Earnings Roundup: ALTR, BILL, NET, HUBS, MRVI, TIXT, GFL
Altair Engineering (ALTR) Reported Q3 results ahead of very conservative expectations. Revenue was up 14% to $121.3 million (versus $113.9 million consensus) with software driving the strong results (up 22.9%). With cost cuts in place adjusted EPS of $0.11 surpassed expectations. Management was very conservative regarding Q4 and said chip shortages will likely impact shipments of some hardware items. ALTR is stable near all-time highs today. All factors considered, with ALTR modestly extended and a current gain of 90%, and a market that feels like it could pull back, we’ll move to hold. HOLD
Bill.com (BILL) crushed expectations in its first quarter of fiscal 2022 sending the stock up over 10%. We’re sitting on three-quarters of our original stake and are up 317%. Revenue in the quarter was up 152% to $116.4 million on the back of significant contributions from the Divvy acquisition. Adjusted EPS was -$0.15, which was $0.06 better than expected. Management raised full-year fiscal 2022 revenue guidance to $539.5 million from $478 million, a material increase. That implies 55% organic revenue growth and a $168.6 million contribution from Divvy. Considering an upgrade to buy. For now, BILL remains a hold though clearly momentum in the business is pulling in more investment. HOLD
Cloudflare (NET) grew over 50% again as the stock continues to be one of the best performers out there. We are up 452% on our remaining half stake. Q3 revenue was up 51% to $172.3 million (vs. $165.7 million consensus) while adjusted EPS of $0.01 beat by $0.04. The story here has been about large new customer additions, and in Q3 the company added another 172 with annualized revenue above $100,000 each (now has 1,260 total). We will continue to hold and enjoy the ride. HOLD
HubSpot (HUBS) reported Q3 revenue of $339.3 million (up 49%), well ahead of expectations. Adjusted EPS of $0.50 was also ahead of consensus. Q4 guidance implies 42% revenue growth as upsells and cross sells of newer solutions continue to pull in dollars from clients seeking HubSpot’s inbound marketing solutions. The stock looks great and digested the report without too much drama. We are now up almost 60% since April. I wouldn’t be surprised to see a pullback in the stock on any broad market weakness but, should that occur, I think it would be another buying opportunity as HUBS’ upward trajectory should continue. Try to buy on weakness. BUY
Maravai Lifesciences (MRVI) hasn’t reported but shares are off around 20% today after news that Pfizer (PFE) will likely get a Covid-19 pill across the finish line (treatment, not vaccine). While this could put a dent in vaccine uptake rates it seems a little premature to say Maravai is dead meat. Vaccines are still a huge part of the solution to this problem and there are a lot of areas around the world where vaccination rates are awful. That said, we don’t want to fight a fight if we don’t think we have a good chance of winning. Let’s give this a few days and see how MRVI does next week. Move to hold. HOLD
Telus International (TIXT) delivered a slight revenue miss but a solid EPS beat and left full-year guidance unchanged. Revenue was up 30% to $556 million while EPS of $0.26 was up 30%. Foreign currency fluctuations probably drove a good portion of the revenue miss. Full-year revenue growth guidance remains in the 37% to 40% range ($2.17 - $2.21 billion) with roughly 16% of growth being organic and the rest from acquisitions. The stock has been volatile today but has come off the lows. We have a modest gain of around 12%. Telus should continue to be a leader in customer support and customer experience solutions, however I want to see more stability out of the stock in the coming days before allocating more capital to it. Moving to hold. HOLD
GFL Environmental (GFL) is a trade idea we entered a few weeks ago and shares are trading right near our entry price after reporting Q3 results that surpassed expectations. Revenue was up 43% to $1.17 billion while adjusted EPS came in at $0.17. I didn’t see anything in the report to suggest the uptrend here shouldn’t continue, however, with shares weak the last two days I’ll admit GFL isn’t at the top of my buy list this second. A pullback to the 50-day line near 38 likely changes that, though a break below that trend line would likely mean a quick exit. We will keep GFL at buy for now. BUY