Morning Preview: May 08, 2024

Early Look

Wednesday, May 8, 2024

Futures

Up/Down

%

Last

Dow

10.00

0.03%

39,037

S&P 500

-1.25

0.03%

5,212

Nasdaq

-10.50

0.06%

18,189

 

 

U.S. futures (Spuz) are little changed, down less than -0.1% at 5,210 in very narrow 10-point range overnight (5,208.25 low and 5,218 high) ahead of a third straight day of little to no U.S. economic data. There are however some big overnight earnings movers, with some to the upside including ANET, CFLT, CRUS, KD, LYFT, RDDT and WYNN, while there are also plenty of big moves to the downside on earnings/guidance including ALAB, DV, EA, FLYW, GO, INSP, RIVM, SHLS, TWLO, UPST and ZI among them. In Asian markets, The Nikkei Index tumbled -632 points to 38,202, the Shanghai Index fell -19 points to 3,128, and the Hang Seng Index dropped -165 points to 18,313. Meanwhile in Europe, stock rose to a record high as the German DAX jumps 97 points to 18,537, while the FTSE 100 advances 47 points to 8,361. The dollar rises for a 3rd straight day as Asian markets slide, while the Japanese yen weakens past 155-handle against the dollar despite cautionary words from BOJ’s Ueda and Finance Minister Suzuki. Another earnings blitz is expected this morning and evening as over 435 S&P companies have reported this quarter, with the big retailers (WMT, TGT, HD, LOW) and apparel names expected next week. Treasury yields edge higher along with the dollar, while gold is flat and oil down.

 

Market Closing Prices Yesterday

  • The S&P 500 Index gained 6.96 points, or 0.13%, to 5,187.70.
  • The Dow Jones Industrial Average rose 31.99 points, or 0.08%, to 38,884.26.
  • The Nasdaq Composite dipped -16.69 points, or 0.10%, to 16,332.56.
  • The Russell 2000 Index gained 3.97 points, or 0.19% to 2,064.65.

Economic Calendar for Today

  • 7:00 AM ET                  MBA Mortgage Applications Data
  • 10:00 AM ET                Wholesale Inventory M/M for March
  • 10:30 AM ET                Weekly DOE Inventory Data
  • 1:30 PM ET                   Fed’s Cook Speaks on Financial Stability

Earnings Calendar:

  • Earnings Before the Open: ACMR AFRM ALIT BBGI BCO BR BXSL CHH DCO DIN DINO ELN EMR EPC EVRI EYE FWONA GFF HAIN IEP IMXI KLTR KMT LBRDA LCII LL LPX LSXMA MCFT MIDD MMI MPLN MRNS NFE NI BYT ODP PAYO PFGC QRTEA RCM REYN RMBL SMRT STWD SUN SWX TGNA TPG UBER VCEL VERX VSH VVV WHF WWW YOU
  • Earnings After the Close: ABNB ACAD ACEL ACVA AINC AIRG APP ARCT ASLE ASYS ATP AZEK BCOV BGS BKH BLBD BLZE BMBL BOWL BRCC BYND CAKE CART CDLX CDXC COOK CPAY CPRX CXT CXW CYTK DCGO DHX DOX DUOL DVAX EE EGHT ET EXAS FLL FLNC FNF FOSL FOXA FSK FWRD GDEN GNK GRWG HCI HLI HMN HNST HOOD HUBS IIPRT INST IONQ JAMF KW LFMD LMB LNW MGNI MKSI MMS MRC NUS NWSA OM OSUR PBPB PETQ PNNT PRCH PX PYCR QDEL RAIL RUN SBGI SBRA SKYT STE STR SUPN TASK TKO TTD UTI VNDA VSTO VZIO WISH

Other Key Events:

  • BMO Capital 19th Annual Real Estate Conference, 5/7-5/9, in New York
  • DA Davidson 26th Annual Financial Institutions Conference, 5/8-5/10, in Colorado Springs, CO
  • Oppenheimer 19th Annual Industrial Growth Conference, 5/6-5/8
  • RSA Conference, 5/7-5/9, in San Francisco, CA
  • ASGCT Annual Meeting – American Society of Gene & Cell Therapy, 5/7-5/11, in Baltimore, MD

 

 

Macro

Up/Down

Last

Nymex

-0.72

77.66

Brent

-0.79

82.37

Gold

-1.00

2,323.20

EUR/USD

-0.000

1.0751

JPY/USD

0.67

155.37

10-Year Note

+0.018

4.48%

 

