What You Need to Know for Feb 13th

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The Week Ahead Of Us 🔍

Welcome back!

Inflation surprised to the upside yesterday, plus earnings season has been jampacked. Let’s get into it.

Earnings Corner 📜 

Trending Up 📈 

Super Micro Computer (SMCI) reported preliminary earnings that fell short of estimates, with revenue of $5.6B-$5.7B up 54% y/y (vs. $5.5B-$6.1B forecast) and EPS of $0.58-$0.60. The incomplete numbers come as the AI darling’s accounting practices have faced strict scrutiny over the last 7 months. Yet, mgmt. expects to be able to submit audited financials by Nasdaq’s Feb. 25 deadline in order to avoid delisting from the exchange. SMCI’s FY 2025 guidance projects revenue of $23.5B-$25B (vs. $26B-$30B previously), but CEO Charles Liang also predicted 2026 sales of $40B (vs. $29.2B estimated). The stock was up 2.4% on the news, and 24% over the last week

Robinhood (HOOD) reported earnings that crushed estimates, with revenue of $1.01B up 114% y/y (vs. $951.8MM expected) and EPS of $1.04 (vs. $0.52 expected). Transaction-based revenue was up 236% to $672MM in the flurry of market activity following President Trump’s election. Half these gains were from crypto trading, where revenues saw a 700% spike. The stock was up 15.3%

CVS Health (CVS) reported earnings that beat estimates. CVS’s pharmacy and consumer wellness, health services, and insurance segments all outperformed expectations, even as insurance costs spiked due to more Medical Advantage patients seeking expensive procedures. Mgmt. plans to counter this challenge by shrinking the Medicare-affiliated program’s membership. Pharmacy results were a bright spot, with revenue growing 7% y/y. CVS issued a FY 2025 outlook in line with expectations. The stock was up 15%

Cisco (CSCO) reported earnings that beat estimates, with revenue of $13.99B up 9% y/y (vs. $13.87B expected) and EPS of $0.94 (vs. $0.91 expected). The growth comes after a full year of revenue declines, with mgmt. noting that they saw $350MM+ in AI infrastructure orders in Q2. Cisco’s FY 2025 outlook projects EPS of $3.68-$3.74 (vs. $3.66 expected) and revenue of $56B-$56.5B (vs. $55.99B expected). The stock was up 6.6%

McDonald’s (MCD) reported mixed results, with earnings in line with expectations, but revenue falling short. October’s fatal E. coli outbreak hurt the top line, and comparable sales for U.S. restaurants was down 1.4% y/y. Across all locations, however, same store sales improved 0.4%. The stock was up 4.5%

Coca-Cola (KO) reported earnings that beat estimates. Revenues were up 6% y/y as global demand for the company’s soft drinks rose. The stock was up 6.3%

DoorDash (DASH) reported earnings that beat estimates, with 25% revenue growth and a first full year of GAAP profitability. The delivery company processed 685MM orders, totaling $21.3B (vs. $20.9B projected). For Q1 mgmt. guided for gross orders of $22.8B (vs. $22.4B expected). The stock was up 4%

Trending Down 📉 

Reddit (RDDT) reported earnings that beat estimates, with revenue of $428MM up 71% y/y (vs. $405MM expected) and EPS of $0.36 (vs. $0.25 expected). However, despite 39% y/y growth, the global daily active uniques (DAUq) average of 101.7MM fell short of projections of 103.1MM. Mgmt. attributed the fluctuation to changes in Google’s search algorithm, and noted that traffic has since recovered. The stock was down 13.3%

Lyft (LYFT) reported earnings that missed estimates, with revenue of $1.55B up 27% y/y (vs. $1.54B expected) and EPS of $0.15 (vs. $0.21 expected). The ride-sharing company faces a cut-throat landscape, with the CEO calling inertia its biggest competition. Mgmt. projected gross bookings growth of 10%-14%, which is below its 3-yr mid-teens target. The stock was down 7.9%

Shopify (SHOP) reported mixed results, beating on revenue but falling short on earnings. Mgmt. projects Q1 revenues to grow in the mid-20% range, while analysts expected 24.4%. The stock was down 1.4%

Marriott International (MAR) reported earnings that beat estimates, but Q1 projections fell short of estimates. Mgmt.’s outlook calls for EPS of $2.20-$2.26 (vs. $2.35 estimated) and room growth of 4%-5% (vs. 5.23% estimated). The stock was down 4.5%

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Today’s Headlines 🍿 

• Inflation is on the rise: The market got spooked yesterday when January inflation data surprised to the upside. As a result, interest rate cut odds for September got slashed, with expectations of a rate cut pushed back into December. See below:

  • U.S. January consumer prices rose 0.5% month-over-month (est. +0.3%).

