No Real Money Being Made for Now
The news today is all about the tariffs on Canada, Mexico and China, which caused the second straight Monday of losses and keeps the intermediate-term trend of most stocks, sectors and indexes pointed sideways. As always, we’ll have to see how things play out—it’s possible the past month and a half of tedious action is a top that leads to a bigger decline, but to this point, most things are simply hacking around in a range, so we’re fine holding resilient titles and ditching those that crack. Even so, our biggest thought beyond the headline news or daily reactions is that, unless you’re hopping in and out of things every couple of days, there’s no real money being made of late, with selling on strength seen and headline news causing big moves up and down most days. To be clear, that’s more descriptive than predictive—a few good days could change the landscape—but until that happens, we favor keeping new positions on the small side, holding some cash and practicing patience waiting for this ping-pong action to stop. We’re leaving our Market Monitor at a level 6 today.
We will say, however, that this week’s list is encouraging—it’s very growth heavy, and even after today’s pothole, many names are in position to get going if the market allows it. Our Top Pick is Duolingo (DUOL), which is in the midst of a solid-looking nine-week rest after a huge comeback in the second half of last year.
Price |
Agnico Eagle Mines (AEM) |
Atlassian (TEAM) |
Corcept Therapeutics (CORT) |
CrowdStrike (CRWD) |
Duolingo (DUOL) ★ Top Pick ★ |
GitLab (GTLB) |
Instacart (CART) |
Rocket Lab (RKLB) |
Shopify (SHOP) |
Snowflake (SNOW) |
Stock 1
Agnico Eagle Mines (AEM)
Price |
Why the Strength
A combination of looser monetary policy from some of the world’s biggest central banks, plus growing concerns over a trade war involving the U.S., Canada and Mexico (not to mention China), has prompted a flight-to-safety move in gold as investors worry that inflation will worsen. As a result, gold prices rose past the $2,800 an ounce mark for the first time ever last week, in turn prompting renewed interest in the companies that produce the yellow metal. Among the biggest is Canada-based Agnico, the world’s third-largest gold miner with a pipeline of high-quality exploration and development projects in the U.S., Canada, Mexico and Columbia, and owner of Canada’s top two biggest gold operations—the Detour Lake project and the Canadian Malartic mine. The latter mine is located in the heart of Québec’s Abitibi Gold Belt, which is regarded as one of the world’s largest, most profitable gold mining regions, with rich gold deposits, established infrastructure and mining-friendly policies. Complementing Agnico’s already sizable footprint in this region is its recent acquisition of Québec-based gold explorer and mine developer O3 Mining, which is adjacent to Agnico’s Malartic mine. O3 Mining owns a 100% interest in all its properties and its principal asset is the Marban Alliance project in Québec, which it has advanced over the last five years to the cusp of its next stage of development, with the expectation that the project will deliver excellent long-term benefits to shareholders. The deal allows Agnico access to approximately four million ounces of proven gold resources, plus it gains access to even more exploration in the lucrative Abitibi region. Financially, Agnico is in great shape as the rising gold prices of recent years have boosted results, with Q3 boasting a 31% year-on-year revenue increase, to nearly $2.2 billion, and earnings of $1.14 beating estimates by 12%. Payable gold production and gold sales both rose by 2%, while the firm’s all-in sustaining costs (AISC, a key metric) of $1,286 an ounce is less than half the current gold price. When Agnico reports Q4 earnings on February 13, analysts expect revenue to increase 29% and earnings to more than double, while 2025 as a whole could see the bottom line lift nearly 30%. A 1.7% dividend yield is an added attraction.
Technical Analysis
After a year of consolidation, AEM bottomed last February, broke out in March and rallied all the way up to 89 at the end of October. There was a sharp dip from there that led to about nine weeks of correction and consolidation, but the stock began to perk up right after the New Year and it hasn’t stopped yet, tagging its old highs two weeks ago and breaking to new highs last week. AEM and gold prices will be news driven, but we’re OK taking a swing at it on modest dips.
