Tuesday’s Headlines: Cloud Stocks Plunge
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Eventbrite (EB) +3.3%
Boston Beer Co. (SAM) +1.9%
Vail Resorts (MTN) +1.7%
Brown-Forman (BF.B) +1.5%
Moving Down ⬇️
The Trade Desk (TTD) -26.0%
GoPro (GPRO) -14.3%
Lemonade (LMND) -10.2%
Trupanion (TRUP) -9.5%
Bill.com (BILL) -7.9%
1. Last year’s best stock performers are getting hammered as the rotation out of tech stocks continues, with cloud companies getting hit the hardest. Fears of rising interest rates are one of the main causes of the rotation, coupled with a move into stocks from traditional industries, such as financials, commodities, and industrials. ServiceNow (NOW) and Twilio (TWLO) shares dropped last week even after both companies posted impressive earnings. Coupa Software (COUP) stock is also down 30% this year making it one of the biggest decliners. Analysts attributed the drops to weaker-than-expected Q2 forecasts, however, this was to be expected after cloud companies experienced a year of hyper-growth in 2020. Read more on the story here.
2. Apple (AAPL) is in the midst of yet another legal dispute as London files a lawsuit over claims it overcharged 20 million U.K. customers for App Store purchases. The case calls for the tech giant to compensate Apple users who have been charged the company’s standard 30% fee, with claimants calling the costs “excessive” and “unlawful.” The lawsuit, which Apple described as "meritless" comes just one week after the U.S. trial involving Epic Games who claims that the iPhone maker is running its marketplace like a monopoly that cheats developers and consumers. Apple’s recent legal challenges could cost the company billions of dollars in revenue and have become an important topic for investors to watch closely. See more here.
3. It seems you can’t please everyone as shares in The Trade Desk (TTD) fell 26% yesterday after the company announced a 10-for-1 stock split and reported an earnings beat. The ad tech company topped Wall Street’s estimates, reporting adjusted earnings of $1.41 per share on revenue of $219.8 million. However, analysts believe that shareholders were expecting a bigger beat on earnings, given the recent solid Q1 results from Google (GOOG) and Roku (ROKU). As of June 9 this year, The Trade Desk shareholders will receive nine additional shares of common stock that will be given on June 16. Read the full press release here.
Some more earnings from last night:
The fitness equipment maker delivered its second quarter of record-breaking results yesterday and posted its highest quarterly revenue in the company’s 35-year history as demand for in-home exercise products remains high. Nautilus recorded a 120% increase over the past year in revenue to $206 million on adjusted earnings of $0.93 per share. Check out the full Press Release here.
Wynn Resorts (WYNN)
As you can imagine, pandemics are not good for casino companies, resulting in Wynn Resorts missing Wall Street’s earnings estimates for Q1 yesterday. While earnings per share rose 31% year-over-year to a loss of $2.41, revenue of $725 million decreased 23% compared to the same period last year. CEO Matt Maddox commented on the uptick in travel though, stating: "Our first quarter results reflect continued progress in our business as consumers began to once again travel to their favorite leisure and gaming destinations." Read the full press release here.
There are 2 companies on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.