Thursday’s Headlines: Shopify Plummets on Poor Outlook

Thursday’s Headlines: Shopify Plummets on Poor Outlook

Morning folks! Did anyone get yesterday’s puzzle? 

The answer was Ark Invest. 

See if you can figure out today’s puzzle, and let us know on Twitter @MyWallStHQ if you think you’ve got it.

Airy PVC

Hint: Google has made some changes to these features.

We’ll reveal the answer in tomorrow’s headlines. 

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Upstart Holdings (UPST) +35.7%

2U (TWOU) +5.9%

Chuy's (CHUY) +4.8%

Airbnb (ABNB) +3.6%

Datadog (DDOG) +2.9%

Moving Down ⬇️

Wix (WIX) -23.1%

Shopify (SHOP) -16.0%

Ericsson (ERIC) -11.6%

Lovesac (LOVE) -8.2%

Duolingo (DUOL) -7.9%

1. Shopify (SHOP) suffered a 16% drop yesterday following its fourth-quarter earnings call. Despite topping analyst expectations for both earnings and revenue — with earnings per share (EPS) of $1.36 on revenue of $1.38 billion — the e-commerce company fell afoul of a mixed outlook for the coming year. Shopify warned that the pandemic-related shopping surge was likely to slow down as the world returns to normality and inflation takes hold. Now Shopify will have to prove to investors that it can continue to grow alongside physical retailers instead of just in their absence. With Shopify currently one of the biggest success stories from the MyWallSt shortlist of stocks, this news certainly caught our eye yesterday. As such, we turned to our Head Analyst, Rory Carron, for his thoughts on the news, which you can read here.

2. Google (GOOG) has announced plans to adopt a much more comprehensive set of privacy restrictions for its Android devices. The new restrictions will stop apps from tracking users on these devices in a move that mirrors Apple’s (AAPL) infamous iOS 14.5 update, which changed the face of digital advertising entirely. In a small bit of good news for companies utilizing tracked ads, Google has said that these changes won't be fully implemented for two years, giving them time to pivot. Google even went as far as criticizing Apple’s approach in its announcement, despite not mentioning it by name, calling its rash and sudden update “ineffective” and maintaining it leads to “worse outcomes for user privacy and developer businesses.” Read more here.

3. Wix (WIX) suffered a catastrophic drop of over 23% yesterday following a less than stellar fourth-quarter earnings report. The cloud-based development company posted a loss of $0.38 per share on revenue of $328.34 million. This represented a beat on earnings but a slight miss on revenue compared to analyst predictions. More worrying, however, is the marked deceleration in growth shown by the company. Revenue only grew 16% year-over-year — a considerable slow down from the 26% and 24% seen in the previous two quarters respectively. Management also declined to provide guidance for some key financial metrics, citing “a much higher level of volatility in demand for online services.” This series of events has triggered an effective fire-sale of Wix stock. Find out more by clicking here.

Some more earnings from last night:

Boston Beer Company (SAM) reported a loss of $0.09 per share on revenue of $348 million for the fourth quarter of 2021. This represented a significant miss on both which has seen the stock tumble by over 7% in pre-market trading. Supply chain issues were once again the main issue stunting growth as the company outlined a number of operational challenges that affected revenue for the quarter. You can find the full earnings report here.

Pet insurance provider Trupanion (TRUP) surpassed analyst expectations for both earnings and revenue yesterday. The company posted a loss per share of $0.06 against an expected $0.16, on revenue of $194.4 million versus a predicted $193.1 million. CEO Darryl Rawlings explained that “we added a record number of new pets while sustaining high levels of retention, and maintaining scale in our subscription business.” Find out more here.

Despite posting earnings and guidance that topped expectations, The Trade Desk (TTD) still lost value yesterday following its Q4 earnings report. Earnings of $0.42 per share represented a 14% YoY rise, while revenue jumped 24% YoY to $395.6 million. According to CEO Jeff Green, “I could not be more excited about the momentum we’re carrying into the first quarter and the year ahead.” Read the full report here.

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

Retail Opportunity Investments Corp (ROIC)
Cognex (CGNX)
Roku (ROKU)
Chuy's (CHUY)
Tripadvisor (TRIP)
Redfin (RDFN)

Get this week’s full earnings calendar here. 

Pádraig BolgerPádraig Bolger