What Happened In The Stock Market This Week?
This was a busy week in the stock market as earnings once again were the main headlines. We had a large array of companies from multiple sectors release earnings. The companies who stole the show were rideshare company, Lyft ($LYFT), and up-and-coming coffee company, Dutch Bros ($BROS). The losers of the week were e-commerce company, Shopify ($SHOP), entertainment company, Disney ($DIS), rideshare company, Uber ($UBER), and AI-defense technology manufacturer, Palantir Technologies ($PLTR). We also had EV maker Rivian Automotive ($RIVN), and Airbnb ($ABNB) release earnings this week.
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Lyft, Inc. ($LYFT):
Shares of Lyft jumped more than 5% during the market session on Wednesday, after the release of the company's latest earnings report during the post-market session from the previous day. The rideshare company reported solid earnings and KPI's. Gross bookings of $3.7B were up 21% year-over-year. The company reported revenue of $$1.3B, which is up 28% year-over-year. Adjusted EBITDA for the company came in at $59.4 million, which is more than double the figure it was last year for the same period. The company is also expecting gross booking to continue the positive trend, increasing to $4B in the current quarter. The company reported strong KPI's as well including rides being up 23% year-over-year, coming in at 188 million. Growth in early morning, commute, and weekend evening trips were particularly strong. Active riders came in at 21.9 million which is up 12% year-over-year, reflecting an improvement in rider retention along with an increase in new riders. Company CEO, David Risher, said in the latest earnings report, "Lyft is off to a strong start in 2024. We are executing well and bringing much-needed innovation to the market. That's why drivers and riders are choosing Lyft more often...After a year in the driver's seat at Lyft I'm thrilled to see all the ways that our customer obsession drives profitable growth." Company CFO, Erin Brewer said in the latest earnings report, "We continue to see demand for our platform increase and our Q1 results reflect this: we delivered strong top-line growth and had our second consecutive quarter of positive free cash flow...We've had a solid start to the year and we're on track to deliver on our full-year financial goals with an improved outlook for our full-year free cash flow."
Dutch Bros, Inc. ($BROS):
Shares of Dutch Bros jumped more than 10% during the market session on Wednesday after the release of the company's latest earnings report during the after-hours session from the previous day. The coffee company posted EPS of $0.08, beating estimates of $0.02, and beating their year-over-year figure of a loss of $0.07. Revenue increased $275.1 million, up nearly 40% year-over-year, and surpassing estimates of $255.7 million. The company also reported net income of $16.2 million, compared to a loss of $9.4 million from the same period in the prior year, and obliterating analyst expectations of a net income of $2.63 million. Same-store sales growth also increased by 10%, indicating strong customer retention. The company also raised 2024 revenue guidance to between $1.2B and $1.215B. Company CEO, Christine Barone, said in the latest earnings report, "We are pleased with our performance in the first quarter - we delivered exceptional results and witnessed the momentum we saw leaving 2023 continue into Q1...Given this strong start to 2024, and despite a continued volatile economic backdrop for the consumer, we are comfortable raising our guidance for the year." She went on to add, "Notably, a record 66% of all transactions in Q1 came through Dutch Rewards members, which allows us to efficiently and effectively connect with our customers." Lastly, she stated, "This marks the 11th consecutive quarter of 30 or more new shop openings and demonstrates the consistency by which we are executing our growth plans."
