Wednesday’s Headlines: Netflix Ends 2020 With A Bang
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Stitch Fix (SFIX) +13.7%
Etsy (ETSY) +8.3%
Roku Inc. (ROKU) +6.3%
PagerDuty (PD) +5.8%
Moving Down ⬇️
Lemonade (LMND) -3.5%
Match Group (MTCH) -3.1%
Ulta Beauty (ULTA) -2.9%
Baozun (BZUN) -2.7%
1. What a difference one quarter can make. While Netflix (NFLX) stock plummeted last October after its disappointing Q3 performance, the company’s share price is now up more than 12% pre-market thanks to a great final quarter of the year. Despite missing estimates on earnings per share (EPS) of $1.19, the streaming giant managed to beat on revenue of $6.64 billion, while adding 8.5 million subscribers to top 200 million — doubling its subscriber base since 2017. The top story from the evening though was the company’s claim that it will be cash-flow positive after 2021 and no longer needs outside financing, having borrowed $15 billion since 2011. All that investment into original content appears to finally be paying off for Netflix, which has had question marks over its cash-burning in recent years. Read the full earnings report here.
2. The whole world has gone crazy for electric vehicles and autonomous driving, with tech giant Microsoft (MSFT) becoming the latest to enter the space. The Windows-maker has officially entered into a long-term strategic relationship with General Motors and Cruise, the automaker’s majority-owned autonomous car unit, to accelerate the commercialization of self-driving vehicles. Joined by GM and Honda Motors, the trio will pump an additional $2 billion in equity into Cruise, bringing its total valuation to $30 billion. Why is Microsoft doing this? Simple; it has now become the preferred cloud provider for GM and Cruise and will work collaboratively on software and hardware engineering, cloud computing capabilities, manufacturing, and partner ecosystem. First Apple (AAPL), now Microsoft; Elon Musk must be looking over his shoulder by now! Read the full story here.
3. You may be reading this just after hopping off a morning ride on your Peloton (PTON) and be shocked to see that its stock price has fallen almost 5% overnight. The drop has come as a direct result of UBS analyst Eric Sheridan lowering his rating on Peloton stock to Sell from Neutral. His reasoning is that it will be hard to compete with 2020’s strong results, which means targets will be missed in 2020, sending the stock down. The darling of locked-down Wall Street soared 440% in 2021, and though it is unlikely to replicate such outstanding results any time soon, the stay-at-home trend isn’t going anywhere when this virus ends, meaning Peloton still has massive growth potential. If you’re unsure, feel free to check out our opinion here.