Market Cap | $47.2B | EPS $ Annual (Dec) | ||
Forward P/E | 18 | FY 2022 | 3.31 | |
Current P/E | 27 | FY 2023 | 2.22 | |
Annual Revenue | $7.83B | FY 2024e | 4.11 | |
Profit Margin | 38.9% | FY 2025e | 5.20 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($B) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 2.16 | 31% | 1.14 | 165% |
One qtr ago | 2.08 | 21% | 1.07 | 67% |
Two qtrs ago | 1.83 | 21% | 0.76 | 33% |
Three qtrs ago | 1.76 | 27% | 0.57 | 50% |
Weekly Chart | Daily Chart |
Stock 2
Atlassian (TEAM)
Price |
Why the Strength
The latest string of big contract wins and heady growth for project management and collaboration specialist Atlassian has prompted a wave of enthusiasm that’s carried shares to new highs. The company reported its fiscal Q2 (ending December) earnings after the market closed last Thursday, featuring decisive beats on both the top and bottom lines: Total revenue of $1.3 billion jumped 21% from a year ago while earnings of 96 cents beat estimates by 23 cents. Both figures were boosted by a 30% increase in recurring sales, with customers who spent at least $10,000 annually rising 15% year over year. One highlight of the quarter included what management called “some incredible customer wins,” including a record number of deals inked in Q2 that were valued over $1 million in annual contract value, with some of the world’s largest companies “committing to the Atlassian cloud and embracing the Atlassian system of work.” Yet another milestone was the firm’s surpassing of $5 billion in annual run rate revenue, thanks largely to its strategic investments in AI and enterprise expansion, as well as growing customer adoption of Atlassian’s system of work platform. More than a million monthly active users are now using the firm’s AI-powered Intelligence offering, leading to AI interactions increasing more than 25-fold year over year. Meanwhile, premium and enterprise editions saw adoption growth of over 40% year over year, supported by those features. The excellent showing prompted a number of major financial institutions to up their price targets for the stock (another reason for the strength). Looking ahead, management reiterated its long-term target of $10 billion in annual revenue to be obtainable by or before 2030, supported by the increasing adoption of premium cloud offerings. (Some analysts believe Atlassian will reach this target in under three years based on current trends, especially from its cloud offerings.) It’s not growing at lightning speed, but big investors seem to think many years of 20%-ish growth is possible from here.
Technical Analysis
TEAM is one of many former pandemic winners that had a decent off-the-bottom rally for about a year and a half, but then went through the wringer last year, with shares falling as much as 48% from February through August before bouncing back. The November/December action was very bullish in the wake of the Halloween earnings report, and the 18%-deep consolidation while growth stocks struggled was normal. Last week’s fresh earnings gap to new highs is bullish, though if you want in, we suggest aiming for dips.
Market Cap | $80.9B | EPS $ Annual (Jun) | ||
Forward P/E | 90 | FY 2023 | 1.92 | |
Current P/E | 94 | FY 2024 | 2.93 | |
Annual Revenue | $4.90B | FY 2025e | 3.44 | |
Profit Margin | 26.9% | FY 2026e | 4.19 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($B) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 1.29 | 21% | 0.96 | 32% |
One qtr ago | 1.29 | 21% | 0.77 | 18% |
Two qtrs ago | 1.13 | 20% | 0.66 | 16% |
Three qtrs ago | 1.19 | 30% | 0.89 | 65% |
Weekly Chart | Daily Chart |
Stock 3
Corcept Therapeutics (CORT)
Price |
Why the Strength
