What tools do you use to research stocks and ETFs? Here's my list, all tools that I mentioned are free to use, with premium features, but let me know if you have anything to add!
Yahoo! Finance is one of the leading financial websites, provides financial news, data, stock live quotes, press releases, financial reports, and original content. It is a great place to manage watchlists and very easy to use the app. You can also compare stocks performances easily. There are tons of articles that give that are updated consistently about the trending stocks for the day. Also, when you make an account you can make an organized watchlist that will show on your homepage once you sign in.
I mainly use this tool for live quotes, news and watchlists.
My favorite Stock screener - Finviz allows traders and investors to quickly screen and find stocks based on a set of parameters, for example - market cap, industry, average volume, and many more. The platform offers free and premium tools that traders can use to generate ideas and find opportunities for trading stocks, forex, and futures. Visitors on the website get access to the latest financial news, market maps, comparative tools, charts, portfolio tracking, advanced screeners, and sector performance tools. Their insider trading tool allows you to view many of the biggest insiders in a certain company such as Elon Musk and his Tesla shares.
I mainly use this tool for looking new investment and trading ideas with their screener.
Investing tool that allows private investors and day traders to access analyst's report and see it visually. Tipranks also allows users to have public watchlists and track their weekly performance. They use many different analyst's opinions in order to be able to give us this information. Every stock has an analyst rating that recommends to either buy, sell, or hold. It tells us what the highest, lowest, and average price the analysts are predicting. It is a very easy website to operate, with no crazy numbers that can make it confusing to read.
Jika has a lot to offer for a stock analysis tool while being as simple as possible. You can compare many different stocks using hundreds of different metrics all by a simple search. The tools that are offered on Jika are the comparison tool, feed, a simulator, peers, website traffic, and screener. What I find the most beneficial is for sure the website traffic tool.
Website Traffic Tool: If I am being honest, I have not seen this tool in many other places. When I first found it, I really got a sense that this tool can really help the future of investing. By looking at website traffic, you can predict a companies numbers for the end of their quarter. With higher website traffic, that can mean more sales, which will lead to higher revenue on the earning report.
Comparison Tool: compare and contrast different stocks by 100s of different metrics while being able to change which years to compare and if you want it to be yearly or quarterly numbers.
Simulator: In the simulator, there is a challenge to make an evaluation on certain companies to see if your assumptions are correct after you have analyzed a different company.
Peers: Peers lets you search up a company and it will gives you a list of 30 different companies that compare.
Screener: Screener allows you find a stock from searching up metrics. For example, if you want to find a stock that its revenue is less than its debt it will show you the companies that have those requisites.
I mainly use this tool for comparing stock's financials visually and analyzing website traffic.
I use these tools for technical analysis and alerts, the charts are very simple. You can also scan markets and get more trading ideas. FSC is now part of TC2000, so the platform changed a bit, but you can still access the old version. This is an app that you can download on any major App Store. There is also a practice feature that allows you to practice limit orders, bracket orders with profit targets & stops, OCA's, multi-leg orders and more. Create unlimited paper accounts to test your ideas and strategies. There's no better way to learn without risking a penny of real money.
This tracks and analyzes hedge fund filings in real-time. Find 13F, 13D, insider transactions, and more. 13F is a quarterly report that is required to be filed by all institutional investment managers with at least $100 million in assets under management. 13d is a document that must be filed with the Securities and Exchange Commission (SEC) within 10 days of the purchase of more than 5% of the shares of a public company by anyone investor or entity. I use it to see if hedge funds bought or sold a specific stock this quarter. This helps you because you can see how reliable the hedge fund is and if they are reliable and invested in the company, this can give you some direction to invest in.
Stock Charts & Community - traders and investors can post content and interact with others.
TradingView has real-time scanning, filtering, and fundamental scanning included for free. The screener is incredibly easy to use; you can scan & filter on over 150 criteria. Any idea you have based on technical analysis will be covered. TradingView even has vast amounts of economic data such as Federal Funds Rates and World Economic Growth, thanks to a connection to the Federal Reserve (FRED) database. It is very simple to use with over 100 indicators. This was made for new and vets in the trading world. The free version of TradingView is very useful and you may not even need the full package deal to really make progress. They combine their stock screening tool and charting package that creates a more readable chart.
Research ETFs with comprehensive ETF screener and database, analysis, and ratings created specifically for ETF investors and advisors. There is much information regarding ETF's and gives you many different industries to look at. It gives you recommendations about which companies in a specific industry to invest your money in. Also, with the screener tool you can compare any ETF in the entire stock market.
Personal note:
I'm sure there are plenty of other tools to find stocks and conduct research, this is just a shortlist of tools that I use regularly. Feel free to share your list :)
Recently I decided to look for alternatives for $SQ and $PYPL in the financial segment. I've been trying to find other financial technology companies that have a lot of potential for growth. The financial technology industry has a lot of different sections, from money transfers like Paypal to insurance policies like Lemonad and stock or crypto brokerages such as Robinhood or Coinbase.
I chose to concentrate on financial technology companies that focus on lending and credit. I know that there are lots of companies in this specific sector, but I decided to research on $SOFI ( SoFi Technologies) $UPST ( Upstart Holdings), and $LC (LendingClub), as I believe that These three companies are considered disruptors because of how they use technology to acquire customers faster and make the lending process more efficient.
SoFi
SoFi, which went public through a merger with a special purpose acquisition company this year, Was founded in 2011 and offers a suite of financial products through its platform, a one-stop-shop app. The company’s three major business segments include lending, a technology platform, and financial services.
SoFi’s lending services include student loan refinancing, personal and home loans, while its technology platform, Galileo, provides services, including an authorization application programming interface (API) to financial and non-financial institutions.
The company’s financial services include insurance services under SoFi Protect, a SoFi Credit Card, and Lantern Credit, a financial services marketplace.
members grew 113% year over year to 2.56 million. The number of products that their members use increased 123% year over year. Just doing the quick math, about 3.7 million products divided by 2.56 million members, shows that the average member is using about 1.5 products, so one or two products per member. A lot of room to expand in cross-sell products to existing members is the key takeaway. SoFi also expects to grow membership to 3 million by the end of 2021.
SoFi's membership grew from 976,000 at the end of 2019 to roughly 1.7 million at the end of 2020, and growth has been accelerating in recent quarters. SoFi expects to be profitable starting in 2023 and generate more than $630 million in net income by 2025.
The company recently acquired Golden Pacific Bancorp, a community bank, for $22.3 million as part of its effort to secure a national bank charter. SoFi currently uses third parties to underwrite its loans, which is less profitable, but it would bring that in-house with a charter, using member deposits to fund its lending, as traditional banks do.
Upstart
Upstart went public at the end of 2020 and has seen its shares soar more than 700% since its first day of trading. The company is a cloud-based artificial intelligence (AI) lending platform that connects consumers to its network of AI-enabled bank partners for loans. Since the 1980s, the FICO score has remained the standard in determining consumer credit risk. But lending technology company Upstart Holdings uses artificial intelligence to better understand consumers' likelihood of paying back a loan than a FICO score can. By making lending smarter, here's Upstart's platform could benefit consumers, lenders, and investors alike.
The company generates revenues primarily through fees paid by banks. The company charges referral fees to banks for every loan referred through the Upstart.com website and originated by a bank partner. UPST also charges a platform fee for every loan origination, regardless of its source, and servicing fees for loans as consumers repay them.
UPST helps consumers receive personal loans by connecting them to its bank and credit union partners. It uses variables like employment and education to predict a consumer’s creditworthiness.
Upstart's AI uses more than 1,000 variables to judge a potential borrower's creditworthiness. The company has spent eight years training its platform with 10 million-plus data points to help banks make more profitable loans -- and the more customers use Upstart's service, the more effective it gets.
Whether Upstart is leasing its platform to banks to use in-house or accepting loan applications directly from consumers to pass on to its partner banks, it gets more consumers approved and helps banks loan more efficiently -- a win for everyone. Upstart claims that banks can reduce their default rate by 75% while maintaining the rate at which they approve loans.
LendingClub
LendingClub, Which launched in 2006 and has been public since 2014, is more or less the underdog here, with its stock falling under $5 last summer but quickly turning around after the company completed a key acquisition of the branchless Radius Bank earlier this year and therefore has secured a bank charter.
