Weekend Update #74
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.
Last week after rallying to the 4,300 level ahead of May’s FOMC meeting on May 4, the S&P 500 subsequently went into a decline after the Federal Reserve followed through with its 50-basis-point rate increase—the biggest since 2000—and announcement regarding its plan to reduce its balance sheet beginning in June.
This week began with the April CPI print in mind. Core CPI year--over-year registered a 6.2% increase, above the expected 6.0%, while headline CPI came in at 8.3%, above the expected 8.1%. The news spooked markets, helping send the index lower into Thursday, before bouncing back on Friday, ultimately settling at 4,023.86 and registering a loss of 2.97% for the week. The Dow and Nasdaq also registered losses despite posting Friday rallies—the Dow was down 2.43% for the week while the Nasdaq declined by 3.6%.
As well, earnings season continued this week as companies released their latest financial results. Novavax reported its first-ever profitable quarter and maintained its revenue guidance for the year. Peloton saw lower-than-expected revenue guidance for the fourth quarter while Coinbase’s revenue missed expectations. Disney topped streaming subscriber estimates and automaker Rivian reaffirmed its annual production guidance despite ongoing supply-chain challenges.
Elsewhere in markets, Bitcoin reached a YTD low of $25,939 and Ethereum reached its own nadir for the week of $1,758 as fear gripped cryptocurrency markets. On the fixed income side, US 10-year Treasuries reached rose as high as 3.13% last week before falling to 2.85% as investors sought safety from tumultuous equities markets. The CBOE Volatility Index hovered around the 32 level for the week, which is elevated relative to the 22 level it was registering during the month of April.
Companies that report earnings next week include Walmart, Home Depot, Lowe’s, Target, TJMaxx, Ross, Kohl’s Take-Two Interactive, Deere & Co and Warby Parker. All eyes and ears will be focused on these companies’ ability to manage profitability amidst inflation and what their outlooks look like for upcoming quarters and their fiscal year-end performance. These could serve as catalysts for future market movements.
Thank you Blue Room Analyst OMAR GUZMAN.
Summary and Outlook
Current Price $52.19 as of May 10, 2022
Shares Outstanding 78,134,595 as of April 30, 2022
10.00% 7,813,460 shares
1.00% 781,346 shares
0.10% 78,135 shares
0.01% 7,813 shares
Market Capitalization
$40.00 per share $3,125,383,800
$52.19 $4,077,844,513
$100.00 $7,813,459,500
$150.00 $11,720,189,250
$300.00 $23,440,378,500
Q1 2022 Earnings Expectations (via Bloomberg)
Revenue Estimate: $806.8 million (80.4% year-over-year, compared to $447.2 million in Q1 2021)
GAAP Net Income: $231.0 million (204% year-over-year, compared to $(222.7) million in Q1 2021)
GAAP EPS: $2.65 (+187% year-over-year, compared to $(3.05) in Q1 2021)
Q1 2022 Earnings Expectations — BR Estimates
Revenue Estimate: $1.02 billion (+127% year-over-year, compared to $447.2 million in Q1 2021)
GAAP Net Income: $246.4 million (+211% year-over-year, compared to $(222.7) million in Q1 2021)
GAAP EPS: $3.22 (+206% year-over-year, compared to $(3.05) in Q1 2021)
Q1 2022 Actual Performance
Revenue Estimate: $704 million (miss; +57.4% year-over-year, compared to $447.2 million in Q1 2021)
GAAP Net Income: $203.4 million (miss; +191% year-over-year, compared to $(222.7) million in Q1 2021)
GAAP EPS: $2.56 (miss; +184% year-over-year, compared to $(3.05) in Q1 2021)
Summary and Outlook
Roblox Corporation
Ticker: RBLX
Market Capitalization: $14.6 billion
Shares Outstanding: 540,600,000
Share Price History
May 2, 2022 $32.68
May 3, 2022 $33.10
May 4, 2022 $34.88
May 5, 2022 $30.44
May 6, 2022 $27.81
May 9, 2022 $24.61
May 10, 2022 $23.19
May 11, 2022 $23.97 ← +3.4% following Q1 ‘22 Financial Results released
May 12, 2022 $28.58
May 13, 2022 $32.97
Actual Q1 2022 EarningsOutlook
April Metrics
Revenue: $189 - 192 million
Gross Bookings: $221 - $224 million
DAUs: 53.1 million
Hours Engaged: 3.8 billion
Average Booking per DAU: $4.16 - $4.22
March 2022 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences but not for price changes, were $686.2 billion, up 1.7% from the revised February level and were up 22.1% from the revised March 2021 level.
