This has been a very busy week so far for me, as many stocks in my portfolio or on my watchlist report earnings. I’d like to share some quick thoughts about them.
$HIMS (7% position + call options)
HIMS just missed consensus revenue estimate the first time in their history of being a public company. It missed my expectation as well. However, I don’t think the thesis has been completely broken.
- HIMS did not raise full year guidance. But they did not lower the guidance, either. Let’s don’t forget that the current guidance is already very good! If they meet the higher end guidance of $2.4 billion, that will be 62.5% YoY growth, with half a year lacking the 503B GLP-1 contribution!
- Their core revenue (excluding GLP-1) only grew 18% YoY. However, management mentioned that they were intentionally shifting their strategy, which results in decline of on-demand sexual health subscriber base. In addition, HIMS has put significant amount of ads budgets to GLP-1. If they will ramp back ad spends going forward, the core business will reaccelerate. Despite all these known headwinds, “dermatology business, the oral weight loss, the sexual health daily are all growing north of 55%.”
- HIMS is only traded at less than 6 PS ratio and a TTM PE of 51, how much more would you expect from such a company? I could have sold out some shares, but at the current price of ~$50, I decided to hold my position.
$RDDT (10.4% position + call options)
$RDDT just beat their own revenue guidance by more than 16%, the biggest beat in the past 5 public quarters!
- DAU grew 21% YoY while ARPU grew 47% YoY.
- Q3 will have 65%+ growth if they just beat guidance by a 6% (6% beat was the lowest in their history).
- Stellar results. I won’t sell any of my shares.
$HOOD (8.1% position)
Robinhood is firing on all cylinders! I will recommend everyone to read their earning call slides. Almost all of the tracked metrics have been trending positive for the last several quarters.
- Revenue grew YoY by 45% to $989 million, and Robinhood has a GAAP net margin of 39%! What a cash machine!
- Despite the stellar numbers, what impressed me the most was Robinhood velocity to innovate on new products! I used to think Robinhood was just an APP for retail stock traders, which would be a very cyclical business. However, today, Robinhood already has 9 different products that each generates $100 million or more annual revenue. It’s not only a brokerage, but also has credit cards, mortgage, and will have banking services soon. I also feel Robinhood’s tokenization of stocks (which enable 7/24 trading and access to private market) will be a game changer.
- I will add to this stock on any dip that Mr market will give.
$APP (9% position + call options)
This is probably, in my opinion, one of the most undervalued growth stocks in the market now. With 70%+ topline growth and sub-40 forward PE, what else would you expect?
- Revenue $1259M, 77% YoY growth. But the % beat on guidance was relative small this quarter at ~3.6%.
- Adjusted EBITDA margin is 81%…. Probably the largest among tech companies.
- Q3 guidance indicates a 66% YoY growth assuming a same 3.6% beat, which is a little bit weak.
- GAAP EPS has been $1.24 → $1.72 → $2.10 → $2.26 for the last 4 quarters.
- Ads manager will start to allow referrals on October 1st 2025 and will go public in the first half of 2026, so expect significant catalyst next year. “Once AXON is fully open next year, we plan to begin paid marketing to recruit new advertisers, which will drive predictable compounding growth.“
$UPST (4.7% position)
Very good results. And I have no clue why the stock was down more than 15% today. I loaded more shares on this dip.
- Total revenue up 102% YoY. Beat guidance by more than 14%.
- Raised full year guidance from $1.01B to $1.055B.
- Loan conversion rate improved to 23.9% from 15.2% just one year ago.
- The full year guidance assumed zero rate cut, so any potential rate cut before end of year will be an additional tailwind.
- After reading the most recent two earning calls, my only concern is that I suspect that Upstart’s tech is actually not advanced, which could be both good and bad - The good side is more opportunities and the bad side is regarding tech direction. I could be wrong, but, in last earning call, Upstart mentioned that they added “embedding“ to their model, which, based on my machine learning knowledge, is something very basic… And in Q2’s earning call, they highlighted that they “added neural networks to the model’s meta layers“, which again is very basic in the deep learning era. I was surprised that Upstart is still working on such basic improvements in their model after so many years’ work. In my opinion, they should start to look into utilizing LLMs to replace some of their legacy models. The management did mentioned Gen AI during earning call, but it was basically only used to enhance internal workflow.
$DCTH (~3% position, sold after earning)
They lower their full year revenue guidance from $94M ~ $98M to $93M ~ $96M. I sold all my this morning.
$TARS (2.3% position)
Revenue was $102.7 million, 151.7% YoY growth and 31% QoQ. Great execution. With a LTM PS of 6, this stock still has a lot of room to fly. Cash flow is still negative.
$ARQT (2.8% position)
Another pharmaceutical company that I think is very similar to $TARS. Revenue was $81.5 million, 166% YoY and 28% QoQ. LTM PS is ~7. Still on the path to achieve cash flow profitability.
$SNDX (2.7% position)
I believe this ticker is new to this board, but the company just delivered very good results. It is a biopharmaceutical company that focuses on rare disease (cancer therapies). They have two FDA-approved products: Revuforj (revumenib), a menin inhibitor, and Niktimvo (axatilimab), a CSF-1R blocking antibody.
- Both products are at initial commercial stage and the roll out have been successful so far. Revenue has been $7.7M → $20M → $38M for the last 3 quarters.
- The company’s market cap is ~$1.11 billion.
- $SNDX sold exclusive commercialization rights of Niktimvo in the US to a partner and will take 50% of profits (revenue - cost) from the sales of it. This profit will be logged as revenue of $SNDX in income statement. In Q2, it contributed $9M out of the $38M revenue.
$TGTX (1.6% position)
I think the results were solid. Revenue was $141M, 92% YoY and 17% QoQ. But the market may not like the miss on EPS. Share price was down almost 20% post earning. I wanted to add, but I don’t have enough cash to do so and also want to avoid too much exposure to bio / pharma companies.
$DAVE (watchlist)
DAVE has been doing really really good, with 3 consecutive quarters of acceleration on revenue growth.
- Revenue YoY has been 37.9% → 46.7% → 64%.
- Raised full year guidance to $505 million ~ $515 million, up from $460 million ~ $475 million
- The only miss was an unexpected uptick in delinquency rate (1.5% in Q1 → 2.4% in Q2), which could be the reason why the stock was down 20% today.
- I think this drop is good opportunity for me to start a small initial position.
$ALAB (watchlist)
I misunderstood $ALAB’s guidance in the past and thought this company’s growth was slowing. However, it just delivered eye-popping results! That being said, I think a LTM PS ratio of 48 is too stretched for a chip company, so I decided to stay on the sidelines for now.
$DUOL (watchlist)
This is one of the fastest growing SaaS company in the current market. Revenue of $252.3M (+41.5% Y/Y, an acceleration from 37.7% last quarter). EPS was $0.91. I plan to start a position if I can raise some cash.
These are just some over simplified thoughts as I digest all the earning reports. Any feedback will be appreciated.
Cheers!
Luffy