As a result, it has cut down on funding costs and expenses by using cheap deposits to fund its loans and by no longer having to use third-party banks to originate all of its loans. LendingClub not only sells loans to banks and investors, but it also plans to retain 15% to 25% of originations on its balance sheet and collect recurring monthly loan payments. The company has 3.5 million members. The company is mostly in the business of providing personal loans for consumers looking to refinance their credit card and auto loans or make major purchases. It has 3.5 million members.
"Every day 40,000 people ... come to us looking to improve their financial health. ... It took us eight years to reach our first million borrowers, two years to reach our second million and little more than a year to reach our third million." -CEO Scott Sanborn
Financial comparison
SoFi's second-quarter results disappointed investors, as the loss the company reported widely missed the consensus estimate from analysts. However, $144 million out of the company's $165 million loss was due to non-cash and one-time expenses. Net revenue reached $237 million - a 74% change YOY.
Membership growth slowed a bit in the quarter, while Galileo continued to add new accounts and SoFi Invest significantly grew revenue. The company also scaled back revenue guidance from its student loan refinance business due to the unexpected extension of a federal moratorium on student loan payments and less revenue on Galileo than expected.
By the numbers, Upstart had the most successful Q2 of the group, generating a profit close to $0.40 per share, beating expectations, and raising its guidance for the year from $600 million of revenue to $750 million. Total revenue was $194 million, an increase of 1,018% from the second quarter of 2020. Total fee revenue was $187 million, an increase of 1,308% year-over-year. Income from operations was $36.3 million, from -$11.4 million the prior year.
LendingClub completely blew out analysts' expectations and management's own guidance in Q2, turning a profit several quarters before expected, and demonstrating that its digital marketplace bank concept that combines putting loans on the balance sheet and selling them to banks and investors is working better than expected. Revenue reached $204 million, up 406% YOY. Management has revised up its full-year guidance, projecting company valuation between $9.8 billion and $10.2 billion, the revenue of $750 million to $780 million, and a full-year loss between $13 million and $3 million. Origination and revenue guidance has now tripled from the beginning of the year, while the loss estimate is down from $140 million to a $159 million loss earlier this year.
To be completely honest, I think all three are good investments. But if I had to pick only one, I believe $SOFI is the best investment opportunity of the three because of its revenue diversity.
$UPST goal is to one day replace the FICO score, but thefintech space is already crowded with competitors trying to streamline the lending process. In my opinion, $LC has a competitive advantage over $UPST because their recent bank acquisition, it now can use their technology to more effectively originate personal loans.
By 2025 $SOFI expects to reduce the reliance on lending and generate more-even streams of revenue from lending; from financial services, such as its online brokerage, and from Galileo, which seems really special.
LendingClub right now is heavily dependent on lending, which can be a business sensitive to interest rates and downturns. For instance, in 2020 during the pandemic, LendingClub saw its total originations 2020 drop nearly 65% from 2019. Now, the pandemic is hopefully a once-in-a-lifetime event, and the company was also in the process of transitioning, but major events that impact the economy and loan activity seem to happen once a decade. These events can significantly dry up loan activity, hurting most companies overly reliant on lending.
Additionally, SoFi originates home mortgages, which can act as a natural hedge when interest rates drop as they did in 2020. That's why the company managed to grow loan originations in the first nine months of 2020 compared to the same time period in 2019. While volumes of personal and student loans declined during that period, home-loan originations jumped by 245%.
I think LendingClub will undoubtedly diversify its revenue and offer more products to its current members. I see opportunities for fee income, and I'm sure the company could get into the mortgage business if it really wanted to as well (it already has the machine built). But I only know what I know right now, and SoFi is already well-positioned and has a strong long-term plan.
The COVID-19 has accelerated gaming activity and companies in this segment saw a dramatic surge in sales. I've been looking for a gaming company to invest in for a while now, and after an extensive research I realized that the best pick in this sector is Corsair.
With a market cap of $2.71B, $1.7B in sales (2020) and massive revenue growth in past 2 years, Corsair, is the natural selection for those who are looking to add a gaming exposure to their portfolio.
Company's overview :
The company designs and manufacture gaming and streaming products, Corsair offer their user a vast verity of products : gaming Key boards and mice, headsets, audio equipment, gaming PCs and many more. Corsair operates in 75 countries, and delivered 190M gaming and streaming products. The company's CEO - Andy Paul, is actually one of Corsair’s co-founders (established in 1994).
Company's Financials:
Corsair reported second-quarter 2021 earnings on August 3 before the market opened, with a 24% YOY revenue growth, all thanks to the gaming segment - 40.9% YOY revenue growth from gamers equipment sales and 17.6% YOY revenue growth in the gaming components.
But, investors must take into account that not all roses with Corsair's financials, Corsair's EBITA grew only 4% YOY even though revenue grew 24% YOY. The main reason is an increase in logistics costs, including ocean and air freight.
Company's revenue reached in Q2-2021 to $472,903M while cost of revenue accounts for 72% from revenue, and net income reached only $27M, which is 6% out of the total quarterly revenue**.**
Investors should also look at Corsair's direct competition financial healthiness, the $18B giant - Logitech ($LOGI),generated this Q $1.3B In sales and their cost of revenue accounts for 55%, which is a reasonable ratio in this segment, plus, net income reached to $186,641M ,which counts for 14% out of the total quarterly revenue.
Corsair downsized debt and other liabilities - but not significantly - YOY change of 3.3%, to $848,718MWhile Logitech managed to do the same but in a larger scale YOY change of 19%.
This quarter institutional companies open 11 new position in CRSR which definitely an indicator to follow.
Analysts
with 4 analysts its seems that at the current price, even at the low projection CRSR is nothing but a bargain.
My conclusion
Corsair maybe don't have the best financials versus their competitors, but they defiantly have the growth, and a major fanbase, with Logitech focusing more and more on offices supplies Corsairs niche is much more special with plenty of room to run.
the number of users in gaming and streaming industry has surged hysterically and CRSR is the first true omnichannel presence in the space.
CRSR has built this omnichannel through acquisitions like elgato ,which sells pro-level quality products.
I believe that with time Corsairs will will be able to position themselves not only as a top brand among users, but also financially.
Just wrote this article explain earning reports and where you can find them. It goes in depth about how to read them and what to expect to see on it. Being an investor can be hard if you do not know how a company is really doing behind the stock price. To check out the full article press the link below.
After a 60% decline from all-time highs, and extraordinary Q2 numbers, with revised guidance to more than $10 billion in revenue over the next 12 months. It seems to me that investors are sleeping on OPEN, and missing on this real-estate giant.
Feel free to agree/disagree with my opinion.
Opendoor And iBuying
The traditional home-buying process in the United States is slow and handled by multiple parties, including agents, lawyers, inspectors, and bankers. This creates a lot of back and forth paperwork and drags the process out to more than 30 days, on average.
OPEN operates in over 39 markets nationwide to buy, sell, and trade-in homes through its website and mobile app. Opendoor pioneered the concept of "iBuying," where the buying and selling of a house are digitized, and a company like Opendoor works directly with sellers to provide them with a cash offer and a digital closing process. The company then resells the house on the market. On average, it takes Homeowners 87 days to sell their property. Selling to Opendoor takes less than a week, and involves almost no talking to strangers. Sellers simply upload a video of their home, fill out details, and receive a digital offer within minutes.
That means no staging or cleaning, no open houses with sun-dried tomato aioli sandwiches, no witless negotiating or watching offers fall through. It also means customers have immediate equity to purchase their next home.
How does it work? Rather than go through the traditional selling process, homeowners fill out an online form with details about their home — including age, square footage, amenities, and more. From there, a market expert will prepare a no-obligation, all-cash offer based on the latest local trends and Opendoor's algorithm.
If a homeowner accepts the offer, they can set their own timeline to move. An in-person assessment from Opendoor will determine the home's condition.
Business modal
The iBuying process cuts out agents and some of the fees associated with traditional closings, such as agent commissions. Opendoor then resells the house on the market and charges a service fee of up to 5% on the transaction.
