$U $BIRD $OLO Earnings: What I'm Looking For
Unity Software Inc. ($U) - Reporting earnings this afternoon (5/10)

Here's what I'm looking for:

  • Currently trading at 15.2 trailing sales and 8.7 forward sales which sounds expensive. However, It's slightly on the cheap side on my Price-to-Sales-to-Growth ratio at 0.20 (accurately priced is 0.25). Will they maintain 40% revenue growth and keep the PSG in the range it's at?
  • Net profit margin (I guess it's more accurate to call it a net loss margin) has gotten worse each of the past 2 years. FCF worsened as well. Curious to see what direction this goes. I would guess they'll both get worse before better.
  • Operate revenue growth >50%.
  • DBNER >140%
  • Customers generating $100,000 revenue >1,100.

Current position:
Total cost basis: 27th highest in my portfolio
Time since first buy: 0.32 years
Number of purchases since: 1
Annualized return: (90.7%)
Annualized $SPY return: (30.0%)
Annualized $QQQ return: (45.1%)

Allbirds, Inc. ($BIRD) - Reporting earnings this afternoon (5/10)
This is a company that I'm partially blinded by my love of the product. Allbirds are incredible shoes. I own 5 pairs. I still think $LULU should by them. Seems like a match made in heaven.

Here's what I'm looking for:

  • Really need to see strong revenue growth. 2021 grew at 26.5%. Really hoping for 30%+ in Q1.
  • Would really appreciate if management would begin providing digital vs store revenue breakdown along with shoe vs apparel and men vs women.
  • Just curious to see what management's comments on are the conference call.

Current position:
Total cost basis: 22nd highest in my portfolio
Time since first buy: 0.51 years
Number of purchases since: 2
Annualized return: (92.5%)
Annualized $SPY return: (21.6%)
Annualized $QQQ return: (38.3%)

Olo Inc. ($OLO) - Reporting earnings this afternoon (5/10)
This was my play on the food delivery trend. I hate the food delivery apps ($DASH $UBER $GRUB whatever, they all suck and are predatory to their "contractors" and the restaurants). Olo though is just SaaS for restaurants. I'm getting pummeled in my position but I remain cautiously bullish.

Here's what I'm looking for:

  • Annualized revenue growth of 67% since 2018 is nothing to sneeze at. Need to keep it up to justify their somehow still high P/S ratios. PSG is cheap on my scale though at 0.10.
  • Gross profit margins got worse in 2021. Get it back above 80%, please.
  • Active location count growth >83,000.
  • Average revenue per unit >$525.
  • NRR >120%
  • Not sure of management will provide this metric but a modules per location update would be lovely.

Current position:
Total cost basis: 12th highest in my portfolio
Time since first buy: 1.14 years
Number of purchases since: 1
Annualized return: (61.1%)
Annualized $SPY return: 2.4%
Annualized $QQQ return: (4.1%)
Regulations on short-term rentals will hurt many parts of society
When government policymakers talk about regulating short-term rentals as a way to improve housing affordability, many think about $ABNB and $EXPE (owner or Vrbo) as being the most affected by these laws, along with their hosts and customers.

But according to the Cato Institute, there are more people that are negatively impacted by these regulations. Many hosts that live in areas that don't receive any benefits from their city's tourism industry are able to earn income from travelers looking for a cheap to stay. Seniors reap more income by renting out rooms to those same people. Small businesses see more business as travelers spend more at restaurants and shops.

From SF to Washington D.C., many rely on the income from Airbnb to pay their mortgages and other bills. It's a similar situation to the many workers that rely on ridesharing and food delivery gigs through $UBER $LYFT $GRUB and $DASH to pay their bills. Without these "share economy" and "gig economy" platforms, many Americans will have to eat through their assets before they go broke.

While there are research papers that have found short-term rentals to be a driving force for the price of rent, higher rents incentivize firms to build more housing supply. However, zoning laws have prevented firms from building more housing. In fact, there is research that points out that zoning laws have contributed immensely to the rising cost of housing in the SF Bay Area.

