04:20pm ET 07/06/2022
USANA Health Sciences Shares Plunge On Q2 Preliminary Results, FY22 Guidance Cut
- USANA Health Sciences, Inc. (NYSE:USNA) shares slid in the post-market session after it reported preliminary second-quarter results and updated its FY22 outlook.
- USANA anticipates Q2 net sales will be ~$265 million (compared to $337 million in 2Q21). It expects earnings per share of ~$1.05 (compared to $1.87 in 2Q21).
- “Our sales performance during the second quarter was below expectations, as COVID-related lockdowns, restrictions, and other disruptions continued in mainland China and other markets,” commented Kevin Guest, Chief Executive Officer and Chairman of the Board
- “As a result of this and the continued uncertainty surrounding the operating environment going forward, we anticipate softer sales and customer counts in the second half of the year,” Guest added.
- FY22 Outlook: USANA expects net sales of $1.015 billion- $1.065 billion (prior guidance $1.1 billion – $1.2 billion) vs. consensus of $1.13 billion.
- The company expects EPS of $3.85 – $4.45 (prior guidance $5.00 – $5.70), vs. a consensus of $5.27.
- “As a result of our first-half performance and outlook for the remainder of the year, we now anticipate net sales between $1.015-$1.065 billion and diluted EPS between $3.85-$4.45.”
- “Additionally, inflationary pressures have persisted across several areas of our business, and we are continuing to work with our various stakeholders to manage operating expenses accordingly. Despite current challenges, USANA remains very profitable and expects to generate strong cash flow in the fiscal year 2022,” commented Doug Hekking, Chief Financial Officer.
- Price Action: USNA shares are trading lower by 9.67% at $69.11 during the post-market session on Wednesday.
Virgin Galactic Shares Surge On Partnership With Boeing's Subsidiary To Build New Motherships
- Virgin Galactic Holdings Inc (NYSE:SPCE) has inked an agreement with Aurora Flight Sciences, Boeing Co's (NYSE:BA) subsidiary, to partner in designing and manufacturing its next-generation motherships.
- The mothership is the air launch carrier aircraft in Virgin Galactic's space flight system that carries the spaceship to its release altitude of ~50,000 feet.
- Virgin Galactic has been working with Aurora for several months to develop design specifications. The two-vehicle contract enables Aurora to immediately begin the development of the vehicles, each designed to fly up to 200 launches per year.
- "Our next generation motherships are integral to scaling our operations. They will be faster to produce, easier to maintain and will allow us to fly substantially more missions each year," commented Michael Colglazier, Virgin Galactic Chief Executive Officer.
- Aurora plans to manufacture the aircraft at its Columbus, Mississippi, and Bridgeport, West Virginia facilities.
- The first new mothership is expected to enter service in 2025.
- Price Action: SPCE shares are trading higher by 4.34% at $6.73 during the post-market session on Wednesday, and BA closed lower by 1.01% at $136.31.
- Photo via Wikimedia Commons
03:35pm ET 07/06/2022
Babylon Shares Gain On Plans To Accelerate Path To Profitability
- Babylon Holdings Ltd (NYSE:BBLN) is soaring in the post-market session after it announced plans to accelerate its path to profitability through revenue and cost efficiencies in response to changing market conditions.
- These efficiencies will be implemented in 3Q22, with the projected financial benefit beginning in 4Q22, and are expected to generate savings of up to $100 million per year.
- Babylon raised its FY 2022 Adjusted EBITDA outlook from $(295) million to $(270) million or less, with a monthly December 2022 Adjusted EBITDA of $(18) million or less.
- Babylon reiterated its revenue expectation of $1.0 billion or more for FY22.
- Price Action: BBLN shares are trading higher by 2.97% at $1.04 during the post-market session on Wednesday.
02:28pm ET 07/06/2022
Why Mercer Shares Are Surging Today
- Credit Suisse analyst Andrew M. Kuske upgraded Mercer International Inc. (NASDAQ:MERC) to Outperform from Neutral and raised the price target to $19 (an upside of 36%) from $18.50.
- The analyst believes Mercer faces many positives ranging from commodity prices (pulp, lumber, and power) to favorable FX rates and a rather attractive valuation.
- Kuske states that on a near-term basis, there are some concerns about the impact of a fire at the Stendal Pulp Mill and the impact of a potential economic recession.
- The analyst mentions that the recent downward movement in MERC’s stock provides an interesting opportunity for potential performance.
