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$1.5m follower assets
$BARK $PATH $CHWY $CRWD Earnings: What I'm Looking For Next Week
BARK, Inc. ($BARK) - Reporting earnings Tuesday (5/31) afternoon

I generally try not to sell until at least 3 years of holding to give me thesis a chance to play out but it's on the rocks early here. Here's what I'm looking for:

  • Looking to see a re-acceleration of DTC revenue since it's the higher gross margin segment.
  • Active subs growth obviously but another decrease in monthly churn even more so.
  • Rein in CAC and bring up the LTV:CAC.
  • Average Order Value has been a rare bright spot this fiscal year for Bark. Would love to see them keep it going.
  • Management updates on supply chain constraints.

Current position:
Total cost basis: 14th highest in my portfolio
Time since first buy: 1.43 years
Number of purchases since initial position: 6
Annualized return: (69.8%)
Annualized $SPY return: 0.4%
Annualized $QQQ return: (10.6%)
Chewy, Inc. ($CHWY) - Reporting earnings Wednesday (6/1) afternoon

Here's what I'm looking for:

  • Start the fiscal year right! Give me a revenue beat and continue the trend of improving all the margins. More importantly, keep increasing FCF.
  • I would enjoy breaking the Other revenue segment into more granular reporting, such as Chewy Pharmacy, the telehealth segment, the pet insurance partnership with Trupanion, etc. along with additional KPIs for those.
  • Autoship provide a week moat, but a moat nonetheless. It has increased 4 straight quarters. Would love to see that streak continue.
  • Stop me if you heard this for Bark but active customer growth obviously needs to re-accelerate. However, net sales per active customer has been a shining start, growing every quarter for two years, including a significant acceleration in their past fiscal year. That has to stay strong.

Current position:
Total cost basis: 27th highest in my portfolio
Time since first buy: 2.07 years
Number of purchases since initial position: 6
Annualized return: (40.1%)
Annualized $SPY return: 12.0%
Annualized $QQQ return: 6.4

UiPath Inc. ($PATH) - Reporting earnings Wednesday (6/1) afternoon

One of my highest conviction holdings. I've taken a pummeling and don't care. I'm as bullish as ever for the long-term. I expect 2022 to remain difficult as they transition to a subscription business. Here's what I'm looking for:

  • Subscription revenue. Show me progress.
  • Keep growing the ARR and RPO >50% YoY.
  • This market demands FCF so maybe provide some?
  • Can't recall if they update DBNRR and DBGRR quarterly. If so, I'll be anxious to see if they have remained >140% and >98%, respectively. If they don't report them quarterly, I'll be giving customers with an ARR >$100,000 and >$1M an even closer look.

Current position:
Total cost basis: 5th highest in my portfolio
Time since first buy: 1.10 years
Number of purchases since initial position: 4
Annualized return: (79.6%)
Annualized $SPY return: (5.9%)
Annualized $QQQ return: (17.4%)

CrowdStrike Holdings, Inc. ($CRWD) - Reporting earnings Thursday (6/2) afternoon

Here's what I'm looking for:

  • I know it was off a smaller revenue amount but I'd love to see R&D as a percent of revenue get back over 30% this year. It was 25.6% in their FY22 and hasn't been over 30% since their FY19.
  • Keep the operating margin going in the right direction. Can we get a positive Q by the end of this coming FY and a positive year in FY24?
  • Very curious to see revenue in the EMEA region. I wonder what headwinds they may have faced. On that note, a reiteration of their full year revenue guidance would be great, and an increase would be massive.

Current position:
Total cost basis: 31st highest in my portfolio
Time since first buy: 1.47 years
Number of purchases since initial position: 4
Annualized return: (5.5%)
Annualized $SPY return: 4.5%
Annualized $QQQ return: (4.5%)
That $PATH subscription revenue is so important! I believe they will make a perfect transition in the revenue streams.
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90% Investor
My profile claims I am 90% Investor / 10% Trader.
My experience in the 10% is relatively limited but I have enjoyed the ups and downs while documenting lessons learned and understanding the variety of strategies. Thus far, my posts have been devoted to this 10% because it is new & exciting for me... but what about the other 90%??

