Top US stocks to watch: Disney, Airbnb and DoorDash

Investors are digesting earnings from eBay, Coupang, NIO, Baidu, Bumble and Palantir ahead of preparing for results from Disney, Airbnb, DoorDash and Mister Car Wash after the closing bell. Plus, there is news on Facebook, Boeing and Didi.

USA (1)

Disney

Disney releases third quarter earnings after markets close today, with markets expecting a significant improvement as its theme parks and resorts, studio productions and TV networks recover from the pandemic and its streaming service continues to add subscribers.

Disney+ is expected to have ended the quarter with around 112.3 million subscribers, up from 103.6 million on April 3. The addition of 8.7 million subscribers would match what was delivered in the second quarter but will still be far below the bumper 21 million additions it made in the first.

Meanwhile, its parks and resorts division is set to return to profit for the first time since the pandemic started. Analysts are expecting revenue of $16.76 billion and adjusted EPS of $0.55. That would compare favourably to the $11.77 billion in revenue and the loss per share of $2.61 booked the year before when results suffered due to the pandemic.

Read our full preview ahead of the Disney earnings here and view our technical analysis on the stock.

Airbnb

Airbnb will publish second quarter earnings after the closing bell today, with investors hoping it can build momentum after it returned to topline growth for the first time since the start of the pandemic during the first quarter.

Analysts are expecting revenue to rise to $1.25 billion in the second quarter from just $334.8 million the year before when demand was subdued due to lockdowns. It is expected to turn to adjusted Ebitda of $41.2 million from a $397.5 million loss. That would also compare favourably to the first quarter of 2021, when it reported revenue of $887 million and an adjusted Ebitda loss of $59 million.

While there is little doubt that Airbnb will post a significant improvement in the second quarter, the outlook will be closely watched after the company warned in May that it was ‘too early to predict if the recovery will continue at the same pace in the second half of 2021’. It said whilst the North American market continues to demonstrate resiliency, uncertainty is greater in other regions around the world.

Read our full preview ahead of the Airbnb earnings here and view our technical analysis on the stock.

DoorDash

DoorDash will post second quarter earnings after markets close, with pressure on to maintain momentum after reporting record orders in the first quarter and revealing customers were ordering through its app more than ever before.

Analysts are expecting revenue to inch up to $1.08 billion from the record $1.07 billion booked in the first quarter, and for adjusted Ebitda to rise to $64.3 million from $43.0 million.  DoorDash said it was targeting quarterly adjusted Ebitda of breakeven to $100 million. That figure and the outlook will be closely watched considering annual Ebitda is guided to be breakeven to $300 million.

Operationally, markets will be looking at whether its newer operations, having branched out to deliver new products from the likes of supermarkets and pharmacies, will impact overall order growth, and how the shortage in drivers and other cost pressures are impacting profitability. A news report from The Information suggested DoorDash has considered buying grocery delivery firm Instacart for $40 to $50 billion, but said talks had broken down recently over concerns whether it would get regulatory approval.

Mister Car Wash

Mister Car Wash will release its first set of results since completing its IPO in June when it publishes second quarter results after the closing bell today.

The car wash company listed on June 30 at $15 per share and has consistently traded above that since, having hit as high as $23.53 last month. Analysts are looking for revenue of $191.8 million and a pretax profit of $35.1 million. EPS is anticipated coming in at $0.09.

Investors will be keen to hear how the recent acquisition of new locations in Florida, Central Valley, Texas and Iowa will help fuel growth going forward.

Baidu

Baidu, the Chinese search engine, beat expectations when it released second quarter earnings today, revealing it benefited from a rebound in advertising revenue and continued growth from its cloud computing division and other services.

Revenue rose 20% year-on-year to RMB31.35 billion and came in 11% higher than the previous quarter, beating the RMB30.96 billion expected by analysts. While adjusted Ebitda nudged-up compared to the year before, it turned to a net loss at the bottom-line of RMB583 million from a RMB3,579 million profit the year before.

Baidu said it is expecting third quarter revenue of between RMB30.6 and RMB33.5 billion, which would be 8% to 19% higher year-on-year. However, it warned the coronavirus situation in China is ‘evolving and business visibility is limited’. Baidu also announced that chief financial officer Herman Yu has been appointed as chief strategy officer, but will hold his current role until a successor is found.

eBay

eBay released second quarter results late yesterday, revealing it performed better than expected while disappointing with its outlook as it starts coming up against tougher comparatives.

Revenue rose 14% in the quarter to $2.7 billion. That was well ahead of eBay’s guidance for just 4.2% to 5.9% growth as it comes up against tougher comparatives from last year when demand exploded, but was below the $3.0 billion forecast by analysts. That was the slowest growth delivered in the last year and far below the 42% growth delivered in the first. Adjusted EPS was flat year-on-year at $0.99, beating the $0.95 forecast by markets.

eBay said it is expecting third quarter revenue of $2.42 to $2.47 billion, below the $2.92 billion expected by analysts. The company sold off its Korean business and struck a deal for its Classifieds unit during the quarter, which were described as ‘important milestones in our ongoing transformation’.