Corcept is a commercial-stage developer of drugs for the treatment of severe metabolic, psychiatric and oncologic disorders, with a particular focus on the development of drugs for disorders that are associated with cortisol when surgery isn’t an option. Its sole commercial drug, Korlym (mifepristone), is used to treat Cushing’s syndrome, an endocrine disorder that occurs when the body has too much cortisol—a steroid hormone that facilitates healing for injuries or illness. Although Cushing’s is a rare disease, its potential market seems to be larger than initially thought—for many years most saw it afflicting only about 10 to 15 people per million each year in the U.S., but now many see it occurring at about double that rate, up to 30 people per million each year, mainly those between ages 20 and 50, and with obesity, type 2 diabetes and high blood pressure possibly increasing the risk of this disease. With a whopping price tag of $700 per pill and a daily dose between one and four pills, Korlym is the main moneymaker for Corcept, generating around half a billion dollars per year. Analysts estimate that around 11% of the addressable market for the drug currently uses Korlym, leaving a sizable opportunity for the company—especially as Corcept is actively working with specialists across the country to improve awareness and diagnosis of Cushing’s. Along with the potential of Korlym, Corcept’s pipeline includes four Phase III trials for the drug Relacorilant (to treat Cushing’s and ovarian cancer) and Dazucorilant (for ALS), as well as a Phase II trial for Miricorilant (for the chronic liver condition known as nonalcoholic steatohepatitis, or NASH, with the next results due in March). But for now, Korlym remains the big driver, accounting for most of the firm’s $183 million in Q3 revenue (up 48% year-on-year), with earnings of 41 cents a share beating estimates by 13 cents. When the company reports Q4 results on February 14, Wall Street sees the top and bottom lines growing by around 50% each, with the full-year bottom line lifting 37%.
Technical Analysis
After spending a few years grinding out a lateral base between 15 and 35, CORT broke decisively out of that trading range in September. The stock climbed to 60 by November, where it encountered strong resistance, with an attempt at pushing above it failing in early December. There was a 21% pullback after that, but CORT found support above 50 and then returned to the 60 area in January, followed by a surge to new highs last week on strong volume. We’re OK starting small on this recent hiccup and seeing what earnings bring next week.
Market Cap | $7.17B | EPS $ Annual (Dec) | ||
Forward P/E | 36 | FY 2022 | 0.87 | |
Current P/E | 55 | FY 2023 | 0.94 | |
Annual Revenue | $629M | FY 2024e | 1.39 | |
Profit Margin | 29.0% | FY 2025e | 1.91 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 183 | 48% | 0.41 | 46% |
One qtr ago | 164 | 39% | 0.32 | 28% |
Two qtrs ago | 147 | 39% | 0.25 | 79% |
Three qtrs ago | 135 | 31% | 0.28 | 100% |
Weekly Chart | Daily Chart |
Stock 4
CrowdStrike (CRWD)
Price |
Why the Strength
CrowdStrike had one of the top growth stories last year not just in its sector, but in all of the market: The firm’s cutting-edge cybersecurity platform began years ago for just endpoint security but has since broadened to many other (and faster-growing) areas like identity, cloud workloads protections, threat intelligence and more, giving the firm a one-stop-shop for big clients looking to secure all of their digital data and work—and big clients were gobbling it up as they started to trend away from managing numerous disparate solutions and instead standardized on CrowdStrike’s offering, known as Falcon. It was so popular and integrated into so many systems, in fact, that when CrowdStrike suffered a historic snafu last July (a defective software update) it wreaked havoc on the global economy (flights were shut down, payments systems had issues, even surgeries were postponed due to Windows systems crashing)—and, of course, took a hammer to CrowdStrike’s reputation, which has understandably slowed growth. Even so, the issue was human error (nothing wrong or hacked with its powerful platform), and the top brass has done a good job focusing on retaining clients and rebuilding trust, and while growth has slowed, big investors are thinking the underlying story is still intact. In Q3, some new and current customers took a wait-and-see approach, but net new recurring income signed still totaled $153 million—that was down from $223 million a year ago, but hardly a disaster, and other metrics (like free cash flow) held firm. Q4 and Q1 will likely also have some ups and downs, but analysts are thinking business will start to re-accelerate after that as it remains one of the go-to plays in the space.
