Earnings season started a few weeks ago but none of my companies have released results yet.
TWLO reports this Tuesday after the market close (AMC).
SQ and AYX report on Wednesday AMC.
TTD reports the following Thursday.
The above 4 companies have a 3/31 fiscal quarter close. The other 5 companies (OKTA, ZS, SMAR, ESTC and MDB) have a 4/30 fiscal quarter close so we won’t get the reported quarterly results until June. I will be watching TWLO closely on Tuesday at 1pm when the market closes. Quarterly reports are typically released within minutes of the close. Boarding a plane now from Paris…see you on the other side!!
Smoke and fire damage, but not down for the count! 4 cranes are already busy rebuilding…
HOW DID THE MARKET INDEXES DO?
Let’s look at results year-to-date. The three indexes that I’ve been tracking against for ages closed year-to-date as follows.
The S&P 500 (Large Cap)
Closed up 17.3% year-to-date. (It started the year at 2507 and is now at 2940).
The Russell 2000 (Small and Mid Cap)
Closed up 18.0% year-to-date. (It started the year at 1349 and is now at 1592).
The IJS ETF (Small Cap Value)
Closed up 17.3% year-to-date. (It started the year at 131.9 and is now at 153.6).
These five indexes
Averaged up 17.8% year-to-date.
Dow is up 13.8%Nasdaq, which is up 22.8% you get up 17.8% for the five of them year to date.
Twilo +2.8% on beats, upside outlook
https://seekingalpha.com/news/3456636
TWLO Summary: TWLO had excellent results in their earnings call and guided investors to further upside in the future. Overall they grew revenue 81%, though part of this was their Sendgrid acquisition, so its not apples to apples comparison. Gross margins increased to 58% from 54% sequentially. Dollar-Based new Expansion rate sustained at an astounding 146%…folks, this is a super impressive number. TWLO will continue to grow for the foreseeable future. Not that I follow analysts, but it was noticeable today that four of them significantly upgraded their stock targets. * Canaccord Genuity raises target price to $155 from $125
* Guggenheim raises price target to $150 from $140
* JP Morgan raises target price to $150 from $125
* Rosenblatt Securities raises price target to $158 from $118
So WHY is the stock down 6.25% today then!??
User question: Did The Street expect better numbers?
Victor: My thoughts: First, stocks often are sold on the news. Even when its great news, people who are traders take profits and exit. Supply and demand. Flood the market with 13m shares without the demand and it will temporarily drive the stock down. This has happened the last several quarters.
To answer: No. Actually they beat the street expectations significantly AND revised the streets future growth expectations up.
Second: The valuation on TWLO is high. Very high. But what would you expect of a company that is growing revenues quarter over quarter sequentially the past 12 quarters:
83.7%
74.7%
72.9%
61.8%
55.3%
43.5%
40.0%
45.8%
54.1%
67.8%
76.8%
88.0%
87.4%
This is phenomenal growth and unmatched in almost ANY other company.
It is also why this stock price is up over 400% in the past 17 months!!
I am not adding to my already large 15% position, but I am not selling any either. I expect the stock will rebound over the next couple months and again be at new highs. That is just my thoughts…and of course, I could be wrong, but I’m also fortunate to be sitting on and average of 300% gains. If this was not already my second largest position, I would consider adding on this dip in the price. TWLO has an incredible moat around its technology and is the underlying technology and communication platform for everyone from Uber & Lyft, to Twitter, to Coca Cola to AirBnB, to Match, yelp, eBay, and 100,000 other companies that need to connect a customer to a company. Yes, I said 100,000….not a typo!! They are providing the pics and shovels for the digital revolution. Happy Investing!
User question: MDB also down 5.18%. They just announced their earning date as after close on 5/30. It may be a good time to start a position or add?
Victor: All tech and all of my stocks in particular are down today. No clear reason. I don’t time the market, and I am invested in all my stocks long term and expect them all to 10x themselves…until I see evidence of slowing down or contraction at the company level, I will remain invested in the company. SQ and AYX release today, so I’ll delve into their earnings shortly and see how they did. On first blush, they both beat expectations and raised guidance, but that doesn’t mean anything until I compare them to the past 12 quarters and assess the other metrics I track. AYX is up after hours. SQ is down after hours and TWLO seems to be rebounding after hours already. Tomorrow should be interesting!!