Among the leading categories were farm products (+7.3%), petroleum (+6.9%), apparel (+4.7%), automotive (+3.9%) and lumber (3.8%). Among the laggards: drugs (-4.2%), groceries (-1.3%) and alcohol (-1.2%).
Consumer Sentiment — Preliminary Results From the May 2022 Survey:
Source: Surveys of Consumer Attitudes — University of Michigan
Consumer sentiment declined by 9.4% from April to 59.1 in May, reversing gains realized that month. These declines were broad-based — for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation — continuing the general downward trend in sentiment over the past year. Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36% of consumers attributing their negative assessment to inflation. Buying conditions for durables reached its lowest reading since the question began appearing on the monthly surveys in 1978, again primarily due to high prices.
Summary and Outlook
Ticker: COIN
Market Capitalization: $38.8 billion
Shares Outstanding: 213,741,000
Share Price History
May 2, 2022 $121.34
May 3, 2022 $123.56
May 4, 2022 $130.15
May 5, 2022 $114.25
May 6, 2022 $103.74
May 9, 2022 $83.51
May 10, 2022 $72.99
May 11, 2022 $53.72 ← -26.4% following Q1 ‘22 Financial Results released
May 12, 2022 $58.50
May 13, 2022 $67.87
Actual Q1 2022 Earning
Outlook
Quarter-to-Date
Crypto asset volatility declined 14% compared to the Q1 average and was the lowest level observed since mid-2020.
Q2 MTUs will be lower in Q2 compared to Q1
8.9 million MTUs in April
Total trading volume will be lower in Q2 compared to Q1
Approximately $74 billion total trading volume for April
Subscription and Services will be similar to modestly lower in Q2 compared to Q1
On average, 54% of our MTUs now engage with a non-investing product
Sales and marketing expense to be in the mid-to-high teens
Tech & Development and G&A expenses to be in the range of $1.1-$1.3 billion, including approximately $420 million of SBC
Full Year
Increased transaction expense driven primarily by growth in Blockchain Rewards revenue
Technology & Development and General & Administrative expenses will increase significantly, primarily driven by plans to hire 6,000 employees in 2022 which would nearly triple the current workforce of 3,730
Strong growth in Subscription and Services Revenue
Coinbase expects to have a positive Adjusted EBITDA for the year. However, in a bear case scenario, it expects a maximum a loss of roughly $500M
Full Year Forward Guidance
Monthly Transacting Users: 5 — 15 M (unchanged)
ARPU: pre-2021 levels (trending towards 2019 levels of $34 — lower)
Transaction expense (as a % of revenue): low 20%s (unchanged)
Sales and Marketing (as a % of revenue): 12 — 15% (unchanged)
Technology & Development and G&A expenses: $4.25 — $5.25 B (unchanged)
Tax Expense: low to mid 20%s (higher)
Summary and Outlook
Shares Outstanding 261,384,058 as of April 29, 2022
10.00% 26,138,406 shares
1.00% 2,613,841 shares
0.10% 261,384 shares
0.01% 26,138 shares
Market Capitalization
$7.41 $ 1,937,117,254 Market Cap as of May 12, 2022
$10.00 $ 2,613,840,580
$25.00 $ 6,534,601,450
$50.00 $ 13,069,202,900
$100.00 $ 26,138,405,800
First Majestic Q1 2022 Earnings Summary
Q1 2022 Earnings Expectations (via Bloomberg)
Revenue Estimate: $156.3 million (+56% year-over-year, compared to $100.5 million in Q1 2021)
Adjusted EPS: $0.02 (+143% year-over-year, compared to $0.008 in Q1 2021)
Silver Production: 2.61 million oz (-10.2% year-over-year, compared to 2.9 million in Q1 2021)
Gold Production: 60 thousand oz (+151% year-over-year, compared to 23.9 thousand in Q1 2021)
Summary and Outlook
Oatly Group AB
Ticker: OTLY
