Tuesday’s Headlines: Zoom Beats But Shares Fall

Tuesday’s Headlines: Zoom Beats But Shares Fall

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Ford Motor Company (F) +5.6%

Wynn Resorts (WYNN) +4.0%

Casey's (CASY) +3.0%

Axos Financial (AX) +2.9%

FedEx (FDX) +2.2%

Moving Down ⬇️

Cloudflare (NET) -11.7%

StoneCo (STNE) -11.1%

Airbnb (ABNB) -7.5%

Ericsson (ERIC) -7.1%

Teladoc (TDOC) -6.8%

1. Zoom (ZM) can’t catch a break, even after another earnings beat and a guidance raise. Revenue came in at $1.05 billion, a 35% increase year-over-year (YoY) and net income was $340 million, more than a 70% increase from the previous year. Its Five9 acquisition fell through in the quarter but Zoom announced the launch of its own cloud contact center software in early 2022. Similar to other stocks in this bracket, it has become increasingly difficult for the company to “wow” investors as the pandemic-induced rise makes it difficult to surpass its most recent, unprecedented growth rates. Even still, the brand equity Zoom has now, compared to 18 months ago, makes it a worthy competitor to Microsoft Teams and Google Workspace, despite a rough 2021. Read the full release here.

2. Ericsson (ERIC) has also made moves on the acquisition front, buying cloud communications company Vonage for a whopping $6.1 billion. The company operates a business-to-business model providing customer relationship management (CRM) solutions for enterprises in healthcare, education, logistics, retail, finance, and manufacturing. Vonage has over 120,000 customers and more than one million registered developers worldwide, with trading twelve-month sales of $1.4 billion and a 14% margin. This acquisition is part of Ericsson’s wider efforts to expand globally in the wireless enterprise segment and acquire a greater share in a market expected to be valued at $700 billion by 2030. Read the full story here.

3. Netflix (NFLX) has acquired Scanline VFX, a German visual effects and animation company. Scanline has previously worked on popular series such as ‘Stranger Things’ and ‘Game of Thrones’, as well as several movies from the Marvel franchise, and DC’s ‘Joker’. The acquisition price has not yet been revealed, but it’s part of Netflix’s plan to invest $1 billion in production spending and it aligns well with its acquisition of Albuquerque Studios in 2018, which aims to be one of the world’s largest studios. Netflix says Scanline will operate independently for the time being, to assist in the current productions for existing clients. That being said, it’s likely that we will see much more involvement between both parties in expanding Netflix’s range of ‘Original’ titles in the future, to create a further edge on competitors. Read more here.

There is three other companies on the MyWallSt shortlist that will report earnings today:

Autodesk (ADSK)
Nordstrom (JWN)
Pure Storage (PSTG)

Get this week’s full earnings calendar here.

David GranahanDavid Granahan