Updates on ACA, FTCH, ADPT, FSR, ALTR and HALO
Arcosa (ACA) released an uninspiring report on Wednesday that was particularly ill-timed given yesterday’s market retreat. The company missed across the board. Revenue was up 2.7% to $459 million, missing by $4.7 million while adjusted EPS of $0.33 missed by $0.08. Guidance for 2021 also missed. Nothing to see here folks. The stock sold off and we have a modest loss of around 7%. Let’s move on. SELL
Farfetch Limited (FTCH) reported that Q4 revenue was up 41.3% to $540 million (beating by $22 million) and adjusted EPS of -$0.06 beat by $0.09. Gross merchandise volume was up 49% versus consensus of 46%. Guidance seemed a little light for 2021 (digital platform growth of 30% to 35%) however management said it sees 50% to 55% growth in Q1. They may easily just want to be conservative regarding the rest of the year and not include much of anything from the upcoming launch on Alibaba Tmall. Overall, it was a solid showing and I suspect there will continue to be a lot of investor interest in the name. Still, we will be a little cautious and move to hold. HOLD
Adaptive Biotechnologies (ADPT) reported Monday that revenue rose 24.7% to $30 million (beating by $3.1 million) while GAAP EPS of -$0.33 missed by $0.04. Growth came from the Development Services business, helped by Genentech, which was up almost 70% while Sequencing was down 8%. Guidance for 2021 is a seemingly conservative $144 million to $145 million versus $159 million consensus. Growth should accelerate throughout the year as new products launch, including T-Detect COVID (Q1 2021), T-Detect Lyme and Crohn’s (late in the year) and more. The growth story remains; it just may take a few quarters for things to pick up in 2021 and that could mean the stock stalls out. We are up just over 100%. My best guess is ADPT will be range-bound for a while in the 55 to 65 range. We are looking to take partial gains of a quarter to a half position and will do that in two stages, starting with a quarter position sale today. Sell a Quarter, Hold the Rest
Fisker (FSR) has exploded higher today as news of the deal with Foxconn has brought a ton of interest to the stock and compelled Morgan Stanley to slap a 40 price target on the stock. We are currently up nearly 50%. At this point let’s let things cool down. If you want to keep buying just try to pick shares up on some weakness. Moving to hold. HOLD
Altair (ALTR) reported yesterday that Q4 revenue grew 5.8% to $133.4 million (beating by $16.7 million) and adjusted EPS of $0.17 beat by $0.17. Management sounded more upbeat about the recovery and says the software license part of the business is doing very well, up 19% in the quarter. Engineering is still a little weak (down 15%). Overall things still look on track and I think the stock can work. BUY
Halozyme (HALO) already reported and I detailed the results on Monday, keeping the stock at buy and suggesting you keep new buying slow. After evaluating the post-earnings action and seeing the stock slip just below its 50-day line today I’m moving to sell. This is largely about trimming some positions and taking modest gains where we have them to slightly de-risk our portfolio. If you prefer to hold, that decision is fine as well. SELL