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Recent Articles
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Tesla’s Second Quarter Report Wasn’t Great
Jul 24, 2024
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Image: Tesla’s trailing twelve-month performance across vehicle deliveries, operating and free cash flow, as well as adjusted EBITDA have faced pressure in recent quarters.
In short, Tesla’s second quarter report wasn’t great and was weighed down by reduced vehicle selling prices, restructuring charges, higher operating expenses due to AI projects, and lower vehicle deliveries, which fell 5% on a year-over-year basis in the quarter. Tesla continues to focus on “reducing COGS per vehicle, growing (its) traditional hardware business and accelerating development of (its) AI-enabled products and services,” and all eyes remain fixated on the timing of its Robotaxi deployment as well as the pace of Cybertruck deliveries. We remain on the sidelines with respect to shares.
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Visa Continues to Expect Low Teens Earnings Per Share Growth for the Full-Year 2024
Jul 24, 2024
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Image: Visa’s asset light business model throws off a lot of free cash flow, while the firm returns cash to shareholders via buybacks and dividends.
On July 23, Visa reported mixed fiscal third quarter results with the company missing expectations on the top line and the firm’s non-GAAP earnings per share coming in-line with the consensus forecast. We’re not reading too much into the company’s mixed fiscal third quarter results and remain fans of the company’s competitive positioning and asset light business model. For the fourth quarter, diluted class A earnings per share growth is expected in the high end of low double-digit growth, while low-teens growth is expected for the full-year 2024, in-line with its prior forecast.
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Alphabet’s Free Cash Flow Faces Pressure in Second Quarter
Jul 24, 2024
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Image: Alphabet’s shares have performed well so far in 2024.
Alphabet reported solid second quarter results with strong performance across its operating segments. In the quarter, Google Cloud revenue came in better than expectations, while YouTube ads missed only slightly. Alphabet now pays a dividend, and it continues to aggressively buy back stock. The company’s free cash flow faced pressure in the quarter due to investments to drive innovation, and while this may pressure ROICs in the coming periods, we still like Alphabet as an idea in the Best Ideas Newsletter portfolio.
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Coca-Cola’s Organic Growth Surprises to the Upside
Jul 23, 2024
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Image: Coca-Cola’s shares are trading near all-time highs.
Coca-Cola reported solid second quarter results on July 23, with net revenues up 3% and organic non-GAAP revenues advancing an impressive and better-than-expected 15% thanks to a 9% increase in price/mix and 6% growth in concentrate sales. Looking to the full year 2024, Coca-Cola expects to generate organic non-GAAP revenue growth in the range of 9%-10%. For 2024, Management is targeting comparable non-GAAP earnings per share growth of 5%-6% relative to $2.69 per share in 2023, while it expects to deliver comparable currency-neutral non-GAAP earnings per share growth of 13%-15% on the year. Free cash flow is expected to be $9.2 billion for the year. Shares of Coca-Cola yield 3% at the time of this writing.
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