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BenzingaEditorial

2020 Will Be Remembered as the Year When EV Excitement Kicked Into High Gear

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Mercedes Benz just unveiled 6 EV prototypes to enter production over the next six years. The German automaker might have been a bit slow start in electrification but is now accelerating big time in an effort to catch up to Tesla’s (NASDAQ: TSLA). Come to think of it, even Tesla’s fortunes have made quite a journey since April 2018 when it came within about a month of bankruptcy while bringing the Model 3 to mass production.

From almost bankrupt to record highs

But Tesla persevered through the hard times and started reporting a string of profitable quarters in 2019, and even ended the year with a slight profit. But 2020 has been a roller coaster as its stock began to surge at the beginning of the year, then it plummeted its year low in March, and then ending up surging more than 600% this year.

On the same day that Tesla’s stock bottomed on March 18, Nio (NYSE: NIO), its Chinese EV peer, warned for the second time in three months that it was running out of cash with its future in jeopardy as it had just lost $1.6 billion in 2019. But both Tesla and Nio managed to leave those dark times behind as their stocks have sky-rocketed this year. Moreover, Tesla became the world’s most valuable automaker this summer and is now worth more than Toyota (NYSE: TM), VW (OTC: VWAGY), Daimler (OTC: DDAIF), Ford (NYSE: F), General Motor (NYSE: GM) and Honda Motor Co (NYSE: HMC) combined, despite selling a mere 1% of the vehicles those automakers sold in 2019.

Nio’s stock also rallied roughly 1200% this year, and it is now worth nearly as much as General Motors (NYSE: GM). Overall, electric vehicle companies have raised more than $10 billion this year in fundraising rounds, initial public offerings, and special purpose acquisition companies (SPACs). These companies are standing on the shoulders of Tesla who evoke all that EV excitement in the first place. For example, Lordstown Motors (NASDAQ: RIDE) which will make its trucks in an old GM factory in Ohio went public in November through a SPAC and raised $675 million. It has received approximately $3 billion in pre-orders this year. 

Traditional automakers are catching up

Ford (NYSE: F) and Volkswagen (OTC: VWAGY) announced in June they’d work together on electric vehicles. Then last month VW said it planned to invest $86 billion in electric vehicles and other new technologies. Although it pulled out of its plans to invest $2 billion in Nikola (NASDAQ: NKLA), GM did increase its five-year EV investment plans to $27 billion while, unveiling a dedicated factory and resurrecting the Hummer brand as an electric-only line.

Betting on ethics for a better tomorrow

Mark Frohnmayer, founder of the Oregon-based electric vehicle company Arcimoto (NASDAQ: FUV) believes the pandemic was a wake-up call for many that society needs to change. Embracing better transportation is one of the pillars of that change. Arcimoto’s stock has grown ten times this year to record highs, something even Frohnmayer didn’t expect when the pandemic hit. The company just presented on Benzinga’s small cap conference last week and presented its Deliverator for essential food and goods, a Rapid Responder and announced it is beginning development of Roadster. This is more than just an EV company that is disrupting the market by delivering what it needs at a much lower cost structure, as it is contributing to sustainable transportation and clear skies. Its fun electric vehicles are on a public mission for mankind.

2021

There’s plenty of room for growth as electric vehicles made up less than 3% of global vehicle sales in 2019, according to the International Energy Agency. Tesla needs to be credited for demonstrating that electric vehicles are for real. But new entrants are also taking center stage and making solid ground for an interesting race in 2021.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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This Week’s Key Earnings Reports

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Earnings

Every story has winners and losers. Although there will be no tech winners in this week’s storyline, there are other industries which have benefited from the pandemic. Moreover, there is always space for surprises.

On September 28, Cal-Maine Foods (NASDAQ:CALM) reported its first quarter results of FY 2021. Although net sales for the first quarter of fiscal 2021 amounted to $292.8 million, which marks a 21.4 percent increase compared to the same quarter last year, the bottom line was a net loss of $19.4 million, or $0.40 per share.

Thor Industries (NYSE:THO) crushed estimates as it reported a surprise profit gain due to great demand. Thor earnings rose 28% to $2.14 a share while revenue rose a fraction to $2.32 billion fuelled by summer months. Moreover, Thor expects the trend to continue because first-time buyers accounted for more than half of recent new RV purchases. Consequently, its shares rose 1.5% to 94.65 on Monday following the report. Improving the camping experience worked well for Thor as the pandemic brought in new buyers.

