Showing posts from 2024

IB Net Payout Yields Model

Cloudflare: Don't Fall For Goldilocks Excitement

  Cloudflare plans to dominate the AI inference market with their distributed network capabilities. Despite the strong growth potential in the AI market, the company offered up disappointing Q2 guidance, raising concerns about short-term performance. The stock has surged to unsustainable valuation levels, making it a risky investment despite promising long-term prospects. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » Just when  Cloudflare, Inc.  ( NYSE: NET ) appeared set for a reasonable valuation where investors could load up for the long term, the stock bounced off support and has surged to close the gap following the disappointing Q1 numbers. The  cloud networking and cybersecurity company has outlined a promising future with AI inferencing market growth. My  investment thesis  is Neutral on the stock here, with the ongoing rally likely to continue while the valuation is stretched

Carnival: Set To Cruise Back Up (Rating Upgrade)

Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » Update - June 24, 2024 Carnival reported a h uge quarter with massive cash flows. Not sure why the market got so negative on the stock, but the cruise line is now far more profitable than thought. The  $17 stock likely has earnings power of up to $2 in a few years.  -Q2 Non-GAAP EPS of $0.11 beats by $0.13. -Revenue of $5.78B (+17.7% Y/Y) beats by $90M. -Total customer deposits reached an all-time high of $8.3 billion, surpassing the previous record by $1.1 billion ($7.2 billion as of May 31, 2023). Original article posted on May 13, 2024 Carnival Corporation & plc stock has trended down to $14, providing an opportunity for investors to buy back in. The upcoming August quarter is expected to bring strong earnings finally for Carnival, with a quarterly profit topping $1 per share. Carnival's positive cash flows will help boost profit

Novavax: New Chapter, Questions Remain

  Novavax, Inc. secured a lucrative deal with Sanofi, receiving potentially $1.2 billion in cash and future royalties for Covid vaccines. The deal significantly improved Novavax's financial position, but the stock has already rallied from $4 to $14, limiting potential upside. Novavax's future success hinges on the royalty revenue from the Sanofi deal in 2025, with limited ability to compete with Sanofi's commercialization capabilities. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » In a matter of months,  Novavax, Inc.  ( NASDAQ: NVAX ) went from a biotech with a questionable future to one flush with cash and a potentially huge royalty deal. Investors being too greedy and not alert were probably caught  on the wrong side of the trade. My  investment thesis  is more Neutral on the biotech due to the stock now trading at nearly $14, up from only $4. Read the full article on S

Celsius: Unaltered Growth Story

Updated - June 12 Celsius continues to collapse due to Pepsi optimizing inventory levels. Pepsi cut inventory levels by another $20 to $30 million in Q2 following $20 million in Q1 for a total of up to $50 million. The stock has now fallen from $100 to only $62 and lily on the path to the previous lows at $50.  Celsius Holdings ( NASDAQ: CELH ) is on watch after several analysts lowered Q2 estimates on the energy drink company due in part to further inventory reduction by PepsiCo ( PEP ). During an investor conference on Tuesday, Celsius Holdings ( CELH ) management quantified the  PepsiCo ( PEP ) inventory reduction during the quarter at $20 million to $30 million sequentially, which came on the heels of a $20 million inventory reduction in Q1. "While some of the reduction was driven by PEP's working capital efficiencies and CELH starting to ship more to PEP's smaller distribution warehouses vs larger mixing centers, we believe the bulk of the 1H inventory cut reflects th

Enphase Energy: Market Wants An Irrational Rally

  Enphase Energy, Inc. has seen initial signs of a turnaround in the residential solar business in key European countries, but actual demand is lower than expected. The company has been under shipping demand to reduce inventory in the channel, but the market forecasts a nearly 70% boost in sales from the current sell-through levels. The stock already trades at 20x '26 EPS targets, with many questions about the aggressive growth required to reach those levels. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » The solar space has gone through a digestion phase with light at the end of the tunnel finally.  Enphase Energy, Inc.  ( NASDAQ: ENPH ) has seen initial signs of the residential solar business turning in key European countries, but  the actual demand was far less than expected. My  investment thesis  remains Neutral on the stock after the recent rally has been met with tepid sell-t

