Bespoke Baskets Update — November 2024
Q3 2024 Earnings Conference Call Recaps: Symbotic (SYM)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Symbotic’s (SYM) Q4 2024 earnings call.
Symbotic (SYM) designs and manufactures cutting-edge robotic automation for supply chain and warehouse operations. Its proprietary SymBot technology automates tasks like palletizing and inventory management, generating significant cost savings, efficiency, and scalability for its customers. SYM primarily serves large retailers, wholesalers, and e-commerce businesses, including Walmart. The company’s innovations provide insights into automation trends and labor optimization, showcasing how robotics can reshape industries. SYM closed the quarter with record system deployments, highlighted by its first international customer, Walmex, adding $400 million to its backlog, and progress on GreenBox, its multi-tenant warehouse solution in Georgia. Technological advancements, like vision-enabled robots, were emphasized as differentiators. Gross margins rebounded to 19.6% as operational efficiencies improved, and strong top-line growth will be expected going forward. On in-line EPS and stronger revenue, the stock shot 27.7% higher on 11/19…
Continue reading our Conference Call Recap for SYM by becoming a Bespoke Institutional subscriber. You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call Recap. To sign up, choose either the monthly or annual checkout link below:
Bespoke’s Morning Lineup – 11/20/24 – The Mother of All Earnings Reports
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“We survived ourselves. We were our own worst enemy.” – Jensen Huang
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
There’s a modestly positive tone in futures this morning, but the decks have been cleared to the mother of all earnings reports after the close when Nvidia (NVDA) reports. The only economic report on the calendar was MBA Mortgage Applications which showed a weekly increase of 1.7%. Asian stocks were mixed overnight with modest moves in either direction, and it’s a similar story in Europe this morning. Expect to see much larger moves in tonight’s Asian session, though, as NVDA’s results will have reverberations across the tech sector.
Walmart (WMT) may have marked the unofficial end of earnings season yesterday, but the largest company in the world goes by its own rules and reports on its own schedule. As mentioned above, NVDA will report after the close today, and with the stock accounting for more than 7% of the entire S&P 500 (most than most sectors), a lot rides on how the company reports. The company has reported an astonishing seven straight earnings triple plays which is practically unheard of for any company, but the fact that the most valuable company in the world has so consistently exceeded expectations across the board is unbelievable.
The chart below shows the performance of Nvidia (NVDA) since the release of ChatGPT nearly two years ago, and the red dots indicate each of the seven earnings reports (all triple plays) during that time. While the stock has had several positive reactions to those seven earnings reports (it rallied between 9% and 24% the day after four of those reports) not every one of those triple plays was a launching point for the stock. Following three of those reports, the stock was flat to down on the day after in reaction, including a 6.4% following its triple play in August. As “blowing the doors off” relative to expectations has become more common, investors have come to expect it, which only raises the bar. The best thing NVDA may have going for it heading into this afternoon’s report is that the stock has gone nowhere in the last five months.
For investors positioned for a broadening of the rally, a positive reaction by the market to NVDA earnings may be the last thing they want. The chart below shows the performance of NVDA versus the Russell 2000 ETF (IWM) during 2024. Since the end of May, there has been a tendency for the Russell 2000 to perform poorly when NVDA has surged as it sucks all the capital from the pool, and vice versa.
As the market awaits NVDA earnings, this morning’s major report has been Target (TGT) which reported a reverse triple play with weaker-than-expected EPS, revenues, and lower guidance. While analysts have consistently underestimated NVDA earnings, they have been overly optimistic regarding TGT results. As shown in the snapshot below, before this morning’s report, its last report was the only one in the previous ten where the company didn’t miss EPS forecasts, revenue forecasts, or lower guidance. By missing all three this morning, the stock is indicated to gap down over 18%, which would be the second largest downside gap in reaction to earnings since at least 2001.
As shown in the graphic above, even with the relatively poor results recently, shares of TGT haven’t necessarily reacted negatively to the news. However, even in a bull market where the S&P 500 has surged, the stock has performed negatively, and there are only three reports in the last eight where the stock was higher going into one earnings report than it was heading into the prior report.
