Zoom jumps 9% after the video platform beat earnings estimates and forecast strong growth

Zoom meeting
Zoom stock jumped after it beat fourth-quarter earnings expectations.

  • Zoom stock jumped in premarket trading Tuesday after the firm posted better-than-expected fourth-quarter earnings.
  • Total quarterly revenue came in at $882.5 million, beating analysts’ expectations of $811.8 million.
  • Yet the stock price remained below its October high, as investors look toward economies reopening.
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Zoom shares jumped 9% in premarket trading on Tuesday after the videoconferencing platform posted better-than-expected fiscal fourth-quarter earnings on Monday and said it expected strong growth to continue this year.

Zoom was up 8.6% as of 5:45 a.m. ET, taking shares to $444.88 in the premarket. The stock had jumped 9.65% on Monday before closing at $409.66 a share ahead of the earnings announcement.

Total revenue for the quarter to the end of January came in at $882.5 million, above analysts’ expectation for $811.8 million.

Revenue was up 369% year-on-year, the company said, reflecting the rapid rise of Zoom to prominence during the coronavirus pandemic, when people and businesses around the world turned to the service to keep in touch.

The big question for investors, however, is whether Zoom can keep up its rapid growth. The company’s founder and CEO, Eric Yuan, pleased the markets Monday by saying it could.

“As we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform,” he said in a statement to accompany the earnings.

Zoom said it expected total revenue for the financial year ending in early 2022 to be $3.76 billion to $3.78 billion, above Wall Street estimates.

Despite the bullish forecasts and rising stock price, Zoom’s shares remain well below their October high of more than $560. That reflects investors’ expectations that the reopening of economies will pull people away from the technologies that have become central to their lives.

The company’s shares are up more than 20% in 2021, however, outperforming the Nasdaq’s 5% rise.

Screenshot 2021 03 02 at 10.46.13
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Palantir upgraded to ‘buy’ with a fresh $34 price target from Goldman Sachs after revealing ‘sustainable growth’ in latest earnings

Palantir
Palantir logo on New York Stock Exchange.

  • Palantir posted a surprise loss in its fiscal fourth-quarter earnings on Tuesday, causing the stock to fall.
  • Goldman Sachs analysts thought the quarter was stronger than expected and raised their price target to $34 per share.
  • The analysts cheered Palantir’s government revenue, margin expansion, and backlog visibility.
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Palantir Technologies received a fresh “buy” rating and a $34 price target from Goldman Sachs on Wednesday.

While the big data analytics firm’s stock took a tumble on Tuesday after earnings revealed a surprise loss, analysts at Goldman were pleased with the quarterly results, saying the company now has a path to “sustainable growth”.

The analysts, led by Christopher D. Merwin, CFA, said Palantir posted “strong FQ4 results” that beat their revenue and EBITDA expectations by 6% and 115% respectively.

They also noted Palantir’s robust revenue guidance and backlog of orders going into 2021.

“We were encouraged to see management guide to $4bn of revenue in FY25, implying a 30% 5-year CAGR from FY20,” Merwin said. “With a growing backlog of $2.8bn in deal value (+31% y/y), we believe there is increasing visibility into the achievability of that long-term target.”

Government revenue was another bright spot for Palantir in its most recent earnings report, rising 85% year-over-year to $190 million. The company signed 21 deals worth over $5 million with contractors during the quarter compared to just 15 a year ago.

Goldman analysts also said they expect the margin expansion of 63 points seen in the quarter to continue going forward, leading the group to model 23% non-GAAP EBIT, up from 17%.

Furthermore, Goldman said Palantir’s deal with IBM to “should help to grow what is a relatively small commercial customer count today.”

Palantir’s quarterly results were enough for Goldman to more than double its price target from $13 per share to $34. The company should now “trade more in line with 30%+ growth businesses, which are trading at 44x CY21 sales” according to Merwin and his team.

Goldman’s price target implies a 22% potential return from Tuesday’s closing price.

Palantir’s stock has risen nearly 200% in the last six months amid a bull market for equities. However, the company saw its shares fall from all-time-highs of over $39 per share on Jan. 27.

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Lyft CEO Logan Green predicts US will reach ‘critical immunity levels’ faster than many international markets

GettyImages 466529926 AUSTIN, TX - MARCH 16: Logan Green, CEO & Co-Founder of Lyft speaks onstage at 'Fixing Transportation With Humanity And Technology' during the 2015 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 16, 2015 in Austin, Texas. (Photo by Amy E. Price/Getty Images for SXSW)
Lyft CEO Logan Green speaks at the 2015 SXSW festival in Austin, TX.

  • Lyft CEO Logan Green said the US will reach “critical immunity” faster than many other countries.
  • Lyft told investors Tuesday that it will be EBITDA-profitable in 2021 if the recovery continues.
  • The US still has one of the worst COVID-19 outbreaks, but has higher-than-average vaccine rates.
  • Visit the Business section of Insider for more stories.

The US currently has the worst COVID-19 outbreak globally, with more than 27 million active cases.

But Lyft CEO Logan Green is still optimistic about the country’s road to recovery which, not coincidentally, will have a major impact on his company’s own post-pandemic recovery.

“While we can’t predict the timing or efficacy of vaccine rollouts with certainty,” Green told investors during Lyft’s earnings call Tuesday, he said that, “based on current trends, we believe the US could reach critical immunity levels earlier than many international destinations.”

A spokesperson for Lyft told Insider Green’s comments were based on research from Goldman Sachs and news sources including Bloomberg, which estimates it will take the US nine months to vaccinate 75% of its population – the amount some experts have said is needed to reach herd immunity.

