Higher Prices Are Anticipating Lower Prices

Retail-favorite Palantir Technologies is soaring after reporting its first-ever profitable quarter. 📝

Revenues of $509 million were up 18% YoY and topped estimates of $502.3 million. Driving the strong revenue number was $293 million in government sales (+23% YoY). 

The company’s first-quarter and full-year revenue forecast fell below analyst expectations. 🔮

However, the company’s GAAP profitability was the star of the show, as it hadn’t expected to achieve that until 2025. Its focus on managing expenses and stock-based compensation helped it achieve sooner-than-expected profitability. That resulted in fourth-quarter earnings per share of $0.04, rising 100% YoY and beating the consensus $0.03 estimate.💰

Its Chief Executive Officer Alex Karp said, “Our commitment to and relentless focus on the long term at times has required patience. At other times, as our profitability demonstrates, we will deliver results at a rate that surpasses even the expectations of those who believed we would prevail.”

$PLTR shares were up 16% after hours. 📈

Two tech stocks jumped today on analyst action early in the day. 👍

First up is Fastly, which received a rare “double upgrade” from a Bank of America analyst. Tal Liani noted that the company’s core technology and new management could allow it to achieve profitability next year. As a result, he upgraded the stock from “underperform” to “buy.” 

$FSLY shares rose 28%, marking their largest percentage gain in about three years. 😮

Next is ContextLogic, better known as Wish. The struggling e-commerce platform jumped after Citron Research posted several bullish tweets about the stock following the Super Bowl. 🐦

Chinese -e-commerce giant PDD took out ads for its Temu U.S. shopping site during the Super Bowl, which sparked the flurry of tweets from Citron. They noted they were “reluctant to mention $WISH” but that Temu’s recent traction using the same business model has created the “most asymmetric opportunity in the market.”

They argue that if this business model is going to work, $WISH is being very mispriced by the market. It has a lot of cash on hand, no debt, and a $280 million credit line available. That should give it plenty of time to execute on the longer-term business opportunity. 📈

Whether or not they’re right remains to be seen. But some technical analysts pointed to today’s 37% rally in $WISH shares could be the start of a potential long-term trend reversal. 🤔

When people think of Fidelity, they think of a financial services company. However, there’s a $45 billion IT services provider called Fidelity National Information Services listed on the New York Stock Exchange.

And today, that company is making headlines after announcing weaker-than-expected results and a spin-off. 📰

The payments giant announced that it plans to spin off its merchant business, essentially reversing its $43 billion acquisition of Worldpay in 2019. It expects to complete the tax-free spin-off within a year, saying the companies will maintain a commercial relationship. Additionally, the split will allow its core business to secure a solid investment-grade credit rating and allow Worldpay to invest more aggressively for growth.

The decision comes as new CEO Stephanie Ferris leads a strategic review of the company’s business and operations. Analysts say the decision highlights the weakness in its core business and that the “sum of the parts” clearly indicates the two businesses could create more shareholder value as separate entities. 🧮

Additionally, its fourth-quarter earnings barely topped estimates. Its full-year 2023 earnings guidance of $5.70 to $6.00 per share was well below the $6.57 consensus forecast.

$FIS shares fell another 12% today. It’s now 56% off its 2021 all-time high. 🔻