A Pretty Black Friday

A Pretty Black Friday

Here were the biggest movers in the MyWallSt shortlist this week:

Moving Up ⬆️

Pure Storage (PSTG) +11.8%

Axos Financial (AX) +4.4%

Ford Motor Company (F) +4.4%

Costco (COST) +3.0%

Markel Corp (MKL) +3.0%

Moving Down ⬇️

Nordstrom (JWN) -30.8%

Autodesk (ADSK) -20.3%

Zoom Communications (ZM) -17.1%

LoveSac (LOVE) -12.6%

StoneCo (STNE) -10.8%

What investors need to know 

Moving up

Pure Storage (PSTG) +11.8%

Don’t worry, the earnings stories will be over soon — for like a month before the carousel starts all over again — but Pure Storage’s Q3 report makes it the undoubted winner of the week. The data storage specialist posted an impressive beat on earnings of $0.22 per share versus an anticipated $0.12. What’s more, revenue far surpassed expectations at $562.7 million — a 37% jump year-over-year (YoY). But that’s not what got investors excited — that honor goes to the company’s improved operating margin, which rose from 0.8% a year ago to 12.3% in Q3. With Pure Storage now servicing more than half of all Fortune 500 companies, as well as signing some lucrative government contracts, supply chain issues look to be a thing of the past — one hopes. 

Ford Motor Company (F) +4.4%

Not often does a failed partnership — albeit by mutual agreement — result in good news for a company, but that seems to be the case with Ford this week. The famous ol’ automaker announced that it has scrapped plans to develop an electric vehicle (EV) in a deal with Wall Street debutant Rivian. It’s a bold move, and one that Ford can ‘afFord’ (not sorry) to make, considering that it still holds a $12 billion (12%) stake in Rivian. If Rivian wins, money for Ford. If Ford wins, more money for Ford — it’s a win-win. Investors seem pleased with Ford’s confidence that it can nab itself a dominant share of the EV space on its own, and with more than a century of experience, it would be foolish to rule out that possibility. 

Moving down

Nordstrom (JWN) -30.8%

My oh my, things aren’t looking quite so peachy down here, are they? Not only is Nordstrom weathering a devastating pandemic, but it has to try and claw its way back to pre-COVID levels. Unfortunately, this hasn’t happened yet, and investors are an impatient bunch. Despite net sales rising 18% YoY to $3.5 billion, earnings of $0.39 per share fell far short of an expected $0.56. This prompted a number of analysts to downgrade the stock, resulting in a messy snowball effect for the stock price. The issue lies largely with rising labor and fulfillment costs as a result of the pandemic. However, there are still signs of life at Nordstrom as foot traffic continues to increase, and perhaps a busy holiday season will see an improvement going into 2022. 

Autodesk (ADSK) -20.3%

It’s not just the retailers getting hit as software all-rounder Autodesk saw its stock price get torn apart following its third-quarter report. The company just about managed to beat analyst estimates with revenue coming in at $1.12 billion on earnings per share of $0.61. Unfortunately, those earnings grew barely 3% YoY, while free cash flow actually fell by more than 24% in the same period to just $257 million. Add to this profit margins narrowing as well as underwhelming guidance for Q4, and investors are truly displeased. With shares trading close to 100 times earnings, mediocre isn’t going to cut it in this business, even with the ubiquitous excuse of “supply chain issues” in one’s chamber. 

Zoom Communications (ZM) -17.1%

At least Zoom is still up 40% since COVID hit. Feeling better? No, probably not, so let’s rip off the bandaid that was its Q3 report this week and be done with it. Strangely, all looked good as revenue rose 35% YoY to $1.05 billion and net income was $340 million, or $1.11 — all surpassing estimates. The big problem for investors came from a warning from management that a revenue growth slowdown was imminent following the outsized gains of 2020 caused by… you know what caused it. There’s still plenty of upside for Zoom though as the number of customers it has with $100,000+ contracts rose 94% YoY — meaning that existing customers are actually spending more with Zoom. Could this be its next big growth space?

JamieJamie

Sign up for free to continue reading.