On this side of things, it's pretty quiet.
Before going majority cash, I bought solid/established/quality names ($MSFT, $JNJ, $TGT, $T) or index/thematic ETFs ($QQQM, $SPY, $BUG) and forgot about them. Boring, right?
I look forward to when the market bottoms and starts to turn the corner to put 90% of my money back to work.

With that said, I would like to briefly touch on 2 high conviction holdings that have survived my move to cash.

1) $ZIM (sea-freight shipping/logistics company)

With all the supply chain challenges, shipping rates have soared and ZIM has been a FCF monster. They IPO'd in early 2021 and have been rising ever since. The company recently held their Q1 results announcing a 10% increase in full-year 2022 EBITDA guidance and a $2.85/share dividend. Perhaps most importantly, the company believes this environment will maintain throughout 2022 (and may extend into 2023):

Fairly volatile price action which makes it appealing for buying/selling shares or options (only CSP's or CC's for me!).

2) $ASTS (Satellite 5G direct to smart phones)

This one is more speculative.
In a nutshell: they are launching a large satellite array (named Bluewalker 3 - BW3) soon ("this summer") that will test 5G service from space directly to existing smartphone hardware. I believe the recent price action (current price ~$7.00) is partly due to the expectation that a date was to be announced at their Q1 earnings call (it wasn't).

Following successful BW3 launch and testing, a series of "BlueBird" satellites are planned that will provide service to actual customers.

I may be wrong on this but, for the 1st time, I noticed new names (Scotia Bank & Morgan Stanley) on the Q1 call. Looking into it, Scotia Bank actually released a May 9th report titled "Space Mobile: If Successful, BW3 Could Disrupt Global Tower Industry Within 20weeks". Deutsche Bank is one of the first banks to cover the company and recently adjusted their price target to $31.00 (down from $32.00). I expect Morgan Stanley to initiate coverage in the near future.

Additionally, the company seems to be making good progress on all fronts:
  • Backed by American Tower & Rakuten
  • Allegedly on track to complete their "Site 2" facility this year (designed to manufacture 6 "BlueBird" satellites per month)
  • Granted experimental license by the FCC for BW3 launch / testing
  • MOU's with strategic telecom providers ($TEO, $T, $LILA, $TEF, $AMX, $TIGO, $VOD, $MTN.JO, $ORAN)

Keep Treading!
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Bear Rally?
7 weeks of brutal selling in $QQQ $SPY

Maybe a powerful counter-bear rally that lasts for a 1-2 months? And the fade then fades again for Midterms? Sounds like it.
Steve Matt's avatar
$1.5m follower assets
$SNOW $ADSK $ZS Earnings: What I'm Looking For
Snowflake Inc. ($SNOW) - Reporting earnings Wednesday (5/25) afternoon

Here's what I'm looking for:

  • Continue improving gross and operating margins.
  • Keep the free cash flow coming.
  • Can total revenue and product revenue continue to grow >100% YoY?
  • International revenue has gone from 7% of total revenue in fiscal year 2019 (ending 1/31/2019) to 20% in this recent fiscal year. It's been over 20% for 3 consecutive quarters. Can they speed up the growth outside the US?
  • NRR, customer count, and customers generating >$1M in revenue.
  • My favorite metric: RPOs. Show me the demand for business is growing faster than your revenue.

Current position:
Total cost basis: 12th highest in my portfolio
Time since first buy: 1.63 years
Number of purchases since initial position: 4
Annualized return: (45.5%)
Annualized $SPY return: 5.2%
Annualized $QQQ return: (-3.9%)
Autodesk, Inc. ($ADSK) - Reporting earnings Wednesday (5/26) afternoon
Here's what I'm looking for:
  • Gross margins >90% consecutively for 3 years (11 quarters). Maintain that, please.
  • Operating margin dipped a smidge in fiscal year 2022 (ending 1/31/2022). Blip or a trend?
  • Recurring revenue percent >96.5%.

  • Just like Snowflake, show me a really strong RPO.
  • As this market requires, copious amounts of free cash flow.