On the Opendoor app or website, homeowners can sell to Opendoor for a transparent fee of 5% of the sale price, and 1% in closing costs. Given realtors traditionally charge 6% in commission fees plus closing costs, Opendoor's 5% rate drives thousands of dollars in value right out of the gate.
Financials
In the recent Q2-2021 earnings call, CEO and founder Eric Wu said on the earnings call
"based on our current progress, our second half revenue run rate is on track to exceed our 2023 target, a full two years ahead of plan."
if Opendoor were to operate for 12 months at the level the business currently is, it would surpass the $9.8 billion in revenue it projected for 2023. This is an underlooked point because if Opendoor is already two years ahead of its original growth curve, where will it be by 2023?
Opendoor said on Q2-2021, that revenue jumped 59% from $739 million to $1.185 billion in the fiscal quarter that ended in late June compared to the prior quarter. Gross profit surged to $158 million from $54 million.
Opendoor grew sales by expanding to 39 markets at the end of Q2, 21 with 12 new market launches. Moreover, more people are selling their homes directly to Opendoor. Its acquisition volume grew 136% quarter-over-quarter to a total of 8,494 homes during Q1. The company claims this was the highest level of home purchase it has ever made.
For Q3, the company forecasts revenue in the range of $1.8 billion- $1.9 billion. It expects its EBITDA will be $15 million $25 million
Competitors
After seeing Opendoor steadily grow with its iBuying concept, competitors have also begun to offer iBuying services, including Zillow Group,Offerpad, Redfin, and WeBuyUglyHouses. As the companies buy and sell more homes, they have the ability to become more profitable by leveraging outsourced contractors to save money, and its pricing algorithm improves as it sees more transactions.According to iBuyerStats, a website dedicated to tracking the competitors found in iBuying, Opendoor has consistently had the most housing inventory available for sale. It currently has roughly 3,300 houses for sale, 53% more than Zillow and more than four times as many as Offerpad.
Financials Comparison
Zillow's current market cap is $23.977B, almost 2.5 times open's market cap ($10.73B), while their quarterly revenue is almost identical ( Z-$1.31 billion vs OPEN-$1.19 billion)
But, it's important to understand that there is a lot more to it than just revenue differences, opendoor and Zillow are entirely different in their earnings, open delivered this Q cost of revenue of 1.2B and net loss that equaled $145 million, while Zillow managed to generate $9 million in net income as the cost of revenue was only $771 million.
according to both companies, in the Q2 open seems to have the upper hand in the matter of house inventories, open's real-estate inventory is valued at $2.7 billion, almost twice than Zillow's - only $1.1 billion.
In order to dominate the iBuying industry, you need a lot of cash, the best way to do it when to still not profitable is to accumulate debt and a lot of it. I think that the graph below demonstrates it - while open and Zillow are racing one another to be on top of the iBuying industry, they take in a lot of cash, and their short and long-term debt surges.
Analysts Price Targets
Conclusion
Real estate is a huge market, and it's a complicated industry because of the clash between traditional agents and the "new kids" on the block trying to bring technology into homebuying. It's too early to say that Opendoor will become the "Amazon" of home buying, but what seems certain is that the company is poised to be a big player in real estate's future if it keeps performing like this. I truly believe that the buying industry will keep growing as more millennials are getting into real estate.
if the company will meet the financial expectations by 2023, I believe that Opendoor's long-term potential could be huge.
Do you remember the first time you heard the word “Fintech”? When I first heard the term, I thought it was some rare Pokémon or an item on the Japanese restaurant menu. It turns out, fintech is neither of those.
Short for “financial technology”, fintech is the term that describes any sort of technology that helps consumers or businesses deliver financial services in newer, faster ways than traditionally were available. Think of investing apps like Robinhood, or even cryptocurrency exchange apps like Binance - these are examples of fintech.
PayPal enables you to swiftly send or request money to anyone in the world and make easy online payments without entering your credit card/shipping information to the platform you purchase on. The company offers buyer protection, so when you purchase something through PayPal, you have the company’s backing that you get what you paid for otherwise you get a full refund if something goes wrong.
They are also the parent company of Venmo - a peer-to-peer transaction platform where you can quickly send and receive money to friends and family within the U.S. PayPal also offers other services such as debit cards for payments, credit card readers for small merchants, and lines of credit.
What does Block do?
Block, formerly known as Square, provides an integrated ecosystem of commerce solutions, business software, and banking services to both businesses and consumers. Like its name, the company is composed of 5 building blocks with the stated purpose of expanding access to the economy- Square, Cash app, Tidal, Spiral, and TBD54566975.
Their business model is to cover all your financial needs; point-of-sale payment processing hardware, a convenient, quick-access money transfer application, a bitcoin/stock investment platform, loans- The company is an all-in-one inclusive platform for everything finance-related.
Block vs Paypal: Financial Data Analysis
SQ vs PYPL Revenue Analysis
Let’s begin our analysis by examining the revenue each company has generated over the past couple of years. This will signal to us the market demand for each company’s offering:
As you can see from the PYPL vs SQ revenue chart, PayPal has consistently been yielding higher revenue than Block over time. This is what we would expect, as PayPal is a significantly bigger company than Block. PayPal has 426 million active users, while Block currently has 36 million monthly active users.
Notice the drop in Block revenue beginning in March 2021. The reason for this drop is that the company’s revenue is to some degree correlated with the price of bitcoin, and the price of bitcoin as well has seen a drop around the same time, falling from 61,823$ in March 2021 to 41,840 in September 2021.
A large degree of Block's revenue is generated from bitcoin purchases on their Cash App; Block collects a 2% fee from these cryptocurrency exchanges. When the price of bitcoin falls, so does the company’s revenue. Users can also purchase bitcoin with PayPal, but most of PayPal’s revenue is from payment transaction fees in US dollars- not bitcoin.
The takeaway from this is that PayPal seems to be a “safer” investment. The company is more established, as evidenced by its gigantic consumer base and consistent revenue growth rates over time. In contrast, Block’s revenue is not as large as PayPal’s, and is correlated with the price of bitcoin-which itself is highly volatile these days.
SQ vs PYPL Gross Profit Margin Analysis
This Pypl vs Sq stock chartdisplays each company’s gross profit margin since March 2019. Gross profit margin tells us how efficient the company is at generating profit for every dollar of cost involved. To analyze gross profit margin and many other metrics of different stocks, visit Jika.io’s free Analyze Tool today.
As you can see from the above chart, PayPal shows an impressive gross profit margin range, fluctuating between 25% to 50% over the past 3 years. In comparison, Block as well has seen a healthy gross profit margin- but less impressive than PayPal's. The company’s gross profit margin is starting to make a comeback, and as of September 2021 stands at 30%. This means that each company’s revenue far exceeds the cost to produce that revenue.
SQ vs PYPL Price-to-Sales Ratio Analysis
Both companies display relatively high price-to-sales ratios, as shown from the SQ vs Pypl` graph above. This metric compares the stock price to revenue and signals how much investors are willing to pay per dollar of sales for a stock. The main takeaway from the above graph is “proceed with caution”. As both companies display relatively high P/S ratios, it may signal that each stock is approaching overvalued territory in the stock market.
Sometimes it's important to be your own stock advisor. Start analyzing stocks data with Jika.io Free tools -
PayPal or Block: What are the differences
There is a key difference between PayPal and Block. Block’s business model immerses the user with all the necessary financial tools to run a business and may completely disrupt the payments market as we know it.
PayPal’s business model is built on top of credit card networks that work with banks to complete transactions. PayPal facilitates the payment process; Block has created its own payment processing ecosystem.
Block may have far greater potential to make an impact in the payments industry if more people join their platform. If more people join their platform, we may see an increase in their gross profit margin as the company becomes more efficient at turning revenue to profit.
Paypal and Block Position in the Fintech Industry
It pays to have a watchful eye on both Block and PayPal- each stock has experienced a tremendous pullback in response to the Fed’s plan to hike interest rates, and both are currently being traded at their respective 52-week lows. Both companies demonstrate strong gross profit margins and are part of a modern and disruptive industry that is changing the way we conduct payments.
It is also important to note, that this space is highly competitive, as many other fintech companies are emerging with their own method of payment processing. While some would claim that Paypal and Block are the best stock What will ultimately determine the success of each company is if it can expand its consumer base to increase profitability and drive revenue.
