Market Movers: Is Retail Back From The Brink?

Market Movers: Is Retail Back From The Brink?

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Happy Saturday folks!

War, inflation, climate change, and supply shortages — it would be an interesting time to document on a Netflix series if it wasn’t so tragic. 

But, come rain or shine, the stock market rolls on, and we’ve got some very interesting pieces for you this morning. 

Let’s get to it. 

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

Moving Up ⬆️

Nordstrom (JWN) +23.0%

Pure Storage (PSTG) +14.6%

nCino (NCNO) +14.0%

Upstart Holdings (UPST) +10.4%

Workday (WDAY) +8.9%

Moving Down ⬇️

Bumble (BMBL) -26.2%

Ericsson (ERIC) -20.3%

Sea Limited (SE) -19.9%

Duolingo (DUOL) -18.8%

Veeva Systems (VEEV) -14.5%

The Winners

Let’s start with the winners!

Nordstrom (JWN) +23.0%

You can always count on the big man in red to save the day, which is precisely what happened to Nordstrom in Q4. 

Santa Clause and his extensive shopping list managed to help the beleaguered retailer report better-than-expected profits and sales last quarter:

  • Earnings per share: $1.23 v.s. $1.02 expected

  • Revenue: $4.49 billion v.s. $4.35 billion expected

Amid all of the aforementioned unpleasantness in the world, this performance comes as a real boost to a retailer which found itself facing down oblivion during the so-called ‘retail-apocalypse’, followed swiftly by a deadly pandemic. 

Some real optimism comes in its full-line business, which has returned to 2019 levels, while digital sales remain strong at 44% of total sales. Because of this, Nordstrom is confident that growth will continue in 2022, estimating it to be between 5% and 7%. 

This is a far cry from the Nordstrom of 2020, and should these predictions come to pass, it may be placed to become one of the leading brick-and-mortar retailer stocks on the market. 

Pure Storage (PSTG) +14.6%

Peter Lynch is famed for loving boring companies, but Pure Storage’s last quarter and full-year performance were anything but dull. 

Reporting on Wednesday, the IT pioneer reported revenue growth of 41% and 29% for the last quarter and full year respectively. Driven by strong growth in its subscription business, the company now boasts a net-dollar retention (NDR) rate of 120% — which means that it is making more money from its customers with every year that passes. 

Pure Storage stock had suffered recently from the same chip shortages that are blighting multiple industries, but with its stock now just 10% off all-time highs, this is definitely a high-growth company that’s bucking the trend.

nCino (NCNO) +14.0%

These days, if a growth stock is in the green and you can’t figure out why, then it might just be a bit too good to be true. 

nCino is a fine example of this, jumping on a snippet of news this week despite earnings being almost a month out and its share price falling more than 30% in the past six months. But, a win’s a win, and investors will take what they can get right now. 

The cloud-based banking software provider has landed itself a white whale client in SmartFinancial subsidiary, SmartBank. The $4 billion asset-sized financiers will utilize nCino’s Commercial Banking Solution, which will provide the institution a robust, digitized, end-to-end experience for all its clients. This adds to nCino’s already 1,500+ strong list of clients, and will hopefully produce some robust revenue going forward.

This partnership, while important, may not be enough to prevent some wild swings in the coming weeks as earnings season makes the market do its best impression of a rollercoaster. Investors should watch out for nCino’s Q4 earnings on March 31st. 

The Losers

And now for the losers…

Bumble (BMBL) -26.2%

As we’re still in the middle of earnings season, you could be forgiven for thinking that Bumble has just posted a pretty bad quarter. Incredibly, however, the downward pressure on Bumble shares this week has come in anticipation of the company’s earnings call next week. 

With Bumble experiencing a 15% sell-off yesterday alone, it seems that investors are anxious about a couple of things related to the company — not least the exposure of its Badoo app to Russian markets. With Badoo being the most popular dating app in the region in 2021, according to Statista, the ongoing conflict and international shunning of Russia will likely be the hot topic of conversion when the company reports next Tuesday. 

Be sure to keep an eye on this key metric. 

Ericsson (ERIC) -20.3%

If Ericsson stock was a person, it would be the weird kid that’s got caricature stink lines coming out of them and picks their nose — nobody wants to go near it. 

If you hadn’t heard, the company is in a lobster pot of hot water after reports emerged last month that the telecom giant dealt with Islamic State (ISIS) terrorists and presided over a bribery spree in Iraq. This has led to a Department of Justice (DOJ) investigation in the U.S. as well as questions from domestic authorities in Sweden. This has all come to head this week after the DOJ confirmed that Ericsson failed to make sufficient disclosures about its conduct in Iraq before entering a deferred prosecution agreement in 2019.

If the reports are confirmed true, then management’s credibility and judgment will be called into question, and it will be devastating to the business. Even if they are ultimately untrue, it will take some time before innocence can be proven. Either way, we’ll be keeping a close eye on these proceedings. 

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.

JamieJamie

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