Early Look

Thursday, March 2, 2023

Futures	Up/Down	%	Last
Dow	+74.00	0.23%	32,767
S&P 500	-13.25	0.33%	3,943
Nasdaq	-61.25	0.51%	11,900

 

 

U.S. futures are pointing to a lower open ahead of a few key economic data points, and as Treasury yields extend gains, with the 10-yr yield moving above 4% for the first time since November as investors are coming around to the thought of higher interest rates for longer. Rising Treasury yields and concerns about continuing Federal Reserve interest rate hikes have recently dented demand for risky assets. The 2-yr yield hit above 4.9%, its highest since 2007. In stock news, shares of Tesla (TSLA) slide 5% overnight after introducing higher spending output over the next 5-years, while commentary related to its use on silicon carbide is sinking a handful of semi players (ON, WOLF, STM). In earnings, shares of Dow component and software giant CRM looking 15% higher after a blowout quarter and guidance (lifting Dow futures), while cloud player SNOW slips after guidance. The S&P 500 fell Wednesday, the first day of March, as traders struggled to recover their footing following a losing month. In Asian markets, The Nikkei Index slid -17 points to 27,498, the Shanghai Index dipped -1 point to 3,310, and the Hang Seng Index fell -190 points to 20,429. In Europe, the German DAX is down about -50 points to 15,252, while the FTSE 100 drops -11 points to 7,903.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -18.76 points, or 0.47%, to 3,951.39.

·     The Dow Jones Industrial Average rose 5.14 points, or 0.02%, to 32,661.84.

·     The Nasdaq Composite slipped -76.06 points, or 0.66%, to 11,379.48.

·     The Russell 2000 Index advanced 1.44 points, or 0.08% to 1,898.43.

 

Economic Calendar for Today

·     8:30 AM ET           Weekly Jobless Claims…est. 195K

·     8:30 AM ET           Continuing Claims…est. 1.665M

·     8:30 AM ET           Nonfarm Productivity for Q4…est. +2.6%

·     8:30 AM ET           Unit Labor Costs for Q4…est. +1.6%

·     10:30 AM ET         Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABUS AMRX BBY BIG BURL CRAI GMS HRL KR M MCS OB PTLO SFM SIX SOHO SSYS SUP ULBI UTZ WHF

·     Earnings After the Close: AI AVGO CHPT COO COST DELL DMTK DSP EGLE ESTC HPE IAS JWN LVOX MRVL OOMA PBPB SEER TRIN VMW VSCO WMC XPOF ZS

 

Other Key Events:

·     Mobile World Congress, 2/27-3/2, in Barcelona, Spain

·     Piper Internet Bus Tour, 3/1-3/2, in San Francisco

·     Piper Western Financial Services Conference, 3/1-3/3 in San Diego, CA

·     China Caixin Services PMI, for February

 

 

Macro	Up/Down	Last
Nymex	0.47	78.16
Brent	0.48	84.79
Gold	-3.00	1,842.40
EUR/USD	-0.0038	1.0627
JPY/USD	0.53	136.69
10-Year Note	+0.026	4.022%

 

 

World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -21.4 vs -17 last week. Bulls rise to 23.4% from 21.6%. Neutrals fall to 31.8% from 39.8%, Bears rise to 44.8% from 38.6%.

 

Sector News Breakdown

Consumer

·     Tesla (TSLA) shares fall -5% following its Investor Day commentary which included Tesla saying they could need to spend nearly $150 billion more (including $28B already spent) to achieve its long-term goals, which includes selling 20 million vehicles a year. Today’s largest auto maker sells roughly half that annually, while Tesla delivered around 1.3M vehicles globally last year. The company currently offers four passenger vehicles, with a fifth — the Cybertruck pickup — slated to hit the market later this year.

·     American Eagle Outfitters (AEO) Q4 adj EPS $0.37 vs. est. $0.30; said taking a cautious view on 2023; Q4 total ending inventory at cost increased 6% to $585M; for full-year, management’s outlook reflects revenue in range of flat to up low-single digits; sees FY op income $270M-$310M

·     Aaron’s Company (AAN) Q4 EPS $0.09 vs. est. $0.01; Q4 revs $589.6M vs. est. $591.5M; raises quarterly cash dividend 11% to 12.5c; sees 2023 EPS $0.70-$1.10 vs. est. $1.67 and sees 2023 revenue $2.2B-$2.3B vs. est. $2.37B.

