Tuesday’s Headlines: Zoom’s Reality Check
Did anyone get yesterday’s puzzle? The answer was Operating Profit.
See if you can figure out today’s puzzle, and let us know @MyWallStHQ if you think you’ve got it:
Hint: One of the companies below provides this service. We’ll reveal the answer in tomorrow’s headlines.
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Upstart Holdings (UPST) +16.3%
Lemonade (LMND) +8.4%
Tesla Motors (TSLA) +7.5%
CrowdStrike (CRWD) +7.4%
Teladoc (TDOC) +7.3%
Moving Down ⬇️
Ericsson (ERIC) -8.3%
Booking Holdings (BKNG) -4.8%
Baozun (BZUN) -4.4%
Trip.com Group (TCOM) -4.2%
Tripadvisor (TRIP) -3.6%
1. It was the earnings report that every Zoom (ZM) investor has expected since the first COVID-19 vaccine was rolled out. A worldwide return to ‘normality’, i.e. the office, saw growth slow in Q4, with revenue growth of 21% leading to income of $1.07 billion, far below the 35% year-over-year (YoY) growth experienced in Q3. This figure, along with earnings of $1.29 per share and 191,000 enterprise customers, up 35% from a year earlier, managed to surpass estimates. However, subjectively conservative guidance of $4.53 billion to $4.55 billion in revenue for 2022, implying 10.7% growth, was enough to panic investors last night, sending shares falling 13% after hours before gradually recovering. Read the complete earnings report here.
2. Shares in Teladoc (TDOC) soared more than 7% on Monday following reports of a new telehealth partnership with Amazon (AMZN). Despite Amazon launching its own pilot telehealth rival to Teladoc in 2019, the Big Tech giant’s at-home device, the Echo, will now allow Teladoc users to ask it to call their doctor via its AI assistant, Alexa. With Amazon estimating that a quarter of all U.S. households have at least one Alexa device, this is a massive growth opportunity for Teladoc through sheer ease-of-use, especially as COVID-19 restrictions ease and the threat of slowing growth threatens as customers return to physical doctors appointments. Following yet another quarterly loss in its Q4 earnings last month, investors will gladly take the win. Read more here.
3. Analysts and investors alike are jumping the Ericsson (ERIC) ship of late due to disturbing payment allegations. Fresh reports unveiled on Sunday night detailed the Stockholm-based company’s involvement in making potential payments to the terrorist organization ISIS to facilitate the sales of its goods in Iraq. As a result, shares plummeted on Monday and major analysts have been quick to describe the telecommunication leader as “nearly uninvestable”. The company was quick to reiterate that it was looking into the matter and would take any misconduct very seriously. As investors who try to invest in companies we believe in, that includes our moral convictions, and we will be keeping a close eye on these reports and reconsider Ericsson’s position in our shortlist. Read the full story here.
More earnings from last night:
Shares in Workday (WDAY) are soaring pre-market as total revenues for Q4, 2021, grew 21.6% to $1.38 billion, earnings per share topped expectations at $0.82, and subscription revenue rose 22% to $1.23 billion. Investors were also delighted to see the company raise its guidance for fiscal 2023 subscription revenue to be in a range of $5.53 billion to $5.55 billion, representing year-over-year growth of 22%. Read more here.
There are 5 companies on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.