Weekend Update #72

Written By Emily Philpott
 
Welcome to Blue Room's Weekend Update. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
 
 
 
 
 
 

It was a busy week for at Blue Room as we got into the front end of a several week swing of earnings calls and business updates. A mix of earnings beats and misses across a wide range of tech stocks ultimately pulled the Nasdaq 100, a consolidated index of some of the most relevant tech names globally, down 367 bps this week.

 

The week began on Tuesday with Google and Microsoft reporting. Microsoft recorded a revenue increase of 18% year-over-year and net income rose 8%, both line items beating expectations. Shares closed up 4.98% the following day based on a strong Q4 outlook. On the other end, Google missed on revenue and earnings estimates, with YouTube advertising growth falling short of expectations. Shares of GOOG fell 2.82% the following day. On Wednesday, Meta Platforms reported revenue estimates that fell below analyst estimates, while beating on EPS. The company also guided to a 2Q22 revenue figure of $29 billion at the midpoint, below the consensus forecast of $30.6 billion. Despite seemingly weak sales and outlook, shares oddly exploded 20% the following day. On Thursday, both Amazon & Apple provided weaker guidance than analysts were expecting with Amazon citing higher cost of fulfillment and weaker consumer interest in online spending as headwinds and Apple suffered from the effects of the war in Ukraine and the COVID-19 lockdowns in China, both of which impacted demand for Apple products. The conflict in Ukraine is likely to continue to eat at sales growth going into Apple’s third quarter. Intel earnings beat on all consensus GAAP measures but their annual outlook is in question after the company said that they expected the supply/demand imbalance to extend into 2024, past their original 2023 estimate. 

MAJOR INDICES - PERFORMANCE THIS WEEK

S&P 500 - Finished down, -3.18%

  • Index Leaders: Meta Platforms (Facebook) +8.89%, Microsoft +1.27%, Eli Lilly +4.18%, Mastercard +3.47%, Merck & Co. +4.85%

  • Index Laggards: Amazon -13.90%, Tesla -13.36%, Apple -2.56%, Google class A -4.63% & Google class C -3.89%, Comcast Corp -12.38%

Nasdaq - Finished down, -3.93%

  • Index Leaders: Meta Platforms (Facebook) +8.89%, Microsoft +1.27%, Qualcomm +5.18%, JD.com +18.49%,  Pinduoduo +24.07%

  • Index Laggards: Amazon -13.90%, Tesla -13.36%, Apple -2.56%, , Google class A -4.63% & Google class C -3.89%, Comcast Corp -12.38%

DJIA - Finished down, -2.47%

  • Index Leaders: Visa +2.38%, Salesforce +2.63%, Merck and Co. +4.85%, Microsoft +1.27%, Honeywell +1.51%

  • Index Laggards: Boeing -15.87%, Amgen 6.85%, Goldman Sachs -4.47%, United Health -2.38%, JP Morgan -5.87%

ECONOMICS

TUESDAY

New Home Sales - Tracks the sales of newly constructed homes during a reference period. In March, the index reported 763 thousand versus 768 thousand surveyed and 772 thousand in the prior period.

THURSDAY

GDP Annualized QoQ - GDP can be defined as the final market value of all goods and services produced within the country. In the first quarter of 2022, GDP QoQ, annualized, was -1.4% versus 1.0% growth and 6.9% in the previous period.

Initial Jobless Claims - Initial unemployment claims track the number of people who have filed jobless claims for the first time during a specified period. For the April 23rd period, initial job claims were 180 thousand compared to 180 thousand surveyed, and 184 thousand in the previous period.

FRIDAY

Personal Income MoM - Consumer or Household income tracking all income received by households. In March, the readout was 1.1% versus 0.6% surveyed and 0.2% in February.

Personal Consumption Expenditures - The Federal Reserve Bank’s preferred measure of inflation that measures the changes in prices of all goods and services consumed in the country. For the first quarter of 2022, the readout was 2.7 versus 3.5% surveyed and 2.5% last quarter.


Thank you Blue Room Analyst IAN CARTER.