Thoughts?
Love your last paragraph. It is quite the catch-22. While short term rentals are a primary driver of high housing costs, they are a contributing factor. Eventually, demand will dry up and the increase in housing costs will start to slow or even reverse. We are starting to see that now as mortgage rates rise. Things will eventually normalize, but I am of the opinion that regulating short terms is not needed nor is it the correct approach.
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If oil goes to $200, here's what I'm bullish & bearish on
Bearish:
$UBER $LYFT $DASH $GRUB and other gig economy transportation platforms
$AAL $UAL $DAL $LUV and other airlines
$KNX $JBHT $USX $SNDR and other trucking companies

Bullish:
$TSLA $F $GM $RIVN $LCID $FSR and other electric vehicle manufacturers
$SEDG $RUN $ENPH $TAN and other solar stocks
$XOM $CVX $OXY $PXD $COP and other oil stocks

Oil companies today have pricing power like never before. Automakers have pricing power like never before. Solar companies, they'll soon start jacking up their prices as demand for solar energy systems surges during the summer.

Meanwhile, fewer people are gonna use their vehicles to offer ridesharing services and food delivery services because already, fuel costs are eating up a majority of their earnings. Also, airlines will have to balance between finding ways to attract passengers to fly with them (through lower prices) and not deterring them through higher prices (since they want to pass down the higher fuel costs to customers).

Trucking companies have it the worst. The industry has been commoditized as all truckers are essentially independent contractors with their own trucks and they do their own deliveries. The smaller companies are more vulnerable to high oil prices. Meanwhile, the larger trucking companies will have to bump pay for truckers to justify them making deliveries amid the high fuel costs.

These times are unprecedented. We need to drill more oil. Bring back the fracking revolution. The OPEC cartel members have an incentive to produce a lot more oil than their current production target.

Reactivating nuclear power plants takes months or even a few years. Quadrupling down on renewables requires heavy investment and a lot more raw materials, which we are currently struggling to import. Plus, transitioning to a green energy economy takes a very long time. The green energy solutions we currently have aren't dependable. The wind doesn't blow all the time. The sun doesn't shine all the time and it doesn't shine every day and every month. Geothermal plants and hydroelectric plants can only be built in certain places. Biomass may seem viable but we don't want to cause food prices to rise because we're now removing food supply for the sake of energy production.
I don't argue that higher oil prices are good for ALL EV makers, but I can't rationalize the valuations of $RIVN $LCID $FSR and others. While I do believe $TSLA is wildly undervalued (watch their EPS growth this year), too much unearned credit has been given to others trying to follow in tesla's footsteps. These new players have a long way to go before justifying their current valuations, let alone any future growth.
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The normalization of side hustles is concerning
Throughout history, innovations in government and in other fields have all helped man increase their output within the same number of hours that they work.

At the beginning of time, when we had ancient empires and throughout the Medieval Ages, the lower class folks had to work every day for a set amount of time. Then once democracy and more innovation came in, people would work a job and they would live comfortably.

I find that after the Great Recession, the amount of progress we've made in terms of improving the standard of living for a person while requiring less work from them has turned opposite.

The rise of $DASH $UBER $GRUB and $LYFT were meant as a model for encouraging workers to be able to set their own hours and work whenever they want. However, all I've seen it do is provide many people a way to help pay the bills outside of their 9-5s.

When California was looking to pass AB5, which would've forced these gig economy platforms to classify the workers that worked 35 hours or more each week as employees, there was a ton of uproar against the bill.

Many of the people protesting against the bill were people that would do food delivery or conduct rideshare services outside of work. Those people would often talk about how without those gig economy platforms, they wouldn't be able to live a decent life because their high-earning job isn't enough to pay for the basic things.

Because this type of living standard seems normal, many on social media start normalizing side hustles and carry weird looks whenever people are able to get by without a side hustle. Some of those hustle or wealth gurus would be like "a side business is the new job security" or "if you don't have a side hustle, then you're NGMI" and blah blah blah.

While I wish that this wasn't the case with the rest of the world, unfortunately, that's the case. Employers can use RPA software and boost the productivity of their employees, but unless they choose to start raising wages at or above inflation, I'm not sure if there really is an alternative for most people. Many are already living below their means and are still not getting by.

In the meantime, gig economy platforms can rest assured that as long as these conditions persist for the middle and lower class, they won't have to worry about recruiting labor because there are plenty of people willing to provide rides and deliver food. But once things do improve economically, I'm not sure how these gig economy platforms will be able to provide good service with fewer workers.
Reasons to buy the dip on $DASH
  1. Its acquisition of Wolt allows it to capitalize on the international growth of food delivery, grocery delivery, and other forms of local delivery
  2. They've been free cash flow positive since Q1 2021 and I believe they can keep up the performance
  3. In the long run, local delivery will become a bigger thing
  4. DashPass is gaining momentum, which means more recurring revenue for the company
  5. Having employees do food delivery will help them understand the service better and use this newfound knowledge to provide better service than their competitors $UBER $GRUB and more

At the same time, I acknowledge that revenue growth has decelerated since the pandemic and that the stock may still be overvalued. That's why $0.02 on DoorDash shares.

