Earnings Report: May 2, 2023

 Earnings Report: May 2, 2023

    Today I had 5 of my holdings report earnings. I will summarize the earnings releases and give my opinion on the companies.

Zebra Technology Corporation (ZBRA)- Zebra Technologies reported earnings before the market opened this morning. The stock saw a deep decline during the trading session and is currently trading even lower in the after hours. The company is known for optimizing workflows for other companies who use their service. The company beat on both the top and bottom line. It was the outlook that shot the stock down. The CEO left some remarks about the upcoming challenges the company is going to be facing. With the economy shrinking, it is going to be important for Zebra to hone in on retention and growth where present. The company does seem to have a little bit of a cash to debt problem with debt as the majority in that case. The outlook shows a decrease in sales by about 9-11%. The CEO said they made it over the midpoint of their outlook through some challenges, so it will be interesting to see if they can continue on with more obstacles being thrown their way. 

My thoughts: Zebra did have a decent quarter. The company is going through a lot and I expect them to go through a lot more with a turbulent economy. I am a little disappointed in the outlook that they have provided, but that is the beauty of investing. I invested into this company for the growth potential and we are in a time where that isn't prominent. I hope that they can survive through these challenges and that will be dictated by how effectively they use their cash. With persistent cash usage, the company can put itself at an advantage when the economy starts to heal and we return to prosperity. This is definitely a stock to keep an eye out for on the next quarterly report given the dull outlook they provided. Sure I am disappointed, but I will continue holding to see how the play it out. 

Lumen Technologies, Inc. (LUMN)- Lumen Technologies reported earnings after the markets closed this afternoon. The stock is moving higher in after-hours trading. The company has recently undergone some major changes to the landscape of the business. The company cut its dividend which is one of the reasons many of the investors chased this stock. This quarter didn't look to be too bad and the early outlook of the major changes seem to be going good. The CEO is seeing positive leading indicators as they execute their new game-plan they have. The Free Cash Flow looks to be concerning at a negative value, and I am interested to see how this senior notes things is working with reducing debt. Overall, the quarter results are a lot better than they have been over the last year or so. I am hoping this plan that they have works out for the better. 

My Thoughts: The quarter results look a lot better than what we have seen. This has been a total blunder of an investment. I definitely made a rookie mistake of chasing a high dividend yield. It has come back to nip me in the butt. However, I'm going to play the long game and wait this one out. I like the refurbishing plan that they have going on, but I need to see Cash increase for them to even have a chance to stay afloat. I honestly am strongly exiting my position and move on to a better investment opportunity. I think this quarterly report will keep me around until the next quarter, at least. 

Paycom Software, Inc. (PAYC)- Paycom reported earnings after the market closed this afternoon. The stock saw a nice boost, as the earnings were quite swell. The company beat on both the top and bottom line. Paycom has a platform that has HR and payroll technology. The growth in the revenue was nice at a rate of 28%. I always think the most impressive thing about this company is the recurring revenues. The had a recurring revenue rate of 98.4%, which is something that we do not see often. The CEO had some strong remarks hinting at the robust growth and the demand for their software. The outlook looks to be a little bit weaker than this quarter, but if they keep on this trend, it could be another shocker to the market and another beat. This company continues to dominate and it will be interesting to see how far they can go.

My Thoughts: I will say that I am thoroughly impressed with the performance of this company over the last quarter. The main reason that I jumped into this company was the astonishing retention rates that the company sustains. The growth that they are able to achieve is also very impressive. They are in a highly competitive market with a lot of other high quality companies. It is reassuring to see that the demand is high and that they are working on making the automation as effective as possible for customers to have easy use of the product. I am a fairly a new investor to this company, but I am more than satisfied with the performance so far, and I look forward to see all of the great things they have in store for the future.

Starbucks Corporation (SBUX)- Starbucks reported earnings after the market closed this afternoon. The stock is on a steady decline, even though the top and bottom line numbers beat estimates. Starbucks is a global company that sources and roasts arabica coffee. The earnings report looked very solid, as China has come along way and is starting to revive its economy after being shut down from COVID. This was Starbucks first quarter with Narasimhan at the helm. The company opened up a net of 464 stores and the sales saw an increase of 11%. The company is undergoing a reinvention plan, and it looks to have taken some big strides in Q2. This was one of the better quarters I have seen from Starbucks and they seem to be headed down the right path. I think the lag of the stock price is solely from the growing concern in China. I think this should be overlooked because the company is mightily improving in that geographical region and disregarding any many changes, should be back to pre-pandemic levels in a short time.

My Thoughts: Wow, what an impressive quarter from Starbucks. I can't be more thrilled with the reinvention plans execution. I was shocked to see how well they did in China, even though they still have a little ways to go with shaping it back to pre-pandemic levels. I will say, it seems like the company is starting to gain a pricing power advantage. This is evident by the growth in the sales that they attained, as well as the average ticket price increasing as well. With recession like conditions looming in the US economy and affecting people globally, it is impressive to see companies that are not exactly staples have this impressive of growth. I love what Starbucks is doing and they are continuing to do a wonderful job with the reinvention. Sales and other levels are near pre-pandemic levels. Once they get China back to normalcy, this business will thrive. I am satisfied with the company and the future that they have.

Ford Motor Company (F)- Ford reported earnings after the market closed this afternoon. The company saw a decline in after hours trading. Ford reported some solid beats on both the top and bottom line. The company has been around for decades, but recently split its business into three segments. The three units are Ford Blue (gas and hybrid vehicles), Ford Model e (breakthrough EVs), Ford Pro (Commercial). Ford is trying to stride into the EV market, along with many automakers. Ford Blue had a wonderful quarter with growth in revenues and some astonishing margins. The Model e unit did not perform as well as the company wanted. It is still in the early stages and the company is still working at optimizing that unit. The outlook looks solid, but it will be interesting to see how the company allocates its investments and how the Model e unit will turn out. Overall, the Blue and Pro units both performed above standards and hopefully will continue to be that way as the prices of new vehicles decline and the economy recovers. 

My Thoughts: Ford went from being a solid value company to being a growth company. We are seeing growth out of the Blue and Pro units, which is a solid sign for the business. The EV is the unit to question as the company keeps pouring money into the development. We just have not seen the results from it yet, as the company continues to work on it. I invested into this company before the whole EV breakthrough, but I am still satisfied with what they are doing. I have faith in the company’s ability to reinvest effectively and create a sustainable product that every consumer will want. It is just a matter of time when that will happen. I am happy to see the success of the other two units while the Model e business is being put together. I am long Ford and will be interested to see how they come along with the EVs.

Thank you for Reading.

All information is taken from the companies Earning Releases