Number Crunch: Thursday’s Earnings Reports

A look at earnings from Pinterest, Shopify, Spotify, Comcast and Samsung.
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Pinterest posted an impressive third-quarter bolstered by strong user growth, advertising sales (some of which came from ad-buyers boycotting Facebook).

  • Revenue improved 58% to $443 million compared to the same period from a year ago. 
  • Pinterest reported $93 million in EBITDA, a $4 million improvement over Q3 last year.

Shopify crushed market expectations en route to a robust third quarter as the global pandemic continues to “push shoppers out of brick-and-mortar stores and onto online platforms.”

  • Canada’s largest company posted a $767.4 million revenue with adjusted earnings at $1.13 per share, more than double analysts’ estimates of 52 cents.
  • Gross merchandise volume improved by 109% to $30.9 billion, compared to Q3 of last year.

Spotify rebounded from an early-pandemic slump as customers “collectively spent more time listening to the service than before Covid-19 shutdowns.”

  • At the close of the latest quarter, Spotify had 320 million monthly active users, and its paid subscriber base grew to 144 million.
  • Total revenue rose 14% to €1.98 billion, in line with the company’s guidance. But Spotify lost €101 million in the third quarter, dropping from its €241 million profit in the same period a year earlier.

Comcast’s theme-park business took a pandemic-driven hit in the latest quarter, with revenue falling 81%.

  • Theme-park revenue tanked from $1.63 billion to $311 million
  • The NBCUniversal, Xfinity and Sky parent posted a 4.8% total revenue decrease to $25.53 billion.

Samsung posted its best profit numbers in almost two years thanks to a “bounceback in smartphone sales and demand for memory chips.”

  • Revenue for the South Korean tech giant grew 8% to 66.96 trillion South Korean won.
  • Net profit grew 49% to 9.36 trillion won or the equivalent of $8.24 billion.

Justin Oh:

Pinterest ($PINS) looks really interesting. It’s expected to grow 30% in the near future and is trading at 29x forward gross profit. It’s costly, but the growth and margins are there. Don’t go chasing a stock pop, but we should add it to our list to look into if it returns to reasonable valuations.

Spotify ($SPOT) met or beat expectations on user growth (+29%) but slightly missed expectations on revenue (+15%). I’m undeterred that the stock is down 8.5% today since $SPOT is a long-term play for the dominance of the audio experience, especially for those of you that bought in when I started recommending it in June. Those that did should still be up over 30% on the position.

Shopify ($SHOP) is entirely too expensive at 66x forward gross profit. If you’re concerned about a tech selloff soon, then you may want to hedge your growth positions by shorting overpriced names, like possibly $SHOP. Generally, I wouldn’t say I like talking about shorting since it’s an advanced technique that requires more in-depth analysis, monitoring, and wherewithal, but it’s worth a mention.

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