Thursday’s Headlines: Etsy Sinks Following Weak Guidance
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Chegg (CHGG) +17.0%
Paycom (PAYC) +13.8%
2U (TWOU) +12.4%
Starbucks (SBUX) +9.8%
Upstart Holdings (UPST) +9.5%
Moving Down ⬇️
Calavo Growers (CVGW) -3.1%
Texas Roadhouse (TXRH) -1.8%
RH (RH) -1.5%
Tripadvisor (TRIP) -1.0%
1. Shares in Etsy (ETSY) are trading down over 10% in pre-market trading following its Q1 earnings report last night. The company actually fared relatively well when it came to its financials — posting earnings per share of $0.60 on revenue of $579 million against analyst estimates of $0.60 and $575 million respectively. However, Etsy ran afoul of one of earnings season’s biggest pitfalls — weak guidance. The outsized growth seen during the pandemic is simply unsustainable in the current economic climate, and investors are preparing themselves for the inevitable e-commerce slowdown. Last month Amazon (AMZN) paved the way with a third straight quarter of just single-digit revenue growth, and now companies like Etsy are following suit. “We are emerging from an unprecedented time,” explained CEO Josh Silverman, before stating that “despite the near-term uncertainty, we have ample reason to remain very optimistic for the long-term.” Read more here.
2. Meta (FB) has announced plans to curtail hiring in light of slowing revenue growth and continuing economic challenges surrounding the company. The Big Tech firm has been struggling to grow in recent quarters, with Apple’s (AAPL) infamous iOS 14.1 update still casting a formidable shadow across the online advertising world. According to CFO David Wehner during Meta’s most recent earnings call, “we experienced a further deceleration in growth following the start of the Ukraine war due to the loss of revenue in Russia as well as a reduction in advertising demand both within Europe and outside the region.” This mix of wider economic issues and a changing advertising landscape has left Meta scrambling, with a spokesperson for the company revealing that “in light of the expense guidance given for this earnings period, we are slowing its growth accordingly,” in reference to the firm’s talent pipeline. Find out more here.
3. It was a rollercoaster day for Twilio (TWLO) investors as the stock fluctuated wildly following its first-quarter earnings call. A net loss per share of $1.23 was relatively steady with the year-ago quarter, but when adjusted for expenses and amortization, it broke even at $0.00 per share, whereas analysts had expected a loss of $0.23 per share. Regarding revenue, the company exceeded expectations, posting $875.4 million versus an anticipated $861.6 million. Second-quarter revenue guidance of between $912 million and $922 million came in at the low end of expectations, and investors reacted in kind by sending the stock spiraling by as much as 18% at one point. However, this reaction was short-lived, as Twilio rebounded to be up 9% at one point, before finally settling up 5.5% for the day. You can find out more about Twilio’s earnings by clicking here.
Get this week’s full earnings calendar here.