 

Q1 2022 Earnings Expectations (via Bloomberg)

  • Net Sales: $116.4 billion (+7% year-over-year, compared to $108.52 billion in Q1 2021)

    • Online Stores: $51.5 billion (-2.7% year-over-year, compared to $52.901 billion in Q1 2021)

    • Physical Stores: $4.3 billion (+9.7% year-over-year, compared to $3.9 billion in Q1 2021)

    • Third-Party Seller Services: $25.0 billion (+5.4% year-over-year, compared to $23.7 billion in Q1 2021)

    • Subscription Services: $8.5 billion (+13% year-over-year, compared to $7.58 billion in Q1 2021)

    • AWS: $18.25 billion (+35% year-over-year, compared to $13.5 billion in Q1 2021)

  • EPS: $8.47 (-46% year-over-year, compared to $15.80 in Q1 2021)

Q1 2022 BR Estimates

  • Net Sales: $117.4 billion (+8% year-over-year, compared to $108.52 billion in Q1 2021)

    • Online Stores: $51.3 billion (-3.0% year-over-year, compared to $52.901 billion in Q1 2021)

    • Physical Stores: $4.8 billion (+22.4% year-over-year, compared to $3.9 billion in Q1 2021)

    • Third-Party Seller Services: $24.9 billion (+5.2% year-over-year, compared to $23.7 billion in Q1 2021)

    • Subscription Services: $8.4 billion (+11% year-over-year, compared to $7.58 billion in Q1 2021)

    • AWS: $18.6 billion (+37.5% year-over-year, compared to $13.5 billion in Q1 2021)

  • EPS: $(9.72) (-161.5% year-over-year, compared to $15.80 in Q1 2021)

Q1 2022 Actuals

  • Net Sales: $116.4 billion (met, +7.3% year-over-year, compared to $108.52 billion in Q1 2021)

    • Online Stores: $51.1 billion (miss, -3.3% year-over-year, compared to $52.901 billion in Q1 2021)

    • Physical Stores: $4.6 billion (beat, +17.1% year-over-year, compared to $3.9 billion in Q1 2021)

    • Third-Party Seller Services: $25.3 billion (beat, +6.9% year-over-year, compared to $23.7 billion in Q1 2021)

    • Subscription Services: $8.41 billion (miss, +11% year-over-year, compared to $7.58 billion in Q1 2021)

    • AWS: $18.6 billion (+37.5% year-over-year, compared to $13.5 billion in Q1 2021)

  • EPS: $(7.56) (-148% year-over-year, compared to $15.80 in Q1 2021)

 
 

Summary and Outlook

Ticker: ROKU

Market Capitalization: $282 Billion

Shares Outstanding: 442,778,000

Share Price History

April 18, 2022 $107.91

April 19, 2022 $116.78

April 20, 2022 $109.57

April 21, 2022 $99.55

April 22, 2022 $97.09

April 25, 2022 $101.41

April 26, 2022 $91.76

April 27, 2022 $84.76

April 28, 2022 $91.63

April 29, 2022 $92.90 ←+1.39% following Q1 ‘22 Financial Results released

Actual Q1 2022 Earnings

Revenue: $733.7 M (39% Y/Y increase from Q1 2021, beat expectations)

Operating Income: ($23.5) M (beat expectations)

Diluted EPS: ($0.19) per share (beat expectations)

Total Active Accounts: 61.3 M (14% Y/Y increase, missed expectations)

ARPU: $42.91

Total Streaming Hours: 20.9 B (14% Y/Y increase, beat expectations)


Q2 2022 Forecast

Revenue: $805 M

Total Gross Profit: $395 M

Net Income: ($109) M

Adjusted EBITDA: $0

Full Year Revenue: 35% Y/Y increase

 
 

LATEST EARNINGS REVIEW ~ PINTEREST FIRST QUARTER 2022

Pinterest announced financial results for the quarter ended March 31, 2022, with highlights including:

  • Q1 revenue grew 18% YoY to $575 million, beating consensus estimates of $573 million

  • Global Monthly Active Users (MAUs) decreased 9% YoY to 433 million

  • GAAP net loss was $5 million for Q1, adjusted EBITDA was $77 million for Q1

“Pinterest made good progress in Q1 executing on our long-term strategy. We continued to scale our native content and creators ecosystem, began beta testing Your Shop, our personalized shopping surface and released our new open Pinterest API so that any developer can build applications for Pinners, creators, merchants and advertisers,” said Ben Silbermann, CEO and cofounder of Pinterest. “Despite a challenging macroeconomic and geopolitical environment, we grew revenue 18% YoY. 