Technical Analysis
CRWD was a big leader, not just fundamentally as discussed above, but also technically, breaking out ahead of the market in August 2023 and running up sharply to its peak near 400 in June/July. Then came the huge snafu, which cut the stock in half in less than four weeks, but CRWD began to repair the damage from there, stairstepping its way back toward the prior peak. The nine-week sideways period starting in late November was normal, and shares tested 400 restistance and held up nicely today. We like the action, but we’ll set the buy range up a bit from here, aiming to enter on a more decisive breakout.
Market Cap | $100B | EPS $ Annual (Jan) | ||
Forward P/E | 93 | FY 2023 | 1.54 | |
Current P/E | 103 | FY 2024 | 3.09 | |
Annual Revenue | $3.74B | FY 2025e | 3.76 | |
Profit Margin | 23.8% | FY 2026e | 4.38 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 1010 | 29% | 0.93 | 13% |
One qtr ago | 964 | 32% | 1.04 | 41% |
Two qtrs ago | 921 | 33% | 0.93 | 63% |
Three qtrs ago | 845 | 33% | 0.95 | 102% |
Weekly Chart | Daily Chart |
Stock 5
Duolingo (DUOL) ★ Top Pick ★
Price |
Why the Strength
Duolingo has always appealed to us, as it’s a one-of-a-kind story that could grow many-fold down the road, especially if it expands into adjacent areas. The company has the most popular education app in the world, with nearly all of it today focused on languages, and English in particular. Instead of a boring college-type class, the company’s platform is all about fun and engagement, with constant goals, friend checks and more, and the offering itself goes far beyond basic learning—for English, the firm has more than 20 courses and last year added another 200 units that drill down into specific use cases (job interviews, negotiations, etc.). And now, of course, come AI enhancements to the platform, where users at the firm’s highest subscription tier can do a video call with an AI bot (disguised as a purple-haired teenage character) to practice real-life conversations and get feedback. Language is the main driver and will continue to be for years, but there’s also excitement about things like music and math, which have been launched on the platform but are still early-stage—any real uptake into new areas would be huge. The platform is free to use and has proven to be hugely popular, with 113 million monthly (up 36%) and 37.2 million daily active users that do see some ads—but, of course, a subscription gets you added features, and that is where the big money comes from: In Q3, 8.6 million people were paying subscribers, up 47% from a year ago, resulting in a 40% gain in revenue, a 57% gain in free cash flow and a more than doubling of EBITDA. To be fair, growth is expected to slow some in the quarters ahead as the breakneck pace of the past couple of years will be hard to sustain, but the bottom line is expected to lift 44% in 2025 and even that should prove conservative. If management makes the right moves, Duolingo should go far.
Technical Analysis
DUOL effectively peaked near 250 at the end of 2023 and, after failing to overcome that level a couple of times, tanked into last August, which made it seem done for in terms of being a leader. But the comeback from there was stunning, with shares not only perking up but quickly ripping to new highs—and continuing to motor higher until growth stocks ran into trouble in early December. The eight-week, 19% base-building effort since then looks good, with volume coming in at the right places. DUOL is very volatile, but we’re OK with a small buy here and a stop just under 310.
