Thursday’s Headlines: Roku Finally Closes YouTube Deal

Thursday’s Headlines: Roku Finally Closes YouTube Deal

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

LoveSac (LOVE) +20.8%

Roku Inc. (ROKU) +18.2%

PagerDuty (PD) +11.2%

DocuSign (DOCU) +10.9%

Peloton Interactive (PTON) +9.9%

Moving Down ⬇️

Stitch Fix (SFIX) -23.9%

Casey's (CASY) -6.9% Group (TCOM) -2.8%

Brown-Forman (BF.B) -2.7%

Costco (COST) -2.2%

1. Roku (ROKU) closed up over 18% yesterday following the announcement that it had finally agreed a deal with Google (GOOG) to keep YouTube and YouTube TV on its platform. The news comes after a wild negotiation process that even saw the dispute brought before congress. Roku appears victorious though, with Google stepping back from its initial terms and providing the former with a cut of the potentially massive ad revenue generated by the latter. The alternative would have seen YouTube removed for Roku’s 56.4 million active users in a move that would have certainly led to some loss of revenue for the company. Investors will be pleased to see just how strong a negotiator Roku has developed into, as it has also reached agreements with HBOMax and Peacock recently. Read more here.

2. Lovesac (LOVE) reported earnings before the bell yesterday that beat expectations across the board. The furniture retailer posted earnings per share (EPS) of $0.17 against an expected loss of $0.41, on revenue of $116.68 versus an analyst prediction of $112.19. This impressive earnings beat saw the company rise over 20%. CEO Shawn Nelson was more than pleased, explaining that “we generated strong top-line growth against the backdrop of macro supply chain disruption that reveals some of the many advantages of our unique business model.” Despite the company not offering any Q4 guidance, investors will be hopeful these strong results keep coming throughout the holiday season. Read more here.

3. RH (RH) posted a solid earnings beat yesterday. The company reported adjusted EPS of $7.03 against an analyst estimate of $6.63, on revenue of $1.01 billion against a predicted $984 million. The company’s stock price jumped over 11% following this emphatic report, which probably has a lot to do with the raising of its Q4 outlook. Expected revenue growth and adjusted operating margin both saw small, but not insignificant, outlook improvements for the fourth quarter. Despite the company believing that “a conservative view of revenues in the fourth quarter is prudent due to the uncertainties posed by the new virus variant,” this shows real hope for renewed growth as we close out the year. Read more here.

Some more earnings from last night:

Brown Forman (BF.B)
Brown-Forman posted an earnings miss last night. The American alcoholic beverages company reported EPS of $0.49 against an expected $0.54, on revenue of $994 versus an analyst prediction of $1.07 billion. This miss saw the company’s stock price fall 4%, leaving it down over 8% in total year-to-date (YTD). Read more here.

Casey's (CASY)
The U.S.-based convenience store giant disappointed investors on Wednesday with fiscal Q2 earnings that failed to wow the crowd. Its same-store sales increased 6% while total revenue grew just 12.3% to $463 million. The September quarter was described as a difficult one by CEO Darren Rebelez, as fuel prices soared and inflation uncertainty curbed spending. Read more here.

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

CostCo (COST)
Lululemon (LULU)

Get this week’s full earnings calendar here. 

Pádraig BolgerPádraig Bolger