Early Look

Friday, August 9, 2024

S&P futures are edging higher, looking to build on the solid gains on Wall street yesterday, but still need a big day to turn weekly losses into gains, as the S&P comes into Friday -0.5% on the week, the Nasdaq -0.7% WTD, the Dow -0.73% on week and the Russell 2000 -1.18% on week following the sharp downdraft on Monday. U.S. stocks jumped on Thursday, with the Nasdaq and S&P 500 each ending more than 2% higher after jobless claims fell more than expected in the latest week, soothing worries the labor market was weakening too quickly. There are no economic data points to focus on this morning. All the major S&P 500 sectors rose, led by gains in technology and communication services and healthcare after LLY shares jumped nearly 10% on its results and guidance. We are now about 90% complete through earnings season with results coming in okay, but cautious outlooks have pressured some of the biggest companies in the world. Stocks had sold off sharply after last week’s July U.S. jobs report sparked fears of a potential U.S. recession as well as an unwinding of positions of carry trades, where investors borrow money from economies with low interest rates to fund their bets in high-yielding assets elsewhere. The Cboe Volatility index (VIX) Wall Street’s fear gauge was down on Thursday and looking lower again at 23.60 (off weekly highs above 65). In Asian markets, The Nikkei Index gained 193 points to 35,025, the Shanghai Index dipped -7 points to 2,862, and the Hang Seng Index jumped 198 points to 17,090. In Europe, the German DAX is up 57 points to 17,737, while the FTSE 100 rises 37 points to 8,182. Money markets see a 54.5% chance the Fed will cut interest rates in September by 50 basis points, and expect two more cuts by the end of 2024, according to CME‘s FedWatch Tool. Key CPI and PPI inflation data is expected next week.

• The Dow Jones Industrial Average rose 683.04 points, or 1.76%, to 39,446.49.
• The Nasdaq Composite surged 683.04 points, or 2.87%, to 16,660.02.
• The Russell 2000 Index advanced 49.31 points, or 2.42% to 2,084.42.

• On a month-on-month basis, the CPI rose 0.5% against a 0.2% fall in June and a forecast 0.3% increase.
• Food prices swung from a drop of 2.1% on-year in June to an unchanged outcome in July when they also grew 1.2% month-on-month versus a drop of 0.6% in June.
• Core inflation, excluding volatile food and fuel prices, gained 0.4% on-year in July, down from 0.6% in June.
• Federal Reserve Bank of Kansas City President Jeffrey Schmid signaled in a speech to the Kansas Bankers Association he’s not ready to support a reduction in interest rates with inflation above target and the labor market still healthy despite some cooling.

• Elf Beauty (ELF) Q1 adj EPS $1.10 vs. est. $0.84; Q1 sales $324.47M vs. est. $304.7M; raised 2025 sales to be between $1.28B-$1.3B vs. prior view $1.23B-$1.25B and raises year EPS to $3.36-$3.41 from $3.20-$3.25; said more customers visited stores and websites to buy its affordable cosmetics and skincare products.
• Expedia (EXPE) Q2 adj EPS $3.51 vs. consensus $3.06; Q2 revs $3.56B vs. consensus $3.53B; Q2 total gross bookings were $28.8B, rising 6% y/y and lodging gross bookings were $20.7B, rising 8% y/y; Q2 hotel bookings were up 11% y/y; said seeing more challenging macro env’t and softening demand.
• Sweetgreen (SG) Q2 EPS ($0.13) vs est. ($0.10), adj EBITDA $12.4Mm vs est. $11.08Mm on revs $184.6Mm vs est. $180.78Mm, comps +9%, AUV flat; guides FY +24-26 net new units, revs $670-680Mm vs est. $674.25Mm, comps +5-7%, restaurant level op mgn 19-20% and adj EBITDA $16-19Mm vs est. $18Mm.

