EARNINGS and MARKET UPDATES - 5|10|23

EARNINGS and MARKET UPDATES

The much waited Consumer Price Index (CPI) report came today morning for the month of April. CPI was up 0.4%, pushed higher by rising shelter, used vehicle and gas prices. On an annual basis, the inflation rate was 4.9%, slightly less than the estimate. Please note that it was 5% in March. The average hourly earnings, adjusted for inflation, rose 0.1% for the month of April but it was still down 0.5% from a year ago. Overall, the report looks good that inflation is subsiding. Nasdaq was up 1%, S&P 500 was up 0.45% but DOW was on red.

Casava Sciences (SAVA): This company is know for Alzheimer's disease. However, yesterday the company said new in vitro data from Europe show that simufilam can reverse altered filamin A protein (FLNA) in pituitary tumor cells, leading to improved cell signaling. It’s working very well with an existing drug which was tested on rats. So, it’s too early but if their drug can also work for cancer then it’s a wonderful news!! Shares were up 15% yesterday.

Fisker (FSR): Last week the company delivered its first car in Denmark. The EV manufacturer is expecting regulatory approval to begin deliveries of the Ocean in the U.S. before the end of May. Fisker plans to produce 1,400-1,700 vehicles in Q2. Fisker expects to have a steep ramp up in Q3, followed by a monthly run rate of approximately 6,000 vehicles for the rest of the year, and forecasts 32,000-36,000 units produced in calendar 2023. Net loss totaled $120.6 million and $0.38 loss per share. Fisker Ocean reservation 65K + Fisker PEAR reservations 6K.

My View: If the company can deliver 1500 cars this quarter then it will have about $200 million in revenue. For the year if the company can deliver its low end of the estimate 32,000 EVs then it comes to $2.2 Billion in revenue. If we compare to the market cap of Lucid and Rivian then it's a beggar, messing extremely cheap. So, it makes perfect sense to accumulate the share for long-term.

Plug Power (PLUG): Revenue for the company surged 49.4% YOY to $210.3 million, beating estimates by $2.6 million. But the company posted a net loss per share of 35 cents vs. 9 cents expected. Shares plunged more than 14% following earnings. PLUG is working to increase hydrogen production capacity to 200 tons per day by the end of this year. Plug expects to reach 500 tons of hydrogen per day by the end of 2025. If Plug is able to reach its $1.4 billion revenue goal this year, the company projects its gross margin will improve to $140 million. If it misses the revenue target, Plug expects revenue will total $1.2 billion and a $50 million gross margin.

My view: The company has been missing guidance time and again. I may hang on to it. As said during my investment meet, I have already trimmed some. I don’t expect much improvement before Q4. But I still see a great prospect for investors who can hold patiently for another year to two.

Luminar Tech (LAZR): 

Revenue: better-than-guidance Q1 revenue was $14.5 million, up 112% yea over-year and 30% quarter-over-quarter. Net loss was $88.7 million, or $(0.24) per share (Non GAAP).

Revenue Growth: Luminar expects at least 100% revenue growth in 2023 and expects to reach positive gross margin on a non-GAAP basis by the fourth quarter of this year. It also said to be

on track to meet or beat its goal of adding at least $1 billion to its forward-looking order book in 2023. 

May View: I believe this company has great long term potential. Need some patience to keep accumulating. I have been accumulating this stock. 

Airbnb (ABNB): The company reported a big beat in earnings 18 cents a share vs. the consensus estimate of 7 cents. Revenue rose 19.2% to $1.8 billion vs. $1.6 billion estimated. 

Guidance: The second-quarter forecast is $2.35 billion-$2.45 billion slightly below expectations of $2.42 billion. This small miss in guidance caused a big havoc in the stock price losing 11% in AH trading.

My View: This stock should bounce back in next few days/weeks above $120. For now, I am holding it.

Disney's (DIS): The Q1 earnings came in-line with the analysts expectations 93 cents per share. Revenue jumped 13.3% to $21.82 billion vs. $21.79 billion expected by analysts. However, Disney's total subscribers across Disney+, Hulu and ESPN+ came in at 231.3 million vs. 238.88 million expected by Wall Street Analysts. The company also said to cut 7000 jobs and cut cost of $5.5 billion including content savings.

My View: Disney is a great brand and its theme park revenue would continue to grow. But its streaming business has been a problem. I don’t expect too much on this stock unless the company shows some good evidence good evidence of growth. I will hold for sometime and see whether it makes sense to keep it or look for alternative.

Lucid Motor (LCID) first-quarter net loss was $779.5 million, or 43 cents per share on a revenue of $149.4 million vs. $209.9 million expected. Lucid has 7 times the market capitalization comparing to Fisker and interestingly  projecting less sales than fisker. Also, the company consistently keep missing revenue and profit forecast due to massive operational expenses.

Rivian (RIVN): The company narrowed losses to $1.25 a share on revenue of $661 million. It produced 9,395 vehicles but delivered 7,946. The company is targeting to to produce 50,000 units in 2023. It has got $11.57 billion in cash and around $2 billion in debt. 

My View: Though it looks little better, I like Fisher based on valuation and the SUV which is expected to hit U.S market later this month. 

PayPal: The company did beat top and bottom line but said that its margins will come down in next quarter and the stock was hammered in last two days falling around 15%. But it’s better stay away from this company for now.

TWLO was down 12.64% because guidance was below analysts estimates.