- Kuske believes that MERC’s various new business opportunities (like mass timber) are clearly interesting – albeit rather small at this stage in time.
- Price Action: MERC shares are trading higher by 12.75% at $13.97 on the last check Wednesday.
- Photo Via Company
Why RingCentral Shares Are Trading Lower Today
- Needham analyst Ryan Koontz downgraded RingCentral, Inc (NYSE:RNG) from Buy to Hold.
- His recent fieldwork indicates the company's enterprise growth could continue to slow to the point where 2023 estimates now appear at risk.
- Since 4Q21, he worried that a softening pipeline could impact RNG's enterprise revenue growth and limit the magnitude of revenue beats if new strategic partner sales did not quickly gain momentum.
- It has become clear that Microsoft Corp (NASDAQ:MSFT) Teams' enterprise footprint up-sell to voice represents an "increasing headwind" to RingCentral's growth.
- His recent research indicates that new Teams' sell-in dialing plan opportunities now reach below $5 per month per seat.
- Therefore, he lowered his 2023 estimates for revenue growth from 24% to 22% and EPS from $2.48 to $2.29 and downgraded the stock.
- Price Action: RNG shares traded lower by 9.82% at $55.31 on the last check Wednesday.
Drugmakers, Health Authorities Discarding Several Million COVID-19 Vaccine Doses: Report
- Wall Street Journal reported that governments, drugmakers, and vaccination sites are discarding several unused COVID-19 vaccine doses amid declining demand.
- Packaging in multiuse vials containing from five to 20 doses has also been partly responsible for the wastage.
- The vials generally must be used within about 12 hours of opening or the remaining doses discarded.
- Moderna Inc (NASDAQ:MRNA) recently discarded about 30 million doses. Pharmacies and clinics had to dispose of unused doses from multi-dose vials from Moderna and Pfizer Inc (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX) due to the short shelf life.
- Related: US Government Calls For Additional Doses Of Pfizer/BioNTech COVID-19 Vaccine.
- German health officials disposed of about 3.9 million COVID-19 vaccine doses in a federal central warehouse which expired at the end of June.
- According to the government health department, Canada has disposed of 1.2 million expired doses of Moderna’s vaccine. It is expected to discard around 13.6 million expired doses of AstraZeneca plc’s (NASDAQ:AZN) shot.
- In the U.S., about 90.6 million COVID-19 doses have been wasted, of the more than 760 million doses delivered since late 2020, according to the Centers for Disease Control and Prevention.
- Photo by Johaehn from Pixabay
02:09pm ET 07/06/2022
Vista Outdoor Acquires Fox Racing: Read What's The Advantage
- Vista Outdoor Inc (NYSE:VSTO) has agreed to acquire California-based Fox Racing, a performance motocross, mountain bike, and lifestyle gear provider, for $540 million.
- There is also potential for an additional $50 million earnout based on Fox Racing's financial performance.
- Vista Outdoor expects the deal to be immediately accretive to earnings, excluding transaction costs, transition costs, and inventory step-up.
- For the calendar year 2022, Fox Racing's full-year net sales and adjusted EBITDA are expected to be approximately $350 million and $55 million, respectively.
- Vista Outdoor expects to finance this acquisition through a combination of a $600 million asset-based revolving credit facility, which will replace Vista Outdoor's existing asset-based revolving credit facility, and a $350 million secured term loan facility. It held $22.6 million in cash and equivalents as of March 31, 2022.
- Jeffrey McGuane, CEO of Fox Racing, will continue to lead the company following the closing of the acquisition.
- Vista Outdoor expects to close the transaction in the second fiscal quarter of FY23.
- Price Action: VSTO shares are trading lower by 8.50% at $27.01 on the last check Wednesday.
02:08pm ET 07/06/2022
Touchlight Inks Patent License Agreement With Pfizer
- Touchlight, a biotechnology company pioneering enzymatic DNA production, announced a non-exclusive patent license agreement with Pfizer Inc (NYSE:PFE).
- The pharma giant has inked a non-exclusive license agreement with Touchlight to utilize its enzymatic "doggybone DNA" (dbDNA) in the manufacturing process for mRNA vaccines, therapeutics, and gene therapies.
- Under the deal, Touchlight will receive an upfront payment, plus clinical and commercial milestone payments and royalties upon potential commercialization.
- Specific financial details were not disclosed.