Unlike Uber, its biggest competitor, Lyft has focused primarily on its ride-hailing business and limited its operations to the US and two Canadian provinces.

That has left Lyft particularly vulnerable to failures by the US to slow the spread of the virus, which have caused the economic recovery to lag as well, particularly for the travel and transportation industries.

Lyft reported on Tuesday that, during the fourth quarter of 2020, rides on its platform were still down 51% from the same quarter the previous year, while revenue was down 44%.

Read more: Uber and Lyft driver earnings compared: Data reveals which app pays better in NYC, LA, Chicago, and 13 other major American cities

But Green said “pent-up demand” in the US could lead to a “pop in leisure travel” that Lyft could capitalize on, and the company doubled down on its expectation that it will be profitable on an adjusted EBITDA basis by the end of the year.

However, that trajectory depends on rides bouncing back at a “high single-digit month-over-month growth rate beginning at the start of the second quarter,” CFO Brian Roberts said on the call.

Green said those recovery trends vary across the US, with the West Coast being “the weakest region” while Florida and Texas have fared better.

Most states are seeing improvements, and the US is vaccinating people at a fairly high rate compared to most other countries, but there’s still a long way to go.

Additionally, while the stock market has soared recently on companies’ surprise profits, driven largely by the tech industry, experts have warned the broader economy could take years to recover and individual Americans are still struggling.

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Amazon shares dip as investors digest Jeff Bezos’ plan to step down as CEO following blockbuster Q4 earnings

Jeff Bezos

Shares in Amazon dipped on Wednesday after Jeff Bezos announced plans to step down as CEO and transition to executive chairman following a strong fourth-quarter.

The company delivered a strong beat on fourth-quarter earnings as its revenue grew 44%, topping $100 billion in a quarter for the first time. But its shares were trading around 1% lower at $3,348 per share at the market open.

AWS CEO Andy Jassy is to replace Bezos as Amazon’s CEO. Although the company may lose some of the vision of its founder, Amazon is still “very well placed for future growth disrupting more trillion dollar industries,” said Christopher Rossbach, CIO of asset management company J. Stern & Co.

The fact that the company broke records yet again this past holiday season, when its Prime delivery services were in high demand, goes to show that it’s “almost impossible” for any other retailer to match Amazon, Rossbach said. But after a defining year, it could be difficult to replicate the outsized growth it had in 2020.

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Investors must focus on the Amazon Prime membership base, which is expected to double in market share over the next decade, helping its stock rocket higher, he said.

Further, incoming CEO Jassy’s ascension from the AWS team is seen as a positive for Amazon.

Jassy fully understands the wealth of assets across Amazon’s flywheel of operations and the move should afford Bezos more time to focus on big new bets for the company, according to Nicholas McQuire, vice president of enterprise research at CCS Insight.

“The key question will be how Jassy manages some of the inevitable bumps in the road Amazon will face with issues like anti-trust, workers’ rights and employee activism on this rise,” he said.

Separately, Wedbush raised its price target on Amazon to $4,000 from $3,900 on Wednesday and reiterated an “outperform” rating. Analysts said it wasn’t clear Bezos would actually withdraw from day-to-day oversight of the business, and expected him to continue to be integrally involved in company strategy. 

Amazon’s stock has jumped roughly 70% over the past year. But since its last reported earnings in October, the stock has seen only a 6% increase, well below the broader S&P 500’s 16% rise in the same period.

Read More: GOLDMAN SACHS: Buy these 35 stocks that are unruffled by GameStop mania and set to rally as the economic recovery gains speed

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Spain’s Santander’s 4th-quarter profit plunges 90% as the bank sets aside higher provisions to weather the pandemic

A woman walks past a Banco Santander branch in downtown Rio de Janeiro August 19, 2014.   REUTERS/Pilar Olivares/File Photo
  • Santander’s fourth-quarter profit plunged 90% to 277 million euros ($333.5 million) on Wednesday. 
  • It posted a record annual loss of 8.77 billion euros ($10.5 billion) after setting aside higher loan-loss reserves.
  • The bank still intends to pay the maximum cash dividend allowed in accordance with the ECB.
  • Visit the Business section of Insider for more stories.

Spanish lender Santander posted a sharp drop in fourth-quarter profit Wednesday on higher restructuring costs and provisions to weather the impact of the pandemic.

The bank’s quarterly profit fell 90% to 277 million euros ($333.5 million) compared to the same period a year ago, missing the $411 million euros ($494.7 million) estimate of analysts polled by Reuters. However, estimates varied between 102 million euros to 616 million euros.

The bank posted its first ever annual loss of 8.77 billion euros ($10.5 billion) after setting aside one-off charges worth 12.6 billion euros, taking hits on job losses and branch closures. 

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Here are the key numbers:

  • EPS: €0.008 versus €0.069 estimated
  • Quarterly profit: €277 million versus €411 million
  • Full year net loss: €8.77 billion versus estimated loss of €8.5 billion 

Net interest income rose to 8.02 billion euros ($9.6 billion), beating estimates, and the bank said it expects a rebound in profitability in 2021. The Latin American and North American divisions were the key performance drivers for overall strength, offsetting weakness in Spain and the UK.

Based on the European Central Bank’s recommendation on December 15, Santander said it would pay shareholders a cash dividend of 0.0275 euros ($0.033) per share.

Santander’s stock rose 2.7% in early European trading, as investors looked past the bank’s losses.

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