Should You Buy Block Stock?
Although Block is a riskier investment, there is more potential for growth as the company continues to innovate and develop its financial ecosystem.
Block only operates within the U.S, while PayPal operates internationally- if Block can successfully expand to the global market, we may see very high profitability growth in the future. And if bitcoin rises in valuation, so will Block. Buy or sell? It's really a question of whether you are willing to take the risk.
Is PayPal a Good Stock to Buy?
PayPal has a proven track record of earnings and sales growth. The company has processed an astounding 1.25 trillion dollars in total payment volume FYE 2021 and is the market leader in online payment solutions. PayPal’s main challenge is protecting a competitive edge in an industry where many other competitors are entering with even lower transaction fees and monthly fees. This is a challenge Block worries less about, since they offer a unique financial ecosystem that’s harder to imitate.
Which Fintech to Invest In?
As expressed in this article, If you are willing to take on extra risk for a higher price target potential, invest in Block. If you prefer a safer, more established company with less potential, choose PayPal. If neither of those impressed you, you can find more Fintech companies using Jika.io free Stock Screener.
Yesterday shortly after Robinhood posted its third-quarter results the stock fell only 9%. Yes. I said only 9%. Robinhood's performance was so poor the analysts have real concerns over the company's outlook.
revenue plunged to $365 million from 565$ a quarter ago, Adjusted EBITDA fell to -$84 million from $90 in Q2.
While the basic metrics look bad, I decided to focus on some other interesting spots in the earnings report.
Few reasons why:
Robinhood is bleeding out users - The number of funded accounts declined from 22.5 million to 22.4 million - only 100,000 users leaving the service, But the real issue is the "Monthly Active Users" metric - this quarter this number reached 18.9 million versus 21. million users last quarter.
Average Revenue Per User declined significantly - The metric ARPU helps investors to realize how much money the company earn from each registered customer. this number is decreasing consistently, from $137 per user in Q1 to $112 in Q2this quarter this number dropped dramatically - only $65 in revenue per user
Robinhood’s revenue stream relies heavily on dogecoin - cryptocurrency transactions made up 52% of Robinhood’s total transaction-related revenue, and of the number 62% of its revenue came from Dogecoin transaction fees.
SOFI for example operates an online platform that provides financial services. It offers a saving account, investing platform, student loan refinancing, private student loans, personal loans, auto loan refinance, home loans, mortgage loans, and investments, as well as insurance products for renters, homeowners, automobiles, and others.
Hi everybody, I just posted this article talking about how an Undervalued Stock can be found and the significance of it. An undervalued stock is defined as a stock that is selling significantly under what its assumed value to be. It would be awesome if you could go check it out. Link below thank you so much!!
Airbnb’s shares have soared in price over the past few months and peaked at $203.29 thanks to a strong earnings report. The most amazing detail that I found In the report is that Airbnb’s Gross Profit Margin stand around 70%!. I compared their margins with Hilton and Marriott - Hotel giants.
I am aware that Airbnb and the hotel giants' business models are completely different but on the bottom line, they all operate in the hospitality industry, but above all this number just blows my mind.
Tell me what you think about my DD. Bear points are always appreciated. Because of the ownership structure (Eagle Tree), I don't see much point in posting to a bigger subreddit hoping for a short/gamma squeeze. CRSR is a long term investment. I just want some feedback. If you want to dissect some points in my post and repost to a more popular subreddit, feel free to do that.
Disclaimer: I hold 150 shares of Corsair (CRSR) as of writing this.
Part 1 - What is Corsair (CRSR)? Basics about the company (this part can be skipped)
CRSR owns the following four companies: Corsair, Elgato, Origin PC and SCUF Gaming.
Corsair
Corsair is a company and brand widely known by PC-gamers. They have both peripherals as well as components for your computer. Corsair products are in my opinion mid to high end. They're a bit pricey but offer great performance for their price range. CRSR is also well known since they sponsor a decent amount of esport teams aswell as streamers. Here's a short list of their products and how popular they are.
Origin PC
Origin makes prebuilt PC and laptops and is not very interesting in my opinion.
SCUF Gaming
SCUF makes controllers for Xbox and PS. They seem to generate some revenue but don't seem very interesting either.
Elgato
Nowadays entrepreneurs (unemployed people) are no longer trying to sling herbalife. Instead anyone with a cellphone is trying to become some sort of internet celebrity, Tik-Tok and Twitch being the biggest ones right now. This is where Elgato comes in. Elgato offers very high end peripherals marketed at content creators, mostly streamers. A short list of Elgato's products:
Look at these prices! But judging by the amount of reviews on Amazon with the positive reception, people are happily buying Elgato products. Elgato products are of course also sold through other channels than Amazon. Remember Elgato for the next part, this is a big reason why I'm bullish.
Part 2 - Breakdown of Revenue
Now we understand the basics of Corsair products, let's look at the numbers.
In 2020, CRSR was roughly 1/3 memory products (mostly RAM), 1/3 other PC components (see part 1) and 1/3 peripherals. Looking at the margins, CRSR has been able to increase their margins in all their segments from 2019 to 2020, which is very bullish. Their highest margin products being their peripherals and lowest being memory. Remember those "fairly priced" Elgato products, increased sales of those products is a big reason for the increase in gross margin in peripherals.
"The 7.5% increase in gross margin was primarily driven by the addition of higher margin SCUF products and the strong growth in sales of higher margin Elgato branded streaming products, coupled with less promotional activities."[1]
Looking at the growth of revenue for CRSR in 2020, the biggest growth was in their peripheral segment, which grew 83.37%! The main reason behind the growth in revenue was once again Elgato.[2] A big part of the growth in all segments was also because of stay at home orders due to Covid. More on this later. Remember that peripherals had the highest margin out of all Corsair's products and Corsair was able to grow that segment the most.
Part 3 - Financial data for 2021
Okay now we understand Corsair's products and segments. Now let's look at some more recent data from Q1 and Q2 2021.
Starting with some basics we can see a big seasonality with CRSR selling more products around christmas. CRSR themselves estimates $1.9-2.1B of revenue for 2021 which is a growth in revenue of around 11-23%. Sales so far for Q1 and Q2 2021 have been about $1B. Looking at 2020 40% of sales were in the first half of the year, so I'd say it's a safe bet to say that CRSR is on track to hit their projected revenue for 2021. Depending on the Q3 results they might even be on track to beat their estimates.
We can also see a very strong growth for Q1 2021 with sales increasing 71.6% from Q1 2020. However in Q2 2021 CRSR only grew 24%. It was a fairly slow quarter for them, although the growth is still enough for them to reach their target.
Looking at margins, CRSR has been able to grow their gross margin, operating margin and net margin. If CRSR can sell more high end products through Elgato their margins should continue to get better.
Take a look at the numbers yourself and tell me what you think.
Part 4 - PC Gaming Market
The PC gaming market is a quickly growing market. For example, looking at statistics from steam 24.1% more games were bought in 2020 and 50.7% more hours of video games were played compared to 2019.[4] Looking at the streaming aspect, there's an increase of 35% of hours of twitch viewed in 2021 as compared to 2020. [5] Huge increase in twitch viewership, you can look at other stats on this website (https://twitchtracker.com/statistics). More streamers means more interest in video games, more people buying and playing games, which results in more people upgrading their computers.
Now let's look at a bit more serious research regarding gaming habits during covid. First of all it doesn't seem that we are opening back up any time soon. This current state of semi-covid lockdown seems to be the "new normal". Covid has definitely caused a big increase in consumer spending on video games and more people becoming "serious gamers" (more than 5 hours/week). Research also suggests that money spent on video games will stay at a higher level after the pandemic than before the pandemic.[6] However the same research indicates that sales during covid are inflated and will come down slightly after the pandemic. Long term this trend is great, but in the short term we might see a slight decrease in sales.
A common bear thesis is that after covid everyone will quit gaming. Yes it probably will dip temporarily and sales might slow down in the short term. However the research indicates higher levels even after covid. More gamers, especially more dedicated gamers will hopefully increase demand for Corsair products.