Market Cap: 2.195 billion
Shares Outstanding: 591,777,000
OTLY Share Price History
May 2, 2022 $ 3.68
May 3, 2022 $ 3.49
May 4, 2022 $ 3.94 → +12.89% following earnings announcement
May 5, 2022 $ 3.60
May 6, 2022 $ 3.32
May 9, 2022 $ 3.04
May 10, 2022 $ 2.95
May 11, 2022 $ 2.85
May 12, 2022 $ 3.07
May 13, 2022 $ 3.71
2022 Q1 Consensus Earnings Estimates:
EPS: $ (0.12)
Revenue: $ 161.0 million
Earnings Press Release | Earnings Webcast | Earnings Presentation
2022 Q1 Actual Earnings:
EPS: $ (0.15) (below expectations)
Net Revenue: $ 166.2 million (beat expectations)
Summary and Outlook
Shares Outstanding 307,255,442 as of April 29, 2022
10.00% 30,725,544 shares
1.00% 3,072,554 shares
0.10% 307,255 shares
0.01% 30,726 shares
Market Capitalization
$15.00 per share $4,608,831,630
$20.00 $6,145,108,840
$25.00 $7,681,386,050
$50.00 $15,362,772,100
$100.00 $30,725,544,200
$200.00 per share $61,451,088,400
Initial Public Offering 40,000,000 shares
Filing: $26.00-29.00 per share
Pricing: $29.00 per share
Stock Price History
May 2, 2022 $18.73
May 3, 2022 $18.31
May 4, 2022 $18.71
May 5, 2022 $17.01
May 6, 2022 $15.70
May 9, 2022 $14.13
May 10, 2022 $12.90 ← -8.7% day after Q3 2022 earnings release
May 11, 2022 $12.34
May 12, 2022 $13.62
May 13, 2022 $15.87
Q3 2022 Shareholder Letter | Earnings Call |PTON 2022 Q3 FORM 10-Q
For the quarterly period ended March 31, 2022
Filed May 10, 2022
Q3 2022 Earnings Expectations (from Bloomberg):
Revenue: $971.5 million (-23% year-over-year, compared to $1.262 billion in Q3 2021)
GAAP EPS: $(0.92) (compared to $(0.03) in Q3 2021)
Net Loss: $(291.7) million (compared to $(8.6) million in Q3 2021)
Adjusted EBITDA: $(132.5) million (compared to $63.2 million in Q3 2021)
Q3 2022 Performance:
Revenue: $964.3 million (-24% year-over-year, compared to $1.262 billion in Q3 2021)
Gross Margin: 19.1% (compared to 35.2% in Q3 2021)
Connected Fitness Product Gross Margin: (11.4)% (compared to 28.4% in Q3 2021)
Subscription Gross Margin: 68.1% (compared to 64.6% in Q3 2021)
EPS: $(2.27) (compared to $(0.03) in Q3 2021)
Net Loss: $(757.1) million (compared to $(8.6) million in Q3 2021)
Connected Fitness Subscribers: 2.96 million (+42% year-over-year, compared to 2.08 million in Q3 2021)
Paid Digital Subscriptions: 976,000 (+10% year-over-year, compared to 891,000 in Q3 2021)
Connected Fitness Subscription Workouts: 164.6 million (+10% year-over-year, compared to 149.5 million in Q3 2021)
Avg. Monthly Workouts Per Connected Fitness Subscriber: 18.8 (-28% year-over-year, compared to 26.0 in Q3 2021)
Avg. Net Monthly Connected Fitness Churn: 0.75% (compared to 0.31% in Q3 2021)
Adjusted EBITDA: $(194.0) million (compared to $63.2 million in Q3 2021)
Summary and Outlook
Intellia Therapeutics
Ticker: NTLA
Market Capitalization: 3.686 billion
Shares Outstanding: 73,854,000
NTLA Share Price History
May 2, 2022 $ 51.61
May 3, 2022 $ 51.78
May 4, 2022 $ 55.70
May 5, 2022 $ 50.03→ -10.17% following earnings announcement
May 6, 2022 $ 47.57
May 9, 2022 $ 41.45
May 10, 2022 $ 44.40
May 11, 2022 $ 39.94
May 12, 2022 $ 42.60
May 13, 2022 $ 48.60
Earnings Call Synopsis and Analysis
Earnings Press Release | Earnings Webcast | Earnings Presentation
On Thursday, May 5, Intellia Therapeutics reported earnings for the first quarter of 2022. The company boasted a revenue of $11.3 million and an EPS loss of 1.96. As a biotech company with no commercial products, Intellia’s earnings report was driven mostly by its operational and scientific updates. The Company did not report on any new data, but it reinforced planned dates for when it will present clinical updates.