  • U.S. January consumer prices rose 3% year-over-year (est. +2.9%).

  • U.S. January core CPI rose 0.4% month-over-month (est. +0.3%).

  • U.S. January core CPI rose 3.3% year-over-year (est. +3.1%).

• Elon Musk and Sam Altman exchange jabs. Elon offered to buy a majority stake in OpenAI for $97B. Sam Altman declined, proposing to buy X for $9.4B instead. What’s amusing about Elon’s bid is that it’s a large disconnect from OpenAI’s recent pre-money valuation of $260B

• Meanwhile, President Trump has directed Elon to start layoffs. The White House has ordered agency heads to work with DOGE to “significantly reduce the size of the government” and “limit hiring to essential positions.” Additionally, Musk’s DOGE is heading to NASA for a spending review. This may or may not be a conflict with Musk’s SpaceX aspirations... In terms of other DOGE targets, reviewing the Federal Reserve, according to Musk, is on their to-do-list

• Fed Chair testified in front of Congress. After a January inflation bump, Jerome Powell said that the Fed is in no rush to lower rates. This comes as Powell is expected to endure accelerating pressure from the Trump Administration to cut rates

• BYD is partnering with DeepSeek. The Chinese electric car maker announced that it is releasing a “DiPilot” assisted driving system in its fleet. Beijing has yet to approve Tesla’s most advanced driver assistance protocol

• Ford and GM are raising tariff alarm bells. Ford CEO Jim Farley shared on Monday that tariffs would “blow a hole in the U.S. [auto] industry that we’ve never seen.” Both companies are concerned that Korean, Japanese, and European companies would be able to out-compete American ones

• Chevron announced planned layoffs for 15-20% of their workforce (6k-8k employees) by the end of 2026. This is estimated to drive $2B-$3B of cost savings

• Oaktree has raised a $16B distressed debt fund. The timing is a bit suspect, as distress has been relatively limited as of late. However, Howard Marks must be celebrating, as its the largest fund in his firm’s history and the largest of its kind ever raised

• Axel Springer has acquired 100% ownership of Morning Brew, with co-founder and CEO Austin Rief set to step down from the CEO role and into a transitory Chairman role. 2025E Revenue is estimated to hold steady at $70mm. This is a notable transition for the Gen-Z and Millennial-centric newsletter, which is promoting a 20-year vet COO to take the helm

• A big test for Marvel: This weekend, Captain America: Brave New World hits the movie theaters. In a big test for Marvel in the post Chris Evans world, reviews thus far are relatively lukewarm, with a 51% rotten tomatoes score

• Anduril is likely taking over Microsoft’s $22B U.S. army headset program. Expected to fetch a $28B valuation in its next raise, the defense tech company started by Palmer Luckey will get “oversight of production, future development of hardware and software, and delivery timelines,” pending DoD approval

• NielsenIQ is expected to target raising $1.2B+ in an IPO. The Advent and KKR backed insights company provides retailers and manufacturers with data about customers’ buying behavior to tap into growth

• Blackrock wants to be the private credit solution. The world’s largest asset management firm announced that it wants to be a key financier for private equity firms going forward

• JP Morgan employees started a petition against the 5-day return to office (Good luck with that). Workers argue that the COVID-induced hybrid model drove down costs, boosted morale, and improved employee retention. Right now, ~40% of employees follow a 3-day in office schedule

  • This was promptly followed with news that JPM is planning more layoffs…

• Goldman Sachs ended its IPO diversity pledge. Amidst mounting anti-DEI legal efforts, the bank has ended its commitment to refuse book-running for companies with all white and male boards

• Eggs are (even) harder to come by. Amidst a bird flu epidemic and millions of chicken deaths, prices are up 15% month to month and 55% YoY. Even with purchase limits, grocery shelves across the country are empty

• GLP-1’s may fight addiction. A new study found that Novo Nordisk’s Ozempic reduce alcohol cravings — heartening news given that 28 million American adults struggle with alcoholism

• Going full monty. A giant schnauzer named Monty won this year’s Westminster Kennel Club show. The win marked a victory for the “working dog” category

• Nikola nears bankruptcy filing. The truck-maker once valued at $30B (more than Ford) is close to completing its bankruptcy filing. The company hadn’t sold a single vehicle before its founder was convicted of fraud

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M&A Transactions💭 

Wall Street Prep, a financial education preparatory service, has been acquired by The Riverside Company. Eden Capital was the prior sponsor.

Grain & Protein Technologies reached a definitive agreement to acquire The FoodTech Equipment Offering Unit of Munters for $100.97M. EV/EBITDA was 4.72x and EV/Revenue was 0.55x.