Market Cap | $16.1B | EPS $ Annual (Dec) | ||
Forward P/E | 126 | FY 2022 | -1.51 | |
Current P/E | 199 | FY 2023 | 0.35 | |
Annual Revenue | $690M | FY 2024e | 2.02 | |
Profit Margin | 13.2% | FY 2025e | 2.91 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 193 | 40% | 0.49 | 600% |
One qtr ago | 178 | 41% | 0.51 | 538% |
Two qtrs ago | 168 | 45% | 0.57 | N/A |
Three qtrs ago | 151 | 45% | 0.26 | N/A |
Weekly Chart | Daily Chart |
Stock 6
GitLab (GTLB)
Price |
Why the Strength
GitLab has the potential to be a big beneficiary of large corporations consolidating software systems to fewer platform providers. The reason is to improve security and simplify development, since managing dozens of software systems and modules adds a lot of complexity and cost to operations. In particular, larger companies often have as many as 10 tools for what’s known as DevSecOps (development, security and operations), which helps teams plan, create, deploy, secure and monitor the software production processes, things that are increasingly used to manage tasks in a cloud-based world. Most companies would like to drastically reduce the number of DevSecOps tools they use, which is giving GitLab and its best-in-class platform its momentum. A basic version of GitLab is available for groups of up to five users, with tiers of step-up subscriptions costing $29 and $99 per month per user, depending on bells and whistles, generating its $745 million (fiscal 2025 consensus) of revenue. In Q3 2025, reported in December, sales jumped 31% year over year to $196 million while earnings—which have been in the black for a while but are now beginning to accelerate—boomed 156%. Clients are big names: Lockheed Martin, Goldman Sachs, Nvidia and Airbus are among the 50% of the Fortune 100 that use GitLab today and are increasing their spending over time. There are some risks, however: GitLab is still unwinding a joint venture with a mainland China firm and Microsoft’s GitHub is a significant competitor. But that hasn’t been hurting business at all—sales are expected to rise 25% or so in the current year, with earnings lifting a similar amount, both of which are likely conservative. There are hopes that rolling out generative AI through its platform will make usage even simpler and more powerful. That effort is still in its nascent stages, but management says clients are seeing productivity gains as high as 50% using GitLab generative AI, which is obviously a plus.
Technical Analysis
GTLB broke out in late 2023 and had a great couple of months, but last year was a doozy for the firm despite continued solid results, as shares nearly were cut in half from the spring into the summer before beginning their comeback. That bounce ran into a wall near 73 in early December, but after a quick dip, GTLB has recovered all of that lost ground despite the tricky environment. There’s still resistance above here, so if you want in, aim for weakness.
Market Cap | $12.0B | EPS $ Annual (Jan) | ||
Forward P/E | 94 | FY 2023 | -0.46 | |
Current P/E | 124 | FY 2024 | 0.20 | |
Annual Revenue | $712M | FY 2025e | 0.63 | |
Profit Margin | 19.6% | FY 2026e | 0.79 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 196 | 31% | 0.23 | 156% |
One qtr ago | 183 | 31% | 0.15 | 999% |
Two qtrs ago | 169 | 33% | 0.03 | N/A |
Three qtrs ago | 164 | 33% | 0.15 | N/A |
Weekly Chart | Daily Chart |
Stock 7
Instacart (CART)
Price |
Why the Strength
Instacart is an easy story to grasp and to like—it’s not the fastest growing outfit, but it’s the main player in a sector that’s still in the early stages of growth, and that should translate into sustained, steady growth for years to come. The company, of course, is the big dog in the grocery delivery business, with something around two-thirds market share despite seeing added competition (from both delivery plays like Uber and DoorDash, as well as bigger names like Amazon and Walmart). Still, competition is overrated as a factor here: In Q3, something like 5% of all grocery sales came online, so there’s tons of whitespace for everyone, and besides, big clients of Instacart that used more than one delivery service actually grew faster (in terms of business for Instagram) than those that didn’t, so for now the more the merrier. A big factor here is Instacart’s integration with its clients’ systems (inventory, coupons, etc.) as well as its prediction models (based on more than a billion orders so far) that allow best-in-class fill rates, which is a big reason customer satisfaction is high. Beyond delivery itself (where Instacart charges delivery fees and a 10%-ish cut of sales) is advertising (it makes up nearly 30% of total revenue), with a couple hundred clients now using the firm’s technology to place ads online. Add it all up and you have solid, albeit not spectacular, numbers: In Q3, revenue rose 12% (including transaction revenue up 12% and advertising revenue up 11%), gross volume was up 11% and total orders lifted 10%, while EBITDA (a better profit metric than earnings for this outfit) surged a more significant 39% and made up a solid 27% of revenue. Looking ahead, it should be more of the same in 2025, with high-single-digit or low-double-digit revenue growth while cash flow expands. It’s never going to be as exciting as the latest AI or software firm, but Instacart’s positioning should continue to keep big investors interested (421 funds owned shares at year-end, up from 271 nine months before). Earnings are due February 25.