Current position:
Total cost basis: 34th highest in my portfolio
Time since first buy: 0.36 years
Number of purchases since initial position: 1
Annualized return: (59.1%)
Annualized $SPY return: (34.5%)
Annualized $QQQ return: (50.0%)
Zscaler, Inc. ($ZS) - Reporting earnings Wednesday (5/26) afternoon
Here's what I'm looking for:
  • They dropped full year guidance after Q2 by 2.3%. It's too much to ask for a guidance raise but maintaining 1,047.5MM at the midpoint would be nice.
  • Again, the market demands FCF and ZS has been providing that. I will be watching to see what they produce this Q and on a TTM basis.
  • Calculated billings.
  • I don't remember if Zscaler updates customer information and DBNRR quarterly or annually. I'll be looking to see those metrics if they do quarterly.

Current position:
Total cost basis: 39th highest in my portfolio
Time since first buy: 1.46 years
Number of purchases since initial position: 4
Annualized return: (55.2%)
Annualized $SPY return: (3.4%)
Annualized $QQQ return: (14.2%)
$SPY MEGA Bearish Potential
Here is my incredibly bearish $SPY chart that does have some weight for sure. This has potential to be a megaphone pattern with a false breakout and if that's the case, we could see sub $200 over the next few years.
If this played out - this would provide a generational buying opportunity as it would be a bullish megaphone pattern.
WARNING: This is my incredibly bearish potential. This is not my base case for the market, but it is something that could happen based on TA.

Please ignore the x axis as I have NO idea how fast or slow it could play out. I drew it based on the structure - not the time.

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CW20: Treading Screen
The results of my Custom Screen are in for this week and they are... disappointing haha.
Only 4 names were produced ($DOW $WEC $NRG & $XEL) and, frankly, I don't like any of these setups for this coming week.

All show weak uptrends above EMA/SMA's with no confirmation yet and, most likely, this rise is part of the "chop" expected in Stage 3. Not touching.

Since I don't need to do any DD/FA on these names, I'll use the time to analyze this strategy.

#1: Total output
The total number of leads from this screen has been decreasing recently. This makes sense given the current state of the market (fewer Stage 2 setups). For example, retail stocks ($WMT, $DG, etc.) were part of the output of previous screens showing a weak push for Stage 2 (similar to above) that obviously did not hold.

I've also included $SPY 's weekly closing price on the chart below to see if there was any correlation with screen output (R2 = 0.39).

#2: Potential Return (backtesting)
This is more difficult to accomplish because the screen is only meant to be a starting point (NOT a hands-off algo type strategy). For me to put money at risk, I need to:
  • See a strong setup/entry opportunity
  • Like the company fundamentals
  • Scan for any red flags in the news
  • Assess the sector and macro impacts

But, a wise woman once told me: "Ain't nobody got time for that!"
(Miss the reference? Here ya go!)

Instead, I did a quick check on all outputted tickers and assumed an entry price as the previous week's CLOSE and calculated the average % return using the HIGH of the next week. The assumption of selling at the absolute top is an idealized scenario but can be easily reproduced with your favorite index ETF. Using $SPY for comparison yields:

Across all weeks, the global average return (and stdev) shown above is:
SPY: +1.55% (1.71%)
TreadingStocks: +2.58% (1.18%)

Keep in mind, the TreadingStocks return is the average return of all tickers that the screen produced; this includes so-so setups, companies with bad fundamentals, risky sectors, etc... For a given week, the averages above result from a distribution of the individual ticker performance and this distribution is important to understand and displayed below via a boxplot.

You can see, week 8 in particular had the potential to be feast or famine based on my subjective selections:
Select correct tickers (possible ~20% gain)
Select wrong tickers (possible ~10% loss).... for me, that's a scary bet to make week-to-week

The good news: most other weeks show a more narrow distribution and the vast majority of tickers for a given week had the potential to finish >0%.

Overall, I am pleasantly surprised with the results. Hopefully, with my input, I can help and not hurt these returns over the general market.
Keep Treading!
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I like that when your screen doesn't produce any name you like, you don't force action, and instead spend the extra time analyzing the strategy.
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What to watch for the week of 5/23/22.
Get prepared to take on the market this week by checking out my watchlist. It details some potential catalysts for the week beginning May 23rd. Hopefully this graphic can help you navigate your trading decisions. Feel free to save it for reference, share it in your trade groups and repost it on your social media page. Also be sure to follow me. Good luck everyone! $ZM $SPY $NVDA $QQQ $BIG $DG $BABA $M $BBY
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