Wednesday’s Headlines: Home Depot Crushes Estimates

Wednesday’s Headlines: Home Depot Crushes Estimates

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Upstart Holdings (UPST) +23.5%

Sea Limited (SE) +14.0%

Take-Two Interactive (TTWO) +11.8%

DraftKings (DKNG) +11.1%

Lemonade (LMND) +9.4%

Moving Down ⬇️

Duolingo (DUOL) -4.5%

Smartsheet (SMAR) -2.2%

Datadog (DDOG) -2.2%

Cloudflare (NET) -1.9%

Workday (WDAY) -1.5%

1. The Home Depot (HD) reported its best first-quarter sales ever yesterday in an earnings call that pleasantly surprised shareholders. The home improvement retailer posted earnings per share (EPS) of $4.09 versus an expected $3.68, on revenue of $38.91 billion against an estimate of $36.72 billion. These strong beats weren’t the only good news though, as the company also raised its full-year outlook in a move that defies the prevailing trends of this quarter’s earnings season. Home Depot is now anticipating sales for the fiscal year to grow by 3% with EPS growth expected to hit the mid-single digits. Analysts on Wall Street had expected growth of just 1.8% and 3.6% respectively. This positive performance is even more impressive considering the company was coming off the “robust performance we were comparing against last year” according to CEO Ted Decker — referencing the pandemic boost afforded to the home improvement sector in early 2021. Read more here.

2. Sea Limited (SE) saw its stock pop yesterday following a widely positive earnings report. The Southeast Asian conglomerate saw its shares get a 14% boost after announcing solid beats on revenue and earnings. Sea reported a loss per share of $0.80 against analyst expectations of a loss of $1.40, on revenue of $2.9 billion versus an anticipated $2.76 billion. This represents impressive revenue growth of 64.4% year-over-year (YoY), with e-commerce revenue of $1.5 billion standing out in particular. Its other major segments — Digital Entertainment and Digital Financial Services — also grew significantly. Respective year-on-year increases of 45.3% and 359.9% show the growing health of the company. CEO and co-founder Forrest Li did warn investors of impending headwinds, however, stating that “as we enter a new period, we recognize that the current macro trend and uncertainties could affect our region and world in the near term.” Find out more here.

3. Upstart (UPST) received a much-needed stock boost yesterday following a relatively reassuring annual shareholders meeting yesterday. The AI lending platform lost over 56% in a single day last week following a weak outlook for the fiscal year as part of its Q1 earnings call. Shareholders had been questioning the company's rationale behind keeping loans on its balance sheet as opposed to selling them off to investors as it had done previously. Typically, Upstart held some loans as part of research and development (R&D), but as more loans remained on the balance sheet, investors were fearful that Upstart was taking on unnecessary credit risks. Upstart CFO Sanjay Datta explained the reasons behind this — but also revealed the company’s willingness to bend to its shareholders will a little and keep held loans to R&D loans only. Upstart stock soared by over 23% following the meeting. Find out more on the story here.

Get this week’s full earnings calendar here.

Pádraig BolgerPádraig Bolger