR

·     Earnings After the Close: ADES ALRM AMSC APP ARAY ASYS BLBD BRP CACI CANO CDE CENX CLNE CPRX CYRX DIS DNA ENS FOSL G GRPN HCCI HLTH ILMN INFN JAZZ LAW LGF/A LMB MGNI MGNX NDLS NLS OEC PAR PLUG POWW PRPL QNST RAMP RILY RPAY SMLP SONO SOVO TASK TTD TTEK UHAL VRRM WYNN XPER

 

Other Key Events:

·     Oppenheimer 26th Annual Technology Internet & Communications Conference (virtual), 8/8-8/9

·     UBS Private Software & Internet Conference, 8/9-8/10, in Menlo Park, CA

·     TD Cowen Hot Wheels Bus Tour, 8/8-8/10, in New Jersey

 

 

Macro	Up/Down	Last
Nymex	0.55	83.49
Brent	0.73	86.97
Gold	-0.40	1,959.50
EUR/USD	0.0024	1.0978
JPY/USD	-0.11	143.26
10-Year Note	+0.00	4.024%

 

 

World News

·     China July CPI M/M rose +0.2% vs est. -0.1% and Y/Y fell -0.3% vs -0.4% consensus; China July PPI Y/Y fell -4.4% vs -4.1% consensus; Goldman Sachs notes China’s headline CPI inflation turned negative in July for the first time since early 2021, though slightly above consensus expectations. The moderation was primarily driven by a high base of food prices last July.

·     Citigroup analysts estimated the announcement of a 40% tax on excess income derived from higher interest rates in 2023 will deal a 19% blow to Italian lenders’ net profits for the year. Shares of BPER Banca, Banco BPM, Intesa Sanpaolo, Finecobank and UniCredit all fell sharply during Tuesday trade, wiping more than 9 billion euros from the market capitalization of the Italian banking sector. In a bid to calm market jitters, the Italian finance ministry on Tuesday night said it would cap the levy on net interest income at 0.1% of risk-weighted assets — a fifth of the level that Citi had assessed it could reach.

 

Sector News Breakdown

Consumer

·     Azek Company (AZEK) Q3 adj EPS $0.30 vs. est. $0.25; Q3 adj Ebitda $97M vs. est. $86M; Q3 sales $387.6M vs. est. $373.5M; guides year sales $1.34B-$1.36B vs. est. $1.3B.

·     Blink Charging (BLNK) Q2 EPS loss (-$0.67) vs. est. loss (-$0.49); Q2 revs rose 186% y/y to $32.84M vs. est. $23.76M; raises FY23 revenue to $110M-$120M, consensus $103.16M and targets adjusted EBITDA break even run rate by December 2024; Q2 Gross margin improved to 37% in Q2 compared to 17% y/y.

·     Celsius Holdings (CELH) Q2 EPS $0.52 vs est. $0.28 on revs $326Mm vs est. $276.12Mm; says its drinks were available in more stores, and sold more drinks per location, on average; said its market share doubled in Q2 to 8.6%, making it the 3rd most popular energy drink in the US.

·     Darling Ingredients (DAR) Q2 EPS $1.55 vs est. $1.58, adj EBITDA $508.3Mm vs est. $515.99Mm on revs $1.8B vs est. $1.83B; reaffirms guide FY combined adj EBITDA $1.875B vs est. $1.913B.

·     Duolingo (DUOL) Q2 revs $126.8M vs. est. $123.87M, total bookings were $137.5M, an increase of 41% y/y, subscription bookings were $106.3M, an increase of 43% y/y, paid Subscribers totaled 5.2M at quarter end, +59% y/y and MAUs, grew 50% to 74.1M; guides FY revs higher.

·     Dutch Bros (BROS) Q2 EPS $0.13 vs est. $0.07, adj EBITDA $48.6Mm vs est. $37.45Mm on revs $249.879Mm vs est. $253.44Mm, comps +3.8%; guides FY revs at lower end of previous guide $950Mm – 1B vs est. $972.67Mm, comps +low-single, adj EBITDA $135-140Mm vs prior $125Mm.

·     Luminar Technologies (LAZR) Q2 adj EPS ($0.21) vs est. ($0.23) on revs $16.197B vs est. $16.18B; expects to reach positive adj gr mgn by Q4, expects at least 100% revs growth in FY; on track to meet/beat all 2023 company milestones and guidance.

·     Lyft Inc. (LYFT) Q2 EPS loss (-$0.30) vs. est. loss (-$0.01); Q2 revs $1.02B, in-line with consensus; said lower pricing helped spur an 8.2% jump in the number of active riders on the platform to the highest in nearly three year; guides Q3 revs $1.13B-$1.15B vs. est. $1.09B.