World News

  • BoJ Governor Ueda spoke in parliament saying there was a risk that a weak yen could affect underlying inflation and depending on these moves a monetary policy response may be needed.
  • The Biden administration is holding up shipments of two types of Boeing-made precision bombs to send a political message to Israel, according to a U.S. official and six other people with knowledge of the deliberations. – Politico reports.
  • The Swedish krona slips vs. the U.S. dollar after the Riksbank cut its benchmark interest rate for the first time in eight years and said it could be reduced twice more in the second half of 2024.
  • U.S. consumers pull back sharply on credit-card use in March ‘; Total consumer credit slows to $6.3 billion gain versus estimate of $14.8 billion.
  • The American Petroleum institute weekly report shows crude oil inventories rose by 509K vs analysts’ expectations of 1.430 million barrel draw; Gasoline inventories rose this week by 1.46 million barrels; Distillate inventories also rose this week, by 1.713 million barrels.

Sector News Breakdown

Consumer

  • Dutch Bros (BROS) Q1 EPS $0.09 vs. est. $0.02; Q1 revs $275M vs. est. $255.9M; raises FY24 revenue view to $1.20B-$1.215B from the prior range of $1.19B-$1.205M and same shop sales growth is expected to remain in the low single digits.
  • Grocery Outlet (GO) Q1 adj EPS $0.09 vs. est. $0.18; Q1 revs $1.04B vs. est. $1.02B; Q1 comp store sales increased by 3.9%, driven by a 7.0% increase in the number of transactions, partially offset by a 2.9% decrease in average transaction size; lower FY24 adjusted EPS view to $0.89-$0.95 from prior $1.14-$1.20 and revs $4.3B-$4.35B vs. est. $4.34B.
  • Lyft Inc. (LYFT) Q1 adj EPS $0.15 vs est. $0.03, adj EBITDA $59.4M vs est. $55M on revs $1.3B vs est. $1.161B; sees Q2 gross bookings approx $4.0-4.1B, adj EBITDA $95-100Mm vs est. $81.09Mm and adj EBITDA mgn approx 2.4% of gr bookings; sees FY rides growth +mid-teens, gr bookings slightly faster growth than rides growth, adj EBITDA mgn approx 2.1% of gr bookings.
  • Rivian (RIVN) Q1 EPS loss (-$1.45) vs. est. loss (-$1.17); Q1 revs $1.2B vs. est. $1.16B; cut its annual capital expenditure forecast by $550 million to $1.2 billion; Q1 net loss widened to $1.45 billion in the reported quarter, from $1.35 billion y/y; said its cash and cash equivalents were $5.98B vs. $7.86B q/q; reiterated its 2024 production forecast.
  • Wynn Resorts (WYNN) Q1 EPS $1.59 vs. est. $1.27; Q1 revs $1.86B vs. consensus $1.79B; Operating revenues from Wynn Palace were $586.9 million for the first quarter of 2024, an increase of $217.5M y/y and Operating revenues from Wynn Macau were $411.7 million for the first quarter of 2024, an increase of $181.0M y/y.

Energy, Industrials and Materials

  • GXO Logistics (GXO) Q1 adj EPS $0.45 vs est. $0.43 on revs $2.5B vs est. $2.375B, say on track to achieve full year outlook; sees FY27 organic revs about $15.5-16B vs est. $13.57B and adj EPS CAGR 2024-2027 more than 15%.
  • Kratos Defense (KTOS) Q1 adj EPS $0.11 vs est. $0.05, adj EBITDA $26Mm vs est. $17.2Mm on revs $277.2Mm vs est. $250.5Mm; guiders Q2 revs $265-280Mm vs est. $270.76Mm, adj EBITDA $20-23Mm vs est. $22.94Mm.
  • Occidental Petroleum (OXY) Q1 adj EPS $0.63 vs. est. $0.60; Q1 revs $7.258B vs. est. $6.7B; Q1 capital spending of $1.8B and contributions from noncontrolling interest of $57M, resulting in quarterly free cash flow before working capital of $720M; sees q2 total company production (MBoed) 1,232 – 1,272 excluding any CrownRock component; sees FY24 oil & gas Permian production 569-599 MBoed and sees 2024 capex $6.4B-$6.6B.

