United States

IMMR reported first quarter results reflecting the slowdown in smartphone shipments and the benefits of the Company’s investing activity
Of the $150.3 million invested, at the end of March 2023, equity securities were $56.5 million of the portfolio compared to $53.3 million in December 2022
IMMR’s legal pursuit of patent infringing parties could become an option on the current valuation of the stock

ARLO: Recurring Revenue Growth, PT to $11

ARLO reported a non-GAAP profit in the first quarter of 2023 after the Company implemented a price increase on its subscription plan
ARLO added 182 thousand paid subscribers in the quarter and ended the first quarter with more than 2 million paying subscribers
Service revenue has allowed for greater operating leverage with gross margin expected to rise further in future quarter with the growth in service revenue

PayPal: Panicking As A Result Of Quarterly Trends And Narratives Is Not A Viable Strategy

By Vladimir Dimitrov, CFA

PayPal has significant competitive advantages, and the management is making the right moves to improve them.
PayPal continues to slide to multi-year lows, with a mixed quarter that was perceived as a very negative one.
PayPal has been in a strong position in the market for the past three years.

C.H. Robinson Worldwide: Can Automation & Digitization Save The Day? – Major Drivers

C.H.
Robinson had a disappointing result in Q1 and it failed to meet the revenue expectations and earnings expectations of analysts.
They believe that an increased digitization and automation are critical components of providing an improved client experience and operating leverage.

Commodity and FX Impulse Moves

By Untying The Gordian Knot

We review some charts, starting with commodities that are precariously close to signalling a breakdown.
The weakness became pronounced after China’s PPI, CPI, and the disappointing Aggregate Finance data (this needs a separate section).
If China’s recovery continues to be disappointing, then the deflation of exports and a long position on commodities will be a big problem for the rest of the world.

Fortive Corporation: What You Need To Know About The Q1 Success & Why It Matters – Key Drivers

Fortive Corporation made a solid start to the year, achieving sales, margins, and higher profitability than Wall Street expectations in the first quarter.
Each of their key regions experienced another quarter of rapid sales growth.
Precision Technologies also reported another quarter of double-digit core revenue growth or a 14% revenue increase.

Hilton Worldwide Holdings Inc.: A Strong Emergence From The Lull – Key Drivers

Hilton Worldwide Holdings delivered an all-around beat in its latest result as travel demand has remained robust, continuing the pattern seen in the back half of last year.
This resulted in both the company’s top and bottom line results closing the quarter above the high end of the management guidance.
The quarter’s leisure trends continued to be strong, with RevPAR outperforming the previous quarter’s performance.

Norfolk Southern Corporation: Improved Network Reliability and Productivity Saving The Day? – Major Drivers

Norfolk Southern Corporation delivered strong results in the quarter with revenues in accordance with analyst expectations and managed an earnings beat.
However, these improvements boosted the company’s network’s reliability and made it even more productive.
We give Norfolk Southern Corporation a ‘Hold’ rating with a revised target price.

NOW, INC. – 1Q23 Solid Start to the Year

DistributionNOW’s 1Q23 revenue totaled $584 million, a 23% Y/Y increase and a 7% increase from 4Q22.
US revenue climbed 28% Y/Y, while International revenue climbed by 30%.
Canadian revenue was 1% higher. The US contributed 73% of total revenue in the quarter.

Old Dominion Freight Line Inc.: Is The Bad Result A Sign Of Trouble Or A Bargain? – Major Drivers

Old Dominion Freight Line produced a highly disappointing set of results as a result of the persistent downturn in the local economy and the volume decline.
The revenue decline and slight deterioration in Old Dominion’s operating ratio caused the earnings per diluted share for the quarter to decline by 0.8% to $2.58.
We give Old Dominion Freight Line an ‘Underperform’ rating with a revised target price.