Technical Analysis
CART had a great, big-volume run about a year ago, but the stock ran into resistance around 40 (near the post-IPO peak) and went on to etch a five-month, 25% deep structure before breaking out in late September. Still, while acting well initially, CART didn’t go very far, with an earnings-induced hit in mid-November leading to a couple of months in the wilderness. Now shares are perking up again, returning to resistance near 50 as the market fidgets. If you want in, we’re OK starting small here or on dips.
Market Cap | $12.6B | EPS $ Annual (Dec) | ||
Forward P/E | 31 | FY 2022 | 1.53 | |
Current P/E | 33 | FY 2023 | N/M | |
Annual Revenue | $3.30B | FY 2024e | 1.42 | |
Profit Margin | 18.0% | FY 2025e | 1.58 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 852 | 12% | 0.42 | N/A |
One qtr ago | 823 | 15% | 0.20 | -51% |
Two qtrs ago | 820 | 8% | 0.43 | -7% |
Three qtrs ago | 803 | 6% | 0.44 | -73% |
Weekly Chart | Daily Chart |
Stock 8
Rocket Lab (RKLB)
Price |
Why the Strength
Space, if you haven’t noticed, is big business. Rocket Lab provides launch services, space system components and rocket design and manufacturing. The business fits into a niche of services that provides better services to smaller launches – Elon Musk’s SpaceX provides piggyback options for smaller loads on its missions but often can’t offer ideal orbits, while another competitor, Astra, has seen a number of high-profile failures. Rocket Lab uses a New Zealand base as its launch hub under a bilateral agreement that allows it to use rocket technology that otherwise wouldn’t be permitted outside the U.S., sending a couple of hundred of its own missions into space, a relatively speedy cadence that has helped it gain share. The company’s main vehicle is a rocket called the Electron, which delivers 2,866-pound payloads to low-Earth orbit. Later this year Rocket Lab will debut Neutron, a much bigger, 14-ton payload rocket that puts the company in direct competition with SpaceX’s Falcon 9. About 30% of company revenue comes from its launch missions for customers like the U.S. Defense Department, NASA and other agencies, but the bulk of Rocket Lab’s business, 70% of what should be $434 million revenue for 2024, is from space technologies, like solar panels, star trackers, command and control software and the like; Lockheed Martin, Northrup Grumman and Airbus are big customers. In Q3, Rocket Lab’s sales were up 55% with demand for space system components seen as a long-term 20% annual growth business line. Revenue from the new Neutron system won’t be seen this year – only tests flights are planned – but it should get into the mix for National Security Space Launch eligibility, which would be a lucrative new market. Rocket Lab isn’t profitable yet and spending on the Neutron will increase costs and keep the bottom line in the red, though the top line is seen expanding to $604 million this year, up a solid 39%.
Technical Analysis
RKLB is a hot potato, having had a huge run from last August into year-end. It seemed destined to get hit as growth and glamour names came under pressure in December and January … but instead, the stock has held firm, actually nosing to two higher highs and (so far) two higher lows, while holding north of its 50-day line. Of course, if the market gets ugly, RKLB could hit an air pocket, but the resilience after a big move in the face of a tricky market is intriguing. It’s aggressive, but we’re OK with a small buy here and a stop under the early-January low.
