Tuesday’s Headlines: Is Zoom on the Comeback?
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Apple (AAPL) +4.0%
Axos Financial (AX) +3.9%
Mastercard (MA) +3.6%
Walt Disney Co. (DIS) +3.3%
Moving Down ⬇️
Upstart Holdings (UPST) -6.2%
Nautilus (NLS) -6.0%
Trip.com Group (TCOM) -5.0%
Tripadvisor (TRIP) -4.6%
1. Shares of Zoom (ZM) surged by as much as 20% at one point in after-hours trading following a positive earnings call last night. The communications technology company is currently up 6.5% pre-market now that the initial trading flurry has subsided. The firm reported earnings per share of $1.03 against an expected $0.87, on revenue of $1.07 billion which equaled analyst predictions. One of the key reasons behind this pop is sure to be Zoom’s largely positive guidance, with the outlook for profitability far exceeding the expectations of Wall Street. It should be noted, however, that the company is still down over 50% year-to-date following its struggle to match the unprecedented growth witnessed during the COVID-19 pandemic. Zoom is expecting its enterprise arm to drive a lot of its future growth, with CFO Kelly Steckelberg stating that it “will grow substantially faster” than its online segment. Read more here.
2. Starbucks (SBUX) has become the latest in a long line of companies that will exit the Russian market permanently in the coming weeks and months. The coffee company had previously suspended all business activity in Russia since March 8 as a direct result of the ongoing invasion of Ukraine but has now made the decision to shut its 130 locations for good across the country. This won’t have as big of an impact on Starbucks’ bottom line as people might think, with these stores typically accounting for less than 1% of the firm's annual revenue. This move comes just days after the announcement that McDonald’s is also set to exit Russia by closing over 850 restaurants and selling them to a Siberian franchisee to be run under a new brand. Find out more on the story here.
3. In more news of closures, Airbnb (ABNB) is reportedly set to announce immediate plans to shutter all of its domestic business in China. The company has operated in mainland China since 2016 but has found it difficult to compete with domestic companies. Despite a concerted effort, sales from China were only able to account for roughly 1% of the company’s total revenue in the past few years. While the pandemic devastated Airbnb’s business model for a number of years, those headwinds are still being experienced in China as rolling lockdowns continue across many major cities. This, coupled with the costly and complex nature of operating in the Chinese market, has seemingly forced Airbnb’s hand. All Chinese listings are expected to be taken down by this summer, but the firm may maintain an office in the country in order to provide listings for travelers venturing outside of China. Read more on the story here.
Get this week’s full earnings calendar here.