Earnings reports from Booking Holdings, Match Group, DoorDash, MercadoLibre, Uber Technologies, Lyft, and Celsius
Successful long-term investing requires you to ignore the day-to-day noise. But it's important to check in on the stocks you own when they report quarterly earnings.
Picking up where I left off yesterday, let's take a look at the earnings reports of seven companies I've covered previously...
1) Travel giant Booking Holdings (BKNG) reported solid earnings on Tuesday. Revenues and adjusted net income rose 8% year over year ("YOY"), both beating expectations.
As a result, the stock popped 6.6% on Wednesday. And it's up 12% since I wrote favorably about Booking in my April 15 e-mail, when I concluded:
Booking's financials are spectacular in every way and show no signs of weakening...
[The] stock is trading at 16.9 times this year's estimates and 14.5 times next year's.
That's a very attractive price, both in relation to the stock's history and the market. The S&P 500 Index trades at an average of just above 20 times. Booking is a far above-average company trading at a below-average multiple.
The stock is up 15.6% since my July 21 e-mail, when I shared two pitches for the company from the Value Investing Seminar in Italy. As I wrote then (and still believe), "I think the stock is even more interesting today."
This is a great business that my team and I at Stansberry's Investment Advisory are very familiar with. We recommended the stock more than seven years ago in the February 2019 issue. Subscribers can access it here.
We'll continue to follow Booking. If there's a pullback and we decide to recommend it, as always, subscribers will be the first to know.
Subscribers have access to our model portfolio of open recommendations, our full archive of issues, and our best new ideas each month. If you haven't already subscribed, you can do so by clicking right here.
2) I pitched dating-site operator Match Group (MTCH) at the Stansberry Research Conference & Alliance Meeting in Las Vegas on October 23, 2024. (I shared the presentation in my November 8, 2024 e-mail and have written about the company many times.)
Match reported earnings on Tuesday, and the stock dropped 7.5% on Wednesday.
Revenue was down 1% (down 2% currency adjusted) and slightly missed expectations. Users declined by 6%, offset by a 6% rise in revenue per user, which is consistent with Match's strategy of reducing bots and unprofitable users.
Meanwhile, earnings per share ("EPS"), earnings before interest, taxes, depreciation, and amortization ("EBITDA"), and guidance for the next quarter beat expectations.
The stock is roughly flat in the nearly two years since I pitched it. If the company ever grows again, the stock will take off.
But in the meantime, it's an incredible cash cow. Free cash flow ("FCF") hit an all-time high last quarter of $352.5 million, up 52.7%. And the company bought back $202.9 million of stock, reducing its share count by 5% YOY.
3) In my May 12 e-mail, I shared a presentation on food-delivery service DoorDash (DASH) made by three Columbia Business School students, which was awarded first prize at the 19th annual Pershing Square Challenge on April 30.
I took a first look at the stock on May 13 and concluded that, while it's an excellent idea, the valuation was too high at 60.2 times this year's earnings estimates and 35.4 times next year's. So I was going to wait for a better entry point.
It turns out I shouldn't have waited, as the stock is up 43% since then...
In the most recent quarter, DoorDash's revenue and adjusted EBITDA soared 36% and 40%, respectively – handily beating expectations.
This market-leading company is growing rapidly. But with the stock trading at 48.8 times next year's estimates, it's too richly priced for me. So I'm remaining on the sidelines.
4) Speaking of great companies with richly valued stocks...
I took a first look at Latin American Internet giant MercadoLibre (MELI) in my July 8 e-mail. And I shared the bull-bear debate on the stock on July 20, concluding:
My take is that this stock is an easy pass as a long... and as a short.
It's madness to short a stock growing this rapidly, with a market-leading position in multiple large, untapped markets, run by capable management.
But there's no way I'd pay 45.4 times earnings for a company with rising competition and declining margins that's increasingly relying on growing its finance business to drive growth.
The company reported earnings on Wednesday. Revenue soared 50% – the 30th consecutive quarter of growth above 30% and the fastest pace of growth in four years.
But net income, while ahead of expectations, fell YOY due to declining margins. And yesterday, the stock dropped 4.8% on the earnings release.
There's plenty here for both bulls and bears. But with the stock trading at 46.7 times this year's consensus analysts' estimates and 32.2 times next year's, it remains too richly priced for me.
5) I wrote favorably about ride-hailing leader Uber Technologies (UBER) in my March 2 e-mail, concluding that I like the stock and:
Uber continues to grow rapidly. And the company's operating income and FCF are exploding upward.
However, the forward [price-to-earnings] multiple on the stock is now only about 22 times – down from 30 times about a year ago.
As regular readers know, I like buying the stocks of far-above-average companies when they're trading for market-average multiples.
In the most recent quarter, Uber's revenue grew 12% (11% currency adjusted), FCF rose 13%, and adjusted EPS grew 35%.
The stock is roughly flat since I looked at it in March. It trades at 23.1 times this year's consensus analysts' estimates and 16.1 times next year's – modest multiples for a rapidly growing, market-leading global business.
6) I also like Uber's direct competitor Lyft (LYFT), which I took a first look at on February 10, 2025. The stock is up 7.8% since then.
I also shared the bull-bear debate on the stock the next day, concluding: "I'm not forced to buy it or sell it short – and the threat of autonomous vehicles worries me – so I would stay on the sidelines."
The company reported solid earnings after the close yesterday. As a result, the stock rose as much as 5.5% this morning.
Revenue grew 16%, and the company continues to produce prodigious amounts of FCF – $1.1 billion in the past year. It has used its FCF to buy back $856 million of stock, reducing the share count by a remarkable 8.7%.
The stock trades at 18.7 times next year's earnings estimates, but its enterprise value of $5.6 billion is only 5.1 times trailing-12-month FCF. That's cheap!
7) In my May 14 e-mail, I shared a presentation on energy-drink maker Celsius (CELH), which won third place at the Pershing Square Challenge. And I covered the bull-bear debate on the stock the next day, concluding: "If I were forced to go long or short, I'm not sure which side I'd take."
It was a good call, as the stock is down 18% since then. And it declined 18.5% yesterday due to weak second-quarter earnings.
Revenues rose 11% to $818 million, far below expectations of $870 million. Gross margin narrowed 3.4% (to 48.1%) on higher promotional and incentive activity. This caused adjusted EPS to decline 23% to $0.36, missing estimates of $0.42.
The stock appears cheap at 16.3 times this year's earnings estimates and 13.5 times next year's. But I don't have a lot of confidence in the company's future earnings in light of the bad miss last quarter, so I'd continue to avoid the stock.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.