Market Cap | $14.9B | EPS $ Annual (Dec) | ||
Forward P/E | N/A | FY 2022 | -0.29 | |
Current P/E | N/A | FY 2023 | -0.38 | |
Annual Revenue | $364M | FY 2024e | -0.31 | |
Profit Margin | N/A | FY 2025e | -0.23 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 105 | 55% | -0.10 | N/A |
One qtr ago | 106 | 71% | -0.08 | N/A |
Two qtrs ago | 92.8 | 69% | -0.09 | N/A |
Three qtrs ago | 60.0 | 16% | -0.10 | N/A |
Weekly Chart | Daily Chart |
Stock 9
Shopify (SHOP)
Price |
Why the Strength
Retail sales for the 2024 holiday season “jumped strongly” compared to the previous year’s period, according to the National Retail Federation (NRF), driven largely by online sales that increased 7% for the month and with merchants reporting record-breaking sales for Black Friday and Cyber Monday. Among the biggest winners were the merchants using the payments, shipping and point-of-sales (POS) services of Shopify (covered in the December 16 issue), whose tools allow users with limited technical knowledge to quickly and easily create an online presence and sell directly to their customers without relying on a middleman—in early January, the firm said that the Black Friday to Cyber Monday period saw its merchants grow sales by a solid 24% from a year ago. And this comes after a healthy string of results in recent quarters, highlighted by a much better-than-expected top and bottom line in Q3, driven by a 25% gain in gross merchandise volume. Of course, now the focus has shifted to the impact tariffs that went into effect this weekend may have going forward—though, it should be noted that Shopify’s solution in part plays into what could be a big shift in the international trading dynamic, with tools that enable merchants to collect duties and import taxes directly at checkout, ensuring customers are aware of total costs, while also offering a tax compliance service that automates the identification and mapping of tariff codes to products and calculates duties and import taxes, all of which simplifies the compliance process for international sellers (a key part of the firm’s growth). Still, the tariff issue will be one to watch, though more important will be earnings, which are due February 11—analysts expect 27% growth on both the top and bottom lines, driven largely by its overseas growth.
Technical Analysis
SHOP etched a huge launching pad from February of last year into November before the Q3 report caused a massive gap up—in a liquid name, such action usually doesn’t just up and die. We got stopped out of our stake in the stock during the early-January shakeout, but we never stopped watching it, and now it appears to have set up again, with a reasonable eight-week rest and some buying coming in last week. With the shakeout on Friday and today, we’ll set our buy range up from here, looking to enter if the buyers return in short order—but keep it small given that earnings are out soon.
Market Cap | $155B | EPS $ Annual (Dec) | ||
Forward P/E | 77 | FY 2022 | 0.04 | |
Current P/E | 83 | FY 2023 | 0.73 | |
Annual Revenue | $8.21B | FY 2024e | 1.30 | |
Profit Margin | 39.8% | FY 2025e | 1.56 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($B) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 2.16 | 26% | 0.64 | 167% |
One qtr ago | 2.05 | 21% | 0.26 | 86% |
Two qtrs ago | 1.86 | 23% | 0.20 | 999% |
Three qtrs ago | 2.14 | 24% | 0.34 | 386% |
Weekly Chart | Daily Chart |
Stock 10
Snowflake (SNOW)
Price |
Why the Strength
Cloud giant Snowflake is well known for its data warehousing solution that allows enterprise customers to consolidate data—typically generated on the cloud offerings of Alphabet, Amazon or Microsoft’s—onto a single, global platform that can then be used to derive business insights and build apps. And with the AI “revolution” fully underway, Snowflake has an additional tailwind thanks to machine learning (ML) and large language model (LLM) systems. Analysts see the company at the forefront of innovation for customers across multiple industries, with its cloud-based platform allowing enterprises to process data more easily within a booming data environment while capitalizing on more AI use cases. Indeed, Snowflake is seeing accelerated adoption of its AI-focused products, which the company highlighted in its fiscal Q3 (ended October) earnings report. Management believes AI will change how people consume data, and it said over 3,200 accounts are now using its AI and ML features, which help clients perform tasks like writing code and extracting data from documents. Revenue of $942 million increased 28% year over year, earnings of 20 cents beat estimates by 32%, and the firm counted 754 of the Forbes Global 2000 as customers. Other key metrics were equally sanguine, including a 20% increase in its overall customer base and a same-customer revenue growth rate that showed its customers spent 27% more on the firm’s offerings than they did a year ago. Meanwhile, Snowflake’s remaining performance obligations (RPOs, or unfulfilled contracts), which is one of the key metrics management focuses on, increased an eye-popping 55% to $5.7 billion. Going forward, the outfit sees its product innovation as fueling revenue growth and alignment with its cloud infrastructure partners, and it guided for Q4 revenue to grow 23%, with analysts expecting similar growth through all of 2025. Earnings are due out February 26 (post-market).