Summary and Outlook
Ticker: DIS
Market Capitalization: $196 billion
Shares Outstanding: 1,821,500,000
Share Price History
May 2, 2022 $113.50
May 3, 2022 $113.55
May 4, 2022 $116.19
May 5, 2022 $112.61
May 6, 2022 $110.29
May 9, 2022 $106.98
May 10, 2022 $107.68
May 11, 2022 $105.21
May 12, 2022 $104.31 ← -0.8% following release of Q2 ‘22 Financial Results
May 13, 2022 $107.33
Actual Q1 2022 Earnings
Total Revenue: $19.2 B (23% increase Y/Y, missed expectations)
Revenue (ex: Contract Termination): $20.3 (30% increase Y/Y, beat expectations)
Media Entertainment Revenue: $13.6 billion
Parks, Experiences, and Product Revenue: $6.7 billion
Net Income: $0.470 billion (missed expectations)
Adjusted EPS: $1.08 per share (missed expectations)
Disney+ Memberships: 137.7 million (33% increase Y/Y, beat expectations)
Total DTC Subscribers: 205.6 million (30% increase Y/Y, beat expectations)
Summary and Outlook
Ticker: BYND
Market Cap: 2.304 billion
Shares Outstanding: 63,525,000
BYND Share Price History
May 2, 2022 $ 38.33
May 3, 2022 $ 38.90
May 4, 2022 $ 41.76
May 5, 2022 $ 38.43
May 6, 2022 $ 35.83
May 9, 2022 $ 31.16
May 10, 2022 $ 30.37
May 11, 2022 $ 26.17
May 12, 2022 $ 25.08 → -4.16% following earnings announcement
May 13, 2022 $ 31.24
2022 Q1 Consensus Earnings Estimates (Zacks):
Revenue: $ 111.66 million
EPS: $ (1.04)
Earnings Press Release | Earnings Webcast | Form 10-Q
Actual 2022 Q1 Earnings
Revenue: $109.5 million (missed expectations; +1.2% year-over-year)EPS: $ (1.58) (missed expectations)
Summary and Outlook
Talis Biomedical 2022 Q1 Earnings Summary
Shares Outstanding 56,482,594 as of May 5, 2022 (Common + Preferred)
10.00% 5,648,259
1.00% 564,826
0.10% 56,483
0.01% 5,648
Market Capitalization
$1.18 per share $66,649,461
$5.00 $282,412,970
$10.00 $564,825,940
$20.00 $1,129,651,880
$50.00 $2,824,129,700
Initial Public Offering 15,87,000 shares
February 12, 2021
Filing: $16.00
Pricing: $33.86
Q4 2021 Earnings Expectations (via Bloomberg)
Revenue Estimate: $400k (-94% year-over-year, compared to $7 million in Q1 2021)
GAAP Net Income: $(30.6) million (+50% year-over-year, compared to $(60.5) million in Q1 2021)
GAAP EPS: $(1.18) (+75% year-over-year, compared to $(4.61) in Q1 2021)
Q4 2021 Earnings Expectations — BR Estimate
Revenue Estimate: $0 (-94% year-over-year, compared to $7 million in Q1 2021)
GAAP Net Income: $(39.4) million (+51% year-over-year, compared to $(60.5) million in Q1 2021)
GAAP EPS: $(1.14) (+75% year-over-year, compared to $(4.61) in Q1 2021)
Q4 2021 Actual Performance
Revenue Estimate: $3.19 million (beat; -54% year-over-year, compared to $7 million in Q1 2021)
GAAP Net Income: $(33.1) million (miss; +45% year-over-year, compared to $(60.5) million in Q1 2021)
GAAP EPS: $(1.28) (miss; +72% year-over-year, compared to $(4.61) in Q1 2021)
Guardant Health at the Bank of America 2022 Healthcare Conference
May 10, 2022 at 1:40 PM EST
Moderator: Derik de Bruin — Bank of America
Speakers: Helmy Eltoukhy — Co-Chief Executive Officer
AmirAli Talasaz — Co-Chief Executive Officer
Michael Bell — Chief Financial Officer
Question & Answer Session
Coming out of the Q1 conference call, there was some confusion around why the ECLIPSE readout was being pushed out. There are some concerns that the trial might have to be opened up again or that the PMA might be pushed out. Could you help clarify the situation?
