Operating at the Intersection of Technology and the Capital Markets
Tag: earnings season
On March 31st we told investors to be prepared for weak earnings. After almost 30 years in the capital markets one lesson learned is that sellsiders are slow to publish bad news. Therefore it is not terribly difficult to predict that the sellside will lower EPS estimates for 2023 and beyond when the June and … Continue reading Earnings Estimates Will Be Revised Downward
One thing that's for sure is that many companies are hesitant to get in front of bad news. Given that inflation in all forms is not going anywhere, we expect many companies to report Revenue and Earnings shortfalls in April as March quarter results and 2022 full year outlooks are communicated to investors. Inflation has … Continue reading Get Ready for EPS Misses
Investors have lost their minds when it comes to high-flying stocks such as Tesla (TSLA, up 830% over 13 months), Shopify (SHOP, up 210% over 4 months), DataDog (DDOG, up 220% since the March lows), and many other names where valuations are based on anything but the fundamentals. Why? There Is No Alternative (TINA): The … Continue reading TINA, ZIRP, The Future & The Retail Investor
Forward PE multiples are too low. Given where the numerator is, S&P 500 forward PE multiples ought to be far higher. Earnings estimates are inflated and need to come down. The stark contrast between PE multiples during the Great Recession as compared to today's S&P 500 forward PE multiple of 22x should raise eyebrows. https://soundcloud.com/ceorater
We ran a Natural Language Processing ("NLP")-based analysis of earnings calls from this week. We captured keywords and phrases from 23 earnings calls. Our report is sorted alphabetically by ticker symbol. Access the free report HERE. This analysis may be customized to capture certain keywords and phrases for any text-based document. https://soundcloud.com/ceorater
If we are being honest companies have near zero visibility into the short-term despite sell-side analysts' attempts to generate positive spin. We use last night's Google earnings call as an example. Google's Ad business deteriorated over the course of the March quarter from a year-over-year growth position to a "mid-teens" percentage Y-O-Y decline by the … Continue reading If We Are Being Honest
Headcount reductions continue. We have updated our list of recent Tech company layoffs. Access the Excel version HERE. The PDF version may be accessed HERE. It is difficult to imagine a snap economic recovery as companies continue to shed talented people. The mythical "V" recovery would require all components of the global economy to recover … Continue reading Tech Layoffs & The Mythical “V” Recovery
We were recently critical of companies that decided to completely withdraw their financial outlook given the economic uncertainty that has resulted from the ongoing COVID virus. The good news is that a number of companies are providing financial outlooks, albeit they are taking a conservative approach (which is entirely logical from our perspective). We reviewed … Continue reading Earnings Summary: A Rational Approach To “Guidance”
Earnings calls thus far have struck a similar tone XYZ CEO: "Let me begin by saying our thoughts are with..."XYZ CEO: "We are grateful for the opportunity to delight our customers during this difficult time. We got off to a good start in the months of January and February as we experienced healthy year-over-year growth. … Continue reading Earnings Season Thus Far: Lack of Color & Backbone
More Market Uncertainty Is Coming. However, Don't Paint with A Broad Brush. Align Yourself with Market Leaders. We expect Enterprise Software companies to provide conservative outlooks for the 2020 calendar year. We do not expect Enterprise Software companies to completely yank their respective 2020 outlooks as have other Technology companies. We anticipate negative investor sentiment … Continue reading Enterprise Software 2020 Outlook
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