CHANGE IN GEOGRAPHIC REVENUE ACCOUNTING

Beginning this quarter, Pinterest will provide additional disclosure around revenue, MAUs, and ARPU by presenting U.S. and Canada, Europe and Rest of World separately:

 
 

Shares Outstanding 175,945,110 as of April 25, 2022

10.00% 17,594,511 shares

1.00% 1,759,451 shares

0.10% 175,945 shares

0.01% 17,595 shares


Market Capitalization

$55.00 per share $9,676,981,050

$75.00 $13,195,883,250

$100.00 $17,594,511,000

$150.00 $26,391,766,500

$250.00 $43,986,277,500

$500.00 per share $87,972,555,000

Initial Public Offering 4,000,000 shares

Filing: $14.00-$16.00 per share

Pricing: $14.00 per share

Stock Price History

April 18, 2022 $67.84

April 19, 2022 $68.98

April 20, 2022 $65.56

April 21, 2022 $60.98

April 22, 2022 $60.68

April 25, 2022 $62.64

April 26, 2022 $58.63

April 27, 2022 $62.52 ← +6.6% day after Q4 2021 earnings release 

April 28, 2022 $57.53

April 29, 2022 $55.05


 
 
 

The Chicago Fed National Activity Index is a monthly index designed to gauge overall economic activity and related inflationary pressure. The index is a weighted average of 85 indicators of national economic activity drawn from four broad categories of data: 

1) production and income 

2) employment, unemployment, and hours

3) personal consumption and housing

3) sales, orders and inventories

A zero value indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

 

The Conference Board’s Consumer Confidence Index increased slightly to 107.3 in April, up from 107.2 in March but still below consensus estimates at 108.2. The increase was due to stronger future expectations among those surveyed. Expectations were driven by an increase to 16.5% of consumers who believe their income will increase in the next six months, compared to only 13.8% who believe they will see their income decrease. Consumer purchase plans also remained strong with 49.8% of those surveyed planning to purchase a major appliance within six months.

The University of Michigan’s Consumer Sentiment Index also rose to 65.2 in April, up from 59.4 in March. Similarly, the uptick is also driven by a strong increase in consumer expectations. Some of this can be attributed to falling gas prices and an improved outlook on the global impacts of the war in Ukraine. Importantly, the Surveys of Consumers Survey Results point to the strong labor market and strong wage gains as the only factors supporting optimism — both of which are going to suffer as a result of the Fed’s tightening of financial conditions.

If the Federal Reserve does not take strong action to raise interest rates and tame inflation, it is probably that a wage-price spiral will continue to drive inflation even higher. 

 
 

Shares Outstanding 2,293,518,778 as of April 22, 2022

10.00% 229,351,878 shares

1.00% 22,935,188 shares

0.10% 2,293,519 shares

0.01% 229,352 shares

Market Capitalization

$200.00 per share $458,703,755,600

$250.00 $573,379,694,500

$300.00 $688,055,633,400

$500.00 $1,146,759,389,000

$800.00 $1,834,815,022,400

$1000.00 per share $2,293,518,778,000

Initial Public Offering 484,418,657 shares

Filing: $38.00 per share

Pricing: $38.00 per share

Stock Price History

April 18, 2022 $210.77

April 19, 2022 $217.31

April 20, 2022 $200.42

April 21, 2022 $188.07

April 22, 2022 $184.11

April 25, 2022 $186.99

April 26, 2022 $180.95

April 27, 2022 $174.95

April 28, 2022 $205.73 ← +17.6% day after Q4 2021 earnings release

April 29, 2022 $200.47

 

Shares Outstanding as of January 14, 2022

100.00% 16,319,441,000

10.00% 1,631,994,100

1.00% 163,194,410

0.10% 16,319,441

0.01% 1,631,944

Market Capitalization

$100.00 $1,631,944,100,000

$150.00 $2,447,916,150,000

$163.64 $2,670,513,325,240

$250.00 $4,079,860,250,000

$300.00 $4,895,832,300,000


Q2 2022 Earnings Expectations (via Bloomberg)

  • Total Revenue: $93.98 billion (+5% year-over-year, compared to $89.58 billion in Q2 2021)

  • Products: $75.4 billion +3.7% year-over-year, compared to $72.7 billion in Q2 2021)

    • iPhone: $49.16 billion (+2.6% year-over-year, compared to $47.94 billion in Q2 2021)

    • Mac: $9.23 billion (+1.4% year-over-year, compared to $9.1 billion in Q2 2021)

    • iPad: $7.2 billion (-8% year-over-year, compared to $7.81 billion in Q2 2021)

    • Wearables, home and accessories: $8.98 billion (+14.6% year-over-year, compared to $7.84 billion in Q2 2021)

  • Services: $19.78 billion (+17% year-over-year, compared to $16.9 billion in Q2 2021)

  • EPS: $1.42 (+1.95% year-over-year, compared to $1.40 in Q2 2021)

Q2 2022 BR Estimates

  • Total Revenue: $93.98 billion (+5% year-over-year, compared to $89.58 billion in Q2 2021)

