In today’s briefing:
- Liquidity Risk Short Candidates: Luminar Tech, Asana, Appian, Oak Street Health
- Snowflake FY3Q23 Earnings: Stabilizing Growth in FY2024
- Crypto.com, Independent Reserve in Top 5 for Strong AML; Binance Places 42nd
- Zoom Video Communications: Product Updates & Other Developments
- Dell Technologies: Major Drivers
- Gap Inc: Gap Store On Amazon & Other Developments
- Macy’s Inc: Digital Marketplace & Other Drivers
- Ross Stores: Store Additions & Other Drivers
- The Long and Short of Aave
- Analog Devices Inc: New SPoE PESE & PD Solutions & Other Drivers
Liquidity Risk Short Candidates: Luminar Tech, Asana, Appian, Oak Street Health
- Liquidity shorts can be great short candidates. The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements.
- Liquidity shorts have built-in catalysts, have moderate to higher betas, and can have strong down moves if a crisis develops. They can go bankrupt, pushing the stock price near zero.
- Today we are flagging Luminar Tech, Asana, Appian, Oak Street Health
Snowflake FY3Q23 Earnings: Stabilizing Growth in FY2024
- Snowflake guided below consensus for 4Q2023 revenue growth on a mix of macro conservatism and a quirky point that more vacation travel will reduce the amount of workloads run.
- Margins continue to beat to the upside and management is guiding FY2024 FCF marginst to 23%, just 2pts below the LT guidance.
- Very conservative management team also guided for a stabilization in revenue growth for FY2024 at 47%, a bit below consensus, but better than feared given the earnings reports recently.
Crypto.com, Independent Reserve in Top 5 for Strong AML; Binance Places 42nd
- Familiar names in Singapore landed in the top five of a list featuring crypto exchanges with strong anti-money laundering (AML) systems.
Blockchain.com and Independent Reserve, which are both licensed to operate in Singapore, ranked first and third place respectively. Crypto.com, which has in-principle approval, placed fifth.
Binance, the largest crypto exchange in the world, in the 42nd spot.
Zoom Video Communications: Product Updates & Other Developments
- Zoom Video Communications delivered a decent quarter and managed an all-around beat.
- From a product perspective, the company had robust growth in Zoom Phone, along with contributions from Zoom Rooms and other products.
- Zoom Video Communications has recently announced a wide range of updates in different business units like Zoom IQ for sales, Zoom Events, Zoom Spaces, Zoom Contact Centre, and Zoom One.
Dell Technologies: Major Drivers
- After announcing a weak outlook in the last quarter and causing its stock price to plummet, Dell has shown a decent recovery.
- Its stock price has continued to recover after the company delivered an all-around beat in a challenging demand environment.
- Overall, we remain neutral on Dell and give it a ‘Hold’ rating with a revised target price.
Gap Inc: Gap Store On Amazon & Other Developments
- Gap delivered a strong set of results in the quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
- The company has taken steps to maximize profitability and cash flow while rebalancing and lowering inventory to drive short-term and long-term improvements across its entire business.
- However, the company is proving strength in lifestyle segments, which are growing at an accelerated rate in the current market.
Macy’s Inc: Digital Marketplace & Other Drivers
- Macy’s delivered a strong set of results surpassing Wall Street expectations in terms of revenues as well as earnings.
- Besides, they created permanent Toys “R” Us shop-in-shops within every Macy’s site, offering a unique experience not offered nationally anywhere else.
- Macy’s also has a flexible pricing plan to change discounts and markdowns if demand materializes slowly.
Ross Stores: Store Additions & Other Drivers
- Ross Stores’ results were well above market expectations in terms of revenues as well as earnings as it increased storewide values.
- On the other hand, given their third-quarter sales growth and enhanced holiday assortments, they face their easiest sales and earnings comparisons in the fourth quarter.
- We maintain our ‘Hold’ rating on Ross Stores with a revised target price.
The Long and Short of Aave
- Lending and borrowing in DeFi follows the same basic principles as it does in traditional finance: I supply some asset as collateral and I am able to borrow a certain amount of some other asset.
- However, this being DeFi, there are some important differences from TradFi.
- The most important is that the protocol has no way of knowing how trustworthy I am, and thus will require any loan to be overcollateralized.
Analog Devices Inc: New SPoE PESE & PD Solutions & Other Drivers
- Analog Devices delivered another all-around beat in the recent quarterly result.
- In Communications, Analog Devices expanded its 5G radio systems leadership with its transceiver portfolio, winning some additional share at key suppliers.
- We provide the stock of Analog Devices with a ‘Hold’ rating with a revision in the target price.
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