The Investing Week Ahead: 11/8/21
Join me as I highlight the most important topics to attack the investing week ahead.
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In this post, we’ll cover:
Hot IPOs taking place this week
Quarterly financial reports worth reading
Investor events to keep an eye on
Major economic releases
If you want to learn more about the companies mentioned in this post, consider using Unhedged to conduct your research.
The Investing Week Ahead - Too Long, Didn’t Read:
Rivian hits the public markets, household names like Disney and PayPal report their quarterly financial results, the CEO of Nvidia is presenting at their GPU Technology Conference, and the US inflation rate for October will be announced.
IPOs to Watch this Week:
We’ve got some heavy hitters coming on to the scene this week - including one I made a TikTok video about the other day.
This California-based company founded to “design and sell electric trucks and SUVs to consumers and commercial fleet buyers” is planning to raise $10 billion this week thorough an IPO.
The company generated minimal revenue this year, with their first vehicles - the R1T and R1S - just now being shipped to customers. Despite this “minimal revenue” narrative, Amazon has already committed to purchasing 100,000 units of their commercial vehicles. Both Amazon (AMZN) and Ford (F) were early investors in Rivian.
Some people make the mistake of comparing this company to Nikola Motors (NKLA) - a scam company whose CEO was charged with securities fraud. Rivian is very different - their vehicles are actually real, they have enterprise partners (AMZN, F) who are working alongside them to scale production, and they have retail customers already receiving vehicles.
Above is a video of my friend Marques Brownlee made reviewing the R1T - Rivian’s EV pickup truck. I’ve said this time and again - EVs are not a zero sum game. Which means we’re going to have more than one major winner in the space. Right now, Tesla is that winner because of their first-mover advantage. What makes me excited about Rivian is their relationships with enterprise customers - a code Tesla hasn’t been able to crack just yet. This sector is on fire and expect a full breakdown in the coming days.
This Oregon-based company founded to “develop a platform for expense information collection, management and payments for businesses and individual users” plans to raise $234 million this week through an IPO.
The company generated $80.4 million of revenue in 2019, $88.1 million in 2020, and is on track to rake in $130.1 million of revenue this year - with roughly 76% gross margins. Sales and marketing as a percent of revenue has fallen from 34% in 2019 to only 10.7% in 2021 - incredible.
Expensify also seems to be printing cash - with their cash flow from operations increasing 4X during the last 2 years.
Yes, this company has competitors - including Bento, Brex, Divvy, Coupa, and others.. but they’re also operating in a massive total address market with several secular growth trend tailwinds (gig economy, creator economy, etc). They’ve got my attention.
Key Earnings Announcements:
This week is an important week to pay attention to the market - as a lot of our portfolio companies are reporting their quarterly financial results.
November 8: PayPal (PYPL), Roblox (RBLX), The Trade Desk (TTD)
November 9: Coinbase Global (COIN), Nio (NIO), DoorDash (DASH), Palantir (PLTR), Upstart (UPST)
November 10: Disney (DIS), Affirm (AFRM), SoFi Technologies (SOFI), OpenDoor Technologies (OPEN), Marqeta (MQ)
November 11: Coupang (CPNG)
November 12: Bakkt (BKKT), Warby Parker (WRBY)
Especially excited to see Coinbase, Opendoor, and Marqeta report their earnings - companies who have been top stock ideas for about a month now. Oh - and of course Upstart!
Hoping to also get more clarity on the Affirm Debit+ Card during their earnings release on Wednesday.
Nancy Pelosi’s favorite company is hosting their annual technology conference this week.
November 9: Jensen Huang, CEO of Nvidia (NVDA), presents at the Nvidia GPU Technology Conference (GTC)
Nvidia’s GTC is packed with breakthroughs in AI, graphics, accelerated computing, data center, and more. Anyone can choose from 500+ sessions that deep dive into a wide range of industry use cases - from self-driving cars to medical research - and explore the most transformative technologies of our time.
More topics include:
AI Strategy for Business Leaders
IoT, 5G, & Edge
Major Economic Updates:
The all-important monthly inflation update is coming soon.
November 8: US Inflation Rate (annualized) for October 2021 from the Bureau of Labor Statistics
November 12: US Job Openings (JOLTs) Report for September 2021 from the Bureau of Labor Statistics
All eyes on inflation - hopefully to be cooling down soon. This will certainly impact the market’s performance this week.
Big thank you to Lucky Karthik for mentioning that the DraftKings (DKNG) earnings was left out of the Week in Review post published last night - totally forgot to include them.
So, here they are!
Earnings: -$0.82 per share vs. -$0.55 expected
Revenue: $213 million, an increase of +60% YoY
Monthly Unique Payers (MUP): 1.34 million, an increase of +31% YoY
Average Revenue per MUP: $47, an increase of +38% YoY
Guidance: FY21 revenue to come in around $1.26 billion and FY22 revenue to come in around $1.8 billion - equating to a +43% growth rate YoY
Press Release Callout
“Fundamental user acquisition, retention and engagement trends in the third quarter were outstanding across all of our online gaming products. We delivered $213 million in third quarter revenue which represents a 60% year-over-year increase.
Our key performance indicators also continued to grow, as Monthly Unique Payers increased by 31% and Average Revenue Per Monthly Unique Payer grew by 38%. We are increasing the midpoint of our 2021 revenue guidance and introducing 2022 revenue guidance which points to another year of strong growth in existing states for DraftKings.”
+60% revenue growth for the quarter - fueled by higher retention rates and engagement. This was all during a stretch of bad luck with NFL games throughout the quarter - stating revenue could have been $40 million higher. Sure, their stock traded down on release, but Wall Street sees past the volatility - several banks have all raised their revenue expectations and price targets on the company ($68 / share on average, with some even calling for $105 / share). This company remains on my ‘favorites’ list.
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.