Earnings - Analysis and Beyond

Our new addition is in the feed of daily updates on the community! We’re planning to keep you updated on the stock movements - Before (What to Expect) and After the earnings release of a particular stock.

MongoDB - The database software provider company had better than expected results, making analysts raise their price targets for the stock. The company reported a loss of around $0.11 a share, much less than the expected loss of $0.38. Revenue was high by a considerable margin at $226.9M.

Analysts raised their price expectations to $626 from $524 “MDB remains one of our favourite ideas given our belief that several quarters of strong customer adds and the faster-growing Atlas has set a flywheel in motion for MDB to achieve high levels of sustained growth,” said Needham analyst Jack Andrews in a note.

The stock was rising 21.81% to $523 in premarket trading Tuesday.

Coupa - Despite delivering better than expected earnings and sales, the stock has fallen 11%, owing to poor growth.

Coupa reported third-quarter adjusted earnings of 31 cents to share on revenue of $185.8 million. A year earlier, the company reported an adjusted profit of 18 cents a share on revenue of $133 million.

RBC said Coupa reported a “mixed” third quarter, saying there was “notable deceleration in organic growth and F4Q billings guidance was below consensus.”

Gitlab - Topped Wall St expectations, declined 5% but pulled back. GitLab forecast a loss of 26 cents to 25 cents a share on revenue of $69.5 million to $70.5 million for the fourth quarter and $1.43 to $1.42 a share on revenue of $244 million to $245 million for the year.

Analysts had estimated a loss of 27 cents a share on revenue of $63.9 million for the fourth quarter and $1.52 a share on revenue of $231.2 million for the year.

Note that it’s the first earnings release by the stock.

That’s all for now folks!

Oracle - Oracle jumped significantly as profits surpassed $100 for the first time. Oracle’s cloud sales climbed by 6% and have grown to be a significant component of their business. They now claim to be the top in cloud ERP, dethroning SAP and Workday. They also announced an increase in their share repurchase programme of $10 billion.

Costco - Continuing on from last year’s success, Costco has been able to keep the majority of its margin gains. Their margins fell by only 0.26% this quarter. Consumer demand remains high, and the firm has been able to pass on some of the price hikes caused by supply chain concerns to customers. While they have been able to keep inventory moving, they have stated that many of the toys and seasonal goods may not arrive in time for Christmas.

Lulemon - The market was disappointed that Lulu did not outperform forecasts as much as they did in Q2. They also cut their Q4 projection, which is a pattern we will see for many firms that profited from the stay-at-home period. While the firm is still dealing with supply chain challenges, the good news is that its Vietnam plants have reopened and are ramping up output.

Adobe seemed to be the week’s biggest loser as it traded down as much as 10% as its Q1 guidance of $4.23B in revenues and $3.35 in EPS fell short of analysts expectations of $4.36B and $3.4. FY guidance was also disappointing, with revenues of $17.9bn and EPS of $13.70 (expectations were revenues of $18.2bn and EPS of $14.20).

“Guidance was lower than expected from a top line perspective, due in part to an extra week in Q1/21 which contributed an incremental $267M in revenue,” wrote RBC Capital Markets analyst Matthew Hedberg.

Shares of Adobe dropped 8.5% to $576.68 Thursday following the company’s lackluster forecast.

Adobe also reported fourth-quarter earnings posting an adjusted profit of $3.20 a share, meeting consensus estimates. Revenue was $4.11 billion, topping expectations for $4.08 billion.

The company achieved record annual revenue of $15.79 billion for 2021, representing 23% year-over-year growth. Yearly earnings per share came in at $12.48.

Accenture, the stock climbed after the reports of fiscal first-quarter earnings and revenue that topped estimates. The company raised full year fiscal 2022 guidance amid it’s acquisition spree.

Accenture earnings for the quarter ended Nov. 30 rose 20% to $2.78 on an adjusted basis, said the Dublin-based company. Including acquisitions, Accenture said revenue rose 27% to $14.97 billion.

Taiwan Semiconductor covered in a separate thread.

All major banks - JP Morgan, Citi, Wells Fargo is covered in a separate thread.

Here are the learnings from the major banks:

Loan growth is stagnant and is declining for a few, as in the pandemic businesses and households were shy to borrow or were having loads of money due to government cash.

JPMorgan said loans were up 6% yoy. Well Fargo said loan balances fell by 3%. CitiGroup saw 1% drop.

The Federal Reserve is expected to hike interest rates this year, so a boost in loan growth would be beneficial to banks. The difference between the interest banks earn on loans and the interest they pay on deposits would expand as a result.

Trading is bearish: The economic uncertainty may have resulted in trading that was up. There was a sharp decline in trading revenue amongst the banks.

More expenses:

While JPMorgan’s expenses wereup due to more compensation costs complemented with spending on marketing and technology. The bank expects expenses to increase by around 10%.

Citi posted higher expenses due to recent divestitures and correcting its operation after being pulled up regulators.

Wells Fargo posted at 11% drop due its decreased reliance on outside consultants.

Let’s see what’s next for the remaining banks.