Stock Market Nerd – Earnings Round-Up – February 10, 2024
Enphase (ENPH)
Enphase competes in the solar energy space and collects a bit less than half of its revenue from residential demand. Solar demand, and especially residential solar demand, is immensely cyclical. Demand is tightly negatively correlated with interest rates. As rates rise, financial installations get more expensive and demand suffers. As rates fall, the opposite plays out. Considering we just wrapped up a historically rapid and aggressive rate hike cycle, this space is presently challenged.
If you’re wondering how the data below was rewarded so sharply by investors, consider that markets are forward-looking. This could be a matter of investors exhaling about the expected worst being over and looking ahead to a demand trough with 2024 rate cuts coming. The commentary about bottoming demand in Europe was probably loved by the analyst community as well.
Results:
- Missed revenue estimates by 7.6% & missed guidance by 6.8%.
- Its 4.6% 3-year revenue CAGR compares to 45.5% last quarter & 78.2% as of 2 quarters ago.
- Missed GAAP EBIT estimates by 23%; missed EBIT guidance by 11.5%.
- Met EPS estimates.
- Sharply missed FCF estimates.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- $1.7 billion in cash & equivalents.
- $1.3 billion in debt.
- Share count fell nearly 3% Y/Y.
Next Quarter Guidance & Valuation:
- Revenue missed by 11.4%.
- Missed $16M GAAP EBIT estimate by $40M.
Enphase trades for 73x expected 2024 EPS and 35x expected 2024 FCF. EPS and FCF are both expected to shrink Y/Y.
Chipotle (CMG)
Results:
- Beat revenue estimate by 1.2%.
- Chipotle’s 16.1% 3-year revenue CAGR compares to 15.6% as of last quarter and 22.6% 2 quarters ago.
- Beat GAAP EBIT estimate by 6.3%.
- Beat $9.72 GAAP EPS estimate by $0.49.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- $560M in cash.
- $1.3B in investments.
- Share count fell slightly Y/Y. Added $200M to its buyback program.
Guidance & Valuation:
Chipotle expects to add 300 new stores and see mid-single digital Y/Y same store sales growth.
Chipotle trades for 49x expected 2024 EPS and 48x expected 2024 FCF. EPS is expected to grow by 19% Y/Y while FCF is expected to grow by 23% Y/Y.
Fortinet (FTNT)
Results:
- Slightly beat revenue guidance & identical estimates.
- Beat billings guidance by 13%.
- Beat EBIT estimates by 15.2% & beat guidance by 15%.
- Beat $0.43 EPS estimates & beat the same guidance by $0.08.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- $2.4 billion in cash & equivalents.
- $1 billion in debt.
- Share count fell 2.5% Y/Y.
Annual Guidance & Valuation:
- Missed annual revenue estimate by 3%.
- Roughly met billings estimates.
- Slightly missed annual EBIT estimates
- Met annual EPS estimates.
Fortinet trades for 40x expected 2024 EPS and 30x expected 2024 FCF. EPS is expected to grow by 5% Y/Y while FCF is expected to grow by -1.1% Y/Y.
Pinterest (PINS)
Results:
- Missed revenue estimates by 0.9% & roughly met guidance.
- Beat EBITDA estimates by 1.8%.
- Beat GAAP EBIT estimates by 11.9%.
- Beat $0.51 EPS estimates by $0.02. EPS rose 83% Y/Y.
ARPU = Average Revenue per User; MAU = Monthly Active Users
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Guidance & Valuation:
Pins guided to 16.0% Y/Y revenue growth next quarter vs. expectations of 16.6% Y/Y growth.
The firm trades for 33x 2024 EPS estimates while EPS is expected to grow by 25% Y/Y.
Balance Sheet:
- $2.5 billion in cash & equivalents.
- Share count was roughly flat Y/Y.
Bill.com (BILL)
Results:
- Beat revenue estimates by 6.8% & beat guidance by 7.0%.
- Nearly doubled EBIT estimates.
- Beat $0.40 EPS estimates & beat same guidance by $0.23.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- $2.6 billion in cash & equivalents.
- $1.7 billion in convertible notes.
- Share count is flat Y/Y.
Guidance & Valuation:
Bill raised its revenue guidance by 1.1% for the year, which beat estimates by 1.2%. It also raised $1.86 EPS guidance by $0.34 to $2.20, which beat estimates by $0.28.
Bill trades for 51x next 12 month (NTM) EBIT and 32x NTM FCF. EBIT is expected to grow by 42% Y/Y during this fiscal year while FCF is expected to grow by 15% Y/Y.