Technical Analysis
SNOW peaked last February at 235 then promptly turtled in early March, with shares collapsing to 150, kicking off an awful downtrend that didn’t stop until September when shares bottomed near 105. The next couple of months weren’t much better, but the Q3 report began the change in the stock’s character, with a huge-volume leap to nine-month highs. SNOW has since gone on to base normally for seven weeks, setting up an intriguing launching pad—we’ll set our buy range up from here.
Market Cap | $60.7B | EPS $ Annual (Jan) | ||
Forward P/E | 185 | FY 2023 | -2.26 | |
Current P/E | 206 | FY 2024 | 0.25 | |
Annual Revenue | $3.42B | FY 2025e | 0.79 | |
Profit Margin | 10.5% | FY 2026e | 1.12 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 942 | 28% | 0.20 | -20% |
One qtr ago | 869 | 29% | 0.18 | -18% |
Two qtrs ago | 829 | 33% | 0.14 | -7% |
Three qtrs ago | 775 | 32% | 0.35 | 150% |
Weekly Chart | Daily Chart |
Previously Recommended Stocks
Date | Stock | Symbol | Top Pick | Original Buy Range | 2/3/25 |
HOLD | |||||
11/25/24 | 51-52.5 | 74 | |||
1/6/25 | 35-36.5 | 38 | |||
2/20/24 | ★ | 55-57.5 | 368 | ||
7/29/24 | 475-490 | 660 | |||
1/27/25 | 99.5-101 | 108 | |||
1/27/25 | 115.5-118 | 118 | |||
12/23/24 | 58-59.5 | 56 | |||
1/21/25 | 205-212 | 209 | |||
1/21/25 | 78-80 | 80 | |||
1/21/25 | 122-125 | 137 | |||
1/27/25 | 51.5-53 | 51 | |||
1/27/25 | 15.3-15.9 | 15 | |||
1/6/25 | 332-341 | 371 | |||
1/13/25 | 63.5-65 | 67 | |||
1/27/25 | 472-485 | 468 | |||
8/5/24 | 117-122 | 192 | |||
12/23/24 | 51.5-53 | 63 | |||
1/21/25 | ★ | 50-51.5 | 52 | ||
11/25/24 | 269-278 | 264 | |||
1/27/25 | 197-200 | 204 | |||
1/21/24 | 55.5-57.5 | 59 | |||
1/27/25 | ★ | 44.5-47 | 47 | ||
11/25/24 | 113.5-116.5 | 127 | |||
12/23/24 | ★ | 33.5-35 | 38 | ||
5/20/24 | ★ | 37-38.5 | 59 | ||
1/27/25 | 31.5-33 | 33 | |||
1/27/25 | 940-960 | 980 | |||
1/6/25 | 245-250 | 265 | |||
1/13/25 | 102-105.5 | 108 | |||
10/7/24 | 68-70 | 203 | |||
1/13/25 | 21.7-22.7 | 24 | |||
10/21/24 | 37-39 | 71 | |||
1/6/25 | 63.5-66 | 64 | |||
1/21/25 | 112.5-115.5 | 109 | |||
8/19/24 | ★ | 79-82 | 120 | ||
1/6/25 | 109-112 | 147 | |||
12/16/24 | Warby Parker | WRBY | 22.5-23.5 | 27 | |
WAIT | |||||
None this week | |||||
SELL | |||||
1/27/25 | 171-175 | 145 | |||
1/13/25 | 99-101 | 103 | |||
1/21/25 | 430-440 | 396 | |||
12/9/24 | 50-51.5 | 54 | |||
11/25/24 | Wix.com | WIX | ★ | 214-224 | 230 |
DROPPED | |||||
1/21/25 | 92-94 | 89 |
The next Cabot Top Ten Trader issue will be published on February 10, 2025.
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