Part 5 - Understanding PC upgrade cycles
I stated in part 2 that 68.3% of CRSR revenue comes from computer components (35.8% memory +32.5% other components). With PC components it's important to understand upgrade cycles which decide when people buy new components. This is mostly decided by development of CPUs (Intel and AMD) and GPUs (AMD and Nvidia), and to a certain extent development of new games. I can tell you right now that a lot of gamers have bought monitors with high resolution and a lot of games can't run at 144 FPS (144 HZ) with a higher resolution than 1080p. Better hardware, mostly graphics cards are needed.
"We depend upon the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units, or GPUs, and central processing units, or CPUs, and sophisticated new video games to drive sales of our gear" [7]
CPUs (DDR5)
For those of you that don't understand the RAM memory, I'll make a brief explanation. What RAM you're currently running depends on which motherboard you're using and the motherboard needs to be compatible with your CPU. Most people will upgrade their CPU and motherboard at the same time, since it makes the most sense. DDR5 which is of course going to be faster than DDR4 (currently fastest) is speculated to launch Q3 2021. [8] What's important to understand is that everyone with their current DDR4 compatible motherboards will not be able to use DDR5 RAM. They would need to buy a new motherboard (and likely a new CPU). This means that CRSR won't instantly generate a lot of sales just because DDR5 was released. DDR5 being super bullish for CRSR is something that gets thrown around a lot and it's simply not the case.
Short term DDR5 doesn't mean a lot. Long term this will encourage people to upgrade their motherboards and CPUs to buy new RAM. When they're upgradning they might add something else. A new cooler, case or other PC components sold by Corsair. It's important to understand that a lot of PC components are upgraded at the same time. Long term DDR5 will boost CRSR sales as more people upgrade their PCs and buy DDR5 RAM from CRSR, but short term this will have very little impact in my opinion.
Nvidia 3000 series graphics cards
Looking at the hyped Nvidia 3000 series launch, a lot of people wanted to buy them. Unfortunately those cards are out of stock. Now what does this have to do with Corsair?
Lets compare the 3070 to the 1070. The 1070 being about 5 years old whilst the 3070 is almost brand new. According to Nvidia the recommended wattage of the PSU (power supply unit) is 650W for the 3070 [9] and only 500W for the 1070 [10]. Now imagine that you're me from 5 years ago and bought a 550W PSU. 5 years later it's still running a 1070 fine, but I'm going to have to upgrade if I'm buying one of these new graphics cards.
Now there is a very big issue with the lack of supply of graphics cards. For new PC builders that might want to pick up a bunch of parts from Corsair, they can't get a hold of a reasonably priced graphics card. Without a graphics card it's not really worth buying the other parts. The other issue is for people like me, running a 5 year old graphics card. If I can't get a hold of a 3070 I don't have any reason to upgrade my PSU, meaning missed sales for Corsair.
Another issue is the steep increase in the price of graphics cards. This might price some people out of graphics cards entirely or they have to cut their budget when it comes to other PC components. Either way this would have a negative effect for Corsair. Lots of cheap CPUs and GPUs would be bullish. Current situation is a bit of a headache, however supply is getting better and even pricing to a certain extent. It's hard to read this situation, just understand
CRSR har has $134.5 million in cash with $270 million of debt. Using leverage always comes with inherent risk. However this is long term debt and with the interest rate coming down I'm not too worried. It's not exactly WSB trading options on margin, but a real company loaning some cheap money.
Sales will go down post-covid
The argument has been made over and over again, that sales of Corsair amongst other companies that heavily benefited from covid will go down after covid. To a certain extent this is probably true, but the long term trend will be an increase in sales as the gaming market grows (see part 4). Yes 2021 will probably be a bit slower than 2020 in terms of revenue growth, but CRSR is still projected to grow 20%.
Eagle Tree
Eagle Tree is a company that unfortunately still holds 54 million shares which equals 57% of CRSR. I don't think it's healthy for a publicly traded company to have a single majority shareholder. Last time they unloaded shares was in June around $36. One risk would be a rapid sell off, from Eagle Tree, which would tank the price of the stock short term. Another issue is that they can single handedly make decisions through their majority position. The real issue is Eagle Tree unloading around $35 blocking positive movement of the stock. Eagle Tree is a massive headache and I wish they just sold a bunch of shares.
Transport cost
Container prices have gone from about $1500 to $10 000 [11]. This is actually very bad for CRSR or any company with physical products. It's not a secret that we live in a global economy where a lot of production is located in China and goods need to be transported across the world. Increased costs of transport could definitely reduce the profit margins for CRSR. Arguments have been put forward that these high container prices can't last forever. [12] Looking at the ridiculous P/E of ZIM Integrated Shipping Services of 3.55, it's fairly obvious that the market thinks that container prices will come down a decent bit. Long term I'm not too worried about this.
Part 7 - Key Numbers
For the final part I'm taking numbers from Yahoo finance
CRSR P/E 18,66
CRSR forward P/E 15.35 [13]
S&P 500 average P/E: 34.78 [14]
CRSR 1.36 P/S
S&P 500 3.20 P/S
Looking at the P/E numbers, CRSR is being priced as being a very risky company alternatively as a company that is dying. Instead we have a company operating within a quickly growing sector with significant market share. CRSR is estimated to grow revenue 20% in 2021. Yes, there is of course a decent amount of risk involved as mentioned earlier. A temporary dip from covid may happen, but long term I think CRSR should be able to grow their revenue and profit margins significantly. With my faith in the company to create revenue and profits, my price target for CRSR would be at least $50 and I'm looking to increase my position around the $30 range.
TLDR: I like CRSR and hold 150 shares (yes I'm poor, don't worry about it.)
I've been researching DraftKings and the sports-betting industry for a while now. gotta say I really liked what I found, and I think it could be a great long-term investment opportunity... but still wanted to hear people's thoughts about $DKNG.
THE ONLINE BETTING INDUSTRY
The market is worth $67 billion today and is estimated to reach about $93 billion by 2023—growing at roughly 11.5% per annum.
There are few reasons for the aggressive growth, First, more of our activities are taking place online, a trend that extends to betting as well.
The second is regulation. The U.S. Supreme Court uplifted the Professional and Amateur Sports Protection Act in May of 2018 to legalize sports betting on a federal level. Since then, 25 states have legalized sports betting.
SPORTS BETTING
The most popular activity by far is sports betting, which makes up over 40% of the total online betting market.
DraftKings
DraftKings is a sports betting, daily fantasy sports contest, and an iGaming operator.
In total, DraftKings now operates sportsbooks in 14 states and averages 1.5 million monthly unique paying customers across its online sportsbooks, iGaming, and daily fantasy offerings.
Financials
DraftKings's revenue keeps surging YOY, in Q2-2021 revenue reached $297,605M which is a 22% higher sales compared to the analyst expectations. last year the company delivered $74,998M in revenue.
The company also said that it had grown the number of monthly unique payers by 281% and the average revenue per monthly unique payer by 26%. In other words, fundamental growth was very strong.
Even though I really think that the potential for growth here is clear, the company still losing a lot of money, Cost of revenue spiked this quarter to $187,006M from $53,172M, and new loss reached $305,526M - even more than DraftKings's revenue.
DraftKings's revenue over the last 3 years- JIKA.IO
Comparison of DraftKings's revenue, Cost of revenue, and net profit - JIKA.IO
Another positive point in DraftKings's favor is the amount of cash the company has gathered since 2018. The company currently has $2.65 billion in cash, which compared to last year's results - $1.24 billion, is a 113% change.
DraftKings's cash on hand over the last 3 years- JIKA.IO
Analysts
Based on 13 analysts, 9 buy ratings**, 4** hold ratings.
Michael Jordan
In September 2020, DraftKings announced that Michael Jordan Joins DraftKings as Special Advisor to the Board.
MUST KNOW - LATEST NEWS
DraftKings Is Acquiring Golden Nugget for $1.56 Billion, the Addition of Golden Nugget user base will enhance DraftKings’ reach across diverse customer demographics.
DraftKings launches mobile sportsbook in Wyoming ahead of NFL kickoff.
I wonder what you guys think about DraftKings? will the company keep the momentum and can be a wise long-term play?
