Author: Joe Tenebruso

AXP – Why American Express Stock Surged Today

What happened

Shares of American Express (AXP 10.54%) climbed 10.5% on Friday after the credit card giant boosted its dividend and provided an upbeat financial forecast for the coming year.  

So what

American Express’s revenue rose 17% year over year to $14.2 billion in the fourth quarter. The gains were fueled by record spending by card members, which helped to drive the payments leader’s total network volume higher by 12%, to $413.3 billion.

“Our performance demonstrates that our strategy is working, and our business is in an even stronger position today than before the pandemic,” CEO Stephen Squeri said in a press release. He added:

We have significantly grown the company’s revenue base by investing in our value propositions, increasing our generational relevance, growing merchant acceptance, introducing new digital capabilities, and enhancing our membership model with new lifestyle offerings and financial services.

All told, American Express’s net income decreased by 9% to nearly $1.6 billion. The decline was largely due to increased provisions for credit losses, though the company said its credit metrics remained strong.

Now what

Management sees revenue growing by as much as 17% in 2023, with earnings per share rising by roughly 14%, to between $11 and $11.40.

During a conference call with analysts, Squeri helped to assuage investors’ fears regarding a potential recession by highlighting the robust purchasing behavior of American Express’s affluent card members. “That premium customer base, while not immune to an economic downturn, certainly, right now, is spending on through,” Squeri said. 

These encouraging sales trends, combined with the company’s resilient financial performance during the current challenging macroeconomic environment, gave American Express the confidence to boost its quarterly cash dividend by 15%, to $0.60 per share.

American Express is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

NAKD – Here's Why Naked Brand Stock Surged Today

What happened

Shares of Naked Brand Group (NASDAQ:NAKD) jumped 10.1% on Friday after the swimwear and intimate-apparel company announced that it reached a preliminary agreement on a potential acquisition. 

So what

Naked is a popular stock among investors on social media sites like Reddit. This popularity helped to drive its share price sharply higher earlier this year. Naked took advantage of the opportunity to raise cash by selling shares. That, combined with its asset sales, allowed Naked to eliminate its debt and placed it in a position to potentially acquire other e-commerce businesses. 

Naked sold off its remaining brick-and-mortar operations in April. The move completed the company’s evolution into a fully e-commerce-based business. With $270 million in cash reserves and no debt, Naked then intensified its hunt for value-creating acquisitions. 

An upwardly sloping stock chart.

Naked Brand Group’s stock price rose sharply on news of a potential acquisition deal. Image source: Getty Images.

Now, it appears that Naked has found what it was searching for. “We have recently reached a preliminary agreement on non-binding terms and are now conducting due diligence,” chairman and CEO Justin Davis-Rice said during Naked’s annual shareholder meeting on Friday. “The company is in a sector which has been forecast to have strong growth for many decades to come.” 

Now what

Investors can expect to hear more details about Naked’s current deal soon, though management cautioned that it may not progress beyond its early stages. “There is, of course, no guarantee that we will complete the deal, on the preliminary terms we have negotiated, or at all,” Davis-Rice said.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

HOOD – Why Robinhood Stock Plunged Today

What happened

Shares of Robinhood Markets (NASDAQ:HOOD) fell 10.3% on Thursday after the online brokerage released its second-quarter financial results and alerted shareholders to a slowdown in trading activity.  

So what

Robinhood’s revenue soared 131% year over year to $565 million. The gains were driven by a surge in cryptocurrency-related transaction revenue to $233 million, up from only $5 million in the year-ago quarter.

Traders have flocked to Robinhood’s platform over the past year. Monthly active users jumped 109% to 21.3 million. Its assets under custody, in turn, increased 205% to $102 billion.

“We’re encouraged by the number of people who are accessing the financial system for the first time through Robinhood,” CEO Vlad Tenev said in a press release. “We’re happy to expand access through products like commission-free crypto trading, which saw strong growth this quarter.”