Shopify, Inc. ($SHOP):
Shares of Shopify fell more than 20% during the market session Wednesday after the release of the company's latest earnings report that morning. The drop in share price decreased the company's value by nearly $20B. The company reported better-than-expected figures on EPS and Revenue but spooked market participants by issuing weak guidance for the current quarter. Gross margins for the second quarter are expected to decrease by about 50 basis points compared with the first quarter. Shopify executives said consumer spending in the United States remains strong but, "we have factored in headwinds related to foreign exchange from the strong U.S. dollar and some softness in European consumer spending in our Q2 outlook." Revenue increased 23% to $1.9B from the year prior, and the company also reported free cash flow of $232 million, nearly triple what it was during the same period from the previous year. President of Shopify, Harley Finkelstein said in the latest earnings report, "You're seeing the strongest version of Shopify in our history. Our outstanding Q1 performance is clear proof of our dedication to the new shape of Shopify, our commitment to operating with a consistent team size, and our focus on building for the long term to deliver both growth and profitability...We are building a 100-year company, and we will continue to remain fiercely agile, capitalizing on every opportunity that accelerates the success of our merchants, enables us to continue to build world-class products, and enhances operations efficiency for better returns."
Walt Disney Company ($DIS):
Shares of Disney dipped more than 9% during the market session on Tuesday after the release of the company's latest earnings report. Disney reported Q2 earnings that beat analyst expectations but missed on revenue expectations for the fourth consecutive quarter, as well as issuing weaker-than-expected guidance for the upcoming quarter. Disney's total operating income rose by 17% as streaming apps such as Disney+ and Hulu turned a profit for the first time. However, when you factor ESPN+ into the equation, the company lost $18 million during the quarter. However, this is much improved from the $659 million loss reported during the same period from the previous year. Disney credits increased Disney+ subscribers and higher average revenue per user for the gains. Disney reported EPS of $1.21, topping expectations of $1.10, however, they narrowly missed on revenue, reporting $22.08B vs. analyst expectations of $22.11B. Company CEO, Robert Iger, said in their earnings report, "Looking at our company as a whole, it's clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results. We have a number of highly anticipated theatrical releases arriving over the next few months; our television shows are resonating with audiences and critics alike; ESPN continues to break ratings records as we further its evolution into the preeminent digital sports platform; and we are turbocharging growth in our Experiences business with a number of near-and long-term strategic investments." The company also repurchased $1B worth of shares in the second quarter and remain on track to generate $8B of free cash flow in 2024.
Uber Technologies, Inc. ($UBER):
Shares of Uber fell more than 9% during the market session on Wednesday after the release of the company's latest earnings report that morning. Uber posted a surprise loss of $0.32 vs. expectations of a profit of $0.23. The company also posted revenue of $10.13B, which just surpassed estimates of $10.11B. The company's revenue grew 15% in Q1. The company's net loss grew substantially to $654 million, compared to $157 million during the same period from the previous year. The number of Uber's monthly active platform consumers reached 149 million in Q1, up 15% year-over-year from 130 million. There were 2.6B trips completed on the platform during Q1, up 21% year-over-year. Company CEO, Dara Khosrowshahi said the loss had, "nothing to do with the operating business...We did have to mark down those equity stakes that resulted in a loss...We don't expect that to keep happening going forward." He went on to say that "Demand for Uber remains robust across our platform, supported by our improving marketplace experience, the continued shift of consumer spending from goods to services, and the secular trend towards on-demand transportation and delivery." He went on to state, "Our multi-year growth framework is on track, with audience up 15% and frequency up 6% in Q1...We reached a new quarterly record for Adjusted EBITDA, which grew 82% year-over-year, and we generated free cash flow of $4.2B over the trailing 12 months."
Palantir Technologies Inc. ($PLTR):
Shares of Palantir Technologies fell nearly 14% during the market session on Tuesday after the release of the company's latest earnings report during the after-hours session from the previous day. The AI defense technology company sunk on weaker-than-expected guidance. The company reported EPS (earnings per share) of $0.08, matching exactly what analysts had projected, and reported revenue of $634 million, slightly beating analyst expectations of $625 million. Company leadership is expecting current quarterly revenue to fall between $649 million and $653 million, which is just short of analyst expectations of $653 million. The company is also projecting full-year revenue to fall just short of analyst expectations of $2.71B, where they believe they will report revenue between $2.68B and $2.69B. Company CEO, Alex Karp said, "We anticipate that our U.S. commercial business, which accounted for 24% of our revenue last quarter, will remain one of the most significant drivers of our growth in the near term...Warfare in this century will continue to be transformed by software...The platforms in use by our defense and intelligence partners present a very real threat to the survival of our enemies." To give you a more complete picture of the progress Palantir has made as a business, Karp went on to say, "...we now earn more profit in a single quarter than the amount of revenue we generated in an entire year a little more than a decade ago." Revenue of $634 million was up 21% year-over-year.