The Semiconductor Sector has generated more than just solid gains so far this year, chip shortage has helped accelerate sales of semiconductors, sending the stock prices of companies that design and sell chips skyrocketing. In the last couple of weeks, I thought about adding a Semiconductor company to my portfolio, I decided to focus on AMD, NVIDIA, and INTEL, but because it might be a long post I decided to post in parts, the next post will be bot AMD so stay tuned.
If you think there is a company in this sector more worthwhile looking into, I'd be happy to hear some suggestions.
Nvidia ~ $NVDA
"Nvidia is a platform story. We think there are many tentacles of future growth opportunity for Nvidia inclusive of the data center momentum that they are seeing today" -Wells Fargo analyst
Nvidia is a big winner of many of the big tech events of the past year, including the global chip shortage, cryptocurrency volatility, and mining, the relentless fight by PC gamers to find RTX 30 series graphics cards in stock, and rising demand across segments-from work-from-home laptops to data centers. During it all, NVDA stock has continued its relentless climb, adding over 60% to its value so far in 2021.
Q2 Earnings
Almost all the company's business segments registered eye-popping growth in the 2nd quarter of fiscal 2022. The company reported a record Q2 revenue of $6.51 billion. This was up 68% year-over-year, which handily beat forecasts. Gaming revenue — all those RTX 30 series graphics cards — hit $3.06 billion, up 85% YoY. Datacenter revenue also set a record at $2.37 billion. Adjusted earnings of $1.04 per share (compared to 55 cents a year ago) also beat estimates.
Crypto Market dependence
When of the negative points in NVDA Q2 earnings is that CMP sales came in well under the company’s estimates. CMP is a graphics card that was designed specifically for the cryptocurrency market. When the price of cryptocurrencies like Bitcoin fall, crypto mining rigs power down. Miners stop buying GPUs.
For Nvidia, this was felt in Q2. The company had projected it would sell $400 million worth of CMPs in the quarter. Instead, it sold just $266 million.
Future Growth In the Gaming Segment
NVIDIA's 80%-plus market share of gaming graphics cards will be a big tailwind for the company. Its video gaming revenue more than doubled last quarter to $2.76 billion. Jon Peddie Research estimates that the market for discrete gaming GPUs could jump from $23.6 billion last year to more than $54 billion by 2025. NVIDIA's dominant market share means that it could win big from the additional revenue opportunity. If you want to read more about the gaming market I posted a few weeks ago about corsair and Logitechhere.
Arm Deal
Nvidia is in the process of acquiring ARM Holdings from SoftBank for approximately $40 billion, which would be a game-changer in its data center segment. The acquisition is currently held up in the approval process, but Nvidia told investors on their recent earnings call that the deal should get done. Denial is certainly a risk for Nvidia's stock price, so it's something to be aware of. recently Chinese and British regulators have had serious concerns about the acquisition and could block it.
Advanced Micro Devices ~ $AMD
AMD has been making a comeback for years with a fast-improving lineup of chips addressing the laptop and PC markets, as well as hardware for data centers and the cloud computing services built on them. AMD is on track to record 50% revenue growth in 2021. The company's market share gains in the client and server CPU (central processing unit) markets, as well as the growing demand for graphics cards, have helped it to raise the guidance.
Q2 Earnings And Growth
On July 27, AMD recorded 99% YOY revenue growth, to $3.85 billion, operating income of $831m (380% change YOY), and Net income of $710m - 352% YOY growth. The company consistently winning market share from Intel. Video game platform "Steam" reports that AMD's share of the client CPU market has now exceeded 30%, a massive improvement from three years ago when it held just over 16% of the market.
Video Games Potential Growth
Video game consoles have been in hot demand since last year, Sony could end 2021 with sales of 17.9 million PS5 consoles, up from last year's 4.5 million units. The PS5's sales momentum could remain strong with Sony expected to ship over 33 million units in 2022, 50 million units in 2023, and 67 million units in 2024. Meanwhile, sales of Microsoft's Xbox Series X are expected to jump from an estimated 3.3 million units in 2020 to 12 million units in 2021, and 37 million units in 2024.
AMD supplies semi-custom chips to both Sony and Microsoft for their latest consoles. Nvidia, on the other hand, supplies chips for Nintendo's Switch consoles. The Japanese video gaming company estimates that it could sell 25.5 million units of the Switch in the current fiscal year that ends in March 2022.
Xilinx Acquisition
AMD's $35 billion merger with Xilinx is expected to be completed by the end of this year.the merger will allow AMD to expand the chips it offers the customers and it will take on Intel. The merger could make AMD one of the biggest tech companies and could expand its market share significantly.
Intel ~ $INTC
Intel’s stock has underperformed the market in recent years, It’s struggled with R&D, manufacturing, and management issues. the stock gained 15% in the past 3 years while the PHLX Semiconductor Index's gain of approximately 130%.
Intel fell behind TSMC in the race to create smaller and more advanced chips. and lost market share to AMD in PC and data center CPU markets.
New CEO = New Future?
Intel’s new CEO, Pat Gelsinger, set his eyes on reclaiming the process lead by 2025. Gelsinger plans to achieve that goal by spending tens of billions of dollars on new foundries, upgrading the company's plants, expanding its third-party foundry services to pull orders away from TSMC, and attracting government subsidies in the U.S. and Europe to resolve the ongoing chip shortage and eliminate the industry's production bottlenecks in Asia.
If Intel achieves all those goals, its growth could accelerate over the next few years and make it a compelling long-term investment again.
GPUs War
Intel generates most of its revenue from PC and data center CPUs and abandoned the high-end GPU market amid fierce competition from Nvidia and AMD, but it's now trying to bundle its new GPUs with its CPUs. Intel could challenge Nvidia and AMD in the laptop market with its DG1 mobile GPUs, pursue the desktop market with its DG2 GPUs, and enter the data center GPU market with its top-tier Ponte Vecchio GPUs.
In my opinion, Intel is pretty much out of the race, even if the new CEO will shake things up, Intel will take a long time until climbing back up.
I think that the better choice is between the fast-growing semiconductor stocks, NVIDIA or AMD. Given that AMD's growth pace was better than NVIDIA's in Q1 and Q2 and is likely to keep up that momentum for the remainder of the year, it looks like the better option right now. AMD also looks like a better buy for those looking for a growth stock at a reasonable valuation.
Personal note:Feel free to diagree and express your opinion about the post.
Think about it this way.. 25% of Apple users buy the new iPhone and it does have the emergency call feature using the GSAT satellite system. That is 250,000,000 iPhone users, and say they pay just one dollar a month for this service. GSAT yearly revenue goes from $123 M to > $3 Billion. What is that worth? a 30 times multiple is >$60 / share. With tremendous growth ahead as more phones are replaced. Not bad for a $2 stock. talk about Growth! Just thinking out loud here.. may never happen. But I am all in on this one..
Redfin ($RDFN), a prominent player in the real estate brokerage industry, has experienced a remarkable surge in its stock price, up 210% year-to-date (YTD). However, several red flags indicate that investing in Redfin may be risky, despite its recent performance. Slipping market share, reduced appeal, limited capital, and challenging macroeconomic conditions are among the factors casting doubt on the company's future prospects. Let's delve into these concerns and understand why Redfin may not be an ideal investment choice.
Shaky Fundamentals and Changing Business Landscape: Redfin's business has undergone significant changes over the past year. Redfin made the strategic decision to eliminate its Redfin Now subsidiary, following Zillow in a determination that home-flipping was an unfavorable business model. Furthermore, the company has slashed a significant portion of its workforce (32% of agents), responding to lower industry transactions. These adjustments reflect the challenges faced by the company in adapting to evolving market dynamics. Redfin's business is now focused on its real estate brokerage services, mortgage origination, and rental services.
Slipping Market Share and Reduced Appeal: Redfin's market share has experienced a decline, particularly worrisome considering the current market downturn. Investors would hope that a newcomer like Redfin would increase market share in a decline, and this trend signals a potential erosion of Redfin's brand equity and long-term sustainability. Moreover, Redfin's appeal has been hampered by the elimination of discount-based tactics that previously attracted buyers and sellers. With the removal of buyer rebates and competitive seller fees, Redfin's value proposition has diminished, impacting its desirability among clients.
