What Happened In The Stock Market This Week?
This week in the stock market saw the much anticipated earnings release of NVIDIA ($NVDA), and no surprise...they absolutely crushed projections. Meanwhile, the blood-bath for EV (electric-vehicle) manufacturers continued in full-effect as Rivian ($RIVN) hit all-time lows this week after a disappointing earnings release in which they also announced plans to layoff 10% of their full-time workforce.
There were also some wins for other companies who released earnings this week, including technology company Garmin ($GRMN), and retail grocery store, Sprouts Farmers Market ($SFM).
Lastly, we'll cover our small-cap risers of the week, including TRxADE Health Inc. ($MEDS), and Intuitive Machines Inc. ($LUNR) literally going to the moon.
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Let's get into it, traders!
NVIDIA Corp ($NVDA):
We'll start with the biggest news of the week in the stock market; the release of NVIDIA's latest earnings report. Nvidia beat Wall Street analyst expectations for both earnings and sales, and said that revenue this quarter would be better than expected, even when factoring in elevated expectations for enormous growth. Shares soared more than 15% during the morning session on Thursday after the release of the latest earnings report in the post-market session on Wednesday. The stock even eclipsed the $800 mark as of Friday morning. NVIDIA posted quarterly revenue of $22.10B vs. expectations of $20.62B and recorded EPS (earnings per share) of $5.16 vs. expectations of $4.64. The company also said that they expect roughly $24B in sales for the current quarter, much higher than analyst expectations of $22.17B.
NVIDIA CEO, Jensen Huang addressed concerns and skepticism that the level of growth won't be sustainable for the full year. He stated, "Fundamentally, the conditions are excellent for continued growth" in 2025 and beyond. He went on to state that demand for the company's GPU's will remain strong due to generative AI (artificial intelligence) and an industry-wide shift from central processors to the accelerators that the company produces.
Rivian Automotive Inc. ($RIVN):
The bloodbath for EV (electric-vehicles) manufacturers continued this week as Rivian got pummeled after the release of a disappointing earnings report. Shares of Rivian tumbled more than 30% after the release of their latest earnings report during the post-market session on Wednesday. The company said that it plans to cut 10% of its workforce and forecasted vehicle production that grossly missed estimates, which leadership attributed to downtime for factory upgrades and slowing demand for electric vehicles due to the high interest rate environment. Shares nearly fell below $10 during the morning session on Wednesday.
CEO, RJ Scaringe, in the earnings call on Wednesday, stated, "We firmly believe in the full electrification of the automotive industry, but recognize in the short-term, the challenging macro-economic conditions." Amazon-backed Rivian has been burning through cash reserves to ramp-up production of its R1S SUV and R1T pickup trucks as it spends on building a new factory in Georgia and loses thousands of dollars on each vehicle it builds. After refusing to reduce prices of its vehicles last year, despite a price war sparked by Tesla, Rivian, just this month, cut the price of its R1T trucks and SUV's by $3,100. The company also recorded a 10% fall in deliveries for Q4, missing estimates, citing lack of deliveries to Amazon in the three-month period due to Amazon focusing on navigating the holiday period. One short-term silver lining for Rivian that could improve sales is next month's release of the R2 platform, which is expected to be cheaper and smaller.
Garmin Ltd. ($GRMN):
Shares of Garmin soared more than 12% during the morning session on Wednesday after the release of the company's latest earnings report, in which the company posted EPS (earnings per share) of $6.71, a whopping 27% more than estimate projections. Consensus on Garmin, moving forward is still mixed however, with the most bullish analyst setting a price target of $165 per share, and the most bearish analyst setting a price target of $118 per share. Fitness continues to be a growing area of revenue for the company, as revenue increased 22% in Q4 with growth across all categories in the fitness domain led by strong demand for wearables, such as their fitness watches. This category resulted in $93M of operating income for the quarter. CEO, Cliff Pemble said in a statement to shareholders, "We are very pleased with our 2023 financial performance resulting in record full-year consolidated revenue and record full-year revenue in three of our five segments. We are entering 2024 with strong momentum from our robust product lineup and have many product launches planned during the year."