AmirAli Talasaz — Co-Chief Executive Officer
Guardant is also very confused with the magnitude of reaction to the event
It’s not failing
For this multi-year effort, instead of mid-year, now they’re expecting a September or October readout
In 2 years, they enrolled 13,000 patients
Even through the pandemic
There is a lag that needs to come from the confirmation of CRC findings vs. enrollment, getting the blood draw
They are still waiting for that step for a bunch of patients
The long step is the centralized pathology review
When they had the ECLIPSE engine running and getting samples, they continued that
They used some of those samples for this LDT validation for Shield LDT
So far, they have over 17,000 cases all-in-all
Mainly, they’re getting samples for the versioning for the device
They are also gathering lung cancer cases and other cancer cases in the same cohort
For the next generation Shield
If they need to tap into those biobank samples from the ECLIPSE infrastructure, they can in the future
Enrollment is not the issue here — They will get to the needed number of CRC cases
The long piece is the centralized pathology review to confirm these CRC cases
Long time value drivers for screening are FDA approval, CMS reimbursement, and USPSTF guideline inclusion
They are still keeping the same FDA timeline for submission by the end of FY 2022
Besides the ECLIPSE readout, there are a bunch of other things that need to happen
They already started that modular submission
Conversations with the FDA are already ongoing
Editas Medicine, Inc.
Ticker: EDITMarket Capitalization: 814.77 millionShares Outstanding: 68,641,000
EDIT Share Price History
May 2, 2022 $ 14.27
May 3, 2022 $ 14.18
May 4, 2022 $ 15.81→ +11.50% following earnings announcement
May 5, 2022 $ 14.56
May 6, 2022 $ 13.66
May 9, 2022 $ 11.11
May 10, 2022 $ 11.26
May 11, 2022 $ 10.03
May 12, 2022 $ 10.81
May 13, 2022 $ 11.87
Earnings Call Synopsis and Analysis
Earnings Press Release | Earnings Webcast | Earnings Presentation
On Wednesday, May 4, Editas Medicine reported their earnings results for the First Quarter of 2022. The earnings release focused largely on Editas’ recent scientific highlights and provided guidance on the Company’s goals for its preclinical and clinical candidates. Editas did not release any scientific data during the call, but did provide dates for when they expect to release interim clinical data surrounding its therapeutic candidates.
Starting with EDIT-101, Editas’ in vivo therapeutic for LCA10, the Company announced that it dosed its first pediatric patient in the BRILLIANCE clinical trial. This marks the first time ever a child was dosed using in vivo CRISPR gene editing. Editas expects to complete testing of the pediatric mid-dose cohort in the first half of this year, and expects to provide interim clinical data in October or November. Editas will begin dosing the pediatric high dose cohort later in 2022 once initial results detailing the safety of EDIT-101 in children have been confirmed. EDIT-101 is designed to eliminate a mutation that causes leber congenital amaurosis (LCA). LCA is the leading cause of childhood blindness. Editas read-out preliminary clinical data in September 2021 for the first six adult patients. The therapeutic was well received, but demonstrated limited effects, as of the six patients, only two subjects in the trial showed early efficacy signals. That being said, the next data read-out for Editas will have a significant impact on the Company’s outlook, as it will provide critical proof-of-concept data on their lead therapeutic – also shading light on their technological capabilities as it pertains to CRISPR/Cas9 and their AAV delivery mechanism
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