Hims & Hers Health: Still Firing On Strong Cylinders

Update - May 21  Hims has slumped some after the initial 30% rally on Monday. The telehealth company should benefit from offering a compound GLP-1 version at a discounted price. The big question is the financial impact. The stock only trades at 3x '24 sales targets making Hims intriguing on any further dip.  -Hims & Hers Health (NYSE:HIMS) is offering customers access to compounded versions of Novo Nordisk's (NVO) semaglutide -- the active drug in its weight loss medication Wegovy -- at a fraction of the cost of the brand-name version. -The company said plans for injections of its compounded semaglutide -- which is also sold as the type 2 diabetes med Ozempic -- start at $199 a month. It is also offering a $79 a month plan for an oral version of semaglutide. That is also known as Novo's diabetes pill Rybelsus. Original article posted on May 7 Hims & Hers Health, Inc. is leading in personalized health and building a strong health and wellness platform, leading to str

Trump Media: Excitement Set To Slump

Updated - May 21, 2024 Trump Media & Technology Group actually reported a dip in revenues for Q1. In addition, the media company nearly listed more retail shareholders than revenues. Truth Social continues to have virtually no business, yet the stock only slumped to $44.  Revenues fell to $770,500 from a year-ago $1.116M, and those sales largely came from  the company's "nascent advertising initiative, which will continue to evolve as TMTG implements its vision," the company said. Successfully Debuted as Public Company, and Now Has Over 621,000 Retail Shareholders. Updated - April 8  As expected, Trump Media is slumping after an initial burst following the consummation of the SPAC merger with Digital World. DJT is already down 50% from the initial highs.  Original article published on April 2  Trump Media & Technology Group Corp. completed its SPAC deal with Digital World Acquisition Corp, but shareholders now face major risks with the stock market shifting focus

Nextdoor: Reinvigorating Growth

  Nextdoor Holdings, Inc. is experiencing reinvigorated growth with the return of its founding CEO. The company should exit the year with a 10%+ sales growth rates, adding to investor interest in the local social platform. Nextdoor Holdings stock trades below 2x EV/S targets due to a strong cash balance of $500 million. After a tough couple of years following the Covid boom,  Nextdoor Holdings, Inc.  ( NYSE: KIND ) appears back in growth mode. The local social media player has the founding CEO back in charge and signs of reinvigorated growth are  starting to pop up. My  investment thesis  remains ultra-Bullish on the stock, trading at just $2 despite a strong  balance sheet . Read the full article on Seeking Alpha.  Disclosure: Long KIND. Please review the disclaimer page for more details. 

SoundHound AI: Don't Chase AI Hype Following Q1 Earnings

  SoundHound AI reported 73% sales growth in Q1, boosted by an acquisition. The company doesn't provide enough clarity on the restaurant voice AI ordering opportunity, and the large cumulative backlog doesn't amount to large annual revenues. SOUN stock valuation is too high at 17x 2025 sales targets, making it an unattractive investment. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » SoundHound AI, Inc.   ( NASDAQ: SOUN ) is one of the more promising artificial intelligence ("AI") stocks, but the company doesn't aggressively push the voice AI opportunity and generally lacks scale to fend off competition. The stock constantly jumps to prices requiring far  faster AI growth and market control to warrant an investment. My  investment thesis  remains Neutral on the stock following the post earnings rally back above $5. Read the full article on Seeking Alpha.  Disclosu

Roblox: Major Ads Catalyst

Update - May 9 Roblox is trading down some 30% pre-market on the mobile gaming platform lowering bookings for 2024. The stock will be down to only 4x bookings estimates making Roblox a true bargain at the open below $30.  - -The company also lowered its full-year bookings forecast, as it now sees the closely watched metric coming in between $4B and $4.1B fro 15% growth, down from a prior outlook of $4.14B to $4.28B. Q1'24 Performance Metrics:   Daily Active Users (DAUs): 77.7M; UP +17% YoY Hours Engaged: 16.7B; UP +15% YoY Net Cash Provided by Operating Activities: $238.9M; UP +37% YoY Free Cash Flow: $191.1M; UP +133% YoY Average Bookings per DAU: $11.89; UP +2% YoY Original article posted on Apr. 16 Roblox Corporation is partnering with PubMatic to launch immersive video ads on its platform, targeting major brands and driving revenue growth. The U.S. video game-advertising business is expected to exceed $10 billion in 2025, presenting a significant revenue opportunity fo

