Operating at the Intersection of Technology and the Capital Markets
Tag: earnings season
I expect a weak Q1 earnings season later this month across the Technology sector, including Enterprise Software. Companies may report in-line Q1 Revenues & EPS (perhaps modest EPS beats), but the pace of new sales activity will have fallen off year-over-year during the quarter, especially during the 2nd half of Q1. There is simply too … Continue reading Tech Layoffs & Q1 Earnings
Get ready for an uptick in share repurchase plan announcements. This earnings season as Technology companies issue weak guidance you can be sure that many of those companies will announce new share repurchase agreements to support stock prices. Share repurchase agreements are a waste of capital in my view. CEOs should invest in their businesses … Continue reading Weak Earnings & Buybacks
Tonight after the close Microsoft (MSFT) made our case for us, specifically that the uncertain macro environment is causing corporate buyers to take a cautious approach to spending. We told you that management teams would feature the word "cautious" during the December '22 earnings calls and Microsoft CEO Satya Nadella did just that in the … Continue reading Microsoft Made Our Case For Us
The S&P 500 is approximately at its long-term average P/E multiple of 20x (if one looks back to 1964). However, that multiple could go lower should the Fed hold rates higher for a longer period than what many investors expect. Further, markets tend not to bottom until after the Fed begins to cut rates (we … Continue reading How Low Will Valuations Go?
Get ready to hear the word "cautious" repeated ad nauseam on forthcoming Technology company EPS calls this month and next. Temenos (tkr: TEMN), is one such example. You may read the FinTech company's Q4 press release here: https://www.temenos.com/news/2023/01/16/temenos-pre-announces-preliminary-q4-and-fy-2022-results-bxf9181m/ Temenos also announced a CEO change. I expect to see more CEO changes than normal in 2023. … Continue reading Q4’22 EPS Call Buzzword: “Cautious”
Hopefully most public and private companies took a conservative approach to building their 2023 budgets last year. It is best for public companies to take a similarly conservative approach to 2023 Revenue and EPS guidance during the current earnings season. Most CEOs did not live through the 2008-2009 Financial Crisis. The 2008-2009 period was an … Continue reading 2023: Conservative Budgets & Guidance Are Best
Coinbase up 12% because the company is cutting staff? They can't cut quick enough as crypto trading falls off. ChatGPT at 145x revenue? There are plenty of Technology companies that continue to trade at 20x revenue. Despite the pronounced pullback in Tech valuations over the course of 2022, there is further room for valuations to … Continue reading Rates Going Higher. Equities Going Lower.
Back to the office, equities will sell off. We expect that equities will trade off when investors return to the office in January in anticipation of soft earnings. Technology stocks will be hit the hardest. Another leg down on EPS reports. When earnings are reported in January and early February, there will be another leg … Continue reading Equities Over The Next 2-3 Months
Despite today's uptick in Consumer Confidence, I suspect the measure will turn on a dime (negative sentiment), early next year as job losses mount, as rates remain elevated, as the market rolls over and as the housing market collapses. I expect forced selling in the housing market whether it be of primary homes, secondary homes … Continue reading Consumer Confidence Will Turn On A Dime
The 2008 downturn and the current downcycle have similarities as far as investor sentiment is concerned. We believe that investor sentiment will sour early next year as Q4 2022 earnings reports come in. 2023 earnings estimates and stock prices will move lower off of the Q4 EPS reports. Early cycle disbelief. I recall that in … Continue reading Not So Fast. This Won’t Be Quick & Painless.
You must be logged in to post a comment.