Coupang

South Korea’s largest ecommerce firm Coupang released second quarter earnings after the closing bell yesterday, revealing it slipped much deeper into the red than expected.

Revenue rose 71% year-on-year to $4.47 billion, a fraction higher than analyst expectations. However, the net loss of $518.6 million ballooned from a $102.1 million loss the year before and was considerably larger than the $265.5 million loss anticipated by the markets. The topline growth was spurred on by 26% growth in customer numbers and a 36% rise in the average spend.

Coupang said it was the 15th consecutive quarter of over 50% growth in revenue and posted strong starts for newer initiatives like Fresh and Eats. Still, other investments in the likes of Coupang Eats and Rocket Fresh were the main drivers of the hefty quarterly losses.

NIO

NIO revealed it performed better than expected when it released second quarter earnings late yesterday, and said it intends to continue ramping-up deliveries to new record levels going forward.

The Chinese electric carmaker had already revealed it delivered a record number of cars in the quarter, which led to revenue soaring 127% to RMB8,448 billion. That was ahead of the RMB8,322 expected by analysts. Its loss per share narrowed to RMB0.42 from RMB1.15 and also came in better than the $0.53 loss expected. Its closely-watched vehicle margin came in at 20.3%, a slight dip from the 21.2% delivered in the first quarter. That will be welcomed considering the headwinds it is facing from the chip shortage and rising commodity prices.

NIO said it plans to launch three new vehicles and said it is key to accelerate product development as ‘EV adoption begins to reach a tipping point’. It is aiming to deliver another record number of deliveries of between 23,000 to 25,000 vehicles in the third quarter, which should lead to revenue of between RMB8,913 and RMB9,631 billion.

Palantir

Big data outfit Palantir said it plans to generate double the amount of free cashflow this year than previously thought and said it remains on track to deliver its revenue growth plans over the coming years.

Revenue jumped 49% year-on-year in the second quarter to $376.6 million, coming in higher than the $352.3 million expected by Wall Street. That was the result of a 90% jump in US commercial revenue and closing a significantly higher number of major deals. It added 20 net new customers in the period, up 13% from the previous quarter. However, the reported loss per share of $0.07 was worse than the $0.03 profit expected by analysts.

Palantir said it expects third quarter revenue of around $385 million and an adjusted operating margin of 22% - down from 31% in the second. However, it also raised its full year adjusted free cashflow target to over $300 million from just $150 million previously, and said it continues to expect to deliver annual revenue growth of at least 30% through to 2025.  

Bumble

Dating app Bumble raised its guidance for the full year yesterday after delivering faster growth than expected in the second quarter as people continue to happily pay to improve their love life online.

Revenue rose 38% in the quarter to $186.2 million, ahead of the $178.7 million expected by Wall Street. Its core Bumble app delivered 55% revenue growth to $127.3 million while Badoo and its other apps reported 11% growth to $58.9 million. That came as total paying users jumped 20% to 2.9 million. Adjusted Ebitda improved to $51.9 million from $32.5 million but its net loss at the bottom-line widened to $11.1 million from $5.5 million.

Bumble said third quarter revenue will be between $195 to $198 million with adjusted Ebitda of $48 to $50 million. For the full year, Bumble is now anticipating revenue of $725 to $762 million and earnings of $195 to $200 million.

Facebook

The UK Competition & Markets Authority has said Facebook’s completed acquisition of GIF platform Giphy could significantly reduce competition in the market, keeping the threat of a potential forced sale of the business alive.

The regulator said the deal could lessen competition in social media, display advertising and harm social media users and businesses in the UK. Facebook bought Giphy in May 2020 but has had not been able to absorb the unit while investigations have been carried out.

The CMA has now invited interested parties to comment on the provisional findings by September 2.

Didi

Chinese ride-hailing company Didi has denied speculation that it is looking to shuffle its management as a consequence of the ongoing investigation by China’s cybersecurity regulator.

The China Morning Post cited unnamed sources that said senior management could be changed to try and get on the right side of regulators that shook the company just days after its US listing by having its app removed from stores and preventing it from acquiring new users.

Didi responded in a Weibo post that said ‘Didi is actively and fully cooperating with regulators’ cybersecurity probe’ but said ‘market rumours about management change at the company is not true’.

Boeing

Boeing’s 737 MAX planes are set to be given the go-ahead to start flying again in India after the company managed to convince regulators it is safe for them to return to the skies following two fatal crashes involving the model, according to Bloomberg.

India is thought to have been satisfied about the safety of the plane after it was allowed to start flying again in other countries including the US and Europe, and because Boeing met requests by setting up MAX simulators in the country.

The news follows on from reports yesterday that it had conducted a test flight of the plane in China, where it still remains grounded.

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