Macy's: Still Looking For A Bigger Bid

  Macy's has a buyout bid of $24 per share, up from the original offer of $21. The real estate value of Macy's is estimated to be worth double the current stock price. Macy's plans to focus on luxury stores and close underperforming locations while expanding the Bluemercury beauty brand. Macy's stock only trades at 7x EPS targets that appear conservative. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our subscriber-only portfolios.  Learn More » The retail sector has faced a tough time since the economy reopened after Covid shutdowns, which led to consumers turning attention towards experiences and travel.  Macy's  ( NYSE: M ) still reported solid results in 2023, and along with a  potential buyout bid, the stock should trade much higher. My  investment thesis  remains Bullish on the stock, even after the large bounce off the 2023 lows. Read the full article on Seeking Alpha.  Disclosure: Long M. Please review

Plug Power: Still On The Bleeding Edge

Update - Apr. 23, 2024 Plug Power now has major hydrogen plants in production, now the company has to  start eliminating all of the extra costs for fuel. Stock has the potential for a double bottom low with the elimination of high fuel costs.  -Plug Power (NASDAQ:PLUG) +1.2% pre-market Tuesday after saying it has reached nameplate capacity at the company's hydrogen plants in Georgia and Tennessee, with its Louisiana joint venture with Olin on track to achieve mechanical completion by the end of Q3. -Plug said its Georgia hydrogen plant, home to the largest Proton Exchange Membrane electrolyzer system in the U.S., has been running at a stable rate of 15 tons/day since the beginning of April. -With Plug's Tennessee plant now operating at nameplate capacity of 10 tons/day, the company said it has achieved a total liquid hydrogen capacity of 25 tons/day, which can fulfill roughly half of its customers' green hydrogen demand. Original article posted on Apr. 5, 2024 Plug Power In

Snap: 7 Million Reasons To Buy The Dip

Update - Apr. 17, 2024 Congress spends a lot of time talking about a TikTok ban, but it just seems like talk. Snap is very intriguing here at $10 based on Snapchat+ with an outlier potential for the ban.  -Snapchat surged during Wednesday trading following news that the proposed bill forcing TikTok to divest from ByteDance or face a U.S. ban might get fast tracked. -House Speaker Mike Johnson (R-LA) plans to include the TikTok bill in a fast-track package that includes aid for Ukraine and Israel, Bloomberg reported Wednesday. Original article posted on March 27 Snap Inc.'s Q1 '24 guidance for DAUs and revenue fell slightly below consensus, but disappointed investors missed the progress on returning towards 15% growth. Snapchat+ is growing towards the 14 million target for the end of 2024 with an updated number for the end of Q1 providing a catalyst. The stock only trades at 4x EV/S targets, a discount to social media peers. Looking for a portfolio of ideas like this one? Member

Ouster: Built To Survive And Thrive

Update - April 3 2024 Ouster is holding strong at $10 despite the analyst downgrade.  Chardan Research downgraded Ouster ( NYSE: OUST ) to a Neutral rating on Wednesday after having the stock set at Buy. Analyst Brian Dobson said the firm is moving to the sidelines with the lidar technology stock closing in on the $10 price target. Dobson  also noted that recent share price appreciation may have been bolstered by short covering action. He also warned that Chardan Research's forward price to revenue multiple on Ouster  has risen 150 basis points compared with the preceding six-month average for the metric. Original article posted on March 27 Ouster reported strong 2023 Lidar bookings of $142 million. The company's Q1'24 revenue guidance exceeds consensus estimates, indicating solid growth in the Lidar sensor market. Stock only has a market cap of $200 million, barely above the bookings level for last year. Looking for a portfolio of ideas like this one? Members of Out Fox Th