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May 12

Daily Brief United States: Unity Software, Curve DAO Token, Bakkt and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

[Unity Software (U US) Earnings Review]: Maintain BUY as AI Spending Offset by Topline Growth
TriCrypto: Curve’s Ace in the Hole
Bakkt Holdings Inc. – 1Q23 Revenue Grew 4% Y/Y

[Unity Software (U US) Earnings Review]: Maintain BUY as AI Spending Offset by Topline Growth

By Shawn Yang

Unity’s 1Q23 top line was in line with our estimate, and bottom line was USD 34mn, vs. our est./cons. of USD 4/(3)mn, due to headcount reductions.
We expect it to outperform in coming quarters because: 1) Create solutions are reducing low margin businesses with low churn rate,
2) Growth solutions continue to gain share driven by integrated Mediation platform, 3) announced AI products with accumulated R&D further diversify Unity toolsets.

TriCrypto: Curve’s Ace in the Hole

By Kaiko

Curve recently made waves with the release of crvUSD, its new stablecoin.
However, another under-the-radar development at Curve could cause an even more significant shift in the DeFi landscape: a new TriCrypto pool [1].
This pool contains three high-volume Ethereum assets—ETH, USDT, and wBTC—and could potentially challenge Uniswap’s market share

Bakkt Holdings Inc. – 1Q23 Revenue Grew 4% Y/Y

1Q23 revenue grew 4% Y/Y in a tough market. Expense control improved with opex, excluding a non-recurring restructuring charge, down 11% Y/Y.
These results do not include Apex Crypto, but the 2Q23 report and beyond will include it.
The acquisition of Apex Crypto closed on April 1 and significantly changes Bakkt’s trajectory. With the combined custody solutions from Bakkt and trading capabilities from Apex, the company will be positioned to become the crypto infrastructure provider of choice.

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May 11

Daily Brief United States: GlobalFoundries, Xperi, Texas Pacific Land , AdTheorent, Assertio Holdings, Ecovyst, ACCO Brands, HNI Corp, MariMed, A10 Networks and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

GlobalFoundries Q1’23 Revenue $1.84 Billion, -12% QoQ, -5% YoY. Q2’23 Flat QoQ
XPER: More Design Wins Pathing Revenue
TPL: Free Cash Flow with Depressed Valuation
Adtheorent Holding Company, Inc. -1Q23 Earnings at the High End of Guidance
ASRT: Asserting a New Price Target, $10
ECVT: Input Costs Deflating, Profits Inflating
ACCO: Notes for Free Cash Flow
HNI Corporation – HNI Handily Beats Estimates on WF Sales, Hearth Margins
Marimed, Inc. – Exceeds 1Q Revenue and Adjusted EBITDA Estimates
ATEN: Cycling Thru Revenue Bottom

GlobalFoundries Q1’23 Revenue $1.84 Billion, -12% QoQ, -5% YoY. Q2’23 Flat QoQ

By William Keating

Q1’23 revenues of $1.84 billion, -12% QoQ ,- 5% YoY, but at the high end of the guided range
Remains on track for >50% wafer capacity growth between 2021 and 2024
Muted CY’23 outlook sends shares down ~10% by close. Buying opportunity?

XPER: More Design Wins Pathing Revenue

XPER reported new customer wins with the release of first quarter results. Continued expansion of XPER’s customer base in connected TV and cars affirms our thesis
XPER had already won a major TV OEM in Europe and has now won a second TV producer planning to use TiVo OS
XPER announced a global program design win with a Japanese automaker for DTS AutoStage

TPL: Free Cash Flow with Depressed Valuation

TPL reported first quarter results that included a larger than normal legal expense crippling the Company’s net income in the period
TPL is disputing with its largest shareholder as to the voting agreement they have in place with them
Increase in non-oil and gas royalty revenue during a seasonally soft quarter leads us to expect outperformance over the next two quarters.