The Closer – Tariffs, Office Weakness, Construction – 11/19/24
Log-in here if you’re a member with access to the Closer.
Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we start with commentary on tariffs (page 1). Next, we check in on the performance of office loans and CMBS (page 2) in addition to reviewing today’s residential construction figures (page 3). We finish with a rundown on Canadian inflation (page 4).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Daily Sector Snapshot — 11/19/24
Health Care Weightloss
We discussed the hard fall in Health Care sector stocks in today’s Chart of the Day. While the drop has resulted in extreme underperformance versus the S&P 500, it has also resulted in the sector’s weight in the S&P 500 falling dramatically. At the end of 2022, the sector’s weight rose almost to 16%. At that time, it was the second-largest sector behind Tech, and relative to its history, it was one of the largest weights on record. The past couple of years have seen a dramatic weight loss that is now teetering on moving to a single-digit weighting. At 10.36%, the Health Care sector currently has its lowest weight since September 2000. Additionally, the 1.67 percentage point loss in weight over the past three months is one of the biggest declines on record.
Back at the recent highs in late 2022, Health Care was the second largest sector in the S&P 500. Today, it is only the fourth largest sector which is the lowest ranking it has had in more than a decade (2012). Of course, that smaller weight means that the Health Care sector won’t have the same pull on the broader market that has been typical over the past couple of decades.
Q3 2024 Earnings Conference Call Recaps: Cava (CAVA)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Cava’s (CAVA) Q3 2024 earnings call.
Cava (CAVA) is a fast-casual restaurant chain known for its Mediterranean cuisine, meeting in the middle of taste, speed, and health. With 352 locations across the US and expanding rapidly, CAVA serves a diverse customer base seeking a convenient and healthier dining experience. This quarter, CAVA delivered revenue growth of 39% YoY with same-restaurant sales rising 18.1%, driven by 12.9% traffic growth. Key highlights include the launch of garlic ranch pita chips, driving 12 million social media impressions, and the successful nationwide rollout of a revamped loyalty program, boosting loyalty sales by 200 basis points. Expansion into South Florida and the Midwest in 2025, alongside new restaurants already exceeding expectations, provides confidence for management in its growth potential. AI was also mentioned as a tool being deployed in its kitchens to make operations more efficient. For the third consecutive quarter, CAVA beat estimates and the stock finished trading on 11/13 up 1.6% after opening 16% higher but erasing most of the gains intraday…
Continue reading our Conference Call Recap for CAVA by becoming a Bespoke Institutional subscriber. You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call Recap. To sign up, choose either the monthly or annual checkout link below:
Bespoke Stock Scores — 11/19/24
Can NVIDIA (NVDA) Live Up to Lofty Expectations?
This quarter’s “earnings season” unofficially comes to an end this week now that Walmart (WMT) has reported its numbers and NVIDIA (NVDA) is on tap to report tomorrow after the close. After NVDA, the number of earnings reports per day will slow to a trickle for the next six weeks before the next earnings season begins in early January.
As the largest company in the world, NVIDIA’s quarterly earnings release is now inspiring watch parties at bars in New York City! Needless to say, investors are on edge from both a micro and macro perspective about NVDA’s report tomorrow. NVDA is THE company driving the AI Boom, so any hints of caution or a slowdown will likely not be taken kindly by the market.
As shown in the chart from our website below, NVDA is heading into its report tomorrow down only slightly from all-time highs that were hit last week.
Our Earnings Explorer tool on our website lets users see historical sales trends for individual stocks like NVDA along with how sales came in compared to estimates each quarter. The chart for quarterly NVDA sales is one of the more remarkable ones you’ll ever see. Check out the absolute explosion in sales for NVDA beginning in 2023 (top chart) along with the massive beats versus expectations (lower chart). (You can find these charts for the stocks you follow most closely with a Bespoke Institutional membership.)
NVIDIA (NVDA) shares are up nearly 1,000% since the end of October 2022 just before ChatGPT was released.
