Tuesday’s Headlines: Earnings Can’t Save Upstart
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Hain Celestial (HAIN) +6.3%
Calavo Growers (CVGW) +1.2%
The Home Depot (HD) +0.9%
Brown-Forman (BF.B) +0.3%
Moving Down ⬇️
MercadoLibre (MELI) -16.9%
DraftKings (DKNG) -16.4%
Sea Limited (SE) -15.2%
Cloudflare (NET) -13.8%
Zendesk (ZEN) -12.9%
1. Upstart (UPST) is trading down a whopping 44% in pre-market trading today following the announcement of its Q1 2022 earnings. The AI-driven lending platform drastically cut its forecast for the full year, with expectations for revenue slashed to approximately $1.25 billion — down from a previous figure of around $1.4 billion. According to Chief Financial Officer Sanjay Datta, “given the general macro uncertainties and the emerging prospects of a recession later this year, we have deemed it prudent to reflect a higher degree of conservatism in our forward expectations.” The company has been rocked by rising interest rates, with many people who previously would have qualified for loans now no longer able to receive them. Despite these notable headwinds, Upstart did outpace analyst expectations for the first quarter, posting adjusted earnings per share (EPS) of $0.61 on revenue of $310 million, against estimates of $0.53 and $300 million respectively. Read more here.
2. Tesla (TSLA) has halted almost all production at its Shanghai plant today according to an internal memo released by the automaker. The plant will manufacture less than 200 cars today — a significant cut to the roughly 1,200 vehicles it has typically been building since reopening in April following a COVID-induced closure. Supply chain issues are cited as the major cause behind the significant slowdown, with Tesla simply unable to secure the requisite parts to complete production. As recently as last week, the company had plans to begin ramping up production in Shanghai with the goal of producing 2,600 cars a day from mid-May. These plans will now need to be postponed as lockdowns continue to tighten around the city. April sales figures are expected imminently and it’s likely that Tesla — along with most other auto manufacturers — will witness a significant drop in sales. Find out more here.
3. Dating app producer Match Group (MTCH) has launched legal action against Google (GOOG) in a last-ditch attempt to prevent its apps from being taken off the Play Store. Google is demanding that the company solely utilizes its proprietary payment system so that the Big Tech firm can take a significant slice of Match’s sales. Match’s apps have been exempt from these policies for the last decade but Google is now cracking down and has stated it will block all downloads from June 1 if revenue isn’t shared. Google typically takes up to 30% of app-generated revenue from companies using its Play Store. Match CEO Shar Dubey stated that “we tried, in good faith, to resolve these concerns with Google, but their insistence and threats has left us no choice." This lawsuit follows similar cases taken up by companies such as Epic Games, as firms challenge the alleged anti-competitive practices of the Play Store. For more on the story, click here.
Get this week’s full earnings calendar here.