To better serve its rapidly expanding customer base, Robinhood ramped up its investments in technology and customer support. This spending weighed on profits, but its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) still managed to increase by 43% to $63 million.

A person is pointing to a stock chart that rises sharply and then falls.

Investors sold off shares of Robinhood on fears of slowing growth. Image source: Getty Images.

Now what 

Unfortunately, management warned that Robinhood’s results in the current quarter are unlikely to be as strong. The brokerage’s trading volumes and transaction revenue are heavily influenced by market volatility and investor trading behavior. These factors — including the meme-stock frenzy and the soaring popularity of cryptocurrencies like Dogecoin (CRYPTO:DOGE) — helped to fuel Robinhood’s growth earlier this year. But with these trends now abating, the company told investors to expect “lower revenues and considerably fewer new funded accounts” in the third quarter.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

TLRY – Why Tilray Stock Rose Today

What happened

Shares of Tilray (NASDAQ:TLRY) climbed on Wednesday after the Canadian cannabis company announced a deal with American marijuana retailer MedMen Enterprises (OTC:MMNFF). By the close of trading, Tilray’s stock price was up 1.1% after rising as much as 7.2% earlier in the day.

So what

Tilray agreed to purchase MedMen’s convertible notes from private equity firm Gotham Green Partners. The deal could position Tilray to quickly enter the U.S. market should federal legalization progress.

“Backed by accelerating trends toward legalization globally, we are focused on building the world’s leading cannabis-focused, consumer-branded company with a goal of $4 billion of revenue by the end of our fiscal 2024,” Tilray CEO Irwin Simon said in a press release. “The investment we are announcing in MedMen securities today, one of the most recognized brands in the $80 billion U.S. cannabis market, is a critical step toward delivering on our objective.”

A person is holding a cannabis leaf in front of a U.S. flag.

Image source: Getty Images.

Under the terms of the deal, Tilray and other investors will establish a limited partnership that will purchase roughly $165.8 million of MedMen’s debt and warrants. Tilray’s stake in the limited partnership will essentially give it the right to acquire 21% of MedMen’s Class B shares. 

Now what

Tilray would like to pay for the deal in stock. Management is asking its investors to authorize the issuance of 9 million shares at its meeting tomorrow. If Tilray’s stock owners vote no, the company could be forced to pay in cash.

“Our ability to maximize value from this game-changing transaction rests on the support of our shareholders,” Simon said.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

MRNA – Why Moderna Stock Crashed Today

What happened

Shares of Moderna (NASDAQ: MRNA) plunged 15.6% on Wednesday after Europe’s drug regulator provided a COVID-19 vaccine-safety update. 

So what

The European Medicines Agency (EMA) is studying three new conditions reported by a small number of people who received mRNA COVID-19 vaccines provided by Moderna and Pfizer

These conditions include:

  • Erythema multiforme, an allergic skin reaction.
  • Glomerulonephritis, or kidney inflammation.
  • Nephrotic syndrome, a renal disorder.

The EMA is assessing whether these conditions could be possible side effects of the vaccines.

A healthcare professional is administering a vaccine to a person.

Image source: Getty Images.

The information was provided as part of ongoing safety updates the EMA regularly delivers to the public. The EMA did not recommend any changes to the product information displayed on the labels of these vaccines.

Now what

Analysts had already raised concerns that Moderna’s stock price had risen too far, too fast. Bank of America analyst Geoff Meacham said on Tuesday that Moderna’s nearly $200 billion market valuation was “ridiculous” and “unjustifiable on a fundamental basis.” Meacham argued that to be worth that much, Moderna would need to deliver between 1 billion and 1.5 billion doses of its coronavirus vaccine each year through 2038. Additionally, Moderna’s entire pipeline of experimental drugs would need to prove successful and generate total peak sales of $30 billion. 

Meacham believes those two assumptions are highly unlikely, so he repeated his underperform rating on Moderna’s stock and $115 price forecast for its shares. Even after today’s plunge, Meacham’s price target is still 70% below the stock’s current price near $385.