·     Penn Gaming (PENN) shares rose over 20% after the company announced a 10-year partnership with Disney’s (DIS) ESPN and said it was divesting from Barstool Sports, selling 100% of its stake back to Barstool founder Dave Portnoy. The app will be promoted across ESPN platforms.

·     Rivian Automotive (RIVN) Q2 EPS loss (-$1.27) on revs $1.12B vs. est. $1.1B; 2Q cash & cash equivalents $9.26B, vs. est. $10.19B; sees FY production 52,000 vehicles, saw 50,000 and sees FY adj. ebitda loss $4.20B, vs. prior loss $4.30B; lowering 2023 capex outlook to $1.70B with reduction largely driven by timing shift of some expenses to 2024.

·     2U Inc. (TWOU) Q2 adj EPS ($0.18) vs est. ($0.07) on revs $222.1Mm vs est. $234.15Mm, adj EBITDA $21.8Mm vs est. $27.34Mm; sees FY revs $985-995Mm vs est. $989.09Mm, adj EBITDA $160-165Mm vs est. $159.93Mm.

 

Energy, Industrials and Materials

·     Array Technologies (ARRY) Q2 adj EPS $0.47 vs. est. $0.18; Q2 revs rose 21% y/y to $507.7M vs. est. $448.84M; posted 124% year-over-year growth in STI segment; Q2 gross margin at 29.6%, adjusted EBITDA was $116M; sees year EPS $1.00-$1.07 vs. est. $0.87.

·     FTC Solar (FTCI) and Cat Creek Energy, a renewable energy Independent Power Producer, announced a multi-year, 1-gigawatt tracker supply agreement to supply the PV solar portion of CCE’s multi-technology renewable energy and water storage project.

·     Axon Enterprises (AXON) Q2 adj EPS $1.11 vs est. $0.62, adj EBITDA $82Mm vs est. $63.39Mm on revs $375Mm vs est. $350.46Mm; guides FY revs $1.51-1.53B vs est. $1.46B.

·     Gates Industrial (GTES) announces 15M share secondary as BX to sell shares taking the private equity stake from ~50% to ~44%.

·     DuPont (DD), related companies, and nearly two dozen attorneys general have agreed to revise the terms of a $1.185B settlement the companies are offering water utilities needing to treat PFAS-contaminated drinking water – Bloomberg (late yesterday) https://tinyurl.com/bdhn7edj

 

Financials

·     Fleetcor Technologies (FLT) Q2 EPS $4.19 vs. est. $4.17; Q2 revs $948.2M vs. est. $945.36M; sees FY23 adjusted EPS $17.09-$17.35 vs. est. $17.11; sees FY23 revs $3.84B-$3.86B vs. est. $3.81B.

·     Upstart Holdings (UPST) shares fell -20%; Q2 adj EPS $0.06 vs. est. loss (-$0.06); Q2 revs fell -40% y/y to $135.8M vs. est. $135.9M; Transaction Volume and Conversion Rate. Lending partners originated 109,447 loans, totaling $1.2 billion across our platform in the second quarter of 2023, down 64% y/y; sees Q3 loss (-$28.2M) and revs about $140M.

·     LegalZoom (LZ) Q2 EPS $0.10 in-line with ests and revs $168.90M vs. est. $167.05M; Q2 subscription revenue of $102.2 M for the quarter, an increase of 12% y/y; sees Q3 revs $159M-$161M and FY revs $642M-$652M.

 

Healthcare

·     Doximity Inc. (DOCS) Q1 adj EBITDA $46.6Mm vs est. $40.4Mm on revs $108.469Mm vs est. $107.87Mm; guides Q2 revs $108.5-109.5Mm vs est. $121.35Mm, adj EBITDA $44-45Mm vs est. $53.75Mm; sees FY revs $452-468Mm vs est. $501.63Mm.

·     Halozyme Therapeutics (HALO) Q2 adj EPS $0.74 vs est. $0.63 on revs $221Mm vs est. $199.95Mm, adj EBITDA $115.1Mm vs est. $104.19Mm; raising lower end revs and EBITDA guide, sees FY revs $825-845Mm vs est. $823.06Mm, adj EBITDA $420-440Mm vs est. $435.88Mm and adj EPS $2.65-2.75 vs est. $2.61.

·     Insulet Corp. (PODD) Q2 adj EPS $0.38 vs est. $0.26 on revs $396.5Mm vs est. $384.95Mm, adj gr mgn 66.6%, adj EBITDA $61.3Mm vs est. $50.34Mm; sees Q3 revs +18-21% vs est. +17.64%; guides FY revs +22-25% vs prior +18-22% and est. +20.92%.

