Out Fox The $treet

  SentinelOne enters FQ4 earnings with shares trading at a yearly low due in part to AI-driven sector fears. The cybersecurity company has made a strong transition to AI-native products via internal development and recent AI-related acquisitions. The stock is cheap below 4x forward sales, while the FY27 guidance is expected to top 20% growth. SentinelOne, Inc.  ( S ) heads into FQ4 earnings with the stock oddly not trading down much over the last week due to the AI replacement fears. The cybersecurity stock was already trading substantially lower over the last 6 months due  to fears unexplained by the financial results. My  investment thesis  is ultra Bullish on SentinelOne, with signs some AI-related acquisitions are paying off. Read the full article on Seeking Alpha.  Disclosure: Long S. Please review the disclaimer page for more details. 

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 - Nov. 18, 2024 Baird ups Roku to a PT of $90, up from $70. . -Analysts at Baird upgraded Roku (NASDAQ:ROKU) to "outperform" from "neutral," and the research firm thinks the company's shares are not reflecting the meaningful changes in the business and the attractive long-term opportunity. -Baird noted that ROKU is down 25% so far this year compared to the benchmark S&P index's 23% rally. But their optimism for the upside is pegged on increasingly favorable industry trends, positive developments in the company's strategy, and encouraging early indicators in recent results. -They expect the company to deliver sustained double-digit platform revenue growth going ahead and continued margin expansion, driving upside across estimates and valuation over time. -ROKU has a PT of $90, hiked from $70, implyi...

  SoFi Technologies continues to report strong growth but trades at a low valuation, disconnected from its results. The company hiked adjusted EBITDA guidance for 2023 by 16%, yet SoFi now trades lower. The stock trades at only 11x '24 adjusted EBITDA targets, which are equivalent to adjusted profits. 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 » Despite persistently strong growth,  SoFi Technologies  ( NASDAQ: SOFI ) still trades closer to the lows after going public via a SPAC at $10. The digital bank continues to report impressive growth disconnected from the stock movement where every quarterly beat is  sold off. My  investment thesis  remains ultra Bullish on the secular growth story trading at a massive discount. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

  Stitch Fix, Inc. reported mixed FQ3 numbers, though the company did beat expectations. The online personalized shopping service was cash flow positive despite the revenue dip. Stitch Fix stock is cheap, trading at only 0.1x EV/S targets, a big discount to department stores. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More »   Stitch Fix, Inc.  ( NASDAQ: SFIX ) continues to struggle to turn around the business following covid pull-forwards while facing macro headwinds. The company already uses data science and AI to help personalized stylist selections for  customers, providing a quick path to implement any new AI technologies. My  investment thesis  remains ultra Bullish on the stock, which is trading as if the company is headed towards a disaster while Stitch Fix has solid financials. Read the full article on Seeking Alpha.  Disclosure: Long SFIX. Please review the disclaimer...

This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More »   Update - Mar. 22, 2023 Just a crazy downgrade by GS to a $5 price target. The market just gives Luminar no respect for massive deals.  Goldman Sachs cut its rating on Luminar Technologies ( NASDAQ: LAZR ) to Sell from Neutral. Analyst Mark Delaney said the ratings cut reflected margin risk for LAZR and the premium valuation. While the firm continues to see Luminar  as one of the leaders in the very competitive lidar industry with recent design wins in the ADAS/AV ecosystem standing out, the near-term setup is called worrying. "We see downside to the company's margin outlook with the company targeting revenue per vehicle of ~$1k which we believe implies ASPs roughly 50-100% higher than key competitors for MEMs/solid state lidar. While Luminar attributes this higher ASP in part to software, and we believe it has some opportunities in this regard, th...

Update - Mar. 2 C3.ai didn't report a great quarter in the sense the quarterly revenues were down, but the AI company did guide to a rebound in revenues.  Q3 Non-GAAP EPS of -$0.06  beats by $0.16 . Revenue of $66.66M (-4.5% Y/Y)   beats by $2.41M . Subscription Revenue: Subscription revenue for the quarter was $57.0 million, constituting 85.6% of revenue. Q4 Outlook: Total revenue $70M-$72M vs. consensus of $69.85M, Non-GAAP loss from operations ($24) - ($28)M. Original article posted on Feb. 14 C3.ai soared on the hype surrounding any business related to AI. The enterprise AI software company traded down to irrational levels to end 2022 due to weak short-term results from a switch in the pricing model. Even after the big rally, the stock only trades at just 4.5x EV/FY24 sales targets. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More »   The stock of  C3.ai  ( NYSE: AI ) was dumped b...

