Friday’s Headlines: Into The Metaverse
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
iRobot (IRBT) +9.6%
Ford Motor Company (F) +8.7%
Teladoc (TDOC) +7.6%
Shopify (SHOP) +7.0%
LoveSac (LOVE) +6.2%
Moving Down ⬇️
Twilio (TWLO) -17.6%
Zendesk (ZEN) -3.0%
IMAX (IMAX) -2.9%
Coupa Software (COUP) -2.9%
2U (TWOU) -2.4%
1. Facebook (FB) finally announced its highly anticipated new name to the world yesterday. The company will now be called Meta, and will trade under the ticker symbol "MVRS," effective December 1. In a move similar to Google (GOOG)’s rebranding to Alphabet in 2015, Meta will be the all-encompassing brand that Facebook, WhatsApp, and Instagram will sit under. The company will focus on building its own virtual world, dubbed the Metaverse. As CEO Mark Zuckerberg put it, “the Metaverse is the next frontier just like social networking was when we got started.” Investors will be hopeful that Zuck is even half as right about this as he was about social media. The announcement caused a 3.5% spike in stock price pre-market, with shares closing on a 1.5% gain last night. Read more here.
2. Amazon (AMZN) stock plummeted after-hours following a weak earnings report last night. Suffering from supply chain woes and a resurgence of physical shopping, Amazon posted adjusted earnings per share (EPS) of $6.12 against estimates of $8.92, on sales of $110.81 billion against an expected $111.6 billion. One positive for the company was the performance of Amazon Web Services, which surpassed retail revenue for the first time. This wasn’t enough to avoid underwhelming Q4 guidance, however. CEO Andy Jassy explained, “in the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs.” Read more here.
3. Apple (AAPL) failed to meet Wall Street’s expectations yesterday as it posted underwhelming earnings results. News of Apple’s first failure since 2016 to beat earnings estimates caused a 3% post-market dip. Apple posted revenue of $83.36 billion for the quarter. Despite not matching estimates of $84.85 billion, this still represents a 29% year-over-year (YOY) growth. CEO Tim Cook laid the blame for the earnings miss on the supply chain issues currently faced by the global market, particularly regarding semi-conductors. “The supply constraints were driven by the industry-wide chip shortages that have been talked about a lot, and COVID-related manufacturing disruptions in Southeast Asia,” exclaimed the CEO. Read more here.
Some more earnings from last night:
American Tower (AMT)
Demand accelerated in Q3 for American Tower, which delivered its third earnings beat in a row. Total revenue increased 22% to $2.4 billion, and net income increased 57% to $726 million. Despite supply chain issues across the globe, AMT looks poised to end the year on a high. Read more here.
Atlassian delivered 34% revenue growth, coming in at $614 million compared to $460 million in the year prior, and it added 11,746 new customers, bringing the total to 216,500. CFO James Beer has announced his retirement, with the company actively looking for a replacement, so watch this space. Read more here.
Axos Financial (AX)
The banking firm came out with quarterly earnings of $1.03 per share v.s. $0.87 expected, while revenue also surpassed expectations at $173.34 million. Axos Financial shares have climbed 42% since the beginning of the year as investors grow more optimistic about a return to ‘normal’ post-COVID, but the banking sector may still face some hiccups from the economic fallout. Read more here.
Despite relatively low expectations off the back of a dismal year for event planning, Eventbrite’s $53.4 million in revenue and loss per share of $0.18 wasn’t enough to appease analysts. There were strong signs of life though as demand for event tickets rose 19% YoY, with management optimistic about momentum going into the final stretch of the year. Read more here.
A good quarter for movie releases translated into strong earnings for IMAX, delivering its best quarter since COVID hit as losses per share narrowed to just $0.08 on revenue of $56.6 million — up 52% YoY. Some exciting/nerve-wracking news — depending on your stance — came in the announcement that IMA would be delving into the packed world of streaming movies, and is in “advanced talks” with industry leaders. Read more here.
Not to be outshone by rival Visa, Mastercard beat analyst expectations across the board with earnings per share hitting $2.44 and revenue jumping 29% YoY to $5 billion. Our performance was driven by the execution of our strategy, healthy domestic spending and solid growth in cross-border spending which has recently returned to pre-pandemic levels,” said Michael Miebach, Mastercard CEO. Read more here.
In an occurrence rarer than a profitable growth stock, Shopify failed to excite investors with its Q3 earnings report. Earnings of $0.81 per share on revenue of $1.12 billion fell well short of analyst expectations of $1.23 a share on revenue of $1.15 billion. Despite this, the company’s leadership was upbeat, though slowing e-commerce growth due to supply constraints worldwide and inflation fears will be a concern in Q4. Read more here.
Starbucks has bounced back following the lifting of restrictions, reporting record net revenue of $8.1 billion, but missing expectations of $8.2 million. It also committed to $20 billion in share repurchases and dividends over the next 3 years, and it has lifted its minimum wage to $15 now, rising to $17 in mid-2022. Read more here.
Texas Roadhouse (TXRH)
Perhaps the restaurant industry isn’t quite back where some want it to be as Texas Roadhouse missed expectations on earnings of $0.75 per share, with revenue rising 38% YoY to $870 million. CEO Jerry Morgan stated: “There is no doubt that our industry is being challenged in a number of ways including higher food costs, supply chain shortages, and a tight labor market. We are managing through these pressures and staying committed to our long-term fundamentals.” Read more here.
It was a hectic quarter for Zendesk as it added a new CFO and CMO to its team, and it looks to acquire software company Momentive, owner of the Survey Monkey platform. Revenue grew to $347 million, up 32% on the year before, with gross margins expanding from 76% to 80%. Zendesk has over 100 customers now worth over $1 million in annual recurring revenue (ARR), and customers with more than $250K ARR have increased from 25% to 37%. Read more here.
Get this week’s full earnings calendar here.