Side note: I'm surprised that they're now trading below their IPO price despite the Fed choosing to keep interest rates low.
Can't get behind these businesses, seem like a race to the bottom. What is your rebuttal to that over the medium term?
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Eric Pelnik's avatar
$266.8m follower assets
Earnings this week
Which ones are you most excited about?

Monday, February 1st
$NTDOY Nintendo
$TMO Thermo Fisher Scientific

Tuesday, February 2nd
$AMZN Amazon
$GOOG Alphabet
$PFE Pfizer
$AMGN Amgen
$UPS United Parcel Service
$EA Electronic Arts
$CMG Chipotle
$RACE Ferrari
$BABA Alibaba
$MTCH Match Group
$FEYE FireEye

Wednesday, February 3rd
$SPOT Spotify
$EBAY eBay
$PYPL PayPal
$QCOM Qualcomm
$GRUB GrubHub
$ABBV AbbVie
$RCL Royal Caribbean Cruises

Thursday, February 4th
$SNAP Snap
$GILD Gilead Sciences
$ATVI Activision Blizzard
$UL Unilever
$ICE IntercontinentalExchange Group
$PTON Peloton
$PINS Pinterest
$WYNN Wynn Resorts
$U Unity Software
$MRK Merck

Friday, February 5th
$AON Aon
$EL Estee Lauder
$LAZ Lazard

Sources: Business Insider, Google Finance, and Yahoo Finance
MrBeast & Influencers Launch Restaurants
MrBeast, one of world’s most popular YouTuber and influencer, is partnering with 300 cloud kitchens nationwide to launch a “restaurant”.

Overnight the MrBeast Burger app has reached #1 on the free AppStore chart.

MrBeast is partnering with Virtual Dining Concepts to create MrBeast Burger. Virtual Dining Concepts is a company working to create digital restaurant brands with easy menus that can be replicated across kitchens nationally.

Other digital brands that Virtual Dining Concepts has created and celebrities they have partnered with include:

  • Mariah’s Cookies (Mariah Carey)
  • Tyga’s Chicken Bites
  • Pauly D’s Italian Subs

Virtual Dining is also trying to create virtual brands w/out celebrity partners in popular food categories such as pizza, burgers, sub sandwiches, fried chicken, and more. Orders for these ghost kitchens are fulfilled with popular food delivery services such as UberEats, GrubHub, DoorDash, etc.

VDC is co-founded by a father son team of Robert and Robbie Earl. Robert Earl is the former CEO of Hard Rock Cafe and the founder/current chairman of Planet Hollywood. Robbie Earl is responsible for talent partnerships and marketing of the virtual restaurant concepts.

It is interesting to see a crossover between popular creators and ghost kitchens. I believe the ability for popular creators to drive consumer demand is much bigger than most people give them credit for.

post mediapost media
MrBeast & Influencers Launch Restaurants
MrBeast, one of world’s most popular YouTuber and influencer, is partnering with 300 cloud kitchens nationwide to launch a “restaurant”.

Overnight the MrBeast Burger app has reached #1 on the free AppStore chart.

MrBeast is partnering with Virtual Dining Concepts to create MrBeast Burger. Virtual Dining Concepts is a company working to create digital restaurant brands with easy menus that can be replicated across kitchens nationally.

Other digital brands that Virtual Dining Concepts has created and celebrities they have partnered with include:

  • Mariah’s Cookies (Mariah Carey)
  • Tyga’s Chicken Bites
  • Pauly D’s Italian Subs

Virtual Dining is also trying to create virtual brands w/out celebrity partners in popular food categories such as pizza, burgers, sub sandwiches, fried chicken, and more. Orders for these ghost kitchens are fulfilled with popular food delivery services such as UberEats, GrubHub, DoorDash, etc.

VDC is co-founded by a father son team of Robert and Robbie Earl. Robert Earl is the former CEO of Hard Rock Cafe and the founder/current chairman of Planet Hollywood. Robbie Earl is responsible for talent partnerships and marketing of the virtual restaurant concepts.

It is interesting to see a crossover between popular creators and ghost kitchens. I believe the ability for popular creators to drive consumer demand is much bigger than most people give them credit for.

post mediapost media
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