Mid-Morning Look

Thursday, November 11, 2021

U.S. stocks rebounding early following two days of an inflation-driven selloff (PPI Tuesday and CPI Wednesday), but Disney (DIS) drags media names lower after missing top and bottom-line quarterly results and as subscriber numbers fell short of consensus expectations, as it weighs on the Dow. Stocks are just three days removed from all-time highs for all major averages, so a pullback to some degree is not unexpected at this point. Gold prices rising to 5-month highs as an inflation hedge, while the U.S dollar rises near 16-month highs against the euro and other currencies after the hottest U.S. inflation reading in 30 years yesterday encouraged bets on interest rate hikes. Treasury markets are closed in observance of Veteran’s Day (no economic data today either). Tech stocks leading the gains early today along with a modest recovery in Smallcaps.

Sector Movers Today

·     Retailers; FOSL shares surged after reporting Q3 sales rose 13% to $492M and raised its full-year sales growth forecast to 17-19% from 14-17%; DDS Q3 EPS jumps sevenfold to $9.81, well above est. $5.52, with sales jumping 47% to $1.481B vs est. $1.44B, comp sales +48% also crushing est. +25%; TPR posted Q1 adj EPS 82c vs est. 70c on revenue $1.48B vs est. $1.44B, announced authorization for $1B in buyback, and raised FY22 outlooks for EPS and revs; YETI Q3 adj EPS 64c vs est. 59c on sales $362.6M vs est. $356.7M, now sees full-year adj EPS $2.51-2.53 from $2.42-2.46, sales +28-29% from +26-28%; WISH Q3 EPS (10c) was narrower than est. (15c) on better revenue $368M vs est. $353.6M, sees Q4 revs falling vs Q3 despite holidays due to lower ad spend with Oct revenue down ~20% vs the average Q3 month, and CEO Piotr Szulczewski will be stepping down; FIGS Q3 adj EPS 5c vs est. 3c on revenue $102.7M vs est. $98.5M and raised full-year revenue forecast to $410M from $395M and above est. $399M; LVLU 5.75M share IPO priced at $16.00; DG announced a partnership with DASH to offer same-demand delivery service for everyday essential items, including food and cleaning supplies

·     Auto sector; in the EV space, TSLA CEO Elon Musk sold ~$1.1B in stock as he exercised more than 2.1M stock options that he received as part of his compensation package, SEC filings show; RIDE said global technology firm Foxconn bought stock worth $50M; DIDI is preparing to relaunch its ride-hailing and other apps in China by the end of the year in anticipation that Beijing’s cybersecurity investigation into the company will be wrapped up by then, Reuters reported; HYLN downgraded at Barclay’s and cut tgt to $7 from $12 as they see the product at risk of a slower adoption curve; RIVN rises in its second day of trading as the EV player outperforms

·     Financial Services; OPEN sold 5,988 homes (+72% q/q), generating $2.3B in revenue (+91% q/q), and the Company acquired 15,181 homes (+79% q/q) during the quarter (overall better EPS, revs and guidance); FA 15M share Secondary priced at $20.00; FICO Q3 results came in light on revenue due to noise in the software business, but above consensus on EPS given Scores’ strength and healthy margin leverage; ZIP with better Q3 results and said expects 4Q to return to more normal environment, the company meaningfully raised full year revenue and EBITDA guidance to reflect the increased employer demand; LZ reported 3Q21 revenue/Adj. EBITDA of $148mm/$15mm vs. $146mm/$15mm, but shares slip as Q3 unit volumes missed JMP Securities projections and 4Q guidance calls for increased marketing spend as seasonality; OPAD Q3 eps ($0.13) vs est. ($1.04) on revenue $540.3M vs est. $524.15M; sold 1,673 homes from 749 YoY

·     Med Equipment & Healthcare Services; BHG Q3 net loss of $296.7M, or (-$0.48) which was larger than the $59.3M loss a year ago (ests were for loss of (-$0.14), while revs jumped YoY to $1.08B, but missed ests; GDRX 3Q results were better than expected; OSCR shares slip on larger EPS loss of ($1.02) vs. est. loss (-$0.66), while Medical Loss Ratio of 99.7%, increased 920 bps YoY; AMWL slides as reported mixed results, with revenue coming in below expectations as visit mix shifted from high-ASP specialty care to lower ASP urgent care and lowered guidance for the year; COO announced that it has signed a definitive purchase agreement to acquire Generate Life Sciences, for about $1.6B

