Wednesday’s Headlines: Peloton’s Endless Stock Cycle
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Peloton Interactive (PTON) +15.5%
Trupanion (TRUP) +6.0%
The Trade Desk (TTD) +5.9%
The Home Depot (HD) +5.7%
Etsy (ETSY) +5.1%
Moving Down ⬇️
MercadoLibre (MELI) -5.6%
Sea Limited (SE) -3.8%
Hain Celestial (HAIN) -3.7%
Redfin (RDFN) -3.0%
1. Just weeks after stating it had no need to raise any additional funding, Peloton (PTON) announced plans to raise $1.07 billion through the sale of Class A common stock at a discounted price. The markets, despite dipping initially, responded favorably to the announcement, pushing the stock up by over 15%. This comes off the back of a disastrous period for the company following a lackluster quarterly earnings report. Peloton expects the stock offering to close on Thursday and hopes to use the funds for “general corporate purposes." This could include expansions of its facilities, acquisitions of other companies, or investments in new products and technologies. Read more here.
2. Home Depot (HD) posted an impressive earnings beat yesterday following a profitable third quarter. The home improvement retailer posted earnings per share (EPS) of $3.92 against analyst estimates of $3.40, on revenue of $36.82 billion against a forecasted $35.01 billion. A strong housing market led to increased demand for materials from building professionals, which helped offset the decrease in general home-improvement projects. Despite overall transactions dropping by 5.5% for the quarter, the average customer spend increased by 12.9%. Chairman and CEO Craig Menear was quick to heap praise upon his staff, stating that “as evidenced by our strong performance in the quarter, our team continues to do an outstanding job of operating with flexibility and agility.” Read more here.
3. Sea Limited (SE) saw its share price drop by 3.82% yesterday following a mixed third quarter earnings report. Despite beating estimates on revenue, posting sales of $2.7 billion against an expected $2.5 billion, the company failed to meet analysts forecasted earnings, posting a wider-than-expected loss of $0.84 per share against a predicted loss of $0.65. The main revenue driver was the expansion of Sea’s e-commerce business, which was up 151% year-on-year (YoY). Investors will be wary of widening losses though, with quarterly losses growing by a significant 34%. CEO Forrest Li was optimistic, outlining that “We are reporting another quarter of strong results across all our businesses in the third quarter. Our results once again demonstrate our ability to capture new and attractive opportunities.” Read more here.
Some more earnings from last night:
StoneCo failed to beat analyst estimates in its third quarter earning call, posting a loss of $0.78 per share against a predicted $0.12. This represents a third earnings miss in the last four quarters for the fintech company, with its stock price down over 60% year-to-date (YTD) already. Read more here.
Get this week’s full earnings calendar here.