Friday’s Headlines: Twitter Fails to Impress
Morning folks! Did anyone get yesterday’s puzzle?
The answer was Silicon Valley.
A hint for today’s puzzle: It’s every investor's favourite time of the year.
See if you can figure out today’s puzzle, and let us know on Twitter @MyWallStHQ if you think you’ve got it.
We’ll reveal the answer in Monday's headlines.
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Datadog (DDOG) +12.3%
Zendesk (ZEN) +10.7%
Walt Disney Co. (DIS) +3.3%
Atlassian (TEAM) +3.1%
Moving Down ⬇️
2U (TWOU) -47.9%
iRobot (IRBT) -14.3%
Nautilus (NLS) -7.5%
Upstart Holdings (UPST) -5.6%
Stitch Fix (SFIX) -5.5%
1. Twitter (TWTR) became the latest victim of a poor earnings report as it missed expectations across the board. The social media company posted earnings per share (EPS) of $0.33 against an expected $0.35, on revenue of $1.57 billion versus a predicted $1.58. More worrying, however, was the company’s underperformance when it came to user growth. Following the trend set by Netflix and Spotify, Twitter came in below expectations for monetizable daily active users (mDAUs) for the quarter, reporting 217 million against an expected 218.6 million. The company refused to lower its outlook for the year, however, maintaining a strong conviction to reach its goal of 315 million average mDAUs by Q4 2023. Find out more here.
2. 2U (TWOU) saw it’s value almost cut in half yesterday following a disastrous earnings call. The educational technology company actually reported relatively solid earnings for the quarter, beating on earnings and just missing on revenue. The real trouble, however, came when the company offered its outlook for the rest of the year, expecting it to fall between $1.05 billion and $1.09 billion, missing estimates of $1.12 billion. With in-person education returning to normality, the business is expected to lag significantly following its accelerated growth during the COVID pandemic. CEO Christopher Paucek stated that the company is “laser-focused on transforming 2U into the leading global education platform company,” but that hasn’t stopped investors from selling off in droves. Read more here.
3. Zillow (Z) saw its shares skyrocket by as much as 20% in extended trading following significant progress in its move out of the home-flipping business. The initial pivot away from this practice caused the stock to plummet late last year, but a faster-than-expected transition has investors bullish for the future. “We’ve made significant progress in our efforts to wind down our iBuying business — selling homes faster than we anticipated at better unit economics than we projected,” said CEO Rich Barton. This accelerated move saw the company post higher than expected revenue for the quarter, with the $3.88 billion that was reported easily surpassing analyst estimates of $2.98 billion. Following a challenging few months, Zillow seems to have righted the ship far quicker than anyone expected. Click here to learn more about this story.
Some more earnings from last night:
Blackline (BL) missed on earnings yesterday evening, posting earnings per share (EPS) of $0.08 against analyst estimates of $0.10. This marks a stark contrast from its results in the last quarter, where it outperformed earnings expectations by over 118%. Investors responded in predictable fashion by selling off the stock, with Blackline down over 12% in pre-market trading. The software company will be hoping for a quick rebound, but this year’s rotation away from tech stocks could see it struggle to reclaim its former price. Read more here.
Cloudflare (NET) saw it stock rise following an impressive earnings report late yesterday. Revenue growth of 54% to 193.6 million saw the cloud-computing company surpass analyst estimates of $185.2 million, while earnings met predictions on zero cents per share. As CEO Matthew Price eloquently put it, “we had a most excellent 2021.” A positive outlook for the rest of 2022 is likely the biggest contributor to the stocks positive performance however, with the firm forecasting revenue that exceeds all estimates for the year. See Cloudflare’s full release here.
Zendesk (ZEN) stock soared following a generally positive earnings report, and news that the firm has rejected an acquisition offer. The software company posted EPS of $0.16, just missing estimates of $0.18, on revenue of $375.37 against a predicted $369.49. But the real show-stealer was the announcement that the firm’s board had turned down an offer of up to $16 billion from a private consortium to take the company over. The board felt the offer, which was in the range of $127 to $132 per share in cash, massively undervalued Zendesk. You can read more here.
Coca Cola (KO) saw its earnings and revenue both beat Wall Street estimates yesterday. The beverage maker posted EPS of $0.45 against an expected $0.41, on revenue of $9.46 billion versus a predicted $8.96 billion. Despite the positive figures, the company warned about inflationary pressure for the upcoming quarter, but ultimately forecasted relatively stable growth for 2022. Read the full earnings report here.
Eventbrite (EB) posted a mixed earnings report yesterday, beating on revenue but missing on earnings. The company posted a loss per share of $0.18 against an expected $0.15, but surpassed revenue expectations by 6.65% with a posting of $59.64 million. The stock, currently down 14% year-to-date (YTD), is likely to continue its decline as investors remain averse to buying into small-cap growth stocks. Read Eventbrite’s full earnings report here.
Datadog (DDOG) came out with 84% YoY revenue growth in its Q4 earnings last night driven by explosive growth in its large customer segment. The company added 101 new customers delivering more than $1 million in annual recurring revenue (ARR) bringing the total to 216. Revenue for the full year hit the $1 billion milestone, and CEO Olivier Pomel stated that he was “excited about what we’re working on for 2022 and beyond” noting how early the company is in cloud security and developer services. Read the full report here. Read the full story here.
Avalara (AVLR) posted $195 million in revenue in its quarterly results, a 35% YoY increase. The company is guiding for between $197 million and $199 million in its next quarter. The big win however, was announcing its duty and import tax features will be used for Shopify’s global e-commerce hub. CEO Scott McFarlane noted the company will continue to “leverage our growing scale, competitive moats, and ubiquity in the market to establish Avalara as the standard cloud platform for compliance”. Read the full story here.
There is one company on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.