Stock GAINERS

·     AFRM +13%; as the buy now pay later company posted quarterly revenue that tops estimates, boosted by growth in active consumers, merchants and volume of goods sold while also expanded its relationship with AMZN

·     FCX +7%; among the top gainers in the S&P 500 amid broad strength in metals and industrials; MT better results helping lift metals

·     FOSL +30%; after reporting Q3 sales rose 13% to $492M and raised its full-year sales growth forecast to 17-19% from 14-17%;

·     MQ +14%; reported smaller-than-expected loss for Q3 while revenue rose 56% to $131.5M, topping the $119.6M est. and better Q4 guide $134M-$139M vs. est. $126.3M, driven by strong TPV growth

·     OPEN +20%; sold 5,988 homes (+72% q/q), generating $2.3B in revenue (+91% q/q), and the Company acquired 15,181 homes (+79% q/q) during the quarter (overall better EPS, revs)

·     RIVN +11%; rises in its second day of trading as the EV player outperforms

·     SOFI +16%; posted a strong top-line beat this qtr, lifting shares amid new customer and product momentum as revenues of $277M beat Street’s $252M as lending segment primarily drove beat

·     TPR +7%; posted Q1 adj EPS 82c vs est. 70c on revenue $1.48B vs est. $1.44B, announced authorization for $1B in buyback, and raised FY22 outlooks for EPS and revs

·     UTZ +11%; as Q3 adj EPS $0.18 vs. est. $0.15; Q3 revs to $312.7M vs. est. $307.61M; increase in net sales was driven by acquisitions of +25.1% and Organic Net Sales growth of 1.0%

Stock LAGGARDS

·     AMWL -12%; reported mixed results, with revenue coming in below expectations as visit mix shifted from high-ASP specialty care to lower ASP urgent care and lowered guidance for the year

·     BHG -18%; Q3 net loss of $296.7M, or (-$0.48) which was larger than the $59.3M loss a year ago (ests were for loss of (-$0.14), while revs jumped YoY to $1.08B, but missed ests

·     BMBL -13%; posted a modest 3Q beat and guide up, but shares weighed down as paying subs disappointed despite better monetization

·     BYND -16%; after guiding Q4 revs $85-110Mm well below the consensus estimate of $131.6Mm citing weakening demand from grocery stores that sell its plant-based meat products

·     CRCT -12%; after Q3 profit slips ~40% as EPS missed by $0.03, missing estimates as expenses rise (revs beat), while gross margins tumbled

·     DIS -8%; posted Q4 earnings and revs below consensus ($0.37/$18.53B vs. est. $0.49/$18.78B), while Disney+ subscribers were 118.1Mm, up +1.8% q/q, but missing the estimate of 119.6Mm (Parks revs were a positive data point, rising 26% QoQ to $5.45B)

·     GRWG -6%; misses Q3 profit estimates, reporting earnings of $0.07 vs. est. $0.09 but revs slightly better rising 111% to $111M topping the $114.8M estimate but lower revs for year as sees FY revenue between $435-$440M vs. est. $448.4M

·     PSFE -29%; after Q3 revenue falls short of expectations, partly due to market and performance challenges in its digital wallet business as now sees FY21 revs of $1.47B-$1.48B vs. the $1.53B-$1.55B it previously expected

Syndicate:

·     908 Devices (MASS) 3.15M share Secondary priced at $32.00

·     Apria (APR) 4.5M share Secondary priced at $31.50

·     Backblaze (BLZE) 6.25M share IPO priced at $16.00

·     Diversey (DSEY) 15M share Secondary priced at $15.00

·     European Wax Center (EWCZ) 5.22M share Secondary priced at $26.25

·     First Advantage (FA) 15M share Secondary priced at $20.00

·     HeartBeam (BEAT) 2.75M share IPO priced at $6.00

·     Kidpik (PIK) 2.11M share IPO priced at $8.50

·     KnowBe4 (KNBE) 7M share Secondary priced at $25.75

·     Lulu’s Fashion Lounge (LVLU) 5.75M share IPO priced at $16.00

·     Mirati Therapeutics (MRTX) 3.45M share Secondary priced at $145.00

·     Vaxxinity (VAXX) 6M share IPO priced at $13.00

·     Weave Communications (WEAV) 5.0M share IPO priced at $24.00

·     Winc (WBEV) 1.692M share IPO priced at $13.00