In today’s briefing:
- Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead
- SiC as a Dog (Part 2)
- Duolingo Valuation Update: Year-End Profit Taking Is Likely As ARR Growth Is Slowing Down
- HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report
- Odyssey Marine Exploration, Inc. – Exploring and Developing Seabed Resources Responsibly
Tesla (TSLA) No Longer Prevails, a Dilemma and Touch Challenges Ahead
- Tesla is facing a dilemma whether to aggressively cut price to boost shipment but lose margins or to keep price stable with a more moderated shipment growth like 10-20% y/y.
- Three challenges ahead: 1. Collapsing margin vs. rising margin for key competitors? 2. Cybertruck is selling at a loss, more margin downside? 3. Valuation reset for lower sales CAGR?
- Cautious on Tesla as its sales/earnings CAGR is falling below 20% with a rich valuation until we see cost cut on Cybertruck, FSD AI breakthrough, and low price model introduction.
SiC as a Dog (Part 2)
- The sickness in Silicon Carbide started at On semi.
- Let’s look through the results and see the drivers, the big deal, and what we should do about it.
- The market freaked out about Silicon Carbide, specifically On semiconductor, saying that automotive demand for the year will be weaker.
Duolingo Valuation Update: Year-End Profit Taking Is Likely As ARR Growth Is Slowing Down
- Duolingo shares have outperformed in 2023, with shares up ~115% over the year versus ~26% gain on the Nasdaq. The company priced its IPO at $102 a share in 2021.
- EdTech unicorn achieved the highest-ever MAUs and DAUs in 2QFY23, while paid subscribers reached 5.2M, ~7% of MAUs. Management raised top-line and profitability guidance for FY23.
- With a market cap of ~$7.4B on a fully diluted basis, Duolingo shares trade at ~13x and ~10x EV/Rev on my FY23/FY24 estimates, a significant premium to comparable companies.
HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report
- We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.
- Our sales estimates have moderated. Following the 3Q23 report, margins should be sustainably stronger.
- HNI reported 3Q23 adjusted EPS of $0.93, $0.30 better than consensus. Sales were roughly in line.
Odyssey Marine Exploration, Inc. – Exploring and Developing Seabed Resources Responsibly
- We hosted a fireside chat with Chief Executive Officer and Chairman of the Board of Directors Mark D. Gordon.
- This report contains a transcript of the fireside chat from October 12, 2023, which can be accessed on demand.
- Deep roots and unique capabilities. Odyssey Marine Exploration, Inc. is a company with nearly 30 years of experience exploring and recovering deep-sea sites, amassing more than 24,000 hours of deep-sea experience, and exploring more than 74,000 square kilometers of the seafloor in the process.
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