Ain’t No Rest For The Wicked

It pays to be a shareholder of Block today. Meanwhile, PayPal shareholders are paying the price for holding shares through earnings.

Let’s take a look at how these financial services companies fared.

First, let’s start with Block, formerly known as Square.

The company reported better-than-expected earnings and revenue. Its adjusted earnings per share of $0.42 bested expectations of $0.23. Meanwhile, revenues of $4.52 topped estimates of $4.49 billion.

The company also shared some numbers from its core business units. Its Cash App business saw a 51% YoY rise in gross profit, while its Cash debit card users rose 40% to 18 million people. Square’s point-of-sale business also saw gross profit grow 29% YoY. 📈

Investors were happy that the company did not experience the macro slowdown that has hit other payment companies already. However, given the current commentary surrounding the global economy, many expect that to catch up to them eventually.

Still, $SQ shares are popping 13% after hours.

$PYPL shares did not fare as well, falling nearly 13% today despite the company beating earnings and revenue estimates. 📉

Earnings per share of $1.08 beat the $0.96 expected, while revenues of $6.85 billion beat estimates of $6.82 billion.

Looking forward, PayPal raised its EPS guidance for the full fiscal year, citing “ongoing productivity initiatives.” But what’s hitting the stock is its Q4 revenue estimate falling short of the $7.74 billion expected at $7.38 billion.

As we’ve seen with many other companies this week, forward guidance has been key. And right now, any missteps are being punished by investors. 👎

On that same note, we have to mention two other popular tech companies cratering after hours. Twilio ($TWLO) and Atlassian ($TEAM) are down big after issuing weaker-than-expected guidance. 🔻

It’s been a little while since a strange, low-float Chinese company rallied triple digits. But fear not, another one has popped up. 📈

Its name is Huadi International Group, and it’s a China-based micro-cap company in the business of industrial stainless steel products. While its products are used in various industries, the company’s exposure to China’s real estate market has been of major concern for investors.

Today shares of $HUDI rallied over 240% after announcing a strategic plan to utilize its industrial stainless steel production capabilities for anode materials. For us laymen, those materials are key to battery development. Diversifying its business away from a struggling sector and into the red-hot electric vehicle and alternative energy space has excited many people.

And it’s been able to move so fast because of its low float and lack of Wall Street coverage. That’s also why it’s incredibly risky. ⚠️

Whether or not it will face the same fate as its peers earlier in the year remains to be seen. Investors are likely still trying to determine whether the business pivot is the company pandering to shareholders. Or if the plan is actually viable over the long term.

Either way, the massive move has caught traders’ attention. Expect this one to be on people’s radars in the days and weeks ahead. 👀

It’s been a rough time for growth stocks, but DoorDash delivered a surprise for its investors today.

The food delivery company reported better-than-expected sales and total orders but missed earnings.

Its loss per share was $0.77 vs. the $0.60 expected. Revenues of $1.7 billion beat the $1.63 billion expected. Meanwhile, total orders rose 27% to 439 million, beating estimates of 433 million.

Investors were concerned that the food delivery business would slow as inflation pressures consumers’ discretionary income. Especially since many restaurant chains have reported weaker sales, especially from lower and middle-income consumers who are trading down or skipping dining out altogether. 🥡

However, the company anticipates consumer spending will remain strong in the current quarter. It’s projecting gross order volume of $13.9-$14.2 billion, higher than Wall Street’s view of $13.73 billion.

Shares of $DASH popped 15% today on the news. As we’ve discussed, investors remain hesitant to jump back into growth stocks. So we’ll just have to wait and see if today’s move is the start new trend or yet another head fake. 🤷