What Cramer is watching Friday — Investors are over companies that beat the Street but lose money

Published Fri, May 6 20229:42 AM EDTUpdated Fri, May 6 20229:48 AM EDT

What I am looking at May 6, 2022 The end of "beat and raise" losses. That's what Bill.com (BILL) and HubSpot (HUBS) have said. The change in the investor sentiment is this: If you are not profitable and you beat and raise, it doesn't mean anything anymore. New way to value these stocks is to go back to January 3, 2020, then go to November when the Fed pivoted, and then go to now. Watch market-cap size to see if back near that January 2020 level. Most of these names are still too big to be bought by another company. Shares of HubSpot, a cloud-based marketing and sales platform, might have gone up on this quarter but it got crushed. $15 billion market cap. RBC cuts price target to $750 from $925, but the stock is at $341. HUBS reported first-quarter EPS of 58 cents, estimate was 47 cents. Management says 2022 earnings per share in $2.40 to $2.42 range, versus consensus $2.41. Stock aas at $850 when Fed changed view in November. Cloud-based payments platform Bill.com reported a loss of 8 cents when the Street was looking for loss of 16 cents. Very expensive product. Yet Piper Sandler cuts price target to $300 from $380 — but currently at $120. Management forecast loss of 13-to-14 cents next quarter versus consensus loss of 15 cents. Company expects full-year loss of 34-to-35 cents, yet Street was looking for 46 cent loss. Shares traded at $337 in November. Payrolls accelerated by 428,000 in April, more than expected. Unemployment rate of 3.6%, slightly higher than 3.5% estimate. Average hourly earnings grew only 0.3%. Year over year, earnings up 5.5%. Labor force participation was 62.2%, tied for lowest of year. Why did the Fed take rate hike of 75 basis points off the table? E-commerce definitive slowdown according to Shopify (SHOP), BUT it is back to trend line before the pandemic — not below it — so you have to go back to that period to see where the stocks might be. Go back to January 3, 2020, for price. SHOP was at $352 … now $405. Is it a better company now? Yes. Are rates higher? Yes. Mizuho slashes price target to $400 from $800. Missed across the board and spending like crazy to stay number two after Amazon (AMZN). Stock crushed—innovation on sale. Ark Invest CEO Cathie Wood bought ... Zillow Group (ZG) CEO Rich Barton: "While it's clear people still have a strong interest in moving, total consumer transaction value growth trends are softening and experts have disparate views of what will happen next." Boeing (BA) moving its headquarters to Arlington, Va., from Chicago. More craziness from this Club holding. Datadog (DDOG) price target lowered to $195 from $220 at Citi. Sector-wide multiple compression. Another cloud based monitoring and analytics company … $35 billion market cap. Was at $196, now at $111. Block (SQ) people liked quarterly report, despite financial services company missing expectations on the top and bottom lines. Why? Gross profit $1.3 billion, up 34% year over year or 55% on two-year CAGR. Cash App posted highest quarterly inflows. More than 10 million accounts bought bitcoin since introduced. 13,000 Square merchants adopting and processing with App. DoorDash (DASH) had more than 400 million total orders in the first quarter ... Gross order value of $12.4 billion, up 25%. Still early in $2.7 trillion market opportunity. Revenue up 35% to $1.46 billion, adjusted EBITDA of $54 million. Papa John's (PZZA) price target lowered to $112 from $120 at Wedbush, says "no worse than expected." Well, isn't that something. DraftKings (DKNG) raises 2022 revenue guidance to $1.93 billion to $2.03 billion. EBITDA loss of $760 to $840 billion expected, had seen loss of $912 billion. Gap net loss $468 million and had been looking for $500 million. Shares now trade at $15, had been $63 in fall of 2021. FuboTV (FUBO) downgraded to sell from hold at JPMorgan. Stock at $3, but at $20 in December ... Laura Martin from Needham had a $60 target at one point; lowered to $5 from $15 to $5, keeping a buy rating, says hard to get past fact that FUBO's content costs are more than subscriber revenue was a $34 in November. Odd: RBC Capital downgraded Ball (BLL) to hold from buy, on multiple compression, suspension of Russia business, inflation cost pressure and Brazil problems. Corteva (CTVA) downgraded to a hold from a buy at JPMorgan. Big win but worried about euro and Turkish lira ... trading at 12 times multiple for 2023. ContextLogic (WISH) only a 6 cent loss, analysts were looking for loss of 14 cents. Vimeo (VMEO): Piper Sandler downgrades to neutral. Results in line but stock gets killed. Cathie Wood bought Coinbase (COIN) into bitcoin crash. Bloomberg says new marketplace for non-fungible tokens (NFTs) is now officially open but recorded fewer than 110 transactions. Bitcoin was at $10,000 before pandemic. Will it surrender all of it? It is not an inflation hedge! Lucid (LCID) quarterly results were mostly in-line on revenue and operating loss, but reminds investors that the company is not fully funded and will likely rely on new outside capital to continue to support the business. Morgan Stanley's Adam Jonas forecasts 9,900 deliveries for fiscal year 2022. But company looking for 12,000 to 14,000, only delivered 360. (Jim Cramer's Charitable Trust is long AMZN, BA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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People walk along Wall Street near the New York Stock Exchange on March 08, 2022 in New York City.

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What I am looking at May 6, 2022

The end of "beat and raise" losses. That's what Bill.com (BILL) and HubSpot (HUBS) have said. The change in the investor sentiment is this: If you are not profitable and you beat and raise, it doesn't mean anything anymore. New way to value these stocks is to go back to January 3, 2020, then go to November when the Fed pivoted, and then go to now. Watch market-cap size to see if back near that January 2020 level. Most of these names are still too big to be bought by another company.
Shares of HubSpot, a cloud-based marketing and sales platform, might have gone up on this quarter but it got crushed. $15 billion market cap. RBC cuts price target to $750 from $925, but the stock is at $341. HUBS reported first-quarter EPS of 58 cents, estimate was 47 cents. Management says 2022 earnings per share in $2.40 to $2.42 range, versus consensus $2.41. Stock aas at $850 when Fed changed view in November.
Cloud-based payments platform Bill.com reported a loss of 8 cents when the Street was looking for loss of 16 cents. Very expensive product. Yet Piper Sandler cuts price target to $300 from $380 — but currently at $120. Management forecast loss of 13-to-14 cents next quarter versus consensus loss of 15 cents. Company expects full-year loss of 34-to-35 cents, yet Street was looking for 46 cent loss. Shares traded at $337 in November.