·     Masimo Corp. (MASI) Q2 EPS $0.62 vs. est. $0.56; Q2 revs $455.3M vs. est. $478.35M; guides Q3 and year below views as sees Q3 EPS $0.50-$0.65 on revs $475M-$525M vs. est. $0.94/$539.20M; sees 2023 EPS $3.35-$3.55, vs. consensus $3.71.

·     Oscar Health (OSCR) Q2 revs $1.522B vs est. $1.44B; said expect to be towards the low-end of our MLR guidance and high-end of our full year Adjusted EBITDA guidance; remain on track to deliver on our profitability targets.

·     Mirati Therapeutics (MRTX) 9.7M share Spot Secondary priced at $27.80.

 

Technology, Media & Telecom

·     Akami Technologies (AKAM) Q2 adj EPS $1.49 vs est. $1.41 on revs $936Mm vs est. $929.69Mm, adj EBITDA $388Mm vs est. $377.84Mm; guides Q3 adj EPS $1.48-1.52 vs est. $1.41; sees FY adj EPS $5.87-5.95 vs est. $5.75.

·     Bumble (BMBL) Q2 EPS $0.05 vs. est. $0.03; Q2 revs $259.7M vs. est. $256.6M; app paying users increased 28% to 2.5 mln; grew 139,000 quarter over quarter; Q2 total ARPU increased to $23.23; guides Q3 revs $274M-$280M vs. est. $275.6M.

·     Digital Turbine (APPS) Q1 adj EPS $0.18 vs est. $0.13, adj EBITDA $27Mm vs est. $23.76Mm on revs $146.4Mm vs est. $142.9Mm; guides Q2 revs $141-149Mm vs est. $150.31Mm, adj EBITDA $25-27Mm vs est. $28.52Mm and adj EPS $0.13-0.15 vs est. $0.17.

·     Matterport (MTTR) Q2 adj EPS loss (-$0.07) vs. est. loss (-$0.10); Q2 revs rose 39% y/y to $39.6M vs. est. $39.3M; Sees revenue $155M to $159M, vs. prior $155M-$169M and est. $162.5M; sees ADJ loss per share (24c-28c) vs. prior view loss (27-31c).

·     Rapid7 (RPD) Q2 adj EBITDA $19.096Mm vs est. $16.87Mm on revs $190.422Mm vs est. $188.10Mm, adj op mgn 7%; guides Q3 revs $196-198Mm vs est. $197.35Mm, adj EPS $0.41-0.44 vs est. $0.25; sees FY revs $771-775Mm vs est. $776.06Mm and adj EPS $1.23-1.29 vs est. $0.85.

·     SoundHound AI (SOUN) Q2 EPS ($0.10) vs est. ($0.12), adj EBITDA $(9.9)Mm vs est. $(9.179)Mm on revs $8.8Mm vs est. $8.06Mm; guides FY revs $43-50Mm vs est. $45.34Mm, expects adj EBITDA positive in Q4.

·     Super Micro Computer (SMCI) shares fall -12%; Q4 adj EPS $3.51 vs est. $2.96 on revs $2.18B vs est. $2.083B, adj gr mgn 17.1%; guides Q1 net sales $1.9-2.2B vs est. $2.025B, adj EPS $2.75-3.05 vs est. $2.96; sees FY net sales $9.5-10.5B vs est. $8.424B.

·     Take-Two interactive (TTWO) Q1 adj EPS $0.27 vs est. $0.42, adj EBITDA $105Mm vs est. $150.46Mm on revs $1.28B vs est. $1.214B; guides FY net revs $5.37-5.47B vs est. $5.556B, adj EBITDA $413-466Mm vs est. $956.01Mm, net bookings $5.45-5.55B.

·     Toast Inc. (TOST) Q2 EPS loss (-$0.19) vs. est. loss (-$0.14); Q2 revs $978M vs. est. $942M; Q2 ARR as of June 30, 2023 was $1.1B, up 45% y/y, Gross Payment Volume (GPV) increased 38% y/y to $32.1 billion and total locations increased over 35% y/y to approximately 93,000; raises FY23 revenue view to $3.81B-$3.87B from $3.71B-$3.80B (est. $3.78B).

·     Twilio (TWLO) shares rise 7%; Q2 adj EPS $0.54 vs est. $0.30 on revs $1.04B vs est. $985.96Mm; sees Q3 revs $980-990Mm vs est. $1.019B, adj op profit $75-85Mm and adj EPS $0.33-0.37 vs est. $0.30.