  Twilio reported a surprise profit when reporting Q4'22 earnings last week, but the stock has sold off the last couple of trading days. The customer engagement platform has now reduced 26% of the workforce and is focusing on profitable growth and self-serve communications sales. The stock is cheap at 2x EV/2023 sales while the company is busy repurchasing $1 billion worth of shares. Twilio  ( NYSE: TWLO ) initially soared following  mixed Q4'22 results . Cleary, the market appeared to prefer the shift in the business to a profitable future after a large amount of investors questioned whether the customer engagement company  could ever be profitable. My  investment thesis  remains Bullish on the stock, though the company has clearly reigned in growth opportunities going forward possibly leading to the delayed sell off. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.  

Aurora Cannabis was in talks with Aphria on a merger of equals. The deal was estimated to generate C$200 million in synergies. The stocks could have had up to 50% upside on a merger. Over the last week,  Aurora Cannabis  ( ACB ) and  Aphria  ( APHA ) apparently discussed a  merger  with talks falling apart. A merger would've made the new entity into a global giant in the cannabis space after the Canadians have lost a ton of market leadership to U.S. firms in the last year. The synergies alone could make this a no brainer deal as Aurora Cannabis already had made an impressive transformation on costs making the  long-term investment thesis  on the stock more bullish. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Amazingly, Seeking Alpha is unable to find another Bull to highlight their view on American Airlines (AAL) . All of the other contributors on the financial site pretty much think the airline is going bankrupt. When just about every so-called financial expert is on the same side of a trade usually the opposite happens. Passenger traffic continues to rebound in the best signal the market will return to normal by next year. More research: American Airlines: Stop The Bankruptcy Talk Disclosure: Long AAL. Please review the disclaimer page for more details. 

AT&T is exploring selling their video gaming unit for a reported $4 billion. The company has $154 billion in net debt so the cash isn't as meaningful as the lost revenues from WBIE. The deal value is an apparent low valuation compared to public gaming stocks such as EA or Take-Two Interactive Software. The stock will suffer from the constant hit to revenues per share while the 6.8% dividend yield is covered from the extra cash. Due to the massive scale of  AT&T  ( T ) following the buyout of Time Warner, the company has looked for non-strategic asset sales to lower massive debt levels. One new target is the video game business from Warner Bros. due to the multi-billion valuation estimate thrown around by analysts. Read the full article on Seeking Alpha.  Disclosure: No position. Please reveal the disclaimer page for more details. 

Southwest Airlines reported mixed Q1 results as the coronavirus hit March revenues. The airline now has access to over $13 billion of cash after raising an additional $3 billion of funds. The company has reduced cash burn to ~$10 million. The stock is a bargain at 7x normalized earnings, but the airline isn't the best deal in the sector. Southwest Airlines  ( LUV ) has seen a tepid rally following  Q1 results  as the company is poised to quickly wipe out the daily cash burn. The general airline industry was up over 10% on the quarterly news and bullish signs of  reopening the economy  and international travel with passenger tests. Unfortunately, this airline caused a self-inflicted wound by rushing out equity offerings when cash wasn't needed. Under $30, my  investment thesis  remains bullish on the stock while acknowledging that better upside exists in other sector stocks. Read the full article on Seeking Alpha.  Disclosure...

Delta Air Lines obtained $5.4 billion in government aid. The airline stocks trade at constant discounts to the troubled cruise liners despite better business prospects. The stock trades at a substantial discount to the market at only 4.8x drastically reduced forward EPS estimates. For years now,  Delta Air Lines  ( DAL ) has been the best-run legacy airline, yet the stock was never loved by the markets. The airline always traded at far lower ratios than the other transport stocks and now the lack of love is apparent compared to the cruise lines. My  investment thesis  remains highly bullish on the airlines and particularly Delta as a safe bet for an eventual rebound in air passenger traffic rebound. Read the full article on Seeking Alpha.  Disclosure: Long UAL. Please review the disclaimer page for more details. 

Despite the market uncertainties, AMD (AMD) remains a strong stock. In late Thursday trading, the sock ran into major resistance at $50. The chart appears to show a stock ready for a major breakout. My advice as long recommended this period is the last chance to buy AMD below $50. Any dip here is a buying opportunity. More research on Seeking Alpha: AMD: Work From Home Boost AMD: Right On Target AMD: Last Chance Below $50 Update April 10 Intel (INTC) says demand picked up for chips. Source: No position. Long in Out Fox model. Please review the disclaimer page for more details. 

