Wednesday’s Headlines: Tech Stocks Take a Hit
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Shopify (SHOP) +1.9%
FactSet (FDS) +1.0%
The Home Depot (HD) +0.8%
Moving Down ⬇️
Wix (WIX) -7.7%
iRobot (IRBT) -7.5%
Paycom (PAYC) -6.5%
Match Group (MTCH) -6.4%
Trupanion (TRUP) -6.1%
1. If you own growth or tech stocks, then Tuesday probably wasn’t your day. Heavy losses among tech giants such as Apple (AAPL), Amazon (AMZN), and more caused the Nasdaq Composite (QQQ) to fall 1.9%, while the S&P 500 (VOO) also fell — the Dow Jones Industrial Index (DIA) was the only major U.S. index to close in the green. Between the volatility of earnings season, President Biden’s ongoing recovery plans, and Treasury Secretary Janet Yellen’s comments that interest rates may have to rise, investors are exiting ‘riskier’ stocks for traditional, slow growth sectors such as energy. Read the full story here.
2. Watch out Slack (WORK), Facebook’s (FB) Workplace enterprise communication software is on the rise. The social media giant unveiled on Tuesday that its workplace collaboration tool has now reached 7 million paid subscribers, up 40% from 5 million in the same period last year. Although these figures pale in comparison to Microsoft Teams’ 145 million users — and even Slack’s estimated 12 million subscribers — it still highlights the growing diversification that is taking place at Facebook as it slowly encroaches on yet another industry. Read the complete report here.
3. For a stock that has fallen 40% in the past five years, Under Armour (UAA) is certainly showing signs that a recovery could be possible. The sports apparel brand reported first-quarter sales growth of 35% to $1.26 billion, whilst also surpassing analyst earnings estimates of $0.03 per share by reporting $0.16 per share. CEO Patrik Frisk said that the company is seeing strong demand for the brand, as business rebounds across Asia and North America among a shift to digital retail. After a 20% tumble in sales this time last year, I guess late really is better than never. Read the official press release here.
Some more earnings from last night:
Activision Blizzard (ATVI)
When it comes to crushing earnings estimates, this gaming company can thank its ‘Call of Duty’ franchise, after reporting Q1 EPS of $0.79 on revenue of $2.28 billion — with a record 150 million COD users in Q1 alone. As the gaming industry soars during the pandemic, Activision Blizzard has been one of the main beneficiaries, with management believing that it can maintain its popularity even as lockdowns ease. Read the official press release here.
Arista Networks (ANET)
It was an easy beat for the cloud networking firm, which reported net income of $180.4 million, or $2.27 per diluted share, compared to GAAP net income of $138.4 million, or $1.73 per diluted share in the first quarter of 2020. “Arista begins the 2021 year with a flying start. Clearly, the focus on our cognitive cloud networking suite is resonating with customers across diverse data sets and applications,” stated CEO Jayshree Ullal. Read the official press release here.
Idexx Labs (IDXX)
The animal product developer also enjoyed a strong start to 2021 as it easily beat analyst forecasts with revenue of $778 million and earnings per share of $2.09. “The IDEXX team delivered exceptional performance in the first quarter, reflecting continued robust demand for companion animal healthcare globally, supported by our innovation and direct commercial engagement,” said CEO Jay Mazelsky. Read the official press release here.
Paycom Software came out with quarterly net income of $64.6 million, or EPS of $1.11, while revenue also surpassed expectations, coming in at $272 million. The payroll software firm is enjoying a spell of success amid the global shift to online work and believes that it can use its strong start to the year to leap forward with even more solutions for customer growth. Read the official press release here.
Zillow Group (Z)
The housing market has been very kind to Zillow Group, which surpassed Wall Street estimates to post Q1 revenue of $1.22 billion and take in earnings per share of $0.44, far surpassing the $0.24 expected. CEO Richard Barton cited changing trends among different age groups as the catalyst for growing business, as “Millennials are moving up, Baby Boomers are downsizing, and in between, people of all generations are rethinking their lives in a cultural phenomenon we have termed the Great Reshuffling.” Read the official press release here.
There are 10 companies on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.