·     Celsius Holdings (CELH) Q4 EPS loss (-$0.37) on revs $178M, up 71% y/y but below est. $179M.

·     Frontdoor Inc. (FTDR) 4Q adj EPS $0.13 vs est. ($0.11) on revs $339Mm vs est. $333Mm, adj EBITDA $33Mm vs est. $9.1Mm; guides FY23 revs $1.70-1.74B vs est. $1.73B, gr mgn 43-45% and adj EBITDA $220-240Mm vs est. $229.3Mm.

·     Funko Inc. (FNKO) shares fell -20%; Q4 sales fell -1% y/y to $333M vs. est. $318.1M; Q4 adj EPS loss (-$0.35) vs. est. loss (-$0.11); Q4 Adjusted EBITDA loss $6.28M vs. profit $38.9 million y/y; sees Q1 revs $225M-$255M vs. est. $295.6M.

·     Macy’s (M) Q4 adjusted EPS $1.88 vs. est. $1.58 EPS; Q4 sales -4.6% y/y to $8.26B vs. est. $8.25B; Inventory $4.27 billion, -2.6% y/y; sees FY net sales $23.7b to $24.2b, vs. est. $24.32b.

 

Energy, Industrials and Materials

·     Plug Power (PLUG) 4Q EPS ($1.25) vs est. ($1.05) on revs $220.7Mm vs est. $277.3Mm; reaffirms FY revs and gr mgn guide of $1.4B vs est. $1.37B and 10%.

·     Greif Inc. (GEF) Q1 adj EPS $1.06 vs. est. $1.21; Q1 sales fell -19% y/y to $1.27B vs. est. $1.33B; sees year adj Ebitda $740M, FCF $370M.

 

Financials

·     Silvergate Capital Corp. (SI) shares fall -17%; said it has determined that it is unable to file with the Securities and Exchange Commission its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Form 10-K”), within the prescribed period. Silvergate says evaluates impact of events on going concern.

 

Healthcare

·     Axonics (AXNX) 4Q EPS $0.01 vs est. $($0.24) on revs $85.92Mm vs est. $83.2Mm, adj EBITDA $10.1Mm; guides FY23 revs $342Mm vs est. $336.4Mm.

·     Cano Health (CANO) Q4 EPS loss (-$0.61) vs. est. loss (-$0.13); Q4 revs $680.4M vs. est. $654.5M; sees 2023 total revs $3.1B-$3.25B vs. est. $3.27B; Q4 Membership count 309,590 and sees year Membership count 375,000 to 385,000.

·     Cytokinetics (CYTK) 4Q EPS ($1.45) vs est. ($1.21) on revs $1.96Mm vs est. $7.1Mm; guides FY23 revs up to $5Mm, expect $50Mm milestone payment from Royalty Pharma.

·     Ginkgo Bioworks (DNA) said it expects its revenue to fall by more than 40% in 2023; forecast full-year revenue of “at least” $278 million. That’s well below 2022’s $478 million and a 12% decline from the prior year’s $314 million.

·     Jazz Pharmaceuticals (JAZZ) Q4 adj EPS loss (-$0.07) vs. est. $0.32; Q4 revs $972.12M vs. est. $975.59M; sees FY23 adj EPS $16.90-$17.85 vs. est. $18.00; Xywav became the Company’s largest product by net sales in 4Q22, annualizing at more than $1 billion; sees FY23 revenue $3.675B-$3.875B, consensus $3.76B.

 

Technology, Media & Telecom

·     Salesforce.com (CRM) shares rise 14%; Q4 adj EPS $1.68 vs. est. $1.36; Q4 sales $8.38B vs. est. $7.99B; Q4 adj Ebitda margin 29.2% vs. est. 22.4%; Q4 sub and support revs rise 14% y/y to $7.79B; sees 2024 adj EPS $7.12-$7.14 vs. est. $5.78 and revs $34.5B-$34.7B vs. est. $34.05B; announces share buyback program increased to $20B.

·     Snowflake (SNOW) shares fall -6%; Q4 adj EPS $0.14 vs. est. $0.04; Q4 revs rose 53% y/y to $589M vs. est. $575.7M; Q4 product revs rose 54% y/y to $589M, guides Q1 revs $568M-$573M vs. est. $582.2M; authorizes $2B stock repurchase program.