Flux Power Holdings’ (NASDAQ:FLUX) revenue increased by 81% to $16.8 million, with fourth quarter revenue rising 107% to $6.3 million. Although the company delivered a quarterly loss per share of $0.63, it is emerging as major Lithium-ion forklift battery market participant.

NETSOL Technologies (NASDAQ:NTWK) delivered another year of profitability amidst challenging market conditions. Although total net revenues decreased primarily due to a decrease in total license fees and services revenues, it was partially offset by an increase in total maintenance fees, allowing the company to deliver a gross profit of $7.0 million for the fourth quarter.

Weibo Corporation (NASDAQ: WB) saw its shares climb more than 8 percent on Monday after topping estimates. The Chinese social media platform delivered adjusted earnings of $114.5 million or $0.50 per share. Revenue for the quarter decreased 10% year-over-year to $387.4 million as the pandemic halted  advertising revenues.

McCormick & Co. Inc (NYSE: MKC) also managed to beat third quarter estimates as it is benefiting from dining at home trend that emerged stronger than ever due to the pandemic. The Hunt Valley-based maker of spices and flavorings delivered a net income of $206.1 million and it expects fiscal 2020 sales to grow at the upper end of its up 4% to 5% range.

After the closing bell today, Micron Technology Inc (NASDAQ: MU) will report its fiscal fourth-quarter earnings. FactSet reported Wall Street expects revenue of $5.89 billion resulting in adjusted earnings of 98 cents a share whereas Micron forecasted $5.75 billion to $6.25 billion and 95 cents to $1.15 a share. The biggest U.S. maker of computer memory chips said in August the outlook for demand is worsening and predicted it’s unlikely to meet its revenue forecast due to the recession.

Earlier this morning, Angio Dynamics Inc (NASDAQ: ANGO) reported a loss of $4.3 million or 11 cents per share in its fiscal first quarter on revenues of $70.2 million. The Latham, New York-based medical device maker saw its shares drop 33% since the beginning of the year and 42% over the last 12 months.

This could be a big week for Pepsi Co Inc (NASDAQ: PEP) as it won a major distributorship as it inked a deal today to be the exclusive distributor for Evian brand bottled water in Canada. Its earnings report will cover the maximum impact of the pandemic, which powered historic demand swings in each business segment. On Thursday, Pepsi is expected to deliver positive news on both the sales and earnings sides of the busines as its broad food portfolio turned out to be a huge asset during the pandemic. But, it did report   reported weaker profitability in mid-July and asked investors to brace for further declines ahead due to some historic stresses and COVID-19 related costs.

On Thursday, the market will get an update whether the alcoholic beverage giant Constellation Brands (NYSE: STZ) can better navigate through the challenges that have reduced sales for global peers like Molson Coors (NYSE:TAP) and Anheuser-Busch InBev (NYSE:BUD). For one thing, investors can be thrilled that its business model isn’t as exposed to the dreadful  fate of restaurants and bars. Collapsing sales in that niche only harmed revenues by 6% during the last quarter while its rivals each posted double-digit slumps. The company’s focus on the premium side of the market delivered strong profitability in recent years, but it struggled with especially weak results in its wine and spirits despite some major divestments in fiscal 2020. Capital spending is also an important topic as the company entered recreational marijuana through Canopy Growth (NYSE: CGC). The venture has been a bit of a drag on the business, but management emphasized this is an attractive long-term asset due to the market’s potential.

Bed Bath & Beyond Inc (NASDAQ: BBBY) just announced it hired former  Target (NYSE: TGT) executive as its Chief Strategy Officer as part of its massive restructuring. The embattled home furnishings company failed to revamp its business model in order to survive the onslaught of e-commerce giants. BBB is actively exploring new growth opportunities in the home, baby, beauty and wellness segments. When it reports its fiscal Q2 earnings after markets close on Thursday, it will also provide valuable insight into new customer patterns.

Despite the lack of bluechips on this somewhat lighter earnings schedule, this week will provide us with valuable insights on new consumer trends and how well is the economy doing on its path to recovery. Social distancing made RVs more appealing and we are yet to see the new trends that will reshape our new normal.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

COVID-19 Was Powerless Against FAANG Stocks- But There Are More Battles to Be Won!

