In today’s briefing:
- Nextracker IPO Valuation Analysis
- Teladoc Inc: New Integrated Healthcare Experience & Other Developments
- Sonos Inc: New Launches & Other Drivers
- Upgrading Communications, Downgrading Staples – Both to Market Weight; US Dollar Major Top
- Sunrun Inc: Collaboration With The Enel Group & Other Drivers
- Automatic Data Processing Inc (ADP): Major Drivers
- ON Semiconductor Corp: Major Drivers
- Appian Corp: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)
- United Airlines: Major Drivers
- Enphase Energy Inc: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (01/23)
Nextracker IPO Valuation Analysis
- NEXTracker (NXT US) , a leading solar tracker and software solutions provider for utility-scale and distributed generation projects, filed for an IPO.
- According to Crunchbase, NEXTracker (NXT US) has raised ~$548M in funding over four rounds, and investors include Sigma Partners, DBL Partners, SJF Ventures, and American private equity firm TPG.
- We have a favorable view of the upcoming Nextracker IPO and see upside potential to the last round valuation of ~$3B, when the company announced a strategic investment from TPG.
Teladoc Inc: New Integrated Healthcare Experience & Other Developments
- Teladoc Health delivered a decent result for the last quarter and managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
- Teladoc concluded the quarter with a total US paid membership of 57.8 million members, an increase of 1.2 million members over the second quarter, driven by a combination of new virtual care client onboardings and population expansions within current clients.
- The management conducted their client advisory panel with representatives from 30 health plans, sizable employers, and health systems in attendance.
Sonos Inc: New Launches & Other Drivers
- Sonos delivered a decent performance in the last quarter with revenue growth beyond market expectations and narrower-than-expected losses despite the challenging macroeconomic backdrop.
- In the last quarter, installer solutions revenue grew, driven by robust demand for the company’s Port and Amp products in spite of persistent supply challenges.
- Sonos continues to see strong performance in its installer solutions channel in spite of slowing house activity in the United States.
Upgrading Communications, Downgrading Staples – Both to Market Weight; US Dollar Major Top
- In our January 10th Compass, we discussed a break above 3910 on SPX would signal a tradable rally, with 4100-4165 our target, the top-end of our expected 2023 trading range.
- We believe equities are still in the midst of a rally/short squeeze, but that the rally is likely to fizzle in the 4100-4165 area.
- After being underweight Communications (XLC) since Nov 2021, sidestepping 20% underperformance vs. SPX, we now see signs of price and RS bottoms, and we are upgrading to market weight. Buy.
Sunrun Inc: Collaboration With The Enel Group & Other Drivers
- Sunrun delivered strong results in the last quarter as it continued expanding net subscriber value and delivering cost efficiency.
- During the quarter, Lunar Energy unveiled the clean energy company where Sunrun invested for accelerating whole-home electrification.
- Ford’s partnership with Sunrun continues to deliver strong results.
Automatic Data Processing Inc (ADP): Major Drivers
- ADP had a great start to fiscal 2023 and delivered an all-around beat in its last result.
- The company overcame elevated expense growth over the first quarter of last year and ongoing investments in the business by delivering 30 basis points of adjusted EBIT margin expansion.
- In contrast, the start of bookings growth in the foreign business was slower than the management had anticipated.
ON Semiconductor Corp: Major Drivers
- ON Semiconductor Corporation delivered another all-around beat in its last result.
- The company is a well-known provider of intelligent sensing and power solutions and has established a good market position within its niche in the semiconductor market.
- More and more companies are considering ON Semiconductors as their long-term strategic partners as the company walks according to an amazing foresight.
Appian Corp: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)
- Appian Corp delivered a mixed result in the last quarter with revenues exceeding Wall Street expectations largely driven by the growth in cloud subscription revenue.
- In every category, the revenue growth is healthy and setting records in the quarter.
- While a large part of the tech industry has been retrenching, Appian went ahead and hired 221 employees in the last quarter.
United Airlines: Major Drivers
- United Airlines faced a challenging operating environment during the last quarter but managed to deliver an all-around beat.
- Although the company had high load factors, it quickly accommodated thousands more passengers when other airlines’ flights were cancelled.
- Domestic capacity decreased by 8%, while international capacity decreased by 12%.
Enphase Energy Inc: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (01/23)
- Enphase delivered solid results for the past quarter driven largely by solid revenues through microinverters which helped them produce an all-around beat.
- Enphase Energy has recently announced the launch of IQ8 Microinverters in the Netherlands and France, thereby making the foremost expansion into the international markets for this product.
- In the U.S., the microinverter channel inventory has been very healthy, and its storage channel inventory was slightly elevated because of longer installation times.
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