Hammerstone Markets Early Look

Friday, February 25, 2022

A day after one of the broadest market reversals off the lows to close at the highs (Nasdaq had a 900-point swing closing at highs up 3.3% and the S&P 500 a more than 160 point move off lows to settle higher 1.5%) major U.S. averages are seeing selling pressure overnight as Russia’s invasion of Ukraine deepens as rockets strike the Capital city Kyiv. Meanwhile, China state television broadcaster CCTV says Xi Jinping, Putin holds phone call on afternoon of Feb 25 and supports negotiation with Ukraine. Russian reports also indicate that Ukraine’s Zelensky invites Putin to negotiation table. It was an astonishing day on Wall Street Thursday as the Nasdaq 100 (QQQ) opened down more than 3%, finished up more than 3%, and finished more than 7% off the lows. According to one tweet, that has only happened one other time in history (April 2000). The strong spike snapped a 4-day losing streak for the S&P 500 and a 5-day for the Nasdaq as investors bought amid oversold markets on geopolitical concerns. The picture overseas a little better than in the U.S. as the Nikkei Index rises 1.95% to 26,476, the Shanghai Index gains +0.6% to 3,451, but the Hang Seng Index falls -0.59% to 22,776. In Europe, even stronger as the German DAX rises 1.5% to 14,260, while the FTSE 100 gains 2.2% to 7,365.

Economic Calendar for Today

·      8:30 AM ET           Personal Income m/m for January…est. (-0.3%)

·      8:30 AM ET           Personal Spending m/m for January

·      8:30 AM ET           PCE Price Index m/m for Jan

·      8:30 AM ET           PCE Prices y/y for January

·      8:30 AM ET           Core PCE prices m/m for January…est. +0.5%

·      8:30 AM ET           Core PCE prices y/y for January…est. 5.1%

·      8:30 AM ET           Durable Goods Orders MoM for Jan…est. +0.8%

·      8:30 AM ET           WASDE grain report

·      10:00 AM ET         University of Michigan Confidence, Feb-F…est. 61.7

·      10:00 AM ET         Pending Home Sales m/m for January…est. +1.0%

·      1:00 PM EST         Baker Hughes Weekly rig count data

Earnings Calendar:

·      Earnings Before the Open: GTN, NWN, PNW, STRA

Market Closing Prices Yesterday

·      The S&P 500 Index jumped 63.20 points, or 1.50%, to 4,288.70

·      The Dow Jones Industrial Average rose 92.07 points, or 0.28%, to 33,223.83

·      The Nasdaq Composite surged 436.10 points, or 3.34%, to 13,473.58

·      The Russell 2000 Index advanced 51.91 points, or 2.67% to 1,996.00

Sector News Breakdown

Consumer

·      Beyond Meat (BYND) Q4 adj EPS ($1.27) vs est. ($0.71) on revenue $100.7M vs est. $101.4M; the -1.2% decrease in revenue YoY primarily reflected softer demand, five fewer shipping days in the fourth quarter of 2021 compared to the year-ago period, increased trade discounts, and, to a lesser extent, loss of market share; sees FY22 sales $560M-$620M vs est. $637.3M

·      Car gurus (CARG) adj EPS $0.43 s est. $0.30 on revenue $339.3M vs est. $279.9M; sees Q1 revs $390M-$410M vs est. $302.2M, adj EPS $0.31-$0.33 vs est. $0.33

·      Carvana (CVNA) Q4 revenue $3.75B vs est. $3.53B, retail units sold +57% YoY to 113,016; acquired ADESA U.S. Physical Auction Business from KAR for $2.2B in cash; CVNA -11.1% after results, KAR is spiking +62.9% AHs on the deal

·      Carter’s (CRI) raises quarterly dividend by 25%; sets $1 billion buyback

·      Dillard’s (DDS) announces $500M share buyback plan

·      ETSY inc. (ETSY) 4Q EPS $1.11 vs est. $0.79 on revs $717.1Mm vs est. $685.5Mm; guides 1Q GMS $3.2-3.4B, revs $565-590Mm vs est. $629.5Mm and adj EBITDA margin about 26%