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Facebook Earnings News

FAANG is an acronym that stands for the five most popular and best-performing US technology stocks in the market. They are Facebook Inc (NASDAQ:FB), Amazon.com Inc (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Alphabet’s Google (NASDAQ:GOOG). Well, Facebook, Amazon and Netflix hit record highs recently but this doesn’t mean all is bright.

Alphabet Trails Behind Facebook. But Despite Hitting Highs- Controversies Remain.

Facebook’s stock (NASDAQ:FB)  is up by about 16% since early 2018 which is below 28% gain for Google’s parent Alphabet’s stock (NASDAQ: GOOGL) over the same period. Facebook’s revenues have expanded 74% between 2017 and 2019. This is 1.6x those of Google in the same period. Facebook’s higher revenue growth over recent years and its higher multiple imply higher potential earnings growth in the future. The hype is led by its big push into e-commerce with the launch of Shops.  And it took Shopify Inc (NYSE:SHOP) for the ride as well, which became Canada’s most valuable company. But controversies remain at Facebook’s side as Zuckerberg recently refused to act against President Trump’s posts.

Alphabet’s Potential Could Be Stronger Than We Realize

It can be argued that the company has a higher quality revenue mix, especially due to its highest-growing segment, Google’s Cloud business that gives more resilience to Google’s revenues. Google has very large advertising exposure but unlike Facebook that earns 98% of revenues from it, ads contribute 80% to Google’s revenues. So Google’s pay per click advertising, for which marketers only pay when their ads get results, could hold up stronger than anticipated. While many of Google’s offerings don’t make much money yet, they could imply that Google is being undervalued.

Amazon Stock May Have Soared With Restarted Non-Essential Deliveries But Its Biggest Weakness Remained

The company is at a crossroads as it is facing sharp criticism over its treatment of employees – and the way the company responds to the objections may well determine its future.

The e-commerce giant made it easier for employees to juggle day care amid the COVID-19 pandemic. It announced ten days of subsidized emergency backup child or adult care. By covering more more than 90% of the cost of care, the e-commerce giant will invest several million dollars to offer this benefit during the next few months. What we don’t know is if the spending is part of the $4 billion Amazon took aside for its COVID-19 response during the current quarter.

But it is unclear whether the importance the company now seems to be placing on its employees is just a forced response to the criticism or if it truly reflects its commitment to the wellbeing of frontline employees. After all, the company was known for its poor working conditions long before the pandemic.

You could think that Amazon performed well anyway but workforce management also matters to investors. In last week’s shareholder meeting, they showed concern for the company’s reputation to be permanently damaged by this increased scrutiny. Bezos is being pressured to improve the treatment of Amazon’s workforce.

Apple

Shares of Apple have been on a good track for a while. Investors have applauded the company’s shift from a business model that is dependent on hardware revenue to a more services-based structure. As a reward, its stock went up 80% over the past year. Since surpassing a $1 trillion market cap in 2019, shares of Apple have continued to climb sharply. The company’s value has come near $1.4 trillion. Further robust growth in Apple’s services and wearables businesses and strong operational tailwinds over the next for years will help the tech company go forward. But with sales of the iPhone having hit a saturation point, which is why Apple has only grown its revenue by a total of 20% over the last three years, the switch or innovation is a must.

Netflix Achieved Record Figures but Analyst Fear Collapse

Despite short term headwinds, Netflix gathered a fast-growing member base of 182.86 million. It blew away expectations by adding 15.77 million new subscribers in the first quarter. But sceptics are not a fan of its high cash burn as Netflix is heavily spending on content. It burned more than $3.2 billion in cash last year. Also, whether Netflix will continue to be able to raise prices to offset its rising costs in light of this increased competition.

Outlook

The overall performance of the FAANG stocks is optimistic for the global economic recovery. No one seems to be afraid of holding any of FAANG stocks right now. But that doesn’t mean each doesn’t have its own concern.

The most ‘threatened’ seems to be Amazon. Amazon should direct all its resourcefulness and superior operational capabilities towards employees.  Bezos must see Amazon’s workforce as an energizing wheel that propels the company’s productivity and not as a hit to the bottom line. In other words, Amazon must give the same attention to its employees as it did to its customers.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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