Early Look

Friday, November 8, 2024

U.S. futures are edging lower overnight for the first time this week but are still on track for massive gains with the S&P 500 on track for a weekly advance of 4.2%, the Nasdaq 5.6%. the Dow 4% and the Smallcap Russell 2000 up a whopping 7.8% this week alone! The S&P 500 (SPX) is approaching the 6,000 level for the first time ever, while the Nasdaq easily topped the 19,000 level this week, with both hitting fresh all-time highs. The combination of no surprises from the Fed (lowered rates by 25 bps as expected yesterday) and a definitive Presidential election outcome helped boost market sentiment and push major averages to new heights. The US dollar and Treasury yields have slipped in recent days, unwinding some of the gains leading up to the election results and providing a boost for Smallcaps. U.S. listed Chinese stocks (BABA, BIDU, PDD, JD, etc.) are under pressure after China, after market close, announced fresh round of fiscal support for its sputtering economy with a package that eases debt repayment strains for local governments. The declines came as stimulus measures disappointed high expectations. In Asian markets, The Nikkei Index rose 118 points to 39,500, the Shanghai Index fell -18 points to 3,452, and the Hang Seng Index slid -225 points to 20,728. In Europe, the German DAX is down around -200 points to 19,165, while the FTSE 100 declines -75 points to 8,066. Crude oil, and base metals are pulling back following the underwhelming Chinese NPC press conference. Another earnings barrage overnight, with details of most results provided below.

• The Dow Jones Industrial Average dipped -0.59 points, or 0.00%, to 43,729.34.
• The Nasdaq Composite gained 285.99 points, or 1.51%, to 19,269.46.
• The Russell 2000 Index declined -10.23 points, or 0.43% to 2,382.69.

• 10:00 AM ET                University of Michigan 1-yr and 5-yr inflation expectations
• 12:00 PM ET WASDE monthly grain report
• 1:00 PM ET                   Baker Hughes Weekly rig count data

• DraftKings (DKNG) Q3 revs rose 39% y/y to $1.1B vs. est. $1.11B; Q3 EPS loss (-$0.60) vs. est. loss (-$0.40); Monthly Unique Payers 3.6M, +57% y/y, vs. est. 3.33M and average revenue per monthly unique payer $103, -9.6% y/y; lowered its FY adj Ebitda view to $240M-$280M from $340M-$420M (est. $387M).
• Expedia (EXPE) Q3 adj EPS $6.13 vs. consensus $6.04; Q3 revs $4.060B vs. est. $4.11B; CFO to step down from role; Q3 adj Ebitda $1.25B vs. est. $1.232B; Booked room nights grew 9% compared to 2023, with Brand Expedia growing at mid-teens; Q3 total gross bookings of $27.5 billion grew 7% compared to 2023, a more than 150 basis point acceleration from the second quarter.
• Lucid (LCID) Q3 adj EPS ($0.28) vs est. ($0.30) on revs $200.038Mm vs est. $198Mm, deliveries 2,781, production 1,805; guides FY production about 9,000 vehicles.
• Monster Beverage (MNST) Q3 adj EPS $0.40 vs. est. $0.43 and revs $1.88B vs. est. $1.91B; Net sales for the Company’s Monster Energy Drinks segment increased 0.8% to $1.72B y/y.
• Rivian (RIVN) Q3 EPS loss (-$0.99) vs. est. loss (-$0.92); Q3 revs fell -34.6% to $874M missing ests $989.6M; said is announcing a strategic supply agreement with LG Energy Solution to power its next-generation midsize electric vehicle platform, underpinning the company’s R2 midsize SUV; affirms 2024 delivery outlook of 50.5-52.0K vehicles; said its cash and cash equivalents were $5.4B, compared with $7.86B y/y.
• Sweetgreen (SG) Q3 EPS ($0.18) vs est. ($0.13), adj EBITDA $6.8Mm vs est. $7.03Mm on revs $173.4Mm vs est. $175.2Mm, comps +6%, AUV $2.9Mm; guides FY +24-26 net new units, revs $675-680Mm vs est. $678.52Mm, comps +6-7%, restaurant level margin 19.5-20%, adj EBITDA $18-20Mm vs est. $19.35.

