What Happened In The Stock Market This Week?
It was another massive week in the stock market! We saw the week begin with CPI Data being released and the results weren't good, as inflation showed its continued persistence in the economy even after a historically aggressive rate hike campaign by the Federal Reserve.
Earnings season continued in full swing as we saw real-estate focused companies such as Airbnb ($ABNB) and Zillow ($Z) release their quarterly earnings. We also saw major retailers such as Shopify ($SHOP) and YETI ($YETI) release their quarterly earnings reports. Big-Tech continues to bleed with the results form companies like Sony ($SONY), Roku ($ROKU), and Cisco Systems ($CSCO). We'll also cover how up-and-coming hopefuls in the tech space such as Lyft ($LYFT), Upstart ($UPST), Upwork ($UPWK), DoorDash ($DASH), DraftKings ($DKNG) and Coinbase ($COIN) performed on their earnings report.
Lastly, we'll cover our major small-cap risers of the week. This week saw companies such as Beamr Imaging ($BMR), Ohmyhome ($OMH), and Digital Brands Group ($DBGI) soar on news, squeezing short-sellers in the process.
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Let's get into it, traders!
Consumer Price Index (CPI):
We'll start with the major news of the week. The release of the latest CPI data by the U.S. Bureau of Labor Statistics. The data was released Monday morning, and the it wasn't good. Prices rose more than expected in January as "inflation won't go away". The CPI (consumer price index) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. According to the Bureau of Labor Statistics, the CPI rose by 0.3% in January. Shelter prices accounted for much of the rise, climbing 0.6% on the month and contributing more than two-thirds of the increase. On the year, shelter pricing rose by 6%. Stocks slid sharply following the release of the data as sentiment on macroeconomic conditions grew increasingly bearish from the news.
Airbnb, Inc. ($ABNB):
Kicking off our coverage of earnings season, we'll begin in the real-estate sector and discuss Airbnb. Shares of $ABNB fell by roughly 5% during the morning session on Wednesday. This came after the release of a stellar Q4 earnings report from the company the day prior in after-hours. Airbnb reported $2.2B in revenue for Q4, beating estimates, and said that guest demand is strong for their listed properties, especially for "first-time users". The company also gave optimistic guidance for Q1 of this year. One glaring negative that could have attributed to the decline in share price was that the company reported a net loss of $349 million, equal to 55 cents per share. The company also announced approval to buy back up to $6B of its Class A common stock.
Zillow Group ($Z):
Continuing on in the real-estate sector we'll discuss Zillow. Shares of $Z traded higher by roughly 12% during the morning session on Wednesday. This after the release of a solid Q4 earnings report from the company the day prior in the after-hours session. Zillow reported revenue of $474 million in Q4, up roughly 9% over the same period from 2023. EPS (Earnings Per Share) fell to $0.20, from $0.21 from Q4 in 2023. The jump in revenue occurred due to "significant" gains in Zillow's residential, rental and mortgage business. Rentals saw the biggest year-over-year jump, with revenue rising 37%. Zillow CEO, Rich Barton was elated at the "great revenue numbers across the whole of our increasingly diversified and growing business. This is evidence of the progress we're making to transform the way people buy, sell, finance, and rent homes by continually adding more functionality, software, and services to Zillow's housing super app."
Shopify Inc. ($SHOP):
Shifting to the retail sector, we'll discuss how major retailers performed on their quarterly earnings reports, and we'll begin with Shopify. Shares of $SHOP fell more than 8% during the market session on Tuesday. This came after the release of the company's Q4 earnings report. Shopify reported better-than-expected earnings, but the share price decline came due to mixed guidance from company leadership regarding the current period. CFO, Jeff Hoffmeister, attributed strong earnings to more products being sold on the platform. However, Wedbush analysts noted that Shopify's guidance implies operating income "well below estimates and consensus."
