In today’s briefing:
- [Futu Holdings (FUTU US) Company Update]: Futu App Removal Moves One Step to Final Resolution
- IPAR: Ready for Cash Conversion
- Arista Networks Inc.: Crushing Market Expectations But Is It Enough? – Key Drivers
- Freeport-McMoRan Inc: Is The Volumes Expectation For 2023 Too High? – Key Drivers
- IDEXX Laboratories Inc.: Recurring Veterinary Software Revenues Continue to Grow – Key Drivers
- Starbucks Corporation: Solid Customer Loyalty Through The Rewards Program & Other Drivers
- Cummins Inc.: What Is Their Core Business Strategy? – Key Drivers
- SDRL: Aquadrill Numbers Ahead of Q1 Results
- Advanced Micro Devices Inc.: Important Strides Towards Speeding Its AI Roadmap – Key Drivers
- ZoomInfo Technologies Inc.: Investments In Improved Customer Experience – Key Drivers
[Futu Holdings (FUTU US) Company Update]: Futu App Removal Moves One Step to Final Resolution
- Futu announced to remove the Futubull app in Mainland China in order to fully compliance with the CSRC rectification measures, while the existing paying clients’ trading activities are unimpacted.
- We think the movement is consistent with CSRC’s previous statements, and thus maintain our 5% user churn rate in 2023 unchanged.
- We think the full implementation of penalty fine on Futu is unfair. We expect a symbolic fine to be imposed on Futu in the future.
IPAR: Ready for Cash Conversion
- Inter Parfums (IPAR) continuing to experience demand for its fragrances has not been enough to overcome investor concerns related to the slow demand environment in China and the duty-free segment
- IPAR’s top three brands each grew by more than 20 percent compared to last year with Jimmy Choo sales up 63 percent
- IPAR managing through its inventory balance could result in cash conversion that should improve investor sentiment
Arista Networks Inc.: Crushing Market Expectations But Is It Enough? – Key Drivers
- Arista Networks delivered strong results in the quarter, with $1.35 billion in revenue and $1.43 in non-GAAP earnings per share, crushing market expectations.
- Throughout this year, Arista anticipates seeing increases in its gross margins every quarter.
- We give Arista Networks a ‘Hold’ rating with a revised target price.
Freeport-McMoRan Inc: Is The Volumes Expectation For 2023 Too High? – Key Drivers
- It was a challenging first quarter for Freeport-McMoRan due to disruptions caused by extreme weather conditions and labor shortages.
- The company managed an all-around beat and achieved essentially in-line consolidated unit net cash costs, averaging $1.76 per pound despite lower-than-expected volumes.
- Freeport-McMoRan ended the quarter with $1.3 billion in net debt, and its balance sheet, liquidity, and financial flexibility are in great shape.
IDEXX Laboratories Inc.: Recurring Veterinary Software Revenues Continue to Grow – Key Drivers
- IDEXX Laboratories had a strong Q1 2023 performance and delivered an all-around beat.
- The company’s strategic focus on execution, organic growth, and product portfolio expansion resulted in significant new business gains and sustained growth in recurring veterinary software revenues.
- The company’s performance was reflected in its key metrics, such as high first-quarter premium instrument placements, steady new business gains, and continual growth in recurring veterinary software revenues.
Starbucks Corporation: Solid Customer Loyalty Through The Rewards Program & Other Drivers
- Starbucks Corporation delivered a strong performance in the quarter and managed an all-around beat.
- The company achieved double-digit comp in all company-operated markets, driven by a stronger-than-expected recovery and observed ongoing momentum in its licensed markets.
- The primary drivers of revenue growth were comparable store sales, the year-over-year increase in net new company-operated stores, and the sustained momentum in the company’s worldwide license to market.
Cummins Inc.: What Is Their Core Business Strategy? – Key Drivers
- Cummins had a successful first quarter, marked by a 12% increase in organic revenue growth, as well as higher-than-anticipated quarterly earnings before interest, taxes, depreciation, and amortization, net income, and earnings per share.
- The higher EBITDA percentage was mainly driven by higher volumes and improved pricing, despite increased investment in new products and capabilities.
- Operating cash flow was an inflow of $495 million, $331 million higher than the first quarter of last year, essentially due to higher earnings.
SDRL: Aquadrill Numbers Ahead of Q1 Results
- SDRL is scheduled to report first quarter results on May 23, 2023, before the market open and has provided a glimpse to the profitability Aquadrill is operating at
- The Aquadrill fourth quarter results affirm our investment thesis of the profitability the business is operating at with the day rates Aquadrill has secured
- SDRL is the last company of the major drill ship owners to report first quarter results. Peers have shed a positive outlook on the industry and day rate trend
Advanced Micro Devices Inc.: Important Strides Towards Speeding Its AI Roadmap – Key Drivers
- In the first quarter, Advanced Micro Devices performed well, delivering better-than-anticipated revenue and earnings in a mixed demand environment, launching numerous products across its businesses.
- Revenue for the first quarter was $5.4 billion, down 9% from the same period last year.
- Revenue in the Data Centre category was $1.3 billion, flat year on year, with greater cloud sales offsetting decreased enterprise sales.
ZoomInfo Technologies Inc.: Investments In Improved Customer Experience – Key Drivers
- ZoomInfo Technologies achieved better-than-expected revenues and profitability in Q1 with an adjusted operating income margin of 40% and more than $121 million in unleveraged free cash flow.
- Moreover, ZoomInfo is investing resources in products to develop engaging customer experiences, enhance data leadership, and go upmarket.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
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