  • Products: $75.4 billion (+3.7% year-over-year, compared to $72.7 billion in Q2 2021)

    • iPhone: $45.0 billion (-6.2% year-over-year, compared to $47.94 billion in Q2 2021)

    • Mac: $9.08 billion (+0.2% year-over-year, compared to $9.1 billion in Q2 2021)

    • iPad: $6.6 billion (-15.2% year-over-year, compared to $7.81 billion in Q2 2021)

    • Wearables, home and accessories: $8.968 billion (+14.4% year-over-year, compared to $7.84 billion in Q2 2021)

  • Services: $20.55 billion (+21.6% year-over-year, compared to $16.9 billion in Q2 2021)

  • EPS: $1.26 (-9.7% year-over-year, compared to $1.40 in Q2 2021)

Q2 2022 Actuals

  • Total Revenue: $97.28 billion (beat, +8.6% year-over-year, compared to $89.58 billion in Q2 2021)

  • Products: $77.5 billion (beat, +6.6% year-over-year, compared to $72.7 billion in Q2 2021)

    • iPhone: $49.16 billion (+2.6% year-over-year, compared to $47.94 billion in Q2 2021)

    • Mac: $9.23 billion (+1.4% year-over-year, compared to $9.1 billion in Q2 2021)

    • iPad: $7.2 billion (-8% year-over-year, compared to $7.81 billion in Q2 2021)

    • Wearables, home and accessories: $8.81 billion (+12.4% year-over-year, compared to $7.84 billion in Q2 2021)

  • Services: $19.82 billion (+17% year-over-year, compared to $16.9 billion in Q2 2021)

  • EPS: $1.54 (+8.9% year-over-year, compared to $1.40 in Q2 2021)

 
 
 
 

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BLUE ROOM GLOBAL MEETING
Thursday, April 28, 2022
6 PM / Denver Time
__________ _________

BLUE ROOM
GLOBAL MEETING

Dear Blue Room:

Thank you to everyone who was able to participate in last week's Global Meeting, which can be watched here: vimeo.com/701909044

Earlier this week on Tuesday, Blue Room held a workshop on The Growth Mindset, a best-selling business book authored by Dr. Carol Zweck. A growth mindset is one where challenge is embraced as an opportunity for reflection and improvement.

Communication is core to Blue Room's culture. Communication is what you say, how you say it, and what you don't say. For our icebreaker conversation, let's talk about miscommunication.

+ Have you had a recent miscommunication?

+ What causes it and how can we fix miscommunications so that they do not adversely impact our relationships?

__________ __________

 
 
 
 
 
 

APRIL

=====

Blue Room Fund One

RELATIVE TO

S&P 500

 

A
R
T

ARTIST CONVERSATION AND EXHIBITION TOUR WITH DYANI WHITE HAWK @ MCA DENVER 05/05/22 DOORS 6PM

05/05/2022

ABOUT THE EVENT:

Join nationally-recognized artist Dyani White Hawk for an exhibition walk-through of the exhibition Dyani White Hawk: Speaking to Relatives at the MCA Denver Fries Building. White Hawk will describe the trajectory of her artistic practice and the motivations behind her methods. Guests are invited to begin the evening with drinks in the Cafe at 6PM with the artist, followed by an exclusive tour of White Hawk’s stunning exhibition. 

Dyani White Hawk: Speaking to Relatives

LOCATION:

MCA Denver at the Fries Building: 1485 Delgany Street, Denver, CO 80202

MCA Denver rooftop café and bar.
Continues through Dyani White Hawk's exhibit on the first floor and basement of MCA Denver.

 
 
 

F
U
N
D

O
N
E

IS LIVE

 
 
 
 
 
 
 
 

10% OF ALL BLUE ROOM REVENUES GO DIRECTLY TO FUND OUR NON PROFIT TOGETHERISM.
WE CAN ACCOMPLISH ANYTHING TOGETHER.

These materials do not purport to be all-inclusive or to contain all the information that a prospective investor may desire in considering an investment. These materials are intended merely for preliminary discussion only and may not be relied upon for making any investment decision. Any discussion or information contained in this presentation does not serve as a receipt of, or as a substitute for, personalized investment advice from Blueroom or your advisor. 

This publication does not constitute an offer to sell or a solicitation to buy any securities in any fund, market sector, strategy or any other product. Investing is speculative and involves substantial risks (including, the risk of loss of the investor’s entire investment). Past performance is not indicative of future results, and there can be no assurance that the future performance of any specific investment, investment strategy, or product will be profitable.

For more information about us and our general disclosures contact us directly.

Emily Philpott
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