Financials

  • Flywire Corp. (FLYW) Q1 adj EBITDA $13.2Mm vs est. $10.2Mm on revs $114.1Mm vs est. $108.1Mm, adj gr mgn 65.2%; sees Q2 revs $99-108Mm vs est. $155.93Mm, adj EBITDA $1-4Mm vs est. $39.76Mm; sees FY revs $491-519Mm vs est. $500.97Mm and adj EBITDA $64-75Mm.
  • Legal Zoom (LZ) Q1 adj EBITDA $27.9Mm vs est. $26.5Mm on revs $174.2Mm vs est. $175.2Mm, FCF $24.7Mm; sees FY revs $700-720Mm vs est. $713.89Mm, adj EBITDA $135-145Mm vs est. $140.84Mm.
  • Reddit Inc. (RDDT) Q1 EPS loss (-$8.19) vs. est. loss (-$8.71); Q1 revs $243M vs. est. $212.83M; Q1 DAUs increased 37% year-over-year to 82.7 million; sees Q2 revenue $240M-$255M vs. est. $223.83M; Q1 adjusted ebitda was $10.0 mln, as compared to negative $50.2M y/y and Q1 loss was $575.1M vs. -$60.9M y/y.
  • Toast Inc. (TOST) Q1 adj Ebitda $57M vs. est. $23.6M; Q1 revs rose 31% y/y to $1.075B vs. est. $1.041B; Q1 subscription revenue $151M, vs. est. $148.3M and Q1 Gross payment volume $34.7B; booked restructuring expenses of $41M in the period, taking its total operating costs to $305M from $266M a year ago.
  • Upstart Financial (UPST) Q1 revs rose 24% y/y to $127.8M vs. est. $125.2M; Q1 adj EBITDA loss down -35% y/y to $20.3M; sees Q2 revenue of about $125M vs. est. $140.8M; for second half expects revenue from fees about $300M; Transaction Volume and Conversion Rate. 119,380 loans were originated, totaling $1.1B across our platform in Q1, up 13% y/y.

Healthcare

  • Bio-Rad Labs (BIO) Q1 adj EPS $2.29 vs est. $2.15 on sales $610.8Mm vs est. $619.1Mm, adj gr mgn 54.2%, adj op Inc $59Mm vs est. $58.19Mm; guides FY adj revs +1.0-2.5% vs est. $+0.6%, adj op mgn 13.5-14.0%.
  • Inspire Medical (INSP) Q1 EPS ($0.34) vs est. ($0.65) on revs $164Mm vs est. $161.44Mm, gr mgn 84.9%; sees FY revs $783-793Mm vs est. $782.26Mm, gr mgn 83-85%.
  • Masimo (MASI) Q1 adj EPS $0.77 vs est. $0.69 on revs $492.8Mm vs est. $487.55Mm; guides Q2 revs $480-510Mm vs est. $503.26Mm, adj EPS $0.73-0.79 vs est. $0.77; sees FY revs $2.055-2.165B vs est. $2.102B and adj EPS $3.54-3.70 vs est. $3.52.
  • McKesson (MCK) Q4 adj EPS $6.18 vs est. $6.34 on revs $76.355B vs est. $79.318B; sees FY adj EPS $31.25-32.05 vs est. $31.02.
  • Penumbra Inc. (PEN) Q1 adj EBITDA $37.6Mm vs est. $27.38Mm on revs $278.7Mm vs est. $274.89Mm; guides FY revs $1.23-1.27B vs est. $1.246B, gr mgn +100-150bps, adj op mgn +100-200bps.
  • Teva (TEVA) and MedinCell announce positive phase 3 efficacy results from SOLARIS trial evaluating TEV-‘749 (olanzapine) as a once-monthly subcutaneous long-acting injectable in adults with schizophrenia. The study met its primary endpoint achieving clinically meaningful and statistically significant reductions across all TEV-‘749 dose groups versus placebo.