• Bloom Energy (BE) Q2 adj EPS ($0.06) vs est. ($0.04) on revs $335.767Mm vs est. $307.48Mm, gr mgn 20.4%; guides FY revs $1.4-1.6B vs est. $1.463B, adj gr mgn about 28% and adj op Inc $75-100Mm vs est. $33.4Mm.
• Solventum Corp. (SOLV) Q2 adj EPS $1.56 vs est. $1.51 on sales $2.081B vs est. $2.049B; guides FY organic sales +0-1% vs est. flat and adj EPS $6.30-6.50 vs est. $6.24.

• ADMA Biologics (ADMA) Q2 adj EBITDA $44.5Mm vs est. $27.59Mm on revs $107.2Mm vs est. $86.41Mm; guides FY 24 revs at least $400Mm vs est. $357.5Mm, adj EBITDA over $150Mm vs est. $119.2Mm and net Inc at least $105Mm; sees FY25 revs at least $445Mm vs est. $414.48Mm, adj EBITDA over $200Mm vs est. $166.88Mm.
• Cytokinetics (CYTK) Q2 EPS loss (-$1.31) vs. consensus loss (-$1.06); said the company had approximately $1.4B in cash, cash equivalents and investments compared to $634.3Mat March 31.
• Doximity Inc. (DOCS) Q1 adj EPS $0.28 vs est. $0.22, adj EEBITDA $56.9Mm vs est. $55.4Mm on revs $126.676Mm vs est. $119.9Mm; guides Q2 revs $126.5-127.5Mm vs est. $123.95Mm and adj EBITDA $62.5-63.5Mm vs est. $58.47Mm; sees FY revs $514-523Mm vs est. $512.21Mm and adj EBITDA $248.5-257.5Mm vs est. $244.8Mm.
• Gilead Sciences (GILD) Q2 EPS $2.01 tops consensus $1.60; Q2 revs $7.0B vs. est. $6.72B; said posted 6% year-over-year growth in our base business driven by sales of our therapies for HIV, Oncology and Liver Disease, including 8% growth for Biktarvy; raises 2024 EPS $3.60-$3.90 vs. prior $3.45-$3.85 and affirms sales outlook.
• Insulet Corp. (PODD) Q2 adj EPS $0.55 vs. est. $0.56; Q2 revs $488.5M vs. consensus $463.09M; raises 2024 revenue growth range to 16%-19% from 14%-18%; raises 2024 total Omnipod growth of 18% to 21% versus 15% to 19% previously; now expects to be closer to the high-end of the gross margin range of 68% to 69%.
• Iovance Biotherapeutics (IOVA) Q2 EPS ($0.34) vs est. ($0.35) on revs $31.1Mm vs est. $24.59Mm; sees Q3 revs $53-55Mm vs est. $49Mm, sees FY24 revs $160-165Mm vs est. $143.21Mm, sees FY25 revs $450-475Mm vs est. $403.7Mm.
• Natera Inc. (NTRA) Q2 EPS ($0.30) vs est. ($0.69) on revs $413.4Mm vs est. $343.01Mm; guides FY revs $1.49-1.52B vs est. $1.435B, gr mgn approx 54-56%.

