Earnings Season is Still Going Strong
Well, maybe not strong, but there are still some important companies that still haven’t reported their earnings. This week was a modified week of trading because of the American Thanksgiving holiday, so I didn’t write about any earnings reports I was watching. Next week, there are some interesting tech and cloud companies that will be reporting. Cloud companies in particular have had a terrible year of trading. I’ll be curious about how investors react to their earnings, especially with an anticipated Fed pivot in rate hikes coming as early as December.
Snowflake ($148.41|-0.26%)
Snowflake has been a popular company ever since its IPO in 2020. The stock hit almost $400 in 2021 before falling by nearly 60% this year. The stock is now about flat from its IPO and it has been a heck of a ride for investors. Despite a very successful second quarter in which the company saw 83% year-over-year revenue growth and 12% adjusted free cash flow margins, the stock continues to get price target downgrades from analysts. Snowflake was a darling of investors in 2021 but now, nobody’s a buyer. Has anything fundamentally changed about Snowflake? Not really. As the old saying goes: if you liked the stock at $400, you’ll love it at $140.
Crowdstrike ($294.11|0.14%)
Talk about another pandemic bull market darling. Crowdstrike was trading at nearly double these prices and nobody blinked an eye. Now, as price multiples continue to compress and current cash flow is being valued more than future potential, companies like Crowdstike see their stocks continue to fall. To be honest, Crowdstrike has held up better than most other cloud stocks. The cybersecurity company has proven to be resilient and I’ll be curious to see if it can continue to grow at the same pace. Crowdstrike was recently named the best cloud security software at the 2022 CRN Tech Innovator Awards. The business is still going strong and remains an absolute necessity for many companies around the world.
Marvell Technologies (NASDAQ: MRVL)
Marvell Technologies is often a forgotten semiconductor stock. It does not get the same headlines as companies like AMD (NASDAQ: AMD) or NVIDIA (NASDAQ: NVDA). Marvell deals in 5G communication chips and cloud data centers. These two industries have been front and center in how the world will manage and transfer its massive amounts of data. Despite threats of a looming recession, semiconductor stocks have done pretty well this quarter. Marvell just received another price target upgrade from Credit Suisse, adding to the consensus median price target amongst analysts of $68.89. Considering the stock is trading at just over $40.00, it seems like Wall Street is expecting the good times to continue to roll for Marvell over the next twelve months. Shareholders are likely hoping for similar guidance to what both NVIDIA and AMD provide at their respective calls. If Marvell can provide some hope for 2023, I expect the stock to rebound into a nice end-of-the-year rally.
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