Adtheorent Holding Company, Inc. -1Q23 Earnings at the High End of Guidance

1Q23 revenue of $32.7 million above the midpoint of guidance of $32 million. Challenging advertising market conditions have continued but adjusted gross profit of $20.9 million was slightly above the midpoint of guidance of $20.8 million.
AdTheorent (which has no debt) generated $2.9 million in FCF in the quarter (up Y/Y) and reaffirmed its full-year guidance. The stock was flat in the aftermarket.
The company’s number of Active Customers grew by 31 or 10% Y/Y to 346.

ASRT: Asserting a New Price Target, $10

ASRT reporting better than expected first quarter results were positively overshadowed by the increase in sales of ROLVEDON at Spectrum Pharmaceuticals (SPPI)
There had been concerns ROLVEDON sales would not grow fast enough to warrant the valuation ASRT was paying for SPPI. Those concerns were squashed
ASRT reported first quarter revenue of $42.5 million compared to our estimate of $37.8 million

ECVT: Input Costs Deflating, Profits Inflating

ECVT reported first quarter results depressed from the effects of a winter storm and a facility turnaround
ECVT is maintaining the adjusted EBITDA and free cash flow guidance provided with fourth quarter 2022 results
The biggest adjustment we are making to our earnings model is the reduction in sales due to deflation of pass-through costs

ACCO: Notes for Free Cash Flow

ACCO reported first quarter results reaffirming the outlook provided three months ago where the business should begin to see gradual increase in orders from retailers later this year
Retailers have reverted to their prior ordering patterns where much of the inventory carried is for the back-to-school shopping season
ACCO reporting quarterly sales above $400 million did little to squash the concern related to sales declining in the first half of the year

HNI Corporation – HNI Handily Beats Estimates on WF Sales, Hearth Margins

On May 9, HNI reported better-than-expected results, boosted by unexpected strength in Workplace Furnishings (WF) sales and a strong defense of margins in Residential Building Products (RBP) despite weak Hearth Products sales.
1Q23 GAAP EPS was $0.04 and $0.13 non-GAAP (adjusted) versus consensus of ($0.02) GAAP and ($0.03) non-GAAP (adjusted). Our non-GAAP (adjusted) forecast was ($0.02).
Management noted improving results in its WF segment, driven by productivity and cost-cutting.

Marimed, Inc. – Exceeds 1Q Revenue and Adjusted EBITDA Estimates

MariMed reported first-quarter revenue of $34.4 million, which exceeded our estimate of $32.5 million and consensus of $32.9 million.
This is a 9.90% Y/Y increase and a 3.91% decline Q/Q. 1Q is typically a seasonally softer quarter for cannabis companies.
With new stores opening in Massachusetts, Illinois, and Ohio, plus Maryland moving to adult-use sales in July, revenue should ramp up through 2023.

ATEN: Cycling Thru Revenue Bottom

ATEN had already warned of the shortfall in Q1 revenue and the official release of the results was an update on the improvement the business has seen in recent months
ATEN’s management used the first quarter earnings call asserting orders have increased in recent months and ATEN would post sequentially higher revenue in the second quarter
Network security is not an area we would expect much penny pinching over the course of the year

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May 10

Daily Brief United States: Shockwave Medical Inc, The Walt Disney Co, Southern Copper, Meta Platforms (Facebook), General Electric Co, Pioneer Natural Resources, RCI Hospitality Holdings, Binance Coin, Waste Management, Boeing Co and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Shockwave Medical Inc (SWAV US): Beat-And-Raise 1Q23 Results; BSX Deal Reportedly Hit Roadblock
Disney’s Q2 2023 Earnings: Now Is The Time To Deliver
Southern Copper Corporation: The Best Copper Stock To Own? – Key Drivers
Meta Platforms Inc.: Riding The New AI Wave? – Market Dominance & Other Drivers
General Dynamics Corporation: Winning Big With Its Combat Systems – Key Drivers
Pioneer Natural Resources Company: Making A Real Killing In The Permian Basin – Key Drivers
Rci Hospitality Holdings, Inc. -Tour of Colorado Shows a Promising Growth Opportunity
Binance Halts Withdrawals as BTC Fees Surge
Waste Management Inc.: Cleaning Up With Its Pricing Strategy – Key Drivers
The Boeing Company: Acquisition Of CloudAhoy & Other Developments