• Dropbox (DBX) Q2 adj EPS $0.60 vs. est. $0.52; Q2 revs rose 1.9% y/y to $634.5M vs. consensus $629.81M; said Q2 paying users 18.2M; Total ARR was $2.573B, an increase of 2.9% y/y; Q2 Average revenue per paying user was $139.93, as compared to $138.94 for the same period last year; Q2 GAAP gross margin was 83.1% vs. 80.7% y/y.
• DXC Technology (DXC) Q1 adj EPS $0.74 vs. est. $0.58; Q1 revs $3.24B vs. consensus $3.14B; guides Q3 EPS and revs above views and narrows FY25 EPS view to $2.75-$3.00 from $2.50-$3.00 while boosts its FY25 revenue view to $12.74B-$13.02B from $12.67B-$12.95B.
• Five9 Inc. (FIVN) Q2 adj EPS $0.52 vs est. $0.44, adj EBITDA $41.8Mm vs est. $36.01Mm on revs $252.086Mm vs est. $245.2Mm; sees Q3 revs $254.5-255.5Mm vs est. $266.41Mm and adj EPS $0.57-0.59 vs est. $0.55; sees FY revs $1.013-1.017B vs est. $1.055B and adj EPS $2.25-2.29 vs est. $2.19.
• Mitek Systems (MITK) Q3 adj EPS $0.25 vs est. $0.24 on revs $44.976Mm vs est. $47.99Mm; sees FY revs $169-173Mm vs est. $182.07Mm, adj op mgn 23-25%.
• News Corp. (NWSA) Q4 adj EPS $0.17 vs. est. $0.16; Q4 revs rose 6% y/y to $2.58B vs. consensus $2.49B; Revenue at Dow Jones grew 4%, to $566 million, driven by growth in circulation and subscription revenues.
• Paramount Global (PARA) Q2 Operating loss $5.32B vs. loss $250M y/y; Q2 revs $6.81B vs. est. $7.21B; Q2 results include $5.98B charge for cable networks; 2Q TV Media Revenue $4.27B, 2Q Direct-to-Consumer Revenue $1.88B, 2Q Filmed Entertainment Revenue $679M; Paramount+ Subscribers down 2.8M in 2Q.
• Pubmatic Inc. (PUBM) Q2 adj EPS $0.17 vs. est. loss (-$0.02); Q2 revs $67.3M vs. consensus $70.12M; sees Q3 revenue $65M-$67M, below consensus $68.81M and sees FY24 revenue $288M-$292M, below consensus $300.3M.
• SoundHound AI (SOUN) Q2 adj EPS ($0.04) vs est. ($0.09), adj EBITDA ($13.8)Mm vs est. ($11.95)Mm on revs $13.5Mm vs est. $13.1Mm; guides FY revs over $80Mm vs est. $70.51Mm and FY25 revs over $150Mm.
• Synaptics (SYNA) Q4 EPS $0.64 vs. est. $0.55; Q4 revs $247.4M vs. consensus $245.17M; Q4 Core IoT products grew 63% y/y led by wireless group; sees Q1 revenue $255M plus or minus $15M vs. consensus $257.67M.
• Taiwan Semi (TSM) said in July, TSMC’s revenue jumped 44.7% to T$256,953M($7.94B) from a year earlier; last month, TSMC raised its FY revenue forecast given surging demand for chips used in artificial intelligence
• Take-Two Interactive (TTWO) Q1 adj EBITDA $24.9Mm vs est. $72.28Mm on revs $1.338B vs es.t $1.253B; sees Q2 revs $1.29-1.34B vs est. $1.467B and FY revs $5.57-5.67B vs est. $5.644B.
• Trade Desk (TTD) Q2 EPS $0.39 vs. est. $0.35; Q2 revs rose 26% y/y to $585M vs. est. $577.8M; sees Q3 revenue ‘at least’ $618M vs. consensus $604.2M and sees Q3 adjusted EBITDA approximately $248M; said Customer retention remained over 95% during the second quarter, as it has for the past ten consecutive years.
• Unity Software (U) Q2 revs $449.3M vs. est. $436.7M; Q2 adj. EBITDA $113.5M vs. est. $82M; lowers FY adj. EBITDA to $340M-$350M from prior $400M-$425M and guides FY revs $1.68B-$1.69B, below forecast $1.76B-$1.80B; said the reduction in guidance represents a more cautious recovery in the Grow Solutions business.
• China’s Semiconductor Manufacturing International Corp said on Friday it will steer clear of a price war in the industry and forecast current quarter sequential revenue growth of up to 15%. Co-CEO Zhao Haijun, who had warned about the price war in May, said: “We have indeed encountered a situation where some of our peers with excess capacity are using low prices to attract customers.