·      Farfetch (FTCH) shares jump over 30%; Q4 adj EPS loss in-line at (-$0.03); Q4 revs $666M vs. est. $676.88M; sees FY22 adjusted EBITDA margin 1%-2%; sees FY22 digital platform GMV growth 28%-32%; Q4 2021 GMV and Digital Platform GMV each increase 22% y/y to $1.3 billion and $1.1 billion, respectively; Q4 gross Profit Margin of 47.1%; Digital Platform Order Margin of 32.4%

·      Floor & Decor (FND) 4Q adj EPS $0.44 vs est. $0.45 on revs $914.3Mm vs est. $908Mm; guides FY net sales $4.285-4.375B vs est. $4.24B, comps +10.5-13%, adj EBITDA $575-610M vs est. $563M

·      Fox Factory (FOXF) Q4 adj EPS $1.06 vs est. $1.05 on revs $342.3M vs est. $330.4M; sees Q1 adj EPS $1-$1.20 vs est. $1.15, on revs $325M-$340M vs est. $335.6M; for the full year, expects adj EPS $4.90-$5.20 vs est. $5.12 on revs $1.435B-$1.465B vs est. $1.43B

·      Frontdoor Inc. (FTDR) Q4 adj EPS 10c vs est. 20c on revenue $340M vs est. $336.1M; sees Q1 revenue $345M-$355M vs est. $352.1M, full-year revs $1.7B-$1.73B vs est. $1.72B

·      Monster Beverage (MNST) Q4 EPS $0.60 vs. est. $0.61; Q4 revs rose 19.1% to $1.43B vs. est. $1.33B; was not able to fully satisfy increased demand for its products in several markets in 2021 Q4; net sales for company’s monster energy drinks segment increased 20.7% in Q4

·      Sprouts Farmer (SFM) Q4 EPS $0.32 vs. est. $0.30; Q4 sales fell 7% y/y to $1.49B vs. est. $1.47B; sees Q1 EPS $0.69-$0/73 vs. est. $0.67 and year PS $2.14-$2.24 vs. est. $2.08; Comparable store sales growth of -1.1% and two-year comparable store sales growth of 2.7%; gross margin of 35.7%, a decrease of approximately 100 basis points y/y

Energy

·      American Electric (AEP) Q4 EPS $0.98 vs. est. $0.93; Q4 revs $4.1B vs. est. $3.73B; raises year EPS view to $4.87-$5.07 vs. est. $4.96; initiating sale process for portion of unregulated business to de-risk, simplify portfolio; raises long-term growth rates

·      Clean Energy (CLNE) Q4 adj EPS 3c vs est. 4c on revenue $91.9M vs est. $92.1M, delivered 104.6M gallons (+9% YoY)

·      EOG Resources (EOG) Q4 adj EPS $3.09 vs. est. $3.19; Q4 revs $6.04B vs. est. $5.88B; declares $1.00 per share special dividend; sees 2022 capital plan of $4.3 to $4.7 billion; qtrly crude oil production of 450,600 boepd was above the mid-point of the guidance range due to better well productivity

·      Southwestern (SWN) Q4 adj EPS $0.31 vs. est. $0.28; Q4 revs $2.94B vs. est. $1.41B; sees Q1 total production 411-426 Bcfe and sees FY22 total production 1,683-1,723 Bcfe; total production for quarter ended December was 385 bcfe, comprised of 86% natural gas, 12% ngls and 2% oil

·      Stem Inc. (STEM) Q4 revs $52.8M vs est. $72.9M, bookings $216.9M; sees FY22 revenue $350M-$425M vs est. $360.9M, bookings $650M-$750M, adj EBITDA ($60M)-($20M)

