Discover our shortlist of great, hand-picked stocks in the MyWallSt app. Your one-stop solution to beat the market. 

app_store_button_en.png
google play button.png
  • Jamie Adams

Amazon's Hardware Could Soon Rival Apple

More earnings this week including big hitters such as Match and Disney, Under Armour and Alphabet are in trouble, Amazon’s hardware takes off, and Twilio makes the mother of all blunders. It’s the Five on Friday of course!


#UnderArmoured

Yet again, Under Armour shares have shrunk, as the once-great sportswear giant becomes embroiled in a U.S. federal probe.


What does this mean?

It seems Under Armour just cannot catch a break these days. Sales growth has declined yet again from the last quarter while consumers in North America flock to rivals Nike, and just last week its founder and CEO Kevin Plank stepped down. As if all this wasn’t enough, the Wall Street Journal reported last Sunday that a U.S. federal probe has been examining whether Under Armour cooked its books to enhance sales results in reports. The probe, which Under Armour says it is fully cooperating with, will reportedly examine revenue-recognition practices at the company and whether Under Armour recorded revenue before it was earned or deferred the dating of expenses to make earnings appear stronger. In a company that has had three CFOs since 2016 and a CEO who stepped down after more than 2 decades at the helm, just 2 weeks before such an investigation is reported, one must wonder what skeletons may hang in Under Armour’s closet.


Bet you didn’t know

The largest accounting fraud known involved telecommunications giant Worldcom, which had inflated its assets by $11 billion. 


#Misconduct

McDonald’s saw its CEO removed this week over an inappropriate employee relationship, while Alphabet’s board of directors is investigating executives over similar accusations.


What does this mean?

The issue of inappropriate corporate relationships featured heavily in this week's news, as McDonald’s CEO Steve Easterbrook was relieved of his post when he was found to be in a consensual relationship with an employee. A mere 3 days later, and a bigger fish made headlines when the board of Google parent company Alphabet said it was conducting an investigation into sexual misconduct by executives and has hired a law firm to assist. The company’s Chief Legal Officer David Drummond is one of the high-profile executives accused of having inappropriate relationships with employees. On Tuesday, Drummond cashed out of $27 million in Alphabet stock after alleged emotional abuse of a former employee who claims to have had an affair and child with him. Alphabet has suffered a string of sexual misconduct suits so far in 2019, and should be cracking down on pushing out such behavior or it could well damage the company and its stock.


Bet you didn’t know

A total of 1,332 U.S. based businesses have changed CEOs so far this year, on track to be the most ever after last year's record. 



#AmazonHardware

Amazon has ramped up its hardware efforts with its latest range, and is seeking to catch up with market leader Apple.


What does this mean?

Amazon’s latest competitor to the iPad – the Fire HD 10 – seems to be getting high praise indeed among U.S. reviewers, as the company continues to perform admirably on the hardware stage. At more than half the price of Apple’s latest iPad, it is now 30% faster than older models and now comes with improved battery. If that didn’t have Apple concerned, the e-commerce giant may have also revealed a potential game-changer in its Echo Buds earbuds software. Users found that software used to manage the Echo Buds shows workout tracking as an option. By adding fitness tracking to its earbuds, Amazon could mark its first entrance into the fitness monitoring space, bringing it into more direct competition with the Apple Watch, and the recently Google-acquired Fitbit.


Bet you didn’t know

Amazon employs over 647,500 people across the globe, more than Google, Facebook, and Alibaba combined.


#Earnings

It was a big week for earnings here at MyWallSt, with plenty of companies on our market-beating shortlist reporting on their last quarter. So, to save you some time, here’s ‘The Good, The (Not-So) Bad, and The Ugly’:



The Good


Booking Holdings - Shares in the travel-website company jumped in after-hours trading last night after reporting third-quarter profits of $1.95 billion and sales of $5.04 billion.


BlackLine - The cloud-based solutions firm beat estimates with earnings per share of $0.12 on top of revenue of just under $75 million.


Chegg - The education company got a good boost in after-hours trading after beating analyst expectations for the quarter and raising its full-year guidance, including a 29% growth in subscribers.


Chuy's - Revenue growth of close to 8% and comparable restaurant sales of 2.6% helped the company to a solid quarter, with management raising its expectations for the full fiscal year.


Disney - Shares in the House of Mouse jumped following an increase of 34% in revenue year-on-year at $19.1 billion, as well as strong growth across its sectors including its parks and film production.


Eventbrite - Shares in Eventbrite jumped more than 20% in after-hours trading as the ticketing company reported an 11% increase in net revenue and smaller losses than the year-ago period.


