Wednesday's Headlines: iBuying? No, iSelling

Wednesday's Headlines: iBuying? No, iSelling

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Arista Networks (ANET) +20.4%

Under Armour (UAA) +16.5%

Zendesk (ZEN) +4.0%

Cognex (CGNX) +3.8%

Lemonade (LMND) +3.7%

Moving Down ⬇️

Chegg (CHGG) -48.8%

Zillow (Z) -10.2%

2U (TWOU) -9.2%

IDEXX Laboratories (IDXX) -5.9%

Texas Roadhouse (TXRH) -5.7%

1. Zillow (Z) is officially shutting down its iBuying business, Zillow Offers. It was criticized for being “underwater” on many many homes, and Zillow confirmed the rumors in last night’s earnings. It missed estimates as a result, revenue coming in at $1.74 billion v.s. $2.01 billion expected, and earnings per share was a loss of $0.95 v.s. $0.16 profit expected. Zillow is cutting 25% of its workforce on the back of the news and will have to resell the purchased homes, now at a loss. Zillow CEO Rich Barton dismissed ideas regarding a fire sale, saying it will “wind down the inventory in an orderly way”. Read more here.

2. Under Armour’s (UAA) rollercoaster year took yet another turn last night after it topped Wall Street expectations once more. The athletic apparel maker, which once sought to topple Nike (NKE) from its rubber-soled throne, reported earnings per share (EPS) of $0.31 v.s. $0.15 expected on revenue of $1.55 billion, up 8% YoY. The results are the latest sign that the company’s pursuit of more profitable sales is on track, with CEO Patrick Frisk intent on rehabilitating the brand’s image amongst younger audiences. The company certainly looks to be achieving this goal, having spent the pandemic focusing on getting healthier rather than bigger, with its margins improving as a result. Read the official press release here.

3. Nike’s (NKE) making sure style isn’t forgotten in the metaverse, with several patents filed this week including the brand name, slogans, and logos. It intends to sell its product line as virtual goods, everything from sneakers to clothing, to sports bags and equipment, to headwear and other accessories. The company is also waiting on a patent filed in 2019 for “Cryptokicks”, which Nike intends to sell as non-fungible tokens (NFTs). The Nike brand is built on decades of history, so it’s vital to protect its intellectual property in a changing environment. It could even be the easiest money Nike ever makes; no material cost required, and no supply chain issues to worry about. Read the full story here.

Some more earnings from last night:

Activision Blizzard (ATVI)
Despite a solid Q3 earnings report, Activision Blizzard shares dropped by almost 10% overnight following poor Q4 outlooks. The delay of two franchise game titles and underwhelming forecasted earnings of $0.62 per share against an analyst estimated $1.38 per share for Q4 has investors dumping the stock. Read more here.

Paycom (PAYC)
Paycom posted a solid Q3 earnings beat yesterday, with earnings per share (EPS) of $0.92 beating the estimate of $0.91 per share on revenue of $256.2 million against an expected $250.3 million. “We delivered very strong third-quarter results, which is a reflection of the investments we’ve made in product innovation, sales and marketing, and providing world-class service,” said CEO Chad Richison. Read more here.

Idexx Labs (IDXX)
The vet tech leader managed to top analyst expectations once more after delivering EPS of $2.03 on revenue of $810 million YoY. “The IDEXX team delivered another quarter of excellent performance, reflected in high CAG Diagnostics recurring revenue growth and record Q3 levels of premium instrument placements, with strong gains across our major in-clinic platforms,” said Jay Mazelsky, CEO. Read more here.

There are 9 companies on the MyWallSt shortlist that will report earnings today:

Booking Holdings (BKNG)

Etsy (ETSY)

Evolent Health (EVH)

Markel Corp (MKL)

Match Group (MTCH)

New York Times (NYT)

Roku (ROKU)

Take-Two Interactive (TTWO)

Trupanion (TRUP)

Get this week’s full earnings calendar here.

David GranahanDavid Granahan