·      Vivint Smart Home (VVNT) Q4 revs rose 19.7% to $396.2M vs. est. $374.75M; sees FY22 revenue $1.6B-$1.63B, vs. est. $1.62B; sees FY22 adjusted EBITDA $725M-$745M

Financials

·      Block Inc. (SQ) Q4 EPS $0.27 vs. est. $0.25; Q4 revs $4.08B vs. est. $4.06B; Q4 transaction-based revenue $1.31B (in-line w ests); Q4 gross payment volume $46.33T; Bitcoin revs $1.96B; for Jan/Feb, Square GPV is expected to be up 35% year over year, and sees two-year CAGR up 16%; transaction-based revenue was $1.31 billion in the fourth quarter of 2021, up 41% year over year

·      Coinbase (COIN) Q4 revenue $2.49B vs est. $1.94B; adj EBITDA $1.2B vs est. $832.5M; monthly transacting users rose 54% from Q3 to 11.4M, trading volume $547B; crypto market cap and volatility is impacting lower quarter-to-date trading volume as they see retail TU and total trading volume lower in Q1 vs 4Q20; for FY22, see avg retail MTUs 5M-15M

·      Green Dot (GDOT) Q4 revs rose 16% to $330.8M vs. est. $307.85M; Q4 EPS $0.27 vs. est. $0.31; sees FY22 adj EPS $2.22-$2.35 vs. est. $2.67; sees FY22 revs $1.394B-$1.43B vs. est. $1.44B

·      Intuit (INTU) 2Q EPS $1.55 vs est. $1.85 on revs $2.7B vs est. $2.73B, reit FY guidance

·      Opendoor Technologies (OPEN) 4Q EPS ($0.31) vs est. ($0.18) on revs $3.8B vs est. $3.2B; guides 1Q revs $4.1-4.3B vs est. $3.3B and adj EBITDA $30-40Mm vs est. $11.8Mm

·      Open lending (LPRO) shares rise 19%; Q4 EPS $0.23 vs est. $0.16 on revenue $51.6M vs est. $43.1M; sees FY22 revenue $210M-$240M vs est. $231.5M, total certified loans 195,000-225,000 (vs. 171,697 in FY21

·      Rocket Companies (RKT) Q4 adj EPS $0.32 vs. est. $0.36; Q4 revs $2.59B vs. est. $2.62B; Grew full year 2021 originations volume to $351 billion, up 10% from record 2020 levels; special dividend of $1.01 per Class A common stock declared by Board of Directors

·      CubeSmart (CUBE) 4Q adj FFO/share $0.58 vs est. $0.56, qtrly same-store revs $174.8Mm; guides 1Q adj FFO/share $0.56-0.58 vs est. $0.57 and FY adj FFO/share $2.35-2.42 vs est. $2.41, sees FY same-store revs +8-10%

Healthcare

·      Allscripts (MDRX) Q4 EPS $0.79 vs. est. $0.32; Q4 revs $392M vs. est. $391.1M; Q4 bookings were $219M, which compares with $181M in Q4 of 2020; contract revenue backlog totaled $3.8B as of December 31, 2021l sees FY22 consolidated revenue growth of 1%-2%

·      Chemed Corp. (CHE) Q4 adj EPS $5.25 vs. est. $5.08; Q4 revs rose 1.4% to $541M vs. est. $543.18M; Roto-Rooter is forecasted to achieve full-year 2022 revenue growth of 8.0% to 9.5%; sees FY22 adjusted EPS $19.10-$19.50 vs. est. $19.31

·      Covetrus, Inc. (CVET) 4Q EPS ($0.02) reported vs est. $0.04 on revs $1.12B vs est. $1.14B; guides FY organic net sales +7-8% and adj EBITDA $270-280Mm vs est. $274Mm

·      Invitae Corporation (NVTA) Q4 EPS ($0.90) vs est. ($0.73) on revenue $126.1M vs est. $126.7M; sees FY revenue +40% to ~$640M vs est. $638.7M