Shockwave Medical Inc (SWAV US): Beat-And-Raise 1Q23 Results; BSX Deal Reportedly Hit Roadblock

By Tina Banerjee

Shockwave Medical Inc (SWAV US) reported better-than-expected Q1 results, due to continued geography expansion and strong demand of its IVL catheters for the treatment of coronary and peripheral artery diseases.
Shockwave projects 2023 revenue of $700–720M, which represents 43–47% YoY growth. This compares to previous 2023 revenue guidance of $660–680M.
According to a new media report, the acquisition talks between Boston Scientific (BSX US) and Shockwave have hit a snag as both the parties could not agree on a price.

Disney’s Q2 2023 Earnings: Now Is The Time To Deliver

By Vladimir Dimitrov, CFA

Disney is scheduled to release its Q2 2023 results later this week.
A number of factors are pointing to a strong and a better than expected quarter, but long-term problems remain.
The macroeconomic environment is also supportive for Disney’s Parks, Experiences and Products segment.

Southern Copper Corporation: The Best Copper Stock To Own? – Key Drivers

Southern Copper Corporation had a great quarter despite several economic difficulties and managed an all-around beat.
The company’s other open pit operations reported a decrease in annual copper production, with the exception of the Buenavista operation, where production levels were higher than those in 2021.
We give Southern Copper Corporation a ‘Hold’ rating with a revised target price.

Meta Platforms Inc.: Riding The New AI Wave? – Market Dominance & Other Drivers

Meta Platforms had a decent quarter and surpassed Wall Street expectations in terms of revenues as well as earnings.
The company is progressing in improving its distributed work model, delivering AI tools to improve productivity, and removing unnecessary processes.
AI recommendations now operate more than 20% of users’ Facebook and Instagram Feeds and over 40% of content on Instagram.

General Dynamics Corporation: Winning Big With Its Combat Systems – Key Drivers

General Dynamics had a strong quarter and managed an all-around beat with an improving order book position and a company-wide book-to-bill ratio of 0.9:1.
The Combat Systems group saw particularly robust order activity with a book-to-bill ratio of 5x.
While Aerospace & Technologies continues to deliver strong cash performance, the Combat Systems group, in particular, produced exceptional free cash flow this quarter.

Pioneer Natural Resources Company: Making A Real Killing In The Permian Basin – Key Drivers

Pioneer Natural Resources delivered a mixed set of results in the last quarter.
Pioneer has formed the largest contiguous acreage position in the Midland Basin with its persistent focus on the Permian Basin.
We give Pioneer Natural Resources Company a ‘Hold’ rating with a revised target price.

Rci Hospitality Holdings, Inc. -Tour of Colorado Shows a Promising Growth Opportunity

We recently traveled to Colorado to see RCI’s new properties.
As background, following the purchase of five clubs in the Denver market in late 2021, RCI is planning on investing between $50 million and $80 million in the next two years in Denver and the surrounding areas of Colorado.
As a result, Colorado is expected to be RCI’s third-largest market, behind Texas and Florida.

Binance Halts Withdrawals as BTC Fees Surge

By Kaiko

The rise in popularity of BRC-20 tokens, essentially memecoins on the Bitcoin blockchain, has pushed Bitcoin fees to 2 year highs.
BRC-20s have massively increased demand for Bitcoin blockspace for the first time in recent history, with the network suffering from congestion and unconfirmed transactions as a result.
Over the weekend, Binance had to pause BTC withdrawals twice as they hadn’t accounted for a surge in BTC fees in the amount they pay miners, which had caused many transactions to go unconfirmed.