YETI Holdings, Inc. ($YETI):
Finishing off the retail sector we'll discuss the massive drinkware and equipment retailer, YETI. Shares of $YETI traded down by roughly 15% during the morning session on Thursday after the release of the company's Q4 earnings report. The report revealed a mix of challenges and growth, with the company navigating "cautious consumer spending and achieving significant milestones in its drinkware business and international markets.". YETI reported a 16% increase in Q4 net sales, totaling $519.8 million. The growth was driven by a 12% rise in drinkware sales and a whopping 44% increase in international net sales. EPS for the quarter grew 15% to $0.90 per share. Despite all these impressive feats, the company still fell short of guidance. YETI CEO, Matt Reintjes said this was "primarily as a result of more cautious and inconsistent spending on high-priced ticket items in our coolers & equipment category."
Cisco Systems, Inc. ($CSCO):
We'll shift our discussion to big-tech, and outside of the Big-3 (Nvidia, Amazon, Meta), this industry continues to struggle with shifting macroeconomic conditions and consumer behavior. We'll start our coverage of this sector with Cisco Systems. Shares of $CSCO fell roughly 3% during the morning session on Thursday. This came after the release of the company's Q2 earnings report in the after-hours session the previous day. The company announced plans to cut approximately 5% of its total workforce, resulting in the elimination of about 4,250 jobs. If you haven't noticed the trend by now, tech giants across the globe are trimming their workforce in order to re-allocate resources elsewhere across their companies. In 2024 alone, 144 technology companies have laid off approximately 35,000 workers. Cisco did report strong Q2 results in terms of EPS and revenue but did issue light guidance which spooked market participants.
Sony Group Corporation ($SONY):
Continuing on in technology sector we'll discuss Sony Group Corporation. Shares of $SONY fell roughly 5% during the morning session on Wednesday. This came after the release of the company's Q4 earnings reported in the pre-market session that same day. The company announced its plan to cut its sales forecast for its flagship PlayStation 5 console on Wednesday after warning of weaker sales in its key gaming division. The forecast went from a projected 25 million units sold, down to 21 million units. The cut came after the company posted record quarterly revenue in the December, which encompasses the holiday season. Sony also trimmed its fiscal year sales forecast for the gaming division by 210B yen. The main challenge for Sony now lies in trying to keep up momentum for the PS5, which was released more than three years ago.
Roku, Inc. ($ROKU):
Capping off our coverage of the big-tech sector, we'll discuss the streaming service provider, Roku. Shares of $ROKU slid by more than 20% during the morning session on Friday. This after the release of the company's latest earnings report during the after-hours session from the previous day. The streaming service provider forecasted a steeper-than-expected Q1 loss for this year as it struggles to compete with streaming giants such as Netflix and Amazon in advertising dollars. Adding to the streaming service providers' concerns, Walmart has shown increasing interest in acquiring Vizio, which would create another competitor in their most important retail channel. This is due to the fact that Roku has an exclusive deal with Walmart to sell products fulfilled by the retailer on its devices. The company is also facing slow spending on media and entertainment due to limited releases as a result of the Hollywood strike last year. Analyst Michael Nathanson from MoffettNathanson said, "Roku is at the precipice of being squeezed by the emergence of challengers on all flanks".
Lyft, Inc. ($LYFT):
Shifting our discussion, we'll turn to the up-and-coming hopefuls in the tech industry, and begin our discussion with one of the the wildest events of earnings season so far, and talk about what happened with Lyft this week. Shares of $LYFT soared more than 50% in the post-market session on Wednesday, immediately following the release of the company's Q4 earnings report. However, there was a major clerical error in a key segment of the earnings report. The company had accidentally misstated its margin expansion due to an overlooked typo. Rather than 500 basis points, or 5% growth for 2024, the company is actually forecasting growth of 50 basis points, or $0.50%. The CFO, Erin Brewer made a statement correcting the typo to notify market participants. The company did, however, post better-than-expected earnings in Q4. The stock fell by more than 20% during the morning session on Wednesday after their CFO issued the correction.
