Market Movers: People Like Expensive Couches

Market Movers: People Like Expensive Couches

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Happy Saturday folks!

Looking at this week's winners, it seems that consumer spending might be in play for some companies, despite rising inflation fears, while big COVID winners continue to tumble. 

Let’s take a look.

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

Moving Up ⬆️

Lovesac (LOVE) +22.2%

Lululemon (LULU) +13.7%

Wix (WIX) +9.1%

Veeva Systems (VEEV) +8.5%

Teladoc (TDOC) +8.1%

Moving Down ⬇️

nCino (NCNO) -8.4%

RH (RH) -7.4%

Peloton Interactive (PTON) -7.0%

Etsy (ETSY) -6.1%

Zillow (Z) -5.3%

The Winners

Lovesac (LOVE) +22.2%

Who said people wouldn’t buy a $4,000 couch that can be customized to fit into almost any room’s unique angles? 

Shares in Lovesac soared this week after its Q4 earnings knocked investors’ socks off. The maker of high-end furniture, including beanbag chairs and modular couches, posted sales of $196.2 million, which easily beat estimates at $174.3 million by rising 51.3% year-over-year (YoY). Meanwhile, earnings per share jumped 48% to $2.03 as the company benefited from an income tax benefit, which smashed estimates at $0.54. 

Not to get carried away, its operating margin shrank from 16.8% to 12.3%, but operating income still improved from $21.8 million to $24.3 million. 

With shares down roughly 20% year-to-date (YTD), this week’s bump will please investors going into Q2. 

Lululemon (LULU) +13.7%

Lululemon also benefitted from a positive earnings call, with strong sales and a confident outlook for the year boosting its stock price. The athletic apparel company posted EPS of $3.36 against an expected $3.27, on net revenue of $2.1 billion. 

The firm also announced its 2022 outlook, with revenue for the full year expected to come in between $7.49 billion and $7.62 billion, while analysts had only predicted $7.30 billion. Profit expectations of between $9.15 and $9.35 per share also come in ahead of an anticipated $9.06 from analysts.

With Lululemon tempering investor expectations earlier this year due to supply constraints — surprise surprise — this comes as a welcome “shock”. Coupled with the fact that Lululemon recently launched its own sneaker competitor to Nike, ‘Blissfeel’ — which will be available in North America, China, and the U.K to retail with a price tag of $148 — it looks like 2022 could be an exciting year for investors. 

Teladoc (TDOC) +8.1%

MyWallSt’s favorite telehealth provider is having a bad time of things lately, with Teladoc’s share price down more than 60% in the past year and 25% YTD. Apparently, Wall Street believes that the COVID-19-related catalysts that benefited telemedicine in 2020 simply aren’t there anymore.

One famous fund manager tends to agree with us though in the belief that Teladoc remains a top investment:

Enter, Cathie Wood. 

The ARK Invest CEO and Founder remains a fan and has continued to add to her position in the stock, keeping its price ticking up this week. Whether that’s a bull or a bear case remains a matter of personal opinion to many, but for a company like this, which has barely scratched the surface of its estimated $57 billion total addressable market, we’d consider this dip a good buying opportunity. 

Especially when you factor in recent partnerships with Amazon’s Alexa, the future is exciting for Teladoc. 

The Losers

nCino (NCNO) -8.4%

Given the nature of the market lately, which has ravaged growth-mode tech stocks, nCino investors had been jumping ship prior to its earnings release on Thursday night. 

However, the fear was unfounded, as nCino gave its shareholders plenty to mull over from its Q4 earnings, which were in line with analyst estimates. Total revenue jumped to $74 million in Q4, while subscription revenue rose 40% year-over-year (YoY) to $62.8 million. GAAP net loss attributable to nCino in the fourth quarter was -$0.07 per share compared to -$0.13 per share the year prior. 

What’s more, the financial technology company also announced that Wells Fargo will expand its use of the nCino Bank Operating System to accelerate digital transformation within its Consumer and Small Business Banking division. This represents an exciting opportunity for the bank and investors can take comfort that even more prestigious opportunities may become available from deals like these. 

Peloton Interactive (PTON) -7.0%

You know things are bad when a single-digit percentage drop is considered a “good” week, but unfortunately, that’s been the case this year for Peloton, which is down 75% over the past 12 months. 

The latest dip was not down to any controversies, at least, but more due to fear of impending headwinds. The headwind in question is the fact that people are returning to brick-and-mortar gyms in droves. 

During the height of the coronavirus, many gyms were either closed for business entirely or suffering from low turnout on fears that COVID-19 could spread easily in such environments. This greatly benefited Peloton as it provides home-based exercise hardware and video streaming services. The fear is that this could all be over. 

However, these are only ifs and buts, as Peloton has taken active measures in recent months to get its business back on track, including replacing its founder CEO John Foley. Still, investors may want to keep an eye out.

JamieJamie

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