Friday's Headlines: Nio Stock Surges Ahead of End of Year Push
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Redfin (RDFN) +31.8%
2U (TWOU) +29.8%
Stitch Fix (SFIX) +28.3%
Upstart Holdings (UPST) +27.2%
Cloudflare (NET) +24.9%
Moving Down ⬇️
StoneCo (STNE) -0.1%
Avalara (AVLR) 0.0%
Twitter (TWTR) 0.0%
Zendesk (ZEN) +0.4%
Here are the stories that you need to know ahead of market-open today, Friday the 11th of October.
Nio Stock Surges Ahead of End of Year Push ⚡️
Electric vehicle manufacturer Nio reported its third-quarter earnings yesterday and investors appear impressed with what they heard. The Chinese company’s stock soared by over 11%, and is trending up a further 5% premarket this morning. Despite widening losses, the company displayed strong revenue growth and record vehicle deliveries.
Nio posted a loss per share of $0.30, a marked increase from the $0.06 per share loss witnessed in the year-ago quarter. However, revenue of $1.83 billion marked a more than 32% increase year-over-year. Nio also delivered 31,607 vehicles throughout the quarter, marking a 29% increase year-over-year and setting a new quarterly record for the company. CEO William Bin Li emphasized that the firm is taking steps to meet increased demand, stating that “to meet the growing user demand and shorten the waiting time, we have been working closely with supply chain partners to accelerate production and delivery.”
The release of its new ET5 sedan has proved a hit with consumers with the CEO adding that he believes its sales will “support a substantial acceleration of our overall revenue growth in the fourth quarter of 2022.”
This earnings report and the subsequent shareholder reaction will be welcome news for Nio, which currently sits down over 69% year-to-date.
WeWork Set To Shutter 40 U.S. Locations Following Weak Forecast 😰
Coworking space provider WeWork has made the decision to shut down close to 40 locations that have been underperforming across the U.S. The closures are expected to occur this month in a massive cost-cutting effort as the company aims to move into profitability in the near future. As of yet, WeWork has declined to state precisely what locations will be closed.
This news comes following the firm’s Q3 earnings report released yesterday. Wider-than-expected losses appear to have forced the company’s hand. WeWork posted a loss per share of $0.75, a massive improvement from the $5.50 loss seen in the year-ago quarter, but still quite a way off the $0.48 loss per share expected by Wall Street analysts. Revenue came in at $817 million, a 24% year-over-year increase, but still a deceleration in sales growth from the prior quarter’s 37% growth.
For the upcoming quarter, WeWork has forecast revenue to be in the range of $870 million to $890 million, falling short of analyst estimates of close to $924 million. This muted guidance appears to have been the final nail in the coffin of the locations to be closed, with CEO Sandeep Mathrani stating that “these locations are those that don't meet our design criteria, have obsolescence or there's an oversupply in the market.”
These closures are anticipated to cost the firm close to $200 million in remaining rent payments on leases, before adding approximately $140 million to annual earnings according to the CEO. WeWork is currently down close to 72% year-to-date.
BARK Wags its Tail 🐶
In great news for dog parents everywhere, BARK Inc. beat expectations in its Q2 earnings on Wednesday. The dog subscription service, formally known as BarkBox, delivered revenue of $143.8 million — a 20% increase year-over-year — beating analysts’ estimates by a cool $8.7 million. Even more surprising, the company managed to improve its net loss to -$0.03 per share. Clearly, profitability is nearing with every quarter.
BARK’s revenue beat was brought to us by an 8% increase in average order value, a 1.7% increase in subscription shipments, and a significant surge in commerce orders. BARK’s retail partners placed their holiday season orders early bringing in $26.3 million, a 96.8% increase year-over-year, representing 18.3% of total revenue.
Interestingly, BARK also saw a 102% increase in BARK Bright orders, the dog dental kit the company launched last year. That being said, this segment is still small compared to the service’s overall revenue bringing in just $2.8 million this quarter.
The only low light was gross margins which contracted year-over-year. Coming in at 55.9%, as compared to 58.2% in the same period last year, this decrease upset investors who have often celebrated the company for its strong margins thanks to its vertical integration. However, management stated this was all down to revenue mix. With retail orders coming forward a quarter and making up a larger percentage of revenue, gross margins took a hit.
BARK was able to reiterate its revenue guidance for 2023, anticipating overall revenue of $556 million. In even more positive news, EBITDA expectations were raised for the full year to $(31) million.
BARK rose more than 2.5% on Thursday and is up more than 2% in pre-market trading.