Waste Management Inc.: Cleaning Up With Its Pricing Strategy – Key Drivers

Waste Management is off to a good start in 2023, with first-quarter performance exceeding analyst expectations.
Collection and disposal volume also increased by 0.8% in the first quarter.
Waste Management believes it is poised for another year of robust financial growth in 2023.

The Boeing Company: Acquisition Of CloudAhoy & Other Developments

After a series of bad results, Boeing managed a mixed quarter to start the year as its revenues were above Wall Street expectations though company reported wider-than-expected losses.
However, Boeing still expects to deliver 450 737 airplanes this year and plans to increase its rate to 38 per month later this year.
The company also delivered 130 commercial airplanes in the quarter, steadily increasing rates across critical programs to meet robust demand.

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May 09

Daily Brief United States: Danaher Corp, Corning Inc, Centene Corp, Enphase Energy, Earthstone Energy, Dow , Chipotle Mexican Grill, Elevance Health , Biogen Inc, 3M Co and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers
Corning Incorporated: Is The Drop In Revenues A Point Of Concern? – Key Drivers
Centene Corporation: Improving Market Position In Medicare Advantage – Key Drivers
Enphase Energy Inc.: Launch of New Home Energy Systems & Other Drivers
Earthstone Energy, INC. – Gaining Permian Efficiency
Dow Inc.: What Is Its Biggest Competitive Advantage? – Key Drivers
Chipotle Mexican Grill Inc.: Improved Digital Capabilities & A 6
Elevance Health Inc.: Major Drivers
Biogen Inc.: The Lecanemab Progress On The Alzheimer’s Front & Other Drivers
3M Company: The Secret Strategy to Boost Its Supply Chain and Manufacturing Operations – Key Drivers

Danaher Corporation: This Diagnostics Innovator Continues To Go Strong – Key Drivers

Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.
The strength of its customer base business grew by 6% in this quarter.
For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

Corning Incorporated: Is The Drop In Revenues A Point Of Concern? – Key Drivers

Corning saw a sequential drop in its total revenues of around 7% in the recent result but this was still better than analyst expectations.
Despite the lower sales, Corning’s actions to raise prices and restore productivity ratios resulted in gross margin expanding 160 basis points.
Although multiple markets remain weak, the company expects results to improve in the second quarter.

Centene Corporation: Improving Market Position In Medicare Advantage – Key Drivers

Centene had a successful first quarter, showing continued positive momentum operationally which was demonstrated by its all-around beat.
The company raised its premium and service revenue forecast by $3.7 billion, with full-year 2023 adjusted EPS guidance at $6.40.
We give Centene Corporation a ‘Buy’ rating with a revised target price.

Enphase Energy Inc.: Launch of New Home Energy Systems & Other Drivers

Enphase Energy had a decent first quarter and managed an all-around beat with no significant supply shortages and a stable overall supply environment.
The company also experienced significant growth in Europe, with revenue rising 25% sequentially and more than tripling year-on-year.
In addition, the company launched its most potent Enphase Energy System, featuring the new IQ Battery 5P and IQ8 Microinverters.

Earthstone Energy, INC. – Gaining Permian Efficiency

Earthstone generated $272 million of adjusted EBITDA in 1Q23 on average production of 104.4 MBOE/d.
Production was slightly below the 104.8 MBOE/d produced in 4Q22 and 194% higher than 1Q22.
1Q22 adjusted EBITDA was $123 million. Y/Y gains in both production and adjusted EBITDA demonstrate the impact of three major Permian Basin asset acquisitions that closed in 2022.

Dow Inc.: What Is Its Biggest Competitive Advantage? – Key Drivers

Dow had a challenging quarter given the ongoing market dynamics.
The year’s first quarter is expected to align with the fourth-quarter performance, with discrete headwinds of $75 million.
We give Dow Inc. a ‘Hold’ rating with a revised target price.

