An intriguing upcoming IPO is that of Trump Media & Technology Group Corp, merging with SPAC Digital World Acquisition Corp to trade under the ticker DJT on March 26, 2024.
This merger, associated with Donald Trump's social media platform Truth Social, could generate speculative interest, particularly as Trump makes another presidential run. The SPAC's value has already seen a significant increase, jumping 400% in anticipation of the merger. Given this backdrop, there's a plausible scenario where Trump's supporters might drive the stock price even higher, potentially beyond rational valuations.
A unifying factor among these companies is their cautious or underwhelming forward guidance, leading investors to recalibrate share prices. This trend suggests that the post-earnings declines were rooted in specific concerns rather than merely negative investor sentiment.
FactSet, a financial data firm, exceeded earnings forecasts but did not meet revenue growth expectations, anticipating hitting the lower end of their 5% Annual Subscription Value growth guidance. This resulted in an 8% decline in share value.
Similarly, IT consulting giant Accenture outperformed earnings predictions but slightly missed on revenue. The company also revised its revenue growth outlook downwards from 2%-5% to 1%-3%, leading to a 9% drop in its shares post-announcement.
I've noticed an increasing trend where stocks are taking beating following their earnings releases. Normally, there's been a roughly even chance of stock movements post-earnings, yet recent patterns seem to skew towards the negative.
This was particularly evident on March 21, 2024, which proved to be a challenging day for several companies.
Nike projected a modest gross margin increase of just 1.2%, falling short of analysts' expectations, and did not provide revenue growth forecasts for FY2025.
Lululemon's revenue expectations ranged between $10.7 and $10.8 billion, below the anticipated $10.9 billion.
Notably, Nike (NKE) and Lululemon (LULU), both leaders in the activewear sector, experienced significant drops of 7% and 16%, respectively, after announcing their results. Finally Despite surpassing earnings estimates, their forward-looking guidance disappointed investors.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