Revenue growth has been astronomical for NVDA over the last couple of years, but with a market cap of more than $3.5 trillion and expected full-year sales of $127 billion in 2025, the company trades with an estimated 2025 price-to-sales ratio of 27.9x. That is not cheap!
And while revenue growth is expected to jump more than 100% YoY in 2025, estimates drop to 49% in 2026, 19.5% in 2027, ~18% in 2029 and 2029, and then 10% in 2030 and 2031.
Based on NVIDIA’s current market cap, below is a look at its forward price-to-sales multiple going out to 2031 based on estimates. At NVDA’s current valuation, it’s trading at 18.8x 2026 sales, 15.7x 2027 sales, and even 9.2x 2031 sales.
It’s undeniable: NVDA has a lot to live up to in the coming years.
Getting back to the here and now, investors and traders are focused on how NVDA will react in the immediate aftermath of its earnings report tomorrow night.
Bespoke Institutional subscribers have access to a treasure trove of historical earnings data that shows how stocks have typically traded in reaction to past reports. Below is a snapshot of NVDA’s historical earnings data pulled directly from our website. What you’ll notice with NVDA is just how often it reports an earnings triple play by beating EPS estimates, beating sales estimates, and raising guidance. Typically, an earnings triple play results in an upside share-price reaction, but as we saw last quarter with NVDA when a triple play becomes the norm, sometimes it’s not enough. Back in August following NVDA’s seventh earnings triple play in a row, the stock ended up falling more than 6% on the day.
Looking ahead to tomorrow, it’s hard to envision NVDA shares performing well if it doesn’t manage to report yet another triple play.
Want to gain access to our Earnings Explorer and other tools that can help you monitor the stocks you care about most and find new opportunities? Sign up for a Bespoke Institutional subscription to gain access immediately! Bespoke Institutional gets you access to EVERYTHING we publish on the research side and ALL of our interactive tools.
If you’d like to sign up, here are two options…
You can 1) start a two-week trial to test it out and then continue with a monthly membership after the trial (or switch to a different plan). Or you can 2) sign up for our annual plan and get $1,000 off the first-year rate, which is a 50% discount on regular pricing! Choose either option below to get signed up now!
Trial link:
or…
$1000 Off One Year of Institutional
Below is a quick snapshot of what’s included with a Bespoke Institutional membership versus Bespoke Premium (one level down):
Looking for a fun (and practical) holiday gift for a friend, colleague, or loved one who’s into the stock market? Our “Markets University” sweatshirts are the perfect choice! Click either image below or visit our store at bespokethread.com to order one today!
Q3 2024 Earnings Conference Call Recaps: Instacart (CART)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Instacart‘s (CART) Q3 2024 earnings call.
Instacart (CART) is an online grocery marketplace that connects consumers with a wide range of retailers for same-day delivery and pickup services. The company serves millions of customers across North America and is expanding into adjacent categories like restaurant delivery. What sets CART apart is its deep technological integrations with retail partners, including loyalty programs, in-store innovations like smart carts (Caper Carts, AI-powered that use sensors, cameras, and built-in scales that display purchases and allow checkout directly on the cart to bypass checkout lines), and its growing retail media business. Instacart provides valuable insights into consumer spending habits and grocery e-commerce. In Q3, CART reported 11% YoY growth in gross transaction value (GTV). Technological advancements, including an upgrade to Storefront Pro and expanded Caper Cart deployments, were highlights this quarter. Affordability initiatives like Super Saver delivery and Kroger flyer integration drove an 18% increase in order savings. The advertising business also gained some momentum as emerging brands now span 220 banners. Guidance for Q4 reflects 8-10% GTV growth amid seasonal pressures and tough comps. The stock fell 11% on 11/13 in reaction but had more than doubled YTD leading up to the report…
Continue reading our Conference Call Recap for CART by becoming a Bespoke Institutional subscriber. You can sign up for Bespoke Institutional now and receive a 14-day trial to read our newest Conference Call Recap. To sign up, choose either the monthly or annual checkout link below: