In today’s briefing:
- IMMR: Optionality to Cash
- ARLO: Recurring Revenue Growth, PT to $11
- PayPal: Panicking As A Result Of Quarterly Trends And Narratives Is Not A Viable Strategy
- C.H. Robinson Worldwide: Can Automation & Digitization Save The Day? – Major Drivers
- Commodity and FX Impulse Moves
- Fortive Corporation: What You Need To Know About The Q1 Success & Why It Matters – Key Drivers
- Hilton Worldwide Holdings Inc.: A Strong Emergence From The Lull – Key Drivers
- Norfolk Southern Corporation: Improved Network Reliability and Productivity Saving The Day? – Major Drivers
- NOW, INC. – 1Q23 Solid Start to the Year
- Old Dominion Freight Line Inc.: Is The Bad Result A Sign Of Trouble Or A Bargain? – Major Drivers
IMMR: Optionality to Cash
- 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
- 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
- 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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