Sprouts Farmers Market, Inc. ($SFM):
Shifting to the retail sector, we'll discuss up and coming grocery chain, Sprouts Farmers Market. The company released their latest earnings report in the after-hours session on Thursday. Shares of the company soared roughly 10% during the morning session on Friday. Sprouts posted Q4 results, wherein top and bottom lines not only increased year-over-year, but also beat their Zacks Consensus Estimate. The company attributed this to decent comparable sales, positive foot traffic trends, and accelerating unit growth and increasing customer engagement. Sales of the Phoenix, AZ based retailer increased 7.7% on a year-over-year basis. Adjusted gross profit rose 8.3% year-over-year to $620.4M in the quarter. The company also reported an adjusted operating income of $69.4M, up from $61.9M reported in Q4 during 2022. During the latest quarter, Sprouts Farmers Market opened six new stores, taking the total count to 407 stores across 23 states. The company is strategically expanding its store footprint, particularly focusing on smaller prototype formats, aiming to enhance accessibility to its differentiated assortment. It plans to open 35 additional stores in 2024.
TRxADE Health Inc. ($MEDS):
Kicking off our small-cap risers of the week, we'll discuss TRxADE Health Inc. TRxADE Health is a health services IT company that operates in the United States. The company focuses on digitalizing the retail pharmacy experience by optimizing drug procurement, prescriptions journey, and patient engagement. It operates the TRxADE drug procurement marketplace, which offers price transparency, purchasing capabilities, value-added services, and patient centric telehealth services. Shares of $MEDS soared more than 150% during the market session on Wednesday after news that the company had sold its online trading platform for pharmaceutical products and services to Micro Merchant Systems. MMS paid $22.5M in cash for the platform. TRxADE Health Inc. also has the ability to receive an additional $7.5M in cash if certain conditions are met within four years of the deal closing. The stock did fall to below $8.50 during the market session on Friday.
Intuitive Machines Inc. ($LUNR):
When market participants use the term "to the moon", they don't actually mean a moon landing driving a meteoric rise in price, but that's just what happened with $LUNR. This week, Intuitive Machines' cargo moon lander known as "Odysseus" became the first privately developed spacecraft to land on the lunar surface, and the first U.S. spacecraft to soft-land on the moon in more than 50 years. The Houston, TX based company said that IM-1 mission lander was standing upright and sending data back to Earth. Since the start of February, the stock has risen more than 200%. Cantor Fitzgerald analyst said about the lunar landing, "This validates the company's technology and adds significant credibility to the business.". Wall Street analysts emphasized that the unprecedented nature of the event could lead to volatile momentum trading, potentially creating a meme stock environment of sorts. Andres Sheppard, of Cantor Fitzgerald, stated, "We've never witnessed a publicly traded company go through a moon landing attempt. So this is new, not just for investors, but for us analysts as well." The company has part of a five-year $719M contract to provide engineering services to NASA's Goddard Space Flight Center in Maryland. Analysts expect the Goddard contract is worth about $11M per month in revenue for Intuitive Machines, which is estimated to bring in about $338M in fiscal revenue for 2024. The stock traded near $10 during the market session on Friday.
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Resources:
$NVDA:
https://www.cnbc.com/2024/02/21/nvidia-nvda-earnings-report-q4-2024.html
$RIVN:
$GRMN:
https://finance.yahoo.com/news/garmin-ltd-just-beat-earnings-121925412.html
$SFM:
https://finance.yahoo.com/news/sprouts-farmers-sfm-q4-earnings-134500006.html
$MEDS:
https://seekingalpha.com/news/4069163-trxade-sells-online-pharma-marketplace-stock-rallies
https://finance.yahoo.com/quote/MEDS/profile
$LUNR:
https://www.cnbc.com/2024/02/23/intuitive-machines-stock-lunr-odysseus-moon-landing.html
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