- Touchlight's patented dbDNA technology is "uniquely positioned" for the rapid manufacture of DNA for vaccines and therapeutics, the company says.
- The platform is a minimal, lineal, covalently closed structure that eliminates bacterial sequences, Touchlight adds. According to Touchlight, this enables "unprecedented" speed and scale in manufacturing.
- Price Action: PFE shares are up 1.70% at $52.52 during the market session on the last check Wednesday.
AstraZeneca's COVID-19 Treatment Allowed In China's Southern City: Reuters
- AstraZeneca Plc's (NASDAQ:AZN) COVID-19 antibody cocktail has been cleared for use in a medical tourism zone in China's southern province of Hainan, Reuters reported citing local media.
- The report mentioned that China allows early use of new medical products in the special zone in Qionghai city due to several preferential policies granted to the area to promote medical services to visitors.
- Related: Oxford Biomedica Inks New Three-Year Deal To Make AstraZeneca's COVID-19 Vaccine.
- Hainan Daily reported that a shipment worth 21.98 million yuan ($3.28 million) of AstraZeneca's Evusheld had completed procedures at local customs as special imports.
- "We hope that Evusheld becomes available in more countries as soon as possible," an AstraZeneca spokesperson said, without providing details on any further plan for the medicine in China.
- Novartis AG's (NYSE:NVS) breast cancer drug Piqray and Gilead Sciences Inc's (NASDAQ:GILD) fungal infection medicine AmBisome are also available in Hainan's Boao Lecheng International Medical Tourism Pilot Zone but await national clearance.
- Price Action: AZN shares are up 1.32% at $66.38 during the market session on the last check Wednesday.
Weibo Looks To Raise Up To $1.2B Via Syndicated Debt Offering
- Weibo Corp (NASDAQ:WB) pursued up to $1.2 billion in syndicated financings inspired by other Chinese social media platforms, Bloomberg reports.
- Weibo looks to raise $900 million with an option to increase up to $300 million.
- The offering proceeds will serve general corporate purposes and refinancing, including capital expenditures.
- Citigroup and Credit Suisse Group coordinated the syndication and scheduled a bank presentation on July 11.
- Chinese companies from the communications sector raised a record $11.3 billion of loans offshore in 2021, prompted by Bytedance and search engine Baidu, Inc (NASDAQ:BIDU).
- Weibo held $3.3 billion in cash and equivalents and generated $248.6 million in operating cash flow as of March 31. It held $1.5 billion in unsecured senior notes.
- Price Action: WB shares traded lower by 3.33% at $23.21 on the last check Wednesday.
Needham Sees Netflix's Ad Driven Tier Dependent On Measurement; Looks Forward To CTV Measurement Conference Next Week
- Needham analyst Laura Martin continues to consider it vital for Netflix, Inc (NASDAQ:NFLX) to launch its ad-driven streaming tier, add Sports and News content, offer bundling with other products, and possibly acquire an extensive film and TV content library.
- She saw every major streaming competitor doing one or more of these things, which puts NFLX at a competitive disadvantage.
- Further, Martin believed streaming had become a linear TV bundle substitute.
- She saw the lowest customer churn achieved by having all content genres, deep libraries, and a free ad-driven tier to attract new customers and upsell them over time.
- Martin saw the value of NFLX's new ad-driven tier as dependent on measurement.
- Needham will host a virtual Measurement Conference on July 12-14.
- Confirmed speakers that will discuss the "Future of Measurement" and project winners and losers in the connected TV (CTV) and linear TV advertising measurement space include Innovid Corp (NYSE:CTV), Viant Technology Inc (NASDAQ:DSP), comScore, Inc (NASDAQ:SCOR), VIZIO Holding Corp (NYSE:VZIO), LiveRamp Holdings, Inc (NYSE:RAMP).
- Additionally, the IAB (Internet Advertising Bureau), Taboola.com Ltd (NASDAQ:TBLA), Stagwell Inc (NASDAQ:STGW), and Perion Network Ltd (NASDAQ:PERI) will speak about the Future of Measurement in the post-cookies world and discuss economic risks and potential upside value drivers after cookie IDs sunset in 2023.
- Martin reiterated a Hold on Netflix.
- Price Action: NFLX shares traded lower by 0.40% at $185.16 on the last check Wednesday.
