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Twilio: Too Many Bulls

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Hedge funds have built large positions in the stock. The average analyst has remained bullish on the stock for over a year now. Twilio is priced for perfection at nearly 12x '20 revenue estimates. The importance of paying the right price has hardly ever been more important than in the current stock market. The recent market has consistently overpaid for growth and gotten burned. In the case of Twilio (TWLO), the market had no business paying over $90 for the stock last November, and those buying on the surge to over $150 have already taken a beating.  Read the full article on Seeking Alpha. 
Disclosure: No position mentioned. Please review the disclaimer page for more details. 
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Out Fox The $treet - October 15

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Stocks to watch on Tuesday: Glu Mobile (GLUU) - the stock is soaring from an addition to the S&P SmallCap 600 index. The stock is incredible cheap at slightly over 2x bookings estimates. Glu Mobile has a huge gap to close here. 

Aphria (APHA) - the stock is up over 20% on a relief rally following a big dip in the stock price since the start of September. The Canadian cannabis company saw revenues decline from the prior quarter and adjusted EBITDA from the cannabis operations drop. The key was the reaffirming of guidance: revenues $650 million to $700 million and adjusted EBITDA of ~$90 million. The stock has a market cap of only $1.3 billion or about 14x EBITDA estimates. Aphria should bounce from here.  Snap (SNAP) - the social messaging stock appears a good short, if the stock fails to break above $14 here. Snap shouldn't be above a market cap of $20 billion while still generating large EBITDA losses on revenues of $2.2 billion next year. 


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Which Recent IPO Are You Buying This Week?

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Renaissance provides this data on the IPOs within the last year that had the largest gains or losses in the last week. Some of the best places to look for future winners are IPOs that sell off. Stocks such as Beyond Meat (BYND) and Tilray (TLRY) are down significantly from big runs after the IPO so the 10% losses in the last week aren't necessarily appealing. The others are biotech and ETFs so not sure any stocks this week qualify as beaten down IPOs. Maybe the longs like Roku (ROKU)and Stitch Fix (SFIX) qualify as the most beaten down.  
Add a comment with the IPO that you are buying and why.  More commentary - WhoTrades Disclosure: No position 
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Wayfair: Shaking Off Citron Call

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Wayfair (W) is down about $70 from the all-time highs back in March to $105. The recent repeated negative calls by Citron Research on the online furniture stock actually could signal the bottom. The noted short seller isn't highly bearish on the stock where others he has claimed the stocks were virtually worthless. Citron just picks the stock to dip further to $70.  Citron Research@CitronResearch It Doesn't Matter Until it Matters

https://citronresearch.com/it-doesnt-matter-until-it-matters/ … It Doesn't Matter Until It Matters - Citron Research With new market realities, Wayfair should quickly trade down to $70. Anyone who follows Citron knows that we have been bearish on Wayfair for YEARS as we never thought selling furniture online with... citronresearch.com
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Aurora Cannabis: Positive Market Data With Several Catches

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The Canadian cannabis industry saw a big boost in July sales of dried cannabis. The sales increase was swamped by additional supply pushing inventory levels in 30.5 times total sales for the month. Aurora Cannabis recently dumped a large amount of inventory on the wholesale bulk market at a low gross profit. The stock made a nice bounce off $4, but my stock view still remains bearish with a market cap of $4.5 billion and weak financials. The cannabis sector has taken a beating in the last few months as sector sales and regulatory issues have taken out some of the hot air in the bubble. The July sales and inventory data from Canada finally provides some positive data points for investors, but the market still faces supply rationalization issues not adequately addressed in the recent Aurora Cannabis (ACB) corporate update. The stock has made an initial bounce off the recent lows below $4, but the investment thesis is still tilted towards a bearish view until the cannabis sector address…
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FireEye Beat Q3 Guide Down

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After the close, FireEye (FEYE) released preliminary FQ3 revenues above the previous guidance while bookings were inline with guidance. The numbers aren't that impressive considering the company originally guided revenues below a consensus for the quarter of $229 million.  -The company posted early estimates for Q3 revenue "at or above the high end" of previous guidance for $217M-$221M, and billings to be within the range of $245M-$255M. -The consensus expectations for Q3 revenues of $219.5M.  The stock is worth about $3 billion with slow growth and prospects of generating only $50 million in free cash flow this year. The cybersecurity company continues to go nowhere fast. FireEye likely rallies to $16-17, but the stock isn't going to $22 anytime soon as UBS recently speculated.


Investors should look to unload on any pop on these numbers.   More research: FireEye: Struggler

 More commentary - WhoTrades
Disclosure: No position. Please review the disclaimer page for mor…
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Snap: Still Threatened By Facebook

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After a crazy rally to $18, Snap (SNAP) is finally coming back to earth in early October. Even worse for shareholders, the stock hit a double top as big competitor Facebook (FB) releases a new app targeted at their market.



Whether or not Threads works long term is probably irrelevant to this stock story. The key is that Snap can't afford any more hiccups in their business model with the stock having a $20+ billion valuation with targets for adjusted EBITDA to still stay very negative. The Q3 guidance was for a $72.5M EBITDA loss.

While in the process of still battling it out with the much larger Facebook, the stock trades at the highest P/S multiple in the sector. Throw in the BoA analysis that app downloads slowed in Q3 and the stock is likely headed back to the sub-$10 billion range.


More commentary - WhoTrades

Update - October 4
Morgan Stanley upgraded the stock to an Equal Weight today with a $17 price target. No rally on a big rally in the market is a sure sign that Snap is h…
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