Friday’s Headlines: Peloton’s Chain Comes Off
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Etsy (ETSY) +13.2%
Trupanion (TRUP) +11.9%
Planet Fitness (PLNT) +11.7%
Redfin (RDFN) +8.2%
Wix (WIX) +7.1%
Moving Down ⬇️
Roku Inc. (ROKU) -7.7%
Chegg (CHGG) -7.2%
The Trade Desk (TTD) -5.6%
iRobot (IRBT) -5.4%
1. Stephen King would struggle to top the horror show that was Peloton’s (PTON) Q3 earnings report last night. At time of writing, shares had tumbled more than 30% after-hours off the back of a wider-than-expected loss per share of $1.25 on revenue of $805.2 million — well below the $810.7 million expected. Worse still, thanks to increased marketing costs and reduced product prices, Peloton’s gross margins in the latest quarter fell to 12% from 39.4% a year earlier. The company saw equipment usage drop, and rate of churn — the measurement of non-renewed subscribers — increase, likely due to the widespread ‘return to normal’ as COVID-19 measures are reduced. Read the official press release here.
2. It was a more positive result for social media firm Pinterest (PINS), despite a drop in monthly active users. Earnings per share of $1.28 on revenue of $633 million, including an average revenue per user of $1.41, all topped Wall Street estimates, though monthly active users fell 2% from 454 million in Q2 to 444 million. Two things stuck out for investors: one being the company’s commentary on Apple’s iOS 14.5 update, which it stated has had an adverse impact on its ability to track customer data. The second was actually management’s lack of commentary on last month’s rumors of a takeover from PayPal (PYPL). It’s likely that the company simply wishes to leave the incident behind, though I’m sure investors would like some answers. Read more here.
3. Facebook (FB) — still so-called until its name changes to Meta on December 1 — continues to look into ways to drive user engagement. According to the company, it is testing ways for creators to make money through Facebook Groups, such as users paying fees for exclusive access to content or conversations within subgroups. Facebook is the latest social media platform to adopt such tactics, following the likes of Pinterest and Twitter (TWTR) in their quest to push paid subscriptions and diversify away from overreliance on ad revenue. However, the closed nature of Groups have been under scrutiny for their alleged roll in spreading misinformation, so it will be interesting to see if Facebook takes steps to address this. Read more here. Some more earnings from last night:
SaaS tax solutions company Avalara reported a 42% year-over-year increase in revenues for Q3. Total core users have increased 22%, now at 17,400 users compared to 14,300 a year ago. Read more here.
Bill.com reported a whopping 152% year-over-year growth in revenue to $116.4 million. It completed the acquisition of the mobile billing platform Invoice2go, which will bring in 226,000 subscribers. Gross margins increased slightly from the year prior as well, at 74.4% v.s. 73.8%. Read more here.
Blackline added 106 new customers in Q3, bringing the total to 3,704 customers as of the end of September 2021. Total revenue jumped 21% to $109 million, and net income was up slightly from $15 million to $15.1 million. CEO Mark Huffman noted “Companies are emerging from the pandemic with a greater sense of urgency to upgrade outdated back-office systems”, helping to drive momentum. Read more here.
Despite some inflationary pressures on commodities and labor wages, the Tex-Mex chain delivered tasty results. Total revenue is up 24% to $102 million from a year ago, and net income increased 49% from the previous year to $9.1 million. Chuy’s has $105 million in cash at the end of the quarter with no debt and a revolving credit facility available. Read more here.
Cloudflare won’t let up on its phenomenal run just yet. With total revenue for Q3 at $172 million, increasing 51% from a year ago, and non-GAAP margins expanding to 79.2% from 77.3%, the cloud security company hammered expectations once again. Cash and cash equivalents were up to $1.8 billion at the end of September 2021. Read more here.
Cognex fell short after revealing a 10% decline in net revenue from the year-ago quarter to $78.9 million from $87.5 million. Revenue was up 13% to $285 million, but the company stated supply-chain constraints were having an effect on margins, leading to weaker guidance for Q4 as well. Shares are down 12% premarket on the news. Read more here.
Datadog was no exception to the list of winners, as it continues to beat quarterly expectations once again. Revenues were up 75% year-over-year to $270 million. The highlight of the quarter was the 66% increase in customers spending over $100,000 on a recurring basis, which along with better guidance for Q4, has sent shares up over 17% in the premarket. Read more here.
A solid earnings beat by the California-based action camera company showed that there’s plenty to be positive about for GoPro following a rough six months for its stock price. Impressive earnings per share (EPS) of $0.34 beat estimates of $0.20 per share, on revenue of $316.7 million against a forecasted $292.7 million. Read more here.
Mercado Libre (MELI)
The Latin American e-commerce giant posted a highly impressive earnings report last night. EPS of $1.92 comfortably beat analyst estimates of $1.27 per share, and revenue of $1.86 billion is up 72.9% year-over-year (YoY). As noted in its earnings report, the company “once again reached new records in gross merchandise volume, payment volumes and credit portfolio size; which demonstrate resilience and strength across all parts of our ecosystem.” Read more here.
Monster Energy (MNST)
The American beverage company failed to beat analyst estimates for its earnings this quarter. Earnings of $0.63 per share fell short of the expected EPS of $0.65. The company was able to beat revenue expectations, posting $1.41 billion against an anticipated $1.39 billion. Monster reiterated that “Despite the ongoing impact of the COVID-19 pandemic, the Company achieved record third-quarter net sales.” Read more here.
Planet Fitness (PLNT)
A surge in revenue of 46.4% YoY saw Planet Fitness stock skyrocket by almost 12% following its successful earnings report. Revenue of $154.26 million comfortably beat estimates of $133.25 million. The company also beat on earnings, posting EPS of $0.25 against an expected $0.17. “We are emerging from the COVID-19 pandemic stronger than ever,” exclaimed CEO Chris Rondeau in a post-earnings press release. Read more here.
Redfin posted a mixed earnings report yesterday, with the company beating revenue estimates but missing on earnings. Shares dropped by almost 4% this morning after the company posted EPS of -$0.20 against the estimate of -$0.19 per share on revenue of $540.07 million. CEO Glenn Kelman remained confident, stating that “Redfin had a fantastic quarter...Our revenues were at the top of the range we gave investors in our last earnings report, and our net income exceeded that range.” Read more here.
Square posted an underwhelming Q3 earnings report yesterday, matching earnings estimates but missing heavily on revenue. The company reported EPS of $0.37 which equaled analysts’ expectations, but revenue of $3.8 billion fell well short of an anticipated $4.4 billion. This poor showing has seen the stock drop by over 4% after hours. Downward trends in debit card transactions and transaction amounts were explained as, “partly as a result of changes to consumer behaviors due to COVID-19 and government disbursements.” Read more here.
Truecar had a less than stellar earnings call yesterday, reporting a $6.8 million net loss as well as missing on revenue. The company reported adjusted EPS of -$0.02 against estimates of -$0.04, on revenue of $55 million against an expected $61.43 million. In its shareholder letter, the company doubled down on its vision for a “seamless online car buying experience.” Read more here.
There are 2 companies on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.