• EOG Resources (EOG) Q3 adj EPS $2.89 vs. est. $2.77; Q3 revs $5.97B vs. est. $5.53B; raises quarterly dividend 7% to 97.5c per share and board approves $5B increase to share repurchase plan; Q3 crude oil equivalent volumes was up 7.7% at 1.08 million barrels of oil equivalent per day (Mboepd) from the previous year.
• NuScale Power (SMR) Q3 op Inc ($41.0)Mm vs est. ($36.82)Mm on revs $0.5Mm vs est. $3.14Mm.

• Block inc. (SQ) Q3 adj EPS $0.88 vs. est. $0.87; Q3 revs $5.98B vs. est. $6.24B; Q3 adj Ebitda $807M vs. est. $704.6M; said Q3 cash app qtrly inflows per transacting active were $1,233, up 9% y/y; says on track to deliver mid-teens gross profit growth with expanding margins, and we expect to reach our rule of 40 target in 2026; said expect strong gross profit growth in 2025 of at least 15%.
• H&R Block (HRB) Q1 EPS loss (-$1.17) vs. est. loss (-$1.18); Q1 revs $193.81M vs. est. $188.39M; Total operating expenses of $422.1 million increased by $32.0 million; sees FY25 adjusted EPS $5.15-$5.35 vs. consensus $5.26 and sees FY25 revenue $3.69B-$3.75B vs. consensus $3.72B.
• Redfin (RDFN) Q3 EPS loss (-$0.28) vs. est. loss (-$0.20); Q3 revs $278M vs. consensus $280.74M; sees Q4 revenue $237M-$247M, vs. consensus $238.51M; said total net loss for Q4 is expected to be between $32M and $25M, compared to net loss of $23M y/y; files automatic mixed securities shelf.
• Toast Inc. (TOST) Q3 adj EBITDA $113Mm vs est. $77.88Mm on revs $1.305B vs est. $1.29B, ARR $1.6B, GPV +24% to $41.7B, locations +28%; guides Q4 adj EBITDA $90-100Mm vs est. $74.65Mm.
• Upstart Holdings (UPST) Q3 adj EPS ($0.06) vs est. ($0.15), adj EBITDA $1.4Mm on revs $162.1Mm vs est. $150.22Mm; guides Q4 revs $1.80Mm vs est. $162.27Mm, contribution margin approx 59%, adj EIBTDA approx $5Mm.

• Evolent Health (EVH) Q3 EPS ($0.27) vs est. $0.34, adj EBITDA $31.801Mm vs est. $62.7Mm on revs $621.401Mm vs est. $627.2Mm; guides Q4 revs $642-667Mm vs est. $663.03Mm and adj EBITDA $22-37Mm vs est. $68.5Mm; sees FY revs $2.55-2.575B vs est. $2.578B and adj EBITDA $160-175Mm vs est. $241.42.
• Insulet (PODD) Q3 adj EPS $0.90 vs est. $0.76 on revs $543.9Mm vs est. $518.03Mm; guides Q4 revs +12-15% vs est. +11.5%; sees FY revs +20-21% vs prior +16-19% and est. +18.83%.
• Mettler Toledo (MTD) Q3 adjusted EPS $10.21 vs. consensus $10.01; Q3 revenue $954.5M vs. est. $944.74M; cautions that market conditions are uncertain and could change quickly as guides Q4 adjusted EPS $11.63-$11.78, consensus $11.86 and sees 2024 adjusted EPS $40.20-$40.50, vs. consensus $40.38.

• Axon Enterprises (AXON) Q3 EPS $1.45 vs. est. $1.20; Q3 revs $544M vs. est. $525.4M; guides Q4 revenue $560M-$570M, vs. consensus $547.01M; raises 2024 revenue view to $2.07B from $2.00B-$2.05B (est. $2.04B) and raises 2024 adjusted EBITDA view to $510M from $460M-$475M.
• Fluor (FLR) Q3 adjusted EPS $0.51 misses the $0.76 estimate and revs $4.09B below consensus $4.74B; guides FY adj EPS $2.55-$2.75 vs. est. $2.89.