Upstart Holdings, Inc. ($UPST):
Continuing on in the tech sector, we'll discuss Upstart. Shares of $UPST fell roughly 18% during the morning session on Wednesday. This after the release of the company's underwhelming earnings report the day prior in the after-hours session. Upstart is an artificial intelligence lending marketplace that connects consumers to a network of AI-enabled bank partners. The company reported a slight decrease in revenue for Q4, and a whopping 39% revenue decrease for the entirety of 2023 compared from the year prior. The company's performance reflects the broader challenges in the lending market, including macroeconomic conditions, disruptions in the banking sector an credit markets. CEO, Davew Girouard said in a statement about the latest results, "Despite the difficult lending environment, we delivered solid results to end the year. The numbers will show that we've actually become more efficient in 2023. And even while becoming more efficient, we've laid the groundwork to become more resilient and diversified company that can thrive through a wide range of economic conditions.
Upwork Inc. ($UPWK):
The next tech-giant hopeful we'll discuss is Upwork. Shares of $UPWK fell by roughly 8% during the morning session Thursday. This came after the release of the company's latest earnings report in the after-hours session during the previous day. Upwork is a global online marketplace that connects businesses with skilled independent or freelance professionals. Upwork reported a 14% year-over-year increase in Q4 revenue totaling $183.9 million. They also reported a significant turnaround in net income coming in at $17.4 million in Q4 compared to a net loss of $16.5 million during the same quarter in 2022. Lastly, free cash flow skyrocketed to $48.3 million, up from just $2.2 million from the previous year. The company issues positive guidance for the year ahead and said it has confidence in its business model and strategic direction.
DoorDash, Inc. ($DASH):
Next we'll discuss the mobile-based delivery app, DoorDash. Shares of $DASH fell roughly 13% during the morning session on Friday. This came after the release of the company's Q4 earnings report in after-hours during the previous day. The decline in share prices is surprising considering the company reported a significant increase in total orders, which rose by 23% year-over-year to 574 million, and company revenue for Q4 was $2.3B, a 27% increase from the same period during the previous year. The company also reported strong free cash flow for the year totaling $1.3B. DoorDash's performance in 2023 and its strategic initiatives for 2024 reflect a rapidly growing company that is also enhancing its profitability and operational efficiency.
DraftKings Inc. ($DKNG):
It's only fitting we discuss a sports-betting technology company after a crazy Super Bowl last weekend. Here's what happened this week with DraftKings. Shares of $DKNG traded relatively flat during the morning session on Friday (down by roughly 1%). This after the release of the company's latest earnings report in after-hours from the previous day. DraftKings, the mobile based sports betting company, posted earnings that missed Wall Street analyst estimates, but did increase revenue by 44%. The company also reported a greater loss per share than expected of $0.10 compared to the estimates of $0.08 per share. DraftKings, and sports betting continues to rapidly grow in terms of users, as the company totaled 3.5 million average monthly payers, a whopping 37% increase from the same period in 2022. The company also announced yesterday that they are planning to acquire lottery app Jackpocket for approximately $750 million. For 2024, DraftKings is increasing its fiscal year guidance to between $410 million and $510 million, compared to its prior guidance of between $350 million and $450 million.
Coinbase Global Inc. ($COIN):
We'll cap off our coverage of big-tech hopefuls and talk about the fintech industry giant, Coinbase. Shares of $COIN rose by a whopping 10% during the morning session on Friday. This came after the release of the company's Q4 earnings report in after-hours from the previous day. The company said that they recorded their first quarterly profit in two years, which they attributed to the SEC approval of the first bitcoin spot ETF's and broad expectations for improving macroeconomic conditions in 2024. Bitcoin ETF's enable retail investors to access the cryptocurrency market as a share that's traded on a regulated exchange without directly exposing them to the underlying asset. Coinbase, which is the largest venue for buying and selling cryptocurrencies, totaled $273 million in net income for Q4.