- Photo via Wikimedia Commons
Needham Sees Magnite As Primary Beneficiary Of Netflix, Disney+ Adding Ad-Driven Streaming Tiers
- Needham analyst Laura Martin maintained Magnite, Inc (NASDAQ:MGNI) with a Buy and cut the price target from $25 to $13 (51% upside).
- Macro upside value drivers include an economic recovery and rapidly growing digital and programmatic ad revenues in 2022.
- Martin listed the reasons behind MGNI being her favorite.
- Firstly, MGNI included video and CTV having the highest pay-outs to MGNI, and the SpotX acquisition supercharges CTV and video revenue growth.
- Secondly, MGNI got paid based on a percentage of total ad spending, and experts projected rapid U.S. programmatic ad growth in 2022.
- Thirdly, COVID-19 accelerated consumers' digital viewing and ad units into closer time frames, thereby increasing MGNI's TAM.
- She believed the upside value drivers suggest consensus estimates were too low for 2022.
- Martin cut the 2Q22 and FY22 revenue and earnings estimates for MGNI to account for soft ad spending in the EU beginning in 1Q22, which has spilled over into the U.S. in 2Q22.
- Additionally, she heard from other AdTech companies that digital ad spending weakened as 2Q22 progressed.
- For now, she maintained her 3Q22 and 4Q22 estimates.
- She believed connected TV (CTV) ad growth was a critical exception to ad softness during 2Q22.
- She saw CTV represent over 40% of MGNI's total net revs in 2Q22 and will grow at 30%-40% Y/Y.
- Looking out to FY22 and FY23, she believed MGNI is the primary beneficiary of Netflix, Inc (NASDAQ:NFLX) and Walt Disney Co (NYSE:DIS) Disney+ adding ad-driven streaming tiers.
- MGNI has more representation of premium publishers than any other AdTech competitor, making it the most likely choice, Martin added.
- Price Action: MGNI shares traded lower by 9.43% at $8.59 on the last check Wednesday.
01:16pm ET 07/06/2022
Dominion Energy Advances Drone Operations For Power Facility Inspections
- The Federal Aviation Administration (FAA) has granted Dominion Energy Inc (NYSE:D) a pivotal approval to fly Skydio drones beyond visual line of sight (BVLOS) to inspect power generation facilities in seven states.
- Dominion obtained the waiver in partnership with Skydio’s regulatory team under the FAA BEYOND program.
- Dominion Energy may conduct scaled BVLOS operations to inspect more than 40 power facilities in Connecticut, Georgia, Indiana, North Carolina, South Carolina, Virginia, and West Virginia.
- “A 20-minute inspection by a battery-powered drone will increase safety for our colleagues, who will no longer need to rappel down the side of a structure, as well as save time during inspection-related preparations,” stated Nate Robie, Dominion Energy’s manager of unmanned systems program.
- Price Action: D shares are trading higher by 1.13% at $80.33 on the last check Wednesday.
Here's How Susquehanna Views Union Pacific & CSX
- Susquehanna analyst Bascome Majors downgraded Union Pacific Corp (NYSE:UNP) to Neutral from Positive and lowered the price target to $235 (an upside of 13%) from $310.
- The analyst also lowered the price target for CSX Corp (NASDAQ:CSX) to $36 (an upside of 25%) from $45 while maintaining the Positive rating for the shares.
- Majors stated that the target change is part of a broader note, re-valuing rails lower because volume recovery is at risk from macro downside or capacity constraints.
- Furthermore, the analyst noted the cost of restoring service might surprise to the upside. Majors also lowered his U.S. and Canadian rail target multiples.
- Price Action: UNP shares are trading lower by 0.98% at $208.12 and CSX higher by 0.61% at $28.68 on the last check Wednesday.
12:40pm ET 07/06/2022
Small Cap Consumer Research Reiterates Its Bullish Stance On Build-A-Bear Workshop
- Small Cap Consumer Research LLC analyst Eric M. Beder reiterated a Buy rating with the price target of $33.00 on Build-A-Bear Workshop Inc (NYSE:BBW).
- The analyst thinks the company’s prospects are driven by a continued focus on events for children by their parents, a material ramp-up in inventory, and the return of normalcy in Europe.
- Beder sees no near-term slowdowns and describes BBW business as recession-resistant.
- Also, shifting the stores to more tourist-driven locations and away from lower-performing malls is expected to offer an upside.
- The analyst thinks the company has much potential to capitalize on the streaming ecosystem.
- Price Action: BBW shares are trading lower by 5.66% at $15.09 on the last check Wednesday.