Evolent Health - The health service provider saw its shares jump 2% following earnings which topped revenue estimates, and a loss of $0.09 per share versus expectations of $0.15.


Planet Fitness - Another great quarter for the low-cost gym operator, with same-store sales of 7.9% beating analyst estimates and both sales and earnings outlooks raised for the rest of the year.


Square - The company topped analyst estimates with earnings of $0.25 per share and a revenue increase of 40% year on year, to over $600 million.


Take-Two Interactive - A 74% jump in revenue from the same time last year was helped by some of the company's biggest titles like 'Borderlands', 'NBA 2K' and 'Grand Theft Auto', with management raising the outlook for the rest of the fiscal year.


TradeDesk - The advertising technology company continues to grow, with record revenue of $164.2 million representing a  jump of 38% and the full fiscal year outlook revised upwards.


Trupanion - The pet insurance provider reported surprise earnings of $0.02 per share, where it was expected to report a loss of that amount, on top of revenues just under $100 million compared to $78 million a year ago.


Zillow - The company's new home-flipping segment continues to go from strength to strength and is now expected to pull in as much as $1.25 billion this year — nearly the same as Zillow's total revenue figure from last year.


The (Not-So) Bad


Activision Blizzard - Despite recent backlash over its handling of the Hong Kong protests, the gaming giant beat analyst estimates for the last quarter, though profits had tightened from the same time last year.


Fitbit - The recently Google-acquired wearables company reported a loss of $0.10 per share, on top of revenue of nearly $350 million, just about beating estimates.


GoPro - The troubled camera company welcomed a boost of 7% in after-hours trading due to better than expected revenue of $131 million, as well as early success with its new ‘Hero8’ range. 


Howard-Hughes Corp - HHC stock remained relatively stable after reporting Q3 earnings which had increased on last year, with profit of under $30 million, but missing out on revenue for the quarter.


Monster Energy - The energy drink company narrowly beat expectations for both earnings and revenue in the last quarter, while also announcing a new $500 million share repurchase program.


The Ugly


Match Group - Tinder’s parent company issued a disappointing outlook on Tuesday nights report, overshadowing a forecast-beating quarter, which saw its stock drop.


Roku - Shares in the streaming company fell on Wednesday, despite the company reporting a smaller-than-expected loss on revenue of over $260 million.


Tripadvisor - The travel review company’s stock dropped 5% following a lackluster Q3, which saw it miss estimates with $0.50 per share on revenue of $428 million.


Truecar - The beleaguered company reported a whopping loss of $7.7 million for the third quarter, but management raised the company's end of year revenue and earnings guidance slightly, saying that TrueCar is "getting on the right track".


Wynn Resorts - Another company that fell short of estimates, Wynn stock dropped more than 3%, with earnings per share coming in at $0.17 on top of revenue of $1.65 billion.


#AndFinally

We might need to change this segment to ‘Gaffe of the Week’ following Twilio’s latest blunder. The cloud communications company was forced to re-report its full-year forecast on Monday, after the firm messed up the math the first time around. Twilio’s full-year earnings per share guidance is now expected to be between 12 cents and 13 cents, instead of the 16 cents to 17 cents originally reported alongside its third-quarter earnings. It appears the company just didn’t add up the quarterly earnings correctly for fiscal 2019 when issuing the guidance last week – *facepalm 🤦‍♂️. The company’s shares fell as much as 17% following the original report, and then a further 5.2% following the announcement of the accounting error. Seems some accountants at Twilio have had their heads in the Cloud for too long. 


What does this mean?

Twilio’s gaffe will inspire very little confidence in investors if it is capable of making such a significant blunder.


Bet you didn’t know

In 2012, Bank of America was forced to admit that its accountants had missed an accounting error over the course of several years, resulting in a $4 billion loss.


MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

  • Facebook_2x
  • Twitter_2x
  • Instagram_2x
  • Instagram_2x

© 2019 MyWallSt Ltd. All rights reserved. This website is operated by MyWallSt Ltd (“MyWallSt”). MyWallSt is a publisher and a technology platform, not a registered broker-dealer or registered investment adviser, and does not provide investment advice. Brokerage services are provided to clients of MyWallSt by DriveWealth LLC, an SEC registered broker-dealer and member FINRA/SIPC. Investing involves risk and investments may lose value. Past performance does not guarantee future results. “MyWallSt“, “Brilliant Investing Made Easy” and “Tap To Invest” are registered trademarks of MyWallSt.