Today’s news and Meacham’s warning appear to have driven many investors to take profits and sell their shares in Moderna.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

DDD – Why 3D Systems Stock Soared Today

What happened

Shares of 3D Systems (NYSE:DDD) soared 21% on Tuesday after the 3D printing company delivered strong second-quarter financial results. 

So what

3D Systems’ revenue jumped 44% year over year to $162.6 million, fueled by robust growth in its healthcare segment and a rebound in its industrial business from its lows during the early stages of the pandemic.

“We believe this performance is the result of our exclusive focus on additive manufacturing, bringing together our printers, materials, and software technologies to solve specific key customer applications that drive market adoption in both healthcare and specific industrial markets, such as semiconductors, space systems, and advanced transportation systems,” CEO Jeffrey Graves said in a press release.

A rising bar chart.

Investors applauded 3D Systems’ second-quarter growth. Image source: Getty Images.

Better still, 3D Systems’ profitability improved as it scaled its revenue base and made progress with its cost-reduction initiatives. Its adjusted earnings per share, in turn, checked in at $0.12, compared to a loss of $0.13 per share in the year-ago period.

Now what

Asset sales have helped to refocus 3D Systems on it most profitable operations and bolster its cash reserves. Management now expects to end the third quarter with more than $500 million in cash and no debt, following the sale of its remaining non-core divisions.

“We believe our consistent performance, and our balance sheet, positions us well for future investment in our core business,” Graves said.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

NVAX – Why Novavax Stock Crashed Today

What happened

Shares of Novavax (NASDAQ:NVAX) plunged 19.6% on Friday after the biotech delayed its plans to seek emergency use authorization for its coronavirus vaccine candidate.

So what

Novavax had previously hoped to obtain regulatory clearance by May, before delaying its timeline to the third quarter. The company now expects to submit its application to the U.S. Food and Drug Administration (FDA) in the fourth quarter. 

The delays have likely cost Novavax the potential for billions of dollars of sales, which have instead gone to rival vaccine makers like Pfizer and Moderna.

A downwardly sloping stock chart.

Novavax’s stock price fell sharply on Friday. Image source: Getty Images.

Novavax CEO Stanly Erck told Yahoo Finance that the later timeline is due to production challenges. Novavax was instructed to work with certain manufacturers as part of Operation Warp Speed, a government-run program designed to accelerate the development of COVID-19 vaccines and treatments. One of those manufacturers is struggling with quality control issues, which has temporarily halted production. 

Now what

Investors are understandably disappointed by these delays. However, the battle against COVID-19 is unlikely to be won this year. Health officials are warning that the disease could become endemic and that booster shots could be necessary to protect against new variants. Thus, the need for safe and effective coronavirus vaccines is likely to remain strong for the foreseeable future. So, if Novavax can obtain an emergency use authorization for its drug by the end of the year, it could still generate sizable vaccine-related profits in the coming years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

NVDA – Why Nvidia Stock Climbed 7.7% This Week

What happened

Shares of Nvidia (NASDAQ:NVDA) rose nearly 8% this week, following bullish analyst remarks.

So what

On Monday, Nvidia’s stock price appeared to benefit from positive comments from Morningstar. “After taking a fresh look at our thesis on Nvidia, we are raising our moat rating to wide from narrow, thanks to intangible assets related to the design of graphics processing units (GPUs),” said Morningstar analyst Abhinav Davuluri. Essentially, this means the research company believes Nvidia is widening its lead in GPU technology, which, in turn, is strengthening its competitive advantages over its rivals.

A miniature gold bull stands on a keyboard button labeled Buy.

Image source: Getty Images.

On Thursday, Citigroup analyst Atif Malik reiterated his buy rating on Nvidia’s stock and boosted his price forecast from $180 to $223. If declining cryptocurrency prices lead to a sell-off in the chipmaker’s stock price, Malik believes investors should pounce on the chance to scoop up shares at a discount ahead of the release of Nvidia’s new GPUs next year.

