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Tag: Earnings Call

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Fintech

Pagaya Technologies (PGY) Update: $1.34 – Accumulating Between $1.25 and $1.35

source:pagaya

Pagaya’s earnings call was a much happier experience and it did match expectations, with revenue and adjusted EBITDA being in line. 

The 2024 revenue forecast was in line with the $ 988 Mn V 1.04Bn expected; more importantly, this is more than 20% growth in revenue and volume. I expect the same growth from 2024 to 2025 as well since their new 2023 customers take two years to fully ramp up.

The biggest surprise was the adjusted EBITDA mid-point number of $170Mn for 2024. Pagaya had a run rate of $28Mn going into this quarter and I had modeled $123Mn for next year, a 20% gain, but this was more than excellent and a good sign that they are executing well. They are looking at GAAP levels of profitability from 2025-2026, the reverse split will be 12:1, and Q1-2024 reporting will be with the SEC under US GAAP standards. 

This was first recommended on 02/05, and if you need the details, let me know I can post it again.

Categories
Technology

Rivian (RIVN) Analysis: Navigating Challenges Ahead of Earnings Call

source:rivians

Rivian – (RIVN) $16.15 HOLD. Going to wait till 2/21 Earnings call to make a better judgment, too many conflicting signals to take a position.

Several weaknesses abound

Economies of scale – With about 57,,000 vehicles sold annually (double the previous year), it needs at least double that to break even or drastically increase prices, which is impossible, given that Tesla has decreased prices. 

Inventory appears to be piling up.

GM and Ford have called out weakening EV demand and slowed production.

Amazon didn’t pick up as much last year.

Highly capital intensive – the chances of dilution and/or debt piling up are high.

On the other hand…it’s not curtains yet..

Amazon has a goal of deploying 100,000 EV trucks by 2030, and this is a huge under penetrated market.

Seems as though their potential competition is also weak and fading away. Lordstown (another EV pickup) and Arrival (another ”last mile” EV delivery van) faltered. 

There is likely to be consolidation in this space amongst non Tesla start ups. Tesla itself faces difficulties and could buy up their competitors to fill out the gaps in their global lineup.

Reduction in Lithium input costs and other critical metals needed for the batteries, which made up a large share of the production costs and as these savings could start to show up in the manufacturing lines.

The valuation is not terrible, but I would like to see some progress against the current demand headwinds before taking a call.

Categories
Cloud Service Providers

Microsoft (MSFT) Hold at $407 – Impressive Earnings, Awaiting Guidance

source

Microsoft (MSFT) Hold $407

Earnings: $2.93 per share, vs. $2.78 per share expected, 33% Higher YoY

Revenue: $62.02 billion, vs. $61.12 billion expected, 18% Higher YoY.

CLOUD DOES WELL – Intelligent Cloud revenue $25.88Bn V 25.29Bn expected, 20% Higher YoY contains Azure cloud infrastructure, SQL Server, Windows Server, Nuance, GitHub and enterprise services. Within that segment, revenue from Azure and other cloud services grew 30%. Analysts polled by CNBC had expected 27.7% growth, and the StreetAccount consensus was 27.5%. The metric for the previous quarter was 29%.

This is impressive growth – but most of it is already in the current price.

I own Microsoft but haven’t had a chance to add Microsoft during this rally, and it’s already up 9% this year.

The guidance will be out during the earnings call starting at 5:30 and will update after the call.