Palo Alto stock sees relief rally
Palo Alto Networks Inc (NYSE:PANW) stock is the week’s early mover, with a strong relief rally following Friday’s oddly timed earnings release – Friday after the bell.
The market was spooked by Pal Alto’s scheduling with the stock selling off through last week in fearful anticipation that a Friday after market close report and conference call meant bad news was on its way.
Investors will be left scratching their heads over what inspired the anomalous late diary entry, nonetheless, it appears the results themselves were somewhat ordinary.
Palo Alto reported earnings of $1.44 per share, up from $0.01 a year ago and topping expectations of $1.28, on revenue of $1.95 billion, up 26% and just shy of expectations of $1.96 billion.
In relief, the Silicon Valley stock is today set to start the week up US$25.67 or 12.24% with premarket deals priced at US$235.36.
Tesla stock motors higher on broker upgrade
Tesla stock is set to start the week on the front foot, helped by an upgrade by stockbroker Baird, which expects the upcoming Cybertruck roll-out and recent price cuts to support a more positive commercial narrative through the second half.
With a price target of US$300 and an ‘outperform’ rating, Baird is tipping Elon Musk’s EV pioneer to deliver nearly 40% upside to Friday’s closing price of around US$215.50.
This morning Tesla stock is up US$6.49 or 3.01% in premarket deals, trading at US$221.92 per share.
XPeng put recovery mode as BoA upgrades
Xpeng Inc (NYSE:XPEV) stock is in recovery mode, helped by an analyst upgrade, following last week’s downbeat earnings report – which on Thursday showed a wider-than-expected net loss for its second quarter.
The Chinese Tesla challenger reported a net loss of 2.8 billion yuan (US$390 million), up from 2.7 billion yuan in the same period last year, and, its biggest quarterly loss to date. Revenue was marked at 5.06 billion yuan (US$693.7 million) which was in line with market expectations, albeit it still represented a 31% decline year-on-year.
It pointed to inventory write-downs, increased sales promotions, and the expiration of Chinese EV subsidies as negative factors on its business.
Bank of America has, however, upgraded the stock to ‘Buy’ from ‘Neutral’ pitching a price target some 21% above current levels, at US$22.00, driven by what’s described as a more positive outlook.
In New York, XPeng stock is up 89 cents or 5.9% in premarket trade, changing hands at US$15.87 per share.
NAPCO stock plummets after financial report errors
It is looking like a horror show for investors in Amityville-headquartered NAPCO Security Technologies as its stock fell 32% in Monday’s premarket deals after warning late on Friday that it had identified errors in past financial statements.
As a result, it had overstated its financial metrics for the first three quarters of fiscal 2023, the company said.
NAPCO, which makes security and fire alarms, more specifically told the market that its inventories were overstated and the cost of goods sold was understated.
Now, it expects to confirm 1Q net income of US$2.9 mllion (down from US$6.4 million), 2Q net income of US$3.7 million (down from US$8.4 million) and 3Q net income of US$9.5mln (from US$10.8 million).
Looking into the fourth quarter, NAPCO said it expects US$44.7 million of sales to drive net income between US$10 million and US$11 million.
In New York, Napco stock was down US$12.94 or 33.69% changing hands at US$25.47.
A turkey in favour of Christmas?
Looking at the Nano Dimensions stock price alone, it is hard to tell whether investors are buying into management’s defence or whether they’re glad to hear a turkey arguing in favour of Christmas.
Nano, a manufacturer in the 3D printing sector, boasted 47% organic growth for its third quarter and highlighted improving margins – albeit whilst reporting negative earnings.
At the same time, chief executive Yoav Stern sought to defend the company against the disruption caused by activist shareholder Murchison, which Nano says has shown “no strategic plan or vision’ and, could drive a resignation of the board. Stern ‘warned’ that the actions of Murchison threaten a potential liquidation event, at US$4.00 per share (as cash holdings are returned to shareholders).
He added that: “most (retail shareholders) have cost-basis which is much higher than that (US$4.00), and they will be deprived of the opportunity to reach value which is much more than $4.00 per share.”
In New York, Nano stock today rallied around 3% in premarket deals to trade at US$2.95 – inviting investors to make of that what they will …
Nikola stock drops on convertible bond launch
Nikola dropped more than 13% in Monday’s early deals after the EV firm revealed a US$325 million bond deal that threatens an ‘overhang’ in stock as well as future dilution as debt is swapped for equity. It announced that it will sell the convertible bonds through a direct offering, and, the funding would come in tranches. The initial tranche is for US$124.5 million of principal. The bonds will carry interest at 5%.
Earthstone Energy stock jumps as it agrees to be bought by Permian Resources
Earthstone Energy stock jumped after news of its premium-priced, US$4.5 billion takeover by US shale peer Permian Resources.
The paper deal, pitched at US$18.64 per Earthstone share, aims to create a new ‘premier Delaware basin independent E&P company’ producing around 300,000 barrels oil equivalent per day. It promises to unlock US$175 million of synergies, and, is forecast to see the combined firm improve free cash flow by some 30% over the next two years.
In New York, Earthston stock is up US$1.46 or 9% changing hands at US$17.69 per share. Permian stock was down 3.4% trading at US$12.45 in premarket deals.