·     STMicroelectronics (STM), Wolfspeed (WOLF) and On Semiconductor (ON) shares slide in the SiC space after Tesla yesterday set out plans to significantly reduce the use of silicon carbide in its next generation of powertrains; co said “we’ve figured out a way to use 75% less without compromising the performance or the efficiency of the car.”

·     Box Inc. (BOX) 4Q adj EPS $0.37 vs est. $0.34 on revs $256.4Mm vs est. $256.1Mm; guides 1Q revs $248-250Mm vs est. $260.2Mm, adj op mgn approx 21%, adj EPS $0.26-0.27 incl about ($0.06) from currency vs est. $0.31; sees FY revs $1.05-1.06B vs est. $1.1B, adj op mgn approx 25%, adj EPS $1.42-1.48 incl ($0.14) from currency vs est. $1.47.

·     Credo Technology Group (CRDO) Q3 EPS $0.05 while revs rose 71% y/y to $54.3M, in-line with ests; sees Q4 revs $30M-$32M vs. est. $30.9M; Q3 adj GM’s 58.9%; sees Q4 GM’s 55.8%-57.8%.

·     DoubleVerify Holdings (DV) 4Q adj EBITDA $48.9Mm vs est. $46Mm on revs $133.6Mm vs est. $133Mm; guides 1Q revs $117-119Mm vs est. $117.4Mm and adj EBITDA $28-30Mm vs est. $29.9Mm; sees FY revs $550-564Mm vs est. $556.9Mm and adj EBITDA $164-172Mm vs est. $168.3Mm.

·     Okta (OKTA) 4Q adj EPS $0.30 vs est. $0.09 on revs $510Mm vs est. $489.4Mm; guides 1Q revs $509-511Mm vs est. $497.9Mm and adj EPS $0.11-0.12 vs est. $0.00; sees FY revs $2.155-2.17B vs est. $2.16B and adj EPS $0.74-0.79 vs est. $0.32.

·     PureStorage (PSTG) 4Q EPS $0.22 vs est. $0.39 on revs $810.2Mm vs est. $811.1Mm, subscription annual recurring revs $1.1B +30% y/y; guides FY revs +mid-high-single digit vs est. +13.7% and adj op mgn 15%

·     Splunk (SPLK) 4Q revs $1.251B vs est. $1.07B, adj op mgn 37.9%, FCF $269Mm; guides 1Q total ARR $3.7B, total revs $710-725Mm vs est. $807.3Mm, adj op mgn -3% to -5%, FCF $475Mm; sees FY total ARR $4.125-4.175B, total revs $3.85-3.9B vs est. $4.02B, adj op mgn 16.5-17.5%, FCF $775-795Mm.

·     Veeva Systems (VEEV) Q4 adj EPS $1.15 vs. est. $1.04; Q4 revs $563.4M vs. est. $552.82M; sees Q1 adj EPS 79c-80c on revs $514M-$516M below est. $1.00/$552.27M; sees FY24 revenue $2.35B-$2.36B, below consensus $2.41B.

·     Verra Mobility (VRRA) 4Q adj EPS $0.25 vs est. $0.22 on revs $186.1Mm vs est. $184.4Mm, adj EBITDA $83.6Mm vs est. $80.1Mm; guides FY revs $780-800Mm vs est. $776.8Mm, adj EBITDA $360-370Mm vs est. $361.5Mm, adj EPS $1.00-1.10 vs est. $1.04 and FCF $135-155Mm.

·     Zuora Inc. (ZUO) Q4 adj EPS loss (-$0.04) vs. est. loss (-$0.06); Q4 revs $103M vs. est. $100.2M; sees FY24 EPS $0.07-$0.11 on revs $428M-$440M.

·     Avid Technology (AVID) 4Q adj EPS $0.45 vs est. $0.48 on revs $116.1Mm vs est. $115Mm, adj EBITDA $24.8Mm vs est. $27.3Mm; guides 1Q revs $97-105Mm vs est. $106.2Mm, adj EBITDA $16-20Mm vs est. $18.4Mm and adj EPS $0.21-0.29 vs est. $0.31; sees FY revs $447-472Mm vs est. $454.3Mm, adj EBITDA $95-105Mm vs est. $97.7Mm and adj EPS $1.53-1.75 vs est. $1.64.

·     Inseego Corp. (INSG) 4Q adj EPS ($0.11) vs est. ($0.10) on revs $52.92Mm vs est. $60.5Mm, adj EBITDA ($3.0Mm) vs est. ($0.55Mm).