Beamr Imaging Ltd. ($BMR) (Small-Cap):
It can't be a Traders' Recap without discussing some of the craziest small-cap risers of the week. We'll begin our coverage with Beamr Imaging Ltd. Shares of $BMR soared more than 1000% in the morning session alone on Monday. This came after news was released that Beamr Imaging Ltd., a leader in video optimization technology and solutions, announced it will present joint research relating to automated video modernization with $NVDA (Nvidia) ath the 2024 ACM Mile-High-Video Conference. Beamr Ltd. is headquartered in Israel, and services content distributors, video streaming platforms, and Hollywood studios. Shares of $BMR fell below $15 during the morning session on Friday.
Ohmyhome Ltd. ($OMH) (Small-Cap):
Continuing on in small-cap's, we'll discuss Ohmyhome. Shares of $OMH traded higher by more than 300% during the morning session on Tuesday. This rise in stock price came without any news, SEC filing, or earnings releases from the company. More than 23M shares were traded in the pre-market alone, this exponentially up from its average daily trading volume of 24,000 shares traded. Ohmyhome is a data and technology-driven property tech company based in Singapore and Malayasia. It offers brokerage services that allow customeres to purchase, sell, rent, or lease thier properties on its platform. Shares of $OMH fell below $1.20 per share during the morning session Friday.
Digital Brands Group Inc. (Small-Cap):
Concluding our Traders' Recap and our coverage of the small-cap risers of the week, we'll discuss Digital Brands Group Inc. Shares of $DBGI traded higher by more than 300% during the morning session on Tuesday. There was no direct correlation to the surge in the stock price other than the company did file a Form 8-K with SEC the day prior in which the management team reaffirmed its revenue forecast for this year. A Form 8-K is the current report publicly traded companies must file with the SEC to announce major events that shareholders should know about. During the morning session alone on Tuesday, $DBGI had more than 60 million shares traded. This is in comparison to their average daily volume of approximately 125,000 shares traded. Shares of $DBGI fell below $5 per share during the morning session on Friday.
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Resources:
CPI Data:
$ABNB:
https://www.cnbc.com/2024/02/13/airbnb-abnb-q4-earnings-2023.html
$Z:
https://finance.yahoo.com/news/zillow-zg-q4-earnings-key-003010650.html
https://www.inman.com/2024/02/13/zillow-sees-revenue-rise-in-q4-touts-role-as-household-name/
$SHOP:
https://www.cnbc.com/2024/02/13/shopify-shop-earnings-q4-2023.html
$YETI:
https://finance.yahoo.com/news/yeti-holdings-inc-reports-mixed-114304974.html
$CSCO:
$SONY:
https://www.cnbc.com/2024/02/14/sony-posts-record-quarterly-revenue-on-playstation-sales-boost.html
$ROKU:
$LYFT:
https://www.cnbc.com/2024/02/13/lyft-shares-soar-on-earnings-beat-guidance.html
$DASH:
https://finance.yahoo.com/news/doordash-inc-dash-reports-strong-213437835.html
$UPST:
https://finance.yahoo.com/news/upstart-holdings-inc-upst-reports-214054149.html
$UPWK:
https://finance.yahoo.com/news/upwork-inc-upwk-posts-remarkable-220801869.html
$DKNG:
$COIN:
https://www.cnbc.com/2024/02/16/coinbase-coin-share-surge-13percent-after-earnings.html
$BMR:
https://finance.yahoo.com/quote/BMR/profile
$OMH:
https://finance.yahoo.com/quote/OMH/profile
https://investorplace.com/2024/02/why-is-ohmyhome-omh-stock-up-366-today/
$DBGI:
https://investorplace.com/2024/02/why-is-digital-brands-dbgi-stock-up-150-today/
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