Airbnb, Inc. ($ABNB):
Shares of Airbnb fell more than 6% during the market session on Thursday, after the release of the company's latest earnings report during the after-hours session from the previous day. The company reported Q1 results that beat analyst expectations but delivered weaker-than-expected guidance. The company reported EPS of $0.41 vs. analyst expectations of $0.24. They also reported revenue of $2.14B, beating expectations of $2.06B. Revenue increased for the company by 18% from the previous year. The company also reported net income of $264 million, which is more than double what they reported for the same period during the previous year. However, guidance is where sentiment lies, and the company said it is projecting Q2 revenue to fall between $2.68B and $2.74B, more than likely falling short of expectations of $2.74B. The company said they are already experiencing "robust demand for travel " ahead of the peak summer season, particularly around upcoming events like the Olympics in Paris. App downloads for Airbnb increased by 60% year-over-year in the United States. In terms of net income, the company had their most profitable Q1 on record, posting a figure of $264 million. Airbnb also posted a free cash flow figure of $1.9B.
Rivian Automotive, Inc. ($RIVN):
Shares of Rivian fell roughly 1% during the market session on Wednesday, after the release of the company's latest earnings report during the post-market session from the previous day. The EV manufacturer reported a worse-than-expected loss as Rivian lost more than $38,000 per vehicle. One things that garnered at least some positive sentiment around the company was the speculation that Apple was looking to partner with the EV startup. Rivian reported a loss of $1.24 per share, nearly identical to the reported $1.25 loss from the same period during the previous year. However, revenue did increase 80% to $1.204B The loss, however, was worse than analyst expectations of $1.15 per share. The EV manufacturer did end Q4 with nearly $9B of cash on-hand. CEO, RJ Scarings said in the company's latest earnings release, "(Rivian) expects significant improvement in the material and conversion cost of its vehicles and remains confident in its path to achieving modest gross profit in the fourth quarter of this year." He went on to say, "First quarter results exceeded our outlook and set a strong foundation for the remainder of the year as we focus on continued demand generation, delivering cost and plant efficiency improvements, advancing R2 development, and driving towards profitability." Scarings said on the Q1 earnings call that he wouldn't comment on market rumors or speculation surrounding a potential partnership with Apple, but did add that Rivian has a "history of partnership" as he pointed to their investment from Amazon. It is worth noting that Apple canceled it's "Project Titan" Apple Car in February of this year. Scaring went on to say, "As we thing about what we've built as a company, one of the core elements that makes this unique is just the level of vertical integration around our software and associated electronic platforms."
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Resources:
$LYFT:
$BROS:
https://finance.yahoo.com/news/dutch-bros-inc-bros-surpasses-214029780.html
$SHOP:
https://www.cnbc.com/2024/05/08/shopify-shares-plunge-18percent-on-weak-guidance.html
https://www.shopify.com/news/shopify-announces-first-quarter-2024-financial-results
$UBER:
https://www.cnbc.com/2024/05/08/uber-uber-q1-2024-earnings.html
$DIS:
https://www.cnbc.com/2024/05/07/disney-dis-earnings-q2-2024.html
https://thewaltdisneycompany.com/disneys-q2-fy24-earnings-results-webcast/
$PLTR:
https://www.cnbc.com/2024/05/06/palantir-pltr-earnings-q1-2024.html
$ABNB:
https://investors.airbnb.com/home/default.aspx
$RIVN:
https://www.investors.com/news/rivian-stock-quarterly-loss-on-horizon-apple-partnership-rumors/
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