Chipotle Mexican Grill Inc.: Improved Digital Capabilities & A 6

It was a successful quarter for Chipotle Mexican Grill, reporting an all-around beat.
The company’s quarterly sales were $2.4 billion and it retained about 80% of digital sales and has recovered almost 80% of in-restaurant sales.
We give Chipotle Mexican Grill a ‘Hold’ rating with a revised target price.

Elevance Health Inc.: Major Drivers

Elevance Health’s first quarter results were solid and the company delivered an all-around beat with a growth of around 15% compared to last year.
The company had 48.1 million medical members at the end of the first quarter.
Due to organic growth in Medicaid and Medicare Advantage, dual-eligible special needs plans, and group members, risk-based membership increased by roughly 1 million members year over year.

Biogen Inc.: The Lecanemab Progress On The Alzheimer’s Front & Other Drivers

Biogen had a successful first quarter with an all-around beat.
The company executed the launch of Leqembi, an immediate transformative product in the Alzheimer’s disease therapeutic area.
Biogen has been experiencing a lot of competition, making it necessary to think about how to grow the business in the future.

3M Company: The Secret Strategy to Boost Its Supply Chain and Manufacturing Operations – Key Drivers

3M delivered an all-around beat in the latest result and managed costs aggressively in a challenging environment.
The company experienced noteworthy end-market weakness in consumer electronics, shifting consumer spending patterns along with the mixed industrial end markets and retailer destocking.
The electronic business of the company saw adjusted organic sales declines.

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May 08

Daily Brief United States: M & T Bank Corp, Grid Dynamics Holdings Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

US Banks – Is System Deposit Flight Being Contained?
Navigating The Grid

US Banks – Is System Deposit Flight Being Contained?

By Victor Galliano

Deposit outflows for 1Q23 in the most affected of the mid-sized US banks were in low double digits, much less severe than the deposit collapse suffered by First Republic
In fact, since the end of 1Q23, some smaller banks have reported slightly positive deposit flows, and the recent usage of Fed and FHLB funding lines is not alarming
We review a select group of mid-sized US banks focusing in on a number of key metrics; despite the challenging times, we like M&T Bank and Western Alliance

Navigating The Grid

By subSPAC

As the current digital landscape continues to evolve, companies are racing to adapt to the new normal.
Grid Dynamics has successfully capitalized on this demand, delivering services across Cloud, Data, AI, and Digital Experiences.
As a result, the company has enjoyed impressive growth and significantly expanded its clientele over the last few years.

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May 07

Daily Brief United States: ACM Research and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

[ACM Research (ACMR US)]: Preferred Local Tool Supplier Beginning Global Ascent

[ACM Research (ACMR US)]: Preferred Local Tool Supplier Beginning Global Ascent

By Shawn Yang

ACMR reported C1Q23 top-line, GAAP EBIT and non-IFRS net profit (2.8%), 42% and 35% vs. our est., and in-line, and positive vs. negative, respectively.
We estimate ACMR’s China wafer clean/ECD share was 11%/45%~ in 1Q23, +4/28ppts YoY, while guidance implies 45%/50%~ in 4Q23, respectively;
We maintain BUY and US$ 30 TP, implying 2.0x FY24 EV/Sales

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May 06

Daily Brief United States: Advanced Micro Devices, Cleveland-Cliffs Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

AMD: The Bear Market Rally Is Over
Cleveland-Cliffs Inc: What Is Its True Moat Source? – Key Drivers

AMD: The Bear Market Rally Is Over

By Vladimir Dimitrov, CFA

The sharp rebound of Advanced Micro Devices, Inc. (NASDAQ:AMD) over the recent months came to a sudden halt after market participants were once again surprised by the deteriorating outlook for the company.
Prompted by the bear market rally in equities, AMD’s stock has almost doubled in a matter of just a couple of months from October of last year to March 2023.
While everyone was cheering the new wave of AI-driven demand, the quarterly report from earlier this week is a warning that should not be ignored.

Cleveland-Cliffs Inc: What Is Its True Moat Source? – Key Drivers