Technology, Media & Telecom

  • Arista Networks (ANET) Q1 EPS $1.99 vs est. $1.74 on revs $1.571B vs est. $1.549B, adj gr mgn 64.2%; sees Q2 revs $1.62-1.65B vs est. $1.62B, adj gr mgn approx 64%, adj op mgn approx 44%.
  • Astera Labs (ALAB) Q1 adj EPS $0.10 vs. est. $0.04; Q1 revs $65.3M vs. est. $56.71M; sees Q2 adj EPS about $0.11 (in-line with ests) and adjusted gross margin about 77% and Q2 revenue seen rising within a range of 10% to 12% vs. prior quarter.
  • Cirrus Logic (CRUS) Q1 EPS $1.24 vs. est. $0.64; Q1 revs $371.8M vs. est. $316.5M; sees Q2 revenue $290M-$350M vs. consensus $302.7M and guides Q2 GAAP gross margin forecasted between 49%-51%.
  • Confluent (CFLT) Q1 EPS $0.05 vs. est. $0.02; Q1 revs $217.2M vs. est. $212.14M; says strong start highlighted by 45% y/y revenue growth for Confluent Cloud; sees Q2 EPS $0.04-$0.05 vs. est. $0.04 and revs $229M-$230M vs. est. $229.25M; also guides FY24 EPS and revs just above consensus.
  • Coupang Inc. (CPNG) Q1 adj EPS $0.05 vs est. $0.06, adj EBITDA $281Mm vs est. $258.8Mm on revs $7.1B vs est. $6.925B.
  • DoubleVerify (DV) Q1 EPS $0.04 vs. est. $0.02; Q1 revs $140.8M vs. est. $138.23M; cuts FY24 revenue view to $663M-$675M from $688M-$704M (est. $696.11M) and cuts FY24 adj EBITDA view to $199M-$211M from $205M-$221M.
  • EA Inc. (EA) authorized a new stock repurchase program of $5B over three years; Q4 EPS $1.37 vs. est. $1.52; Q2 revs $1.779B, vs. consensus $1.77B; Net bookings fell 14% to $1.67B; said operating cash flow climbed 49% to a record $2.32B; backed its January projections for the current fiscal year of $7.3B-$7.7B bookings vs. est. $7.74B.
  • Kyndryl Holdings (KD) Q4 EPS loss (-$0.20) vs. est. loss (-$0.22); Q4 revs $3.85B vs. est. $3.76B; guides FY25 revenue $15.2B-$15.5B, vs. consensus $15.27B; see FY25 revenue growth of (2%)-(4%) in constant currency vs. revenue of $16.1B in FY24.
  • Match Inc. (MTCH) Q1 adj op Inc $279.4Mm vs est. $188.9Mm on revs $860Mm vs est. $855.5Mm; sees Q2 revs $850-860Mm vs est. $882Mm and adj op Inc $300-305Mm vs est. $230.7Mm; sees FY revs near low end +6-9% vs est. 6.96%, adj op Inc mgn at least 36%, FCF nearly $1.1B; says don’t anticipate acquisitions near term.
  • Qualys Inc. (QLYS) Q1 adj EPS $1.45 vs est. $1.30, adj EBITDA $69Mm vs est. $64.23Mm on revs $145.8Mm vs est. $145.7Mm; sees Q2 revs $147.5-149.5Mm vs est. $150.21Mm, adj EPS $1.27-1.35 vs est. $1.29; sees FY revs $601.5-608.5Mm vs est. $607.47Mm and prior guide $600-610Mm, adj EPS $5.06-5.30 vs est. $5.18 and prior $4.95-5.27.
  • Ring Central (RNG) Q1 adj EPS $0.87 vs est. $0.80 on revs $584Mm vs est. $578.17Mm; sees Q2 revs $584.5-587.5Mm vs est. $585.54Mm and adj EPS $0.87-0.88 vs est. $0.85; sees FY revs $2.379-2.399B vs est. $2.384B and adj EPS $3.59-3.67 vs est. $3.55.
  • Twilio (TWLO) Q1 adj EPS $0.80 vs est. $0.62 on revs $1.047B vs est. $1.033B, adj op Inc $160Mm vs est. $140.42Mm; sees Q2 revs $1.05-1.06B vs est. $1.103B, adj EPS $0.64-0.68 vs est. $0.68; guides FY organic revs +5-10% vs est. $+5.23% and adj op Inc $585-635Mm vs est. $590.18Mm.
  • ZoomInfo (ZI) Q1 adj EPS $0.26 vs est. $0.23, adj op Inc $119.4Mm vs est. $116.9Mm on revs $310.1Mm vs est. $308.7Mm; guides Q2 revs $306-309Mm vs est. $313.11Mm, adj op Inc $114-116Mm vs est. $122.24Mm, adj EPS $0.23-0.24 vs est. $0.25; sees FY revs $1.255-1.27B vs prior $1.26-1.28B and est. $1.272B, adj op Inc $488-495Mm vs est. $492-502Mm and est. $497.62Mm and adj EPS $1.00-1.02 vs prior $0.99-1.01 and est. $1.00; approves additional $500M buyback.

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.