Wild, operator of a personal care brand, has reached a definitive agreement to be acquired for $284.04M by Unilever (LON: ULVR).

Summit Materials, engaged in the production and sale of aggregates, cement, ready-mix concrete, etc, was acquired for $12.103B by Quikrete Holdings. EV/EBITDA was 14.85x and EV/Revenue was 3.22x. Evercore Group and Morgan Stanley advised on the sale.

SDC, operator of a full-service IT center, reached a definitive agreement to be acquired for $138.8M by Netcompany (CSE: NETC).

Playa Hotels & Resorts (NAS: PLYA), an owner, operator, and developer of all-inclusive resorts, has reached a definitive agreement to be acquired for $2.501B by Hyatt Hotels (NYS: H). EV/EBITDA was 10.89x and EV/Revenue was 2.87x. PJT Partners advised on the sale.

Kito Crosby, manufacturer of lifting and material handling products, has reached a definitive agreement to be acquired for $2.7B by Columbus McKinnon (NAS: CMCO). EV/Revenue was 2.45x. Evercore Group and Goldman Sachs advised on the sale.

Kinara, developer of low-power processors, reached a definitive agreement to be acquired for $307.0M by NXP Semiconductors (NAS: NXPI).

Fosroc International, manufacturer of high-performance chemicals, was acquired for $960.0M by Saint-Gobain (PAR: SGO). EV/EBITDA was 10.55x and EV/Revenue was 1.97x.

Berge Infraestructuras y Servicios Logisticos, provider of marine logistics services, was acquired for $517.88M by A.P. Moller Capital. The transaction values the company at $1.02B.

Argos, manufacturer of anti-drone and radio communication systems, has reached a definitive agreement to be acquired for $15.87B by Human Technology. EV/Net Income was 8765.18x and EV/Revenue was 1618.78x.

Hanwha Group agreed to acquire 58.62% of Our Home, a operator of a food company, for $598.0M.

Loungers, an operator of cafe bars and restaurants, was acquired for $437.83M by Fortress Investment Group. EV/EBITDA was 6.33x and EV/Revenue was 0.9x. Houlihan Lokey, Panmure Liberum, and Peel Hunt advised on the sale.

Heroux-Devtek, designs, developers, manufacturers, and repairs landing gear and actuation systems, was acquired for $937.5M by Platinum Equity. EV/EBITDA was 11.31x and EV/Revenue was 1.84x. Desjardins Capital Markets, National Bank Financial Markets, and Scotiabank advised on the sale.

Genex Consulting, provider of wealth planning services, was acquired for $700.0M by Summit Financial.

Feed Enzyme Alliance, provider of advanced enzyme technology, has reached a definitive agreement to be acquired for $1.55B by Novonesis (CSE: NSIS B).

SBB Serbia, provider of digital television and broadband services, was acquired for $854.64M by Emirates Telecommunications Group Company.

N Brown Group, an apparel, footwear, and homeware retailer, was acquired for $235.97M by Falcon 24 Topco. EV/EBITDA was 4.96x and EV/Revenue was 0.34x. Shore Capital Group advised on the sale.

Private Placement Transactions💭 

Olipop, the probiotics soda startup, raised a $50m Series C at a $1.85B valuation.

Eastern Edition, manufacturer of home decor products, raised $4.7B of Series A venture funding from Korea Investment Partners, BonAngels Venture Partners, and Schmidt.

Alzheon, developer of a small molecule-based drug discovery platform, raised $126.26M of Series E venture funding led by Alerce Medical Technology Partners.

Tines, developer of workflow automation platform, raised $125.0M of Series C venture funding led by Goldman Sachs Asset Management at a pre-money valuation of $1.0B.

Tabby, developer of a financial platform, raised $160.0M of Series E venture funding led by Hassana, STV, Wellington Management and Blue Pool Capital at a pre-money valuation of $3.14B.

Edward Jones, provider of investment advisory and management services, raised $133.2M of venture funding from undisclosed investors.

Alice, operator of a technology-based healthcare service, raised $149.0M of Series C venture funding led by ThornTree Capital Partners, Kaszek, Softbank Latin America Fund, Canary and Globo Ventures.

Tamara, developer of a financial platform, raised $160.0M of Series E venture funding from undisclosed investors.

Harrison.ai, developer of an AI based healthcare platform, raised $179.0M of Series C venture funding led by Horizons Ventures, and Aware Super.

Abcuro, developer of immunomodulatory therapeutics, raised $200.0M of Series C venture funding led by New Enterprise Associates.

Odds of the Day 🍒 

Kalshi traders also don’t have a favorable view on the new Captain America movie…

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Noteworthy Chart 🧭

Meme Cleanser 😆 

Finance Merch Referrals ☕️ 

Until next time!

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