• Alarm.com Holdings (ALRM) Q3 adj EPS $0.62 vs est. $0.49, adj EBITDA $50Mm vs est. $42.9Mm on revs $240.5Mm vs est. $231.42Mm; guides FY revs $933.7-935.9Mm vs est. $926.47Mm, adj EBITDA $174-176Mm vs est. $166.22Mm and adj EPS $2.25-2.27 vs est. $2.07.
• Arista Networks (ANET) Q3 adj EPS $2.40 vs. consensus $2.08; Q3 revenue $1.811B vs. est. $1.74B; sees Q4 revenue $1.85B-$1.9B above consensus $1.81B and sees Q4 adjusted operating margin roughly 44%; board approves a four for one stock split effective December 4^th.
• Bill Inc. (BILL) Q1 adj EPS $0.63 vs. est. $0.50 and revs rose 18% y/y to $358.5M vs. est. $348.5M; raises Fy25 adj EPS $1.65-$1.83 from $1.36-$1.61 prior (est. $1.55) on better revs outlook $1.44B-$1.46B, from $1.42B-$1.45B (est. $1.44B).
• Cloudflare Inc. (NET) Q3 EPS ($0.04) vs est. $0.18 on revs $430.082Mm vs est. $424.1MM; sees FY revs $1.661-1.662B vs est. $1.659B and adj EPS $0.74 vs est. $0.72.
• Dropbox (DBX) Q3 EPS $0.60 vs. est. $0.53; Q3 revs $638.8M vs. est. $636.92M; Q3 GAAP Operating Margin of 20.0% and Non-GAAP Operating Margin of 36.2%; Total ARR was $2.579 billion, an increase of 2.1% y/y; Paying users was 18.24 million, as compared to 18.17 million for the same period last year. Average revenue per paying user was $139.05, as compared to $138.71 for the same period last year.
• Five9 Inc. (FIVN) Q3 adj EPS $0.67 vs est. $0.58, adj EBITDA $52.4Mm vs est. $46.56Mm on sales $264.18Mm vs est. $255.1Mm; guides Q4 revs $267-268Mm vs est. $261.15Mm and adj EPS $0.69-0.71 vs est. $0.69.
• Fortinet (FTNT) Q3 adj EPS $0.63 vs est. $0.52, adj op mgn 36.1% on revs $1.51B vs est. $1.48B; guides Q4 revs $1.56-1.62B vs est. $1.591B, billings $1.9-2.0B, adj op mgn 33-34%, adj EPS $0.58-0.62 vs est. $0.52; sees FY revs $5.856-5.916B vs est. $5.861B, adj gr mgn 80.3-81.3%, adj op mgn 32.9-33.9% and adj EPS $2.20-2.28 vs est. $2.04.
• Informatica (INFA) 16M share Spot Secondary priced at $25.50.
• Lumentum Holdings (LITE) Q1 adj EPS $0.18 vs est. $0.12 on revs $336.9Mm vs est. $325Mm, adj gr mgn 32.8%, adj op mgn 3%; guides Q2 revs $380-400Mm vs est. $354.32Mm and adj EPS $0.30-0.40 vs est. $0.27.
• Pinterest (PINS) Q3 EPS $0.40 vs. est. $0.34; Q3 revs $898M vs. est. $896.35M; said in Q3, users reaching another all-time high of 537 million and revenue growth at 18%; sees Q4 revenue $1.125B-$1.145B, vs. consensus $1.14B and sees Q4 Non-GAAP operating expenses to be in the range of $495M-$510M.
• Taiwan Semiconductor Manufacturing Company (TSM) has notified Chinese chip design companies that it is suspending production of their advanced AI chips from Monday, Financial Times reported on Friday. Separately, TSM reported October revenue at $9.8B — a 29% YoY increase & a 25% rise from September.
• Trade Desk (TTD) Q3 EPS $0.41 vs. est. $0.39; Q3 revs rose 27% y/y to $628M vs. est. $619.9M; sees Q4 revenue ‘at least’ $756M vs. est. $748.8M and sees Q4 adjusted EBITDA $363M
• Unity Software (U) Q3 EPS loss (-$0.31) vs. est. loss (-$0.36); Q3 revs $446.52M vs. est. $430.37M; raising guidance for the full year to $1.703B-$1.708B from prior $1.68B-$1.69B and adj Ebitda view to $363-$368M from prior $340M-$350M view.
• Verizon Communications Inc (VZ) announces offers to purchase up to $3.5B of debt securities
• Warner Brothers (WBD) Streaming service Max will start a password-sharing crackdown over the next several months with “very soft messaging” around the shift, The Verge reports.