Zoom Video is priced for unsustainable trends plus the video conferencing tools isn't ready for privacy issues. The stock is worth double and triple a similar group of companies benefiting from the work-from-home economy. The stock trades at an unsustainable 40x FY21 sales. As the market has collapsed this year due to the coronavirus outbreak,  Zoom Video Communications  ( ZM ) has soared. The company benefits from the virtual economy and reportedly has seen mobile  active users up over 150%  in March. The problem here is that the stock is priced for a virtual only world where users never return to normal trends. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

The Work From Home economy is set to boost data center demand. AMD is poised to take market share from Intel in the growing data center space. The stock has long term EPS potential above $3 making the stock a bargain down at $40. The work from home economy has already boosted several companies in the virtual space which should lead to higher data center demand. While  Advanced Micro Devices  ( AMD ) has held up well in the downturn, investors have probably missed the boost in demand the company could see from the data center segment. My  investment thesis  continues to see the stock as a very compelling buy anywhere below $50. Read the full article on Seeking Alpha.  Update - March 27 Don't see the recent lows being broken. The risk is to the update as virus totals dip over the weekend in Europe and the US potentially hit peak new cases here soon. Disclosure: No position mentioned. Please review the disclaimer page for more details. ...

Square gets 45% of GPVs from sellers generating under $125,000 in sales. The payments company is likely to see customers go out of business. My base case is 0% revenue growth in 2020 and a return to only 15% growth in 2021. The stock is a buy at 7x '21 adjusted revenues with potential upside to estimates. The Covid-19 outbreak and the shutdown of the global economy has investors fleeing  Square  (NYSE: SQ ). The mobile payment company is highly dependent on small business customers, and the economic slowdown is going to hit their customer base the hardest. Just weeks ago,  my view  on the stock was negative with the price back above $80, and now, the stock is far more appealing after a 50% collapse in a matter of weeks. Read the full article on Seeking Alpha.  Update March 25, 2020 The company updated Q1 guidance to only slightly below original forecasts. The stock has already soared on the backs of the agreement on a stimulus deal to help...

Apple closes all retail stores outside Greater China and should take a large hit to FQ2 and FQ3 sales. The company had most China stores closed for about one month. The market will increasingly look towards FY21 sales that should see a boost from delayed spending. My estimate is for a FY21 EPS boost to $17, making the $250 stock cheap at 14.7x this target. Apple  (NASDAQ: AAPL ) has seen several analysts  cut price targets  on the stock due to cuts to FY20 numbers. Regardless, the stock remains a strong investment option based on normalized numbers not impacted by the coronavirus impact on the global economy. My  investment thesis  recommends investing in stocks based on FY21 numbers that might even get a boost from sales pushed into the next fiscal year. Read the full article on Seeking Alpha.  Disclosure: Long AAPL. Please review the disclaimer page for more details. 

Alphabet has dipped $400 on COVID-19 fears. The company has an EV down to only $670 billion due to $115 billion in net cash. A slash in travel ad revenues will cut $1-2 billion in quarterly revenues. The stock only trades at an EV of 12.2x '21 EPS targets. A $1,700 target is only 19.0x EPS targets. With analysts already warning on  Alphabet  ( GOOG ,  GOOGL ) losing ad revenue in the travel space, the stock has taken an amazing $400 hit from recent highs. While consumers Internet search usage may remain high, hotels and travel destinations aren't going to advertise on the platform with a lack of travelers. While the situation sounds dire in the short term, investors should buy the stock for the all but certain rebound in the digital ad space as the coronavirus fears dissipate in the next weeks or months. My  investment thesis  maintains a $1,700 price target on the stock based on no changes to 2021 estimates. Read the full article on Seeking A...

AMD updated their long-term financial targets at Financial Analyst Day 2020 to levels supportive of higher stock prices. The company guided to >20% revenue growth and 25% operating margins eliminating a long-held investor view of limited profits. The conservative outlook is for 2023 revenues of $15.0 billion and 2024 revenues at $18.0 billion suggesting revenues doubling from 2020 levels. My long-term model has an $18.75 billion revenue target (25% market share) and a $3.72 EPS. On March 5,  Advanced Micro Devices  ( AMD ) held their  Financial Analyst Day for 2020 . Despite the DJIA dipping nearly 1,000 points on the day and the COVID-19 fears spreading around the globe, the management team stayed focused on the long term. Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Square rallied following soft 2020 guidance due likely to a confusion over net and adjusted revenues. Revenue guidance suggests only 25% growth this year. The stock trades at a very rich 76x EBITDA targets. Square  ( SQ ) has a lot of moving parts in their revenue numbers so the stock rallying on Q4 numbers and more specifically on disappointing 2020 guidance has investors chasing false revenue hype again. Despite the U.S. stock markets crashing over 10%, the stock is near recent highs. My  investment thesis  remains negative at this valuation due to the likelihood the market doesn't understand the presented revenue metrics and the ramifications. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details.