And on Friday, Argus analyst Jim Kelleher lifted his price target on Nvidia from $175 to $230. Kelleher also argued that Nvidia’s stock is a buy, based on the strong demand for its chips in markets like gaming and data centers, as well as its attractive growth opportunity in autonomous vehicles.

Now what

Analysts are understandably growing more bullish on Nvidia’s growth prospects. The tech giant’s GPU technology is best-in-class — at a time when demand for these chips is soaring in a wide array of industries.

Nvidia’s sales and profits, in turn, are likely to remain impressive in the quarters ahead. And that could help its stock price not just hit, but exceed, these new price targets.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

SQ – Why Square Stock Jumped 11% This Week

What happened

Shares of Square (NYSE:SQ) climbed 11% after the fintech company launched a slate of new banking services, and its CEO shared his crypto-related aspirations.

So what

On Tuesday, Square unveiled three new products: Square Checking, Square Savings, and a rebranding of its business financing division, which will now be called Square Loans. These products will be integrated into Square’s existing merchant services, with the goal of providing business owners with a one-stop solution for their financial needs. 

A person is walking through a dark tunnel towards an opening shaped as a Bitcoin symbol.

Image source: Getty Images.

And on Wednesday, CEO Jack Dorsey shared his vision for Bitcoin (CRYPTO:BTC). “My hope is that it creates world peace or helps create world peace,” Dorsey said during an online event called “The B Word.” 

Dorsey has long been a vocal advocate for Bitcoin and the societal benefits it could bring about. Square gave users of its popular Cash App the ability to buy and sell Bitcoin back in 2018. The next year, the company launched Square Crypto, which funded a small team of developers and designers to help strengthen Bitcoin’s network. Now, Square wants to build a new business tasked with accelerating the growth of decentralized financial services, or DeFi, built upon Bitcoin’s network.

Now what 

Square gives investors many ways to win. Its core payment processing operations and ecosystem of complementary banking services are poised to benefit as the economy recovers. Its cryptocurrency-trading services are driving more people to Cash App and boosting user engagement levels. And Square’s new DeFi-focused division could develop into an intriguing new growth driver in time.

With multiple ways to profit, many more gains could lie ahead for Square’s shareholders.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

MRNA – Why Moderna Stock Surged to a New All-Time High Today

What happened 

Shares of Moderna (NASDAQ:MRNA) jumped 7.8% to a record closing high of $348.83 on Friday after European health officials recommended authorizing the drugmaker’s coronavirus vaccine for kids 12 and older. 

So what

The European Medicines Agency’s Committee for Medicinal Products for Human Use adopted a positive opinion on Moderna’s vaccine. The European Commission will now consider granting authorization for use in adolescents.

“As we help to combat the pandemic, we hope to be able to help get adolescents safely back to school this fall,” Moderna CEO Stéphane Bancel said in a press release.

A person is pointing to an upwardly sloping line.

Investors bid up Moderna’s stock price on Friday. Image source: Getty Images.

Moderna’s COVID-19 vaccine demonstrated efficacy of 100% in a phase 2/3 study with more than 3,700 participants between the ages of 12 and 18. The drug was also generally well tolerated, with a safety profile consistent with that of adults in prior studies.

Now what

Allowing kids to be vaccinated will be an important part of controlling the spread of COVID. Health officials know this, and they’re trying to make this happen as soon as possible while being careful to ensure the vaccines are safe for children.

Booster shots could be another powerful weapon in the battle against COVID. Although regulators want to see more data before authorizing a third dose of Pfizer‘s and Moderna’s vaccines, calls for booster shots are mounting as new coronavirus strains, such as the delta variant, spread rapidly across the globe.

These potential new authorizations for Moderna’s drug could provide a significant boost to the drugmaker’s revenue and profits in the coming quarters.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.