Here’s why the rally in Twitter Inc (NYSE:TWTR) stock may not last too long.
In a big relief for shareholders of San Francisco, California-based Twitter (NYSE:TWTR),shares of the company rallied strongly following its Q1 earnings release on 26th April. Twitter shares soared higher by as much as 12.4% before ending the day nearly 8% higher. As most of us probably know by now, the highlights of the quarter were a big beat on earnings, accelerated user growth and better than expected top line performance. There were a few other positives as well. However, if you take a deeper look, you might come away with the impression that this rally won’t last too long.
First, The Good Part About Twitter’s Q1 Earnings Release.
Twitter came out and beat analyst estimates of top and bottom line performance. The micro-blogging platform reported a revenue of $548.2 million and non-GAAP earnings per share of 11 cents. While both of these numbers represented YoY declines of 8% and 3% respectively, they were ahead of analyst estimates. Analysts expected the company to report a revenue of $511.9 million, translating to a YoY decline of 14%, while non-GAAP EPS was expected to come in at 1 cent. Clearly, the beat on earnings was massive, and the surprise was reasonable in terms of top line growth. However, the point to note is that expectations were very low to start with, and a beat was on the cards. There were other positives for Twitter, like the improvements in operating cash flows and free cash flows, and a relatively smaller GAAP net loss margin of 11%, when compared to the year ago quarter.
stock trading training: Myriad Genetics, Inc.(MYGN)
- [By Cory Renauer]
Shares of Myriad Genetics, Inc. (NASDAQ:MYGN), a DNA diagnostics specialist, dropped 61.4% last year, according todata from S&P Global Market Intelligence.Efforts to offset hereditary cancer-testing segment losses just weren’t successful enough to keep profits, and the stock, from sliding last year.
stock trading training: Valspar Corporation (The)(VAL)
- [By Ben Levisohn]
UBS analyst John Roberts and team consider whether Sherwin-Williams’ (SHW) pending purchase of Valspar (VAL) is a sign of peak pain in the U.S.:
- [By Ben Levisohn]
Chilton first bought Sherwin Williamsduring the depths of the Great Recession. Why? “Paint is a good business,” he says. “There are 134 million homes in the US. I like knowing that when I got to bed at night…there paint will be peeling.” And while Sherwin Williamshas had quite a run, there’s a good reason to buy now: Its acquisition of Valspar (VAL).
stock trading training: Canadian National Railway Company(CNI)
- [By Brett Hershman]
The Swiss bank said it was raising first-quarter estimates on four of the six rails it covers, with updated estimates above consensus on Canadian National Railway (USA) (NYSE: CNI), CSX Corporation (NASDAQ: CSX) and Kansas City Southern (NYSE: KSU), which is seen to show upside against low expectations.
- [By Monica Gerson]
Canadian National Railway (USA) (NYSE: CNI) is estimated to post its quarterly earnings at $0.92 per share on revenue of $3.08 billion.
Container Store Group Inc (NYSE: TCS) is expected to post its quarterly earnings at $0.21 per share on revenue of $230.53 million.
stock trading training: lululemon athletica inc.(LULU)
- [By Peter Graham]
The Q3 2016 earnings report forlarge cap technical athletic apparel stock Lululemon Athletica inc (NASDAQ: LULU) isscheduled forafter the marketcloses onWednesday (December 7th) as the company gets hit by analyst downgrades:
- [By Jon C. Ogg]
When companies raise guidance, or at least when they lift the lower-end of their prior targets, investors usually cheer. But in the case of Lululemon Athletica Inc. (NASDAQ: LULU) there is of course a high-valuation bar that has to be considered. Lululemon narrowed its guidance to the upper-end of prior ranges, but the shares hardly budged on Monday despite having a full trading day to absorb the news.
- [By Ben Levisohn]
Lululemon Athletica (LULU) is scheduled to release its financial results on March 29 after the market close. And while half of the 36 analysts who Lululemon rate it a Buy or Outperform, that still means another half, well, don’t.
Kevork Djansezian/Getty Images
Count Macquarie’s Laurent Vasilescu and team among the latter. In a note today, they offered 10 reasons to be cautious about Lululemon, which they rate Underperform. Here are my excerpts:
Same-store Sales: “We are concerned that store comps are in the low single digits, especially since the store fleet is very young,” Vasilescu warns. Margin Disclosure: “The level of disclosure around the gross margin continues to decrease,” Vasilescu claims. Margin Sapping Businesses: “Mens and ivivva are both growth drivers yet they are
margin dilutive,” Vasilescu explains. Too many stores in the U.S.: “Prior management outlined many times the TAM of 300-350 stores in North America,”Vasilescu writes. “Lulu is reaching saturation.” U.S. Store Profitability: It’s much lower than in Canada, claims Vasilescu. Marketing: Not enough of it, especially compared to Nike (NKE), Adidas (ADDYY), and Under Armour (UAA), Vasilescu says. Not a tech company: On its third-quarter conference call, Lululemon said it was a quasi-tech company. It’s not, says Vasilescu. Competition: Denim. Beyonce. Amazon.com (AMZN). Ouch. High costs: “When comps turn negative we think this will pressure earnings, as we estimate high fixed SG&A costs,” write Vasilescu. Inventories: “Days in inventory remain elevated at 112 vs historical 3Q rate of 90,” warns Vasilescu.
Shares of Lululemon Athletica have gained 0.6% to $64.06 at 2:32 p.m. today, while Nike has fallen 0.9% to $55.86, Adidas has dipped 0.1% to $96.27, Under Armour has risen 0.9% to $19.83, and Amazon.com has ticked up 0.1% to $846.38.
- [By Trey Thoelcke]
And Lululemon Athletica Inc. (NASDAQ: LULU) is expected to release its most recent quarterly results on Thursday afternoon. The consensus forecast calls for $0.35 in EPS and revenue of $567.55 million. The stock ended the week at $60.21 a share. The consensus price target is $61.97, and the 52-week range is $47.26 to $79.41.
- [By WWW.THESTREET.COM]
In after-hours trade, shares of Lululemon (LULU) skyrocketed 14.05% to $68.25 after the Vancouver, Canada-based athletic clothing maker sprinted past analyst expectations for its third-quarter earnings.
- [By Ben Levisohn]
Shares of Lululemon Athletica (LULU) are tumbling in after-hours trading today after the yoga-wear company missed fourth-quarter earnings estimates and offering disappointing guidance.
Joe Raedle/Getty Images
Lululemon reported a profit of $1.00 a share, missing forecasts for $1.01 a share, on sales of $789.9 million, which topped the Street consensus for $783.4 million. Lululemon said it would earning between 25 cents and 27 cents during the first quarter, below forecasts for 39 cents, and between $2.26 and $2.36 in 2017, below expectations for $2.56.
According to Avi Salzman of Barron’s Next, Lululemon blamed “an assortment lacking color” for the disappointing guidance.
Shares of Lululemon have tumbled 18% to $54.21 at 5:06 p.m. in after-hours trading today, after gaining 4.1% during regular market hours. Kudos to Macquaries Laurent Vasilescu, who offered 10 reasons to worry about Lululemon on Monday.
stock trading training: North American Energy Partners, Inc.(NOA)
- [By Lisa Levin]
In trading on Tuesday, energy shares slipped by 1.36 percent. Meanwhile, top losers in the sector included Northern Oil & Gas, Inc. (NYSE: NOG), down 9 percent, and North American Energy Partners Inc.(USA) (NYSE: NOA), down 6 percent.