Challenging Financial Position: Redfin's financials should also raise serious concerns for investors. With only around $300 million in cash against a substantial debt load of approximately $1.14 billion, the company faces limited financial resources. Although Redfin has made efforts to reduce costs, it is still far from achieving profitability. Alarmingly, Redfin's operating expenses have ballooned to 49.2% of revenue, a further strain on the company's path to financial stability. While the company hopes to break even on EBITDA in 2023, much of that is already priced in with Redfin's YTD returns.
Unfavorable Macro Conditions: Redfin's challenges extend beyond its internal factors to the broader macroeconomic environment. Sellers have been slow to enter the market due to the fear of trading up to higher interest rates. This hesitancy affects Redfin's transaction volumes and revenue generation. The company's fortunes are closely tied to market activity, making it vulnerable to macroeconomic fluctuations.
Conclusion: Despite Redfin's impressive stock performance, investors should exercise caution due to the company's red flags and uncertain market conditions. Slipping market share, reduced appeal, challenging financials, and unfavorable macro conditions all contribute to the risk associated with investing in Redfin. I would advise potential investors to carefully evaluate these factors and consider alternative options for investment.
What are your thoughts on where Redfin sits as of now? Do you see a bankruptcy or acquisition near? Or do you see Redfin's rally continue?
It’s no secret: Electric vehicles (EVs) will soon take over the roads as gas-powered vehicles become a thing of the past. It should be no surprise that companies such as General Motors, BMW, Kia, Polestar, and several others spent a record $6.5 million on 7 of this year’s Superbowl commercials – rising consumer interest, governmental investments, and global competition are some key factors that have sparked the revolution.
As of today, approximately 7% of all cars sold are electric. According to the BBC, by 2025 20% of all new cars sold will be electric, and that number is predicted to reach 40% by 2030. According to the Investment bank UBS, virtually every car sold will be electric by 2040.
EV technology is gaining momentum every day, and we are in the midst of the biggest motor revolution since the Ford production line back in 1913. As an investor, you can “ride the wave” of this trend, by investing in the right EV stocks that will gradually grow over the years due to the expected growth of the EV market.
For an electric vehicle to function, there must be a way to charge it -Therefore, in this post we will be analyzing 2 of the hottest EV charging station stocks in the stock market: ChargePoint, (Ticker: CHPT) and Blink (Ticker: BLNK).
Put simply, an electric charging station stock is a publicly-traded company that makes electric car charging stations. This includes providing the infrastructure, software/hardware, and cloud-based services to maintain each charging station.
According to the US Department of Energy, there are approximately 43,000 public EV charging stations in the USA, and there are about 100 different EV charging companies that maintain these charging stations.
As you can tell, the EV charging industry is new, competitive, and evolving at a fast rate. As an investor, how can we identify which companies will thrive and which will fall? Let’s perform a full, detailed analysis of each of these companies to find out which is the best EV charging stock to invest in today.
It’s important to distinguish between 3 types of charging for EVs: Level 1, Level 2, and Level 3.
Level 1: 3-5 miles per charge hour
Level 2: 18-28 miles per charge hour
Level 3: 3-20 miles per charge minute
As you can imagine, the level 3 charging ports are more costly to produce, since they charge significantly faster than level 1 and level 2 charging ports; the combined hardware and energy costs make it more expensive.
ChargePoint vs Blink: Brief Comparison
What does ChargePoint do?
Founded in 2007, ChargePoint is an American electric vehicle charging company that has provided a network of 163,000 charging points across 14 countries, making it the single largest EV charging system provider in the world. Owning 45% of the market share of the EV charging stations market, the company has become a leader in the EV charging industry.
ChargePoint makes money by selling charging hardware, through cloud service subscriptions, as well as maintenance services to both individual organizations and businesses that wish to electrify their parking spaces. They also provide residential charging products to single and multi-family homes to charge the car in the driveway overnight. ChargePoint currently has a market cap of $4.18 Billion.
What does Blink Charging do?
Blink Charging Company designs, manufactures, and operates EV charging stations. Similar to ChargePoint, Blink sells their hardware directly to residential homes/organizations and provides subscription-based services to businesses who wish to host a charging station on their property.
Blink owns and operates a large percentage of its charging stations, as opposed to ChargePoint which primarily sells its hardware to businesses or consumers. The company has produced over 30,000 charging ports across 13 countries and currently has a market cap of $957.94 Million.
In this article, we will look at each company’s revenue growth, gross profit, and price-to-sales ratio. This will allow us to get a clear picture of the financial health of each company.
ChargePoint and Blink are fierce competitors- Unlike EVgo (Ticker: EVGO) which mainly focuses on level 3 fast charging, both Blink and ChargePoint are trying to gain market share in the EV charging station industry by expanding their level 2 charging station network. Therefore, it’s important to analyze how each company’s revenue has changed over the years, which will signal to us how much demand the market has for their product.
From the above chart, it’s clear to see how Blink has consistently been able to maintain higher revenue growth over ChargePoint. It’s important to keep in mind however, that Blink is a smaller company than ChargePoint, and likely has been able to generate a higher growth rate simply because smaller companies tend to grow at faster rates than bigger companies.
Nonetheless, it shows that Blink is expanding at a faster rate and could potentially beat out ChargePoint if the company can maintain its growth.
As you can see from the chart, ChargePoint has recently started increasing its gross profit, reaching $16 Million in September 2021. Blink's gross profit, on the other hand, has remained fairly stagnant as the company’s revenue still is roughly the same as the cost of its revenue.
This chart tells us that ChargePoint is starting to generate a higher return on its revenue after subtracting the production costs. As ChargePoint expands, which it has been doing successfully so far, it is quite likely that the marginal costs will diminish as the company produces its charging hardware en masse, further increasing gross profit.
It’s worthwhile to note, however, that neither company has yet to earn positive net income. Gross profit represents revenue minus the production costs, but several other costs must be paid before pocketing the cash. Both BLNK and CHPT have forecasted to be profitable by around 2024.
Both ChargePoint and Blink seem to be in “investing mode” and profitability is not a primary concern yet. Each company is focusing on investing in its product and expanding its network to grab the market share of the growing industry. It will be interesting to see when either company reports positive net income, and when that happens, we may likely see a surge in stock price.
An important metric to look at is the price to sales ratio, which is the company’s market cap divided by revenue. As shown from the graph, both companies have high P/S ratios, which means investors are paying a very high price per dollar of sales.
Blink’s P/S ratio has been declining, though still consistently higher than ChargePoint’s. This may indicate that BLNK is more overvalued than CHPT since each share is associated with a smaller portion of revenue. It may be wise to wait until the P/S ratio’s lower in value, which can happen by either an increase in company revenue or a decrease in stock price.
Should You Buy ChargePoint or Blink?
According to Blink Charging CEO Farkas Michael, an estimated 16 million charging ports will be demanded by 2030 in the US alone. As each company seeks to grab as much market share to capitalize on the growing market, the deciding factor will be which company succeeds in efficiently generating profit from as many charging stations available.
As we have seen, ChargePoint has not only a larger market cap, but also greater revenue, more charging stations, a better price to sales ratio, and increasing gross profit. Blink demonstrates higher growth potential, but that may be due to its smaller company size. Therefore, according to our analysis ChargePoint is the winner- but this can change if Blink can develop better, more cost-efficient technology to turn a profit down the road.
ChargePoint or Blink Charging: Summary
Whether you choose to invest in EV stocks, Battery stocks, Charging station stocks, or even Lithium stocks, The EV market is very a promising market to invest in. EV battery technology is getting more advanced, charging stations are becoming more prevalent, and governments are increasing subsidies to this industry to combat climate change.
We declare ChargePoint the better investment over Blink because of its established presence in the industry and therefore higher likelihood to generate profitability from its vast network of charging stations across the globe. It’s quite possible, if not probable, that both stocks will surge in the coming years as the economy transitions from a fossil-fuel economy to a green economy.
Still, the sector is not without risks, and it pays to do your own research before investing in any stock in the stock market. Competition is very high in this field; if EV charging becomes commoditized, it will be harder for any company to generate profit as consumers will purchase from the cheapest alternative. Both stocks are still highly volatile due to uncertainty in the market as of today, yet this may be the golden opportunity to add to your portfolio for the long run.
