Tuesday’s Headlines: Zoom’s Billion Dollar Quarter
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Pure Storage (PSTG) +6.2%
Hain Celestial (HAIN) +3.9%
PayPal (PYPL) +3.6%
Etsy (ETSY) +3.5%
Sea Limited (SE) +3.4%
Moving Down ⬇️
Chuy's (CHUY) -4.9%
Tripadvisor (TRIP) -4.7%
StoneCo (STNE) -4.1%
Nordstrom (JWN) -4.1%
Baozun (BZUN) -3.6%
1. Zoom (ZM) shares slid 12% in after-hours trading yesterday after reporting Q2 earnings that showed slowing growth when compared to previous quarters. The ultimate remote working tool smashed Wall Street’s estimates, posting adjusted earnings of $1.36 per share on revenue of $1.02 billion, up 54% year-over-year (YoY). However, this compares to a sales jump of 191% in Q1, while Zoom guided for only 31% growth in the next quarter, which has concerned investors. While growth might be on mute, the video conferencing software described the successes of some of its recent products, including Zoom Events and the Zoom Phone cloud-based phone service, which now has two million seats and added half a million in the quarter. See the full report here.
2. Apple’s (AAPL) latest shopping spree included the tech giant snapping up classical music streaming service, Primephonic. The wearables giant plans to take the classical music-focused service offline next week and Primephonic’s subscribers will receive six free months of Apple Music. The buy boosts Apple Music’s bursting library of over 75 million songs, with rival Spotify (SPOT) not too far behind with 70 million tunes. While Apple casually buys dozens of companies every year, most of its largest acquisitions have been in the music space, including Beats and Platoon. These moves prove that it is set on staying in the lead in the streaming lane by diversifying its library to gain new subscribers who listen to different genres. Check out the full story here.
3. Chinese gaming stocks listed in the U.S. were once again put in the hot seat yesterday after Beijing regulators cut back children's playing time to just three hours per week. The strict new rule sent American depositary receipts (certificates from a U.S. bank which represents shares in a foreign stock) of NetEase and Tencent plunging on Monday over worries the news will affect these companies future sales. Investors in Chinese stocks have been on a rollercoaster this year led by a sweeping crackdown from regulators in the region that has targeted a list of U.S.-listed companies in tech, tutoring firms, and ride-hailing services. While the latest clampdown has fueled bearish sentiment for these stocks, some analysts have said that the risks are still low as minors represent low single digits of both Tencent and NetEase’s gaming revenue. See more here.
One more earning from last night:
Shares in the fintech solutions company are falling in late after-hours trading after StoneCo reported quarterly earnings of $0.32 per share on sales of $115.79 million, down 8.1% YoY. CEO, Thiago Piau, explained that while the company saw strong underlying growth, their numbers were hurt by “a challenging short-term scenario in our credit product, which was strongly affected by industry problems.” See the full report here.
There is one company on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.