·      United Health (UHS) Q4 adj EPS $2.95 vs. est. $2.87; Q4 revs $3.275B vs. est. $3.14B; authorizes $1.4B increase to stock repurchase plan; sees FY EPS $11.90-$12.90 vs. est. $12.24; sees year revs $13.42B-$13.69B vs. est. $12.88B

Industrials & Materials

·      Axon Enterprises (AXON) Q4 EPS $0.46 vs est. $0.17 on revenue $218M vs est. $202.7M; now sees FY22 revs about $1.04B from prior expectation of at least $1B, est. $1.02B

·      MasTec (MTZ) Q4 adj eps $1.35 vs. est. $1.29; Q4 revs rose 10.5% y/y to $1.8B vs. est. $1.88B; sees FY22 adj EPS $5.32 vs. est. $5.35; sees FY22 revenue $9.95B vs. est. $9.83B

·      MP Materials (MP) Q4 revenue $99.1M vs est. $91.7M, adj EBITDA $71.3M vs est. $68.1M; production increased 10% YoY to 10,261 metric tons of REO

·      Mosaic (MOS) announces $400M accelerated share repurchase program

Technology, Media & Telecom

·      AMD Inc. (AMD) announces $8B share buyback

·      Autodesk (ADSK) Q4 non-GAAP EPS $1.50 vs. est. $1.44; Q4 revs $1.21B vs. est. $1.19B; sees Q1 revenue $1.145B-$1.16B vs. est. $1.16B; sees FY23 EPS $6.46-$6.83 vs. est. $6.78; sees FY23 revenue $5.02B-$5.12B vs. est. $5.13B; qtrly subscription plan revenue was $1.12 bln, an increase of 18 percent as reported, and 16 percent on a constant currency basis

·      Alarm.com (ALRM) 4Q adj EPS $0.43 vs est. $0.32 on revs $195.3Mm vs est. $174.4Mm; guides FY revs $808-819Mm vs est. $784.1Mm and adj EPS 1.86-1.88 vs est. $1.99

·      CS Disco (LAW) 4Q EPS ($0.16) vs est. ($0.17) on revs $33.8Mm vs est. $28.7Mm; guides 1Q revs $30-31Mm vs est. $29.9Mm and FY revs $146.8-150.8Mm vs est. $141.7Mm

·      Dell Inc. (DELL) 4Q adj EPS $1.72 vs est. $1.95 on revs $28B vs est. $27.4B, announces initial qtrly cash dividend of $0.33/share

·      LivePerson (LPSN) 4Q EPS ($0.70) vs est. ($0.47) on revs $123.8Mm vs est. $123.9Mm; sees 1Q revs $124.6-126.8Mm vs est. $131.8Mm; guides FY revs $544.8-563.3Mm vs est. $594.8Mm

·      Ping Identity (PING) 4Q EPS ($0.31) vs est. $0.02 on revs $75.4Mm vs est. $71.2Mm; guides 1Q revs $78-82Mm vs est. $78.5Mm, total ARR $320-324Mm, sees FY revs $330-340Mm vs est. $332.6Mm and ARR $378-385Mm

·      Upland Software (UPLD) 4Q adj EPS $0.60 vs est. $0.45 on revs $75.7Mm; guides 1Q revs $75-79Mm vs est. $77.1Mm and adj EBITDA $22-24Mm vs est. $23.9Mm; sees FY revs $313-329Mm vs est. $316.2Mm and adj EBITDA $95-103Mm vs est. $100.2Mm

·      VMW Inc. (VMW) 4Q adj EPS $2.02 vs est. $1.97 on revs $3.53B vs est. $3.52B

·      Zscaler (ZS) shares fall -16%; 2Q adj EPS $0.13 vs est. $0.11 on revs $255.6Mm vs est. $241.6Mm; guides 3Q revs $270-272Mm vs est. $256.7Mm and adj EPS $0.10-0.11 vs est. $0.11; sees FY revs $1.045-1.05B vs est. $1.01B and adj EPS $0.54-0.56 vs est. $0.52

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