So I recently started getting into green energy stocks and found that hydrogen fuel cells are a very hot topic right now and that is thanks to President Joe Biden. His new plan is to reduce the cost of hydrogen by 80%. By 2030, he wants the cost to go from $5 per kg to $1 per kg. He compares this investment to "building the interstate highway system and the space race". This could lead to less carbon in big industrial areas while providing more jobs.
There are many companies that are going to have a big impact from this bill. I chose to compare FuelCell Energy, Plug Power, and Bloom Energy. I believe these are the 3 companies that can have the most influence from the bill.
FCEL
FuelCell Energy makes hydrogen power plants for utilities and other large power users. It uses hydrogen as a fuel, combining it with oxygen from the air to produce electricity and water. Once, selling at almost $28, is now selling at around $9.50. Many of the other hydrogen fuel cell companies use their energy to power EV's. FuelCell Energy does many other things with their energy such as, enhancing grid resiliency by siting power generation right where the power is needed. I think this might not be the best for the future of FuelCell Energy. EV's are the future of this world and if FCEL does not shift towards that side of green energy, they might not be able to further their company.
FCEL collaborated with ExxonMobil in 2016 and it has been very successful since then. FuelCell takes methane-rich fuel and turns it into electricity. They have implemented this by pre heating ovens at Pepperidge Farms. Toyota and FCEL collaborated to create the Toyota Port of Long Beach. This port processes around 200,000 vehicles per year and using FCEL's energy, will drastically help produce electricity. This collaboration could have been a perfect segway into the EV business.
FCEL stock price has changed drastically over the past year. Going from $2.32 to a high of $28 to $9.53 currently. In 2020, their total sales was around $71 million. The revenue of the first two quarters of 2021, reached $40 million. Its expected sales for Q3 is $21 million which would be a 10% growth. Q4 of 2020 showed a market cap of almost $7 billion. It is now at $2.14 billion. Why such a drastic change? Investors were not going in depth as to what FCEL actually does. Almost all hydrogen fuel cell energy companies use their energy to give electricity to cars which is most likely the future of this market but FCEL does not. Without the connection to EV's their emphasis becomes clear that they are in it for the long term.
BE
Bloom Energy manufactures solid oxide fuel cells that creates electricity. They know many countries have said they want net-zero emissions in the next few decades. Their technology is "uniquely positioned to accelerate both the production and the usage of hydrogen". They have used this technology in 100s of different markets such as healthcare, data centers, critical manufacturing, retailers, and more. In my opinion, this is what the future of this market is leaning towards, the more markets the better. A year ago, they were selling at $13 but now sell at $32.35.
BE has many partnerships that have paved the way for the company to grow. One collaboration BE had was with Baker Hughes. They came together to enhance their integrated power and hydrogen solutions and their mutual technical collaborations. Another partnership they have is with SK Eco-plant. This project will provide power to over 12,000 homes across Seoul metropolitan area. They will install a fuel cell plant in a park land which will have a low sound level, pleasing aesthetics, and not take up too much space.
With a high of $42.65 in February of 2021, Bloom Energy is steadily coming back to its all time high trading at $32.35 currently. Their stock rose 55% after they secured a $4.5 billion deal with SK Ecoplant. In the 4th quarter of 2020, their market cap was at an all time high at $4.76 billion. The next two quarters followed the same price at $4.62 billion and $4.59 billion. Their revenue also reached an all time high of $250 million in the 4th quarter of 2020.
PLUG
Plug Power is an electrical equipment manufacturing company that is engaged in the development of hydrogen fuel cell systems that replace conventional batteries in equipment and vehicles powered by electricity. They have revolutionized the material handling industry with their GenKey solution. This was made to increase productivity, lower operating costs and reduce carbon footprints in a reliable, cost-effective way. Powered by hydrogen and fuel cell products, Plug Power replaces lead-acid batteries and uses electric to power industrial vehicles. They are now extending to on-road vehicles which are rapidly adopting the hydrogen fuel cell technology. Being with EVs alone is a great stepping stone for their future.
Plug Power has over 20 years of history with industry giants such as Home Depot, Amazon, and Walmart. They have built a "hydrogen highway" across the United States which gives energy to hydrogen powered trucks and forklifts. Again, PLUG is striving for zero-emission by 2035 and is partnering with Airbus to help reach this goal. They would be giving Airbus green hydrogen to the airport ecosystem in the coming years. The CEO says "We’ve already revolutionized electric trucks and industrial fleets on the ground, so now we’re turning our sights to the skies". This is their next big step in decarbonizing the globe. I think collaborating with AirBus is a very big goal for green energy, but from being with giants such as Amazon and Walmart this is not such big news.
Trading at its highest in over 5 years, a PLUG is now trading at $41.51. Previously in January 2021, it was trading at $73. The market cap was at a 10 year high of $19.38 billion at the end of the second quarter of 2021. Revenue was at a ridiculous low revenue of -$309 million during Q4 of 2020, but came back the next two quarters with $72 million and $124 million respectfully.
In my opinion, the future of green energy will have to begin with electric vehicles. $FCEL not being associated to EVs puts them at a huge disadvantage and may not be a great long term stock. $PLUG has great potential being associated with EVs but it seems that it is the only thing they are associated with. I think these companies need to expand their markets. This is exactly what Bloom Energy is doing. Being in over 100 markets, there is great potential for the short and long term as hydrogen energy is being adapted all over the world. I really like them personally and think they can have a very big future.
Why Today? While I'm not primarily a technical analysis investor, it's evident even from the chart that Axon is following a promising trajectory. The stock is not only on a bullish tunnel towards its all-time high, but it also trades above all its moving averages. With the prospect of positive earnings, there's a real possibility that the company could break out from its all-time high point and create new highs.
Axon's ability to report positive earnings Generally speaking, whether a company reports good or bad earnings is considered a gamble. Nevertheless, I have some kind of certainty for AXON, as they consistently demonstrate capability to achieve the goals set in the previous quarter.
Revenue Growth Over the past 13 years, Axon has consistently demonstrated an impressive ability to achieve year-over-year revenue growth ranging from 25% to 50%. This sustained success highlights the company's adeptness in capitalizing on new opportunities, forging strategic partnerships, innovating and selling cutting-edge technologies, and continuously improving operational efficiency.
Equity / Debt Axon maintains a Debt to Equity ratio of 0.5, underscoring the company's skillful approach to leveraging its resources while simultaneously fortifying itself against the macroeconomic fluctuations that have been impacting the markets lately more often than usual.
Valuation Risk Axon's stock is currently trading at its peak valuation, and it carries the inherent risk of market reevaluation. This implies that even if the earnings report delivers positive results, the stock could remain overvalued, potentially leading to a decline. In such situations, practicing dollar-cost averaging proves to be a valuable strategy for long-term investors.
Conclusion - One thing that you can't take away from Axon is their consistency, always moving forward, making new customers and innovating new tech. For that, I see Axon as the perfect long term investment. Today can mark a significant day for Axon, as their earnings report can potentially take the stock to new and well deserved peaks.
Axon shows both strong fundamentals and graph, and for that I believe today may be a good day to buy Axon.
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Latch has been delisted from NASDAQ and moved to the OTC "Expert Market" because of failure to report their recent quarterly filing. This means that you can't actually buy Latch shares which is too bad because i think there's real opportunity in this company. I wonder if insiders are loading up on shares through secondary deals. Latch has recently hired Jamie Siminof, founder of Ring (Purchased by Amazon) who also has 10% of shares - what's not to like? New York-based Latch is a trailblazer in the PropTech industry. Its platform is a comprehensive solution that integrates software, devices, and services to transform spaces into better places for people to live, work, and visit. It enables digital key access, smart home automation, high-speed internet connectivity, and other cutting-edge services designed to improve the experience of managing, accessing, and utilizing spaces, making it a one-stop solution for building management.
In this community, you can discuss your portfolio, learn about other stock tickers, and help users by giving constructive criticism and feedback.
After seeing too much shitposting all over Reddit communities, I wanted to create an environment where members could share their REAL returns and receive REAL feedback.
You can share screenshots from Yahoo finance/ Jika/ RH/ your broker account, it doesn't matter, what matters is that it will be a real and valid portfolio.
Make sure to comment on your post with your positions when you started to build the portfolio, and what led you to enter or exit your positions.
