Chipotle Stock Heats Up!

Chipotle Stock Heats Up!

Happy Friday folks! 

Wall Street witnessed an aggressive sell-off on Monday due to fears that the Delta variant is spreading fast across the globe. However, the market began to recover mid-week and all three major indexes finished in the green on Thursday. Adding to bullish sentiment were the better-than-expected earnings reports and overall good performances from industry leaders last quarter.

Of course, we have to mention the big news from the week which was Jeff Bezos’ successful, long-awaited flight on Blue Origin’s New Shepard spaceship. Read all about the space race in our recent Daily Insight: Enter Player Two.

Here were the biggest movers in the MyWallSt shortlist this week:

Moving Up ⬆️

Chipotle Mexican Grill (CMG) +15.2%

Nautilus (NLS) +12.5%

DraftKings (DKNG) +12.4%

Bill.com (BILL) +11.6%

Cloudflare (NET) +10.8%

Moving Down ⬇️

Trip.com Group (TCOM) -5.5%

Netflix (NFLX) -3.5%

Evolent Health (EVH) -2.9%

Walt Disney Co. (DIS) -2.3%

Calavo Growers (CVGW) -2.2%

What investors need to know 

Chipotle Mexican Grill (CMG) +15.2%

Spicy food was at the top of the menu for Wall Street this week after Chipotle smashed Q2 earnings expectations. As customers returned to in-house dining, the burrito expert posted revenue of $1.9 billion, a 38.7% jump year-over-year (YoY). Chipotle stated that, despite higher menu prices due to rising beef and freight costs, sales surpassed pre-pandemic levels. Amid inflationary pressures and rising COVID-19 cases, investors had wondered if consumers would return to restaurants, but Chipotle has eased some of these short-term concerns, stating: “It was pretty amazing to see how quickly the consumer showed up” proving the longevity of the popular brand. 

DraftKings (DKNG) +12.4%

Announcing that the betting firm is entering the highly lucrative NFT industry sent DraftKings soaring this week. The company is teaming up with NFL legend Tom Brady’s NFT marketplace, Autograph, to pursue the untapped market of sports personality collectibles instead of opportunities with league partnerships, which rival Dapper Labs already dominates. Outside of partnerships, DraftKings is shaking up the space by allowing users to buy NFTs with fiat currency instead of just cryptocurrency. Given the billions of dollars that have flowed into the NFT market in the first several months of 2021 and increasing investor interest, this could be a highly profitable move for DraftKings. 

Bill.com (BILL) +11.6%

A classic acquisition was the cause of Bill.com’s stock rising this week after the company announced it is buying Invoice2go. The firm is an accounts receivable (AR) software provider that offers businesses and freelancers account management and invoicing services. Invoice2go has footprints in Australia and California which will help Bill.com serve a larger global customer base whilst also improving its current offerings. With contactless payments remaining popular in our virus-ridden world, Bill.com can capitalize on this trend by offering companies a way to get paid faster. Invoice2go was acquired for $625 million; 75% in Bill.com common stock and the remainder in cash. 

Trip.com Group (TCOM) -5.5%

A resurgence in COVID-19 cases and a crackdown from Chinese regulators is hurting Trip.com’s share price right now. Travel companies are already missing out on summer sales and now investors are expecting further lockdowns as the new Delta variant spreads. Meanwhile, ongoing investigations into U.S.-listed Chinese stocks are also worrying investors as Beijing cracks down on home-grown businesses that have listed shares abroad. Shareholders should remember that Trip.com has not been the subject of a formal investigation and travel should pick up in China soon given the country has an accelerated vaccine rollout.  

Netflix (NFLX) -3.5%

Netflix investors were less than impressed with the streaming platform’s missed earnings estimates after it spent big on new content in Q2. Despite revenue jumping 19% YoY, investors focused on Netflix’s subscriber additions, which at 1.54 million beat estimates but were not exactly groundbreaking either, and its disappointing outlook for Q3. However, investors should be excited for ‘The Witcher’ maker’s plans to push into the $130 billion gaming industry. While gaming is a costly and difficult industry to break into, the move shows that it is no longer going to just rely on streaming content to increase engagement and entice new users to sign up.

NicoleNicole

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