Plus, jobless claims fell sharply last week amid harsh winter storms across the central U.S., an analyst says Moderna could soon see a $100 billion valuation, Wayfair reported an earnings miss, and Coinbase is going public.
Stocks were lower to start Thursday, with the Dow slid 6 points, or less than 0.1%. The S&P 500 dipped 0.2%, while the Nasdaq sank 0.6%.
Meme stocks are back, baby. GameStop shares opened 85% higher after gaining more than 100% yesterday following the company’s announcement that CFO Jim Bell was ousted to make way for a finance chief who can help transform the retailer into an e-commerce company. The rise in GameStop helped push several Reddit-loved stocks higher including AMC Entertainment, Koss Corp, Nokia, and Express. The sudden revival in these stocks is reminiscent to an episode late last month that captured Wall Street’s attention as members of Reddit’s WallStreetBets forum forced such stocks higher in an attempt to take on short sellers.
Jobless claims fell sharply last week. The Labor Department reported initial claims totaled 730,000 for the week ended February 20, well below economists’ estimate for a reading of 845,000. “The sharp drop in jobless claims likely is due to people in states hit hardest by last week’s huge storm, especially Texas, having better things to do than make jobless claims,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We expect a rebound next week. The trend seems to be about flat, but we remain of the view that claims will soon start to trend down, slowly at first but then more quickly as the reopening of the economy accelerates in April and May.”
Moderna shares are up more than 5% this morning after the company said it expects to generate $18.4 billion in sales from its COVID-19 vaccine this year. “It is just the beginning,” CEO Stephane Bancel said on an earnings call, noting that the company has eight other infectious disease-focused candidates in its pipeline, and will continue to use mRNA technology. “We are not a COVID-19 vaccine company.” Moderna reported fourth quarter revenue of $571 million, versus estimates for $318.9 million. Oppenheimer managing director and senior biotech analyst Hartaj Singh said the company could see a much higher valuation. “I think with Moderna’s coronavirus vaccine franchise, and they’re also starting to develop flu vaccines which should hit the market in the next couple of years… you know, we could see a $10 billion franchise five to seven years from now,” Singh said. “If you put a ten times sales multiple on that then, you can do the math, then it’s a $100 billion-plus market cap company.”
In other earnings news, Wayfair reported quarterly results that fell short of analysts’ expectations. The home goods e-commerce company reported adjusted earnings per share of $1.24 on revenue of $3.67 billion, versus expectations for revenue of $3.76 billion. “Online shopping behavior is becoming increasingly entrenched and consumer demand for the home category remains strong. Wayfair is capitalizing on these tailwinds by delivering a truly differentiated experience for both customers and suppliers. In the process, we are cementing our position as the leading platform for the Home, reinforcing our brand to tens of millions of customers, and developing innovative and value-added solutions for thousands of our suppliers,” said Niraj Shah, CEO, co-founder and co-chairman, Wayfair, in an earnings release. “As we look beyond the pandemic period, we are confident that our long-term orientation and years of investments should translate to compounding share gains and increasing profitability in a rapidly growing e-commerce market.” Domino’s Pizza also disappointed, posting earnings of $3.46 per share on revenue of $1.36 billion, compared to Wall Street estimates for earnings per share of $3.89 on revenue of $1.39 billion. The pizza chain said pandemic costs weighed on profits as U.S. same-store sales growth slowed.
And the biggest cryptocurrency exchange in the U.S. is going public. Coinbase Global Inc filed on Thursday to go public via a direct listing, revealing in a filing with the SEC that its revenue more than doubled last year. The listing could value Coinbase at more than $100 billion, making it one of the biggest companies to go public in recent years. Coinbase said that the volatile nature of cryptocurrencies is a potential risk factor that could affect its listing plans. “Our net revenue is substantially dependent on the prices of crypto assets and volume of transactions conducted on our platform,” the company said in the filing. “If such price or volume declines, our business, operating results, and financial condition would be adversely affected.”
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Upwork Inc (NASDAQ: UPWK): Upwork shares popped nearly 24% yesterday after the company reported fourth quarter revenue grew 32% year-over-year to $106.2 million. “2020 was a watershed year for Upwork. In the fourth quarter, we achieved our highest year-over-year growth since going public,” said Hayden Brown, President and Chief Executive Officer of Upwork. “Nearly a year into the pandemic, organizations are embracing remote work to unleash the potential of a global workforce of independent talent that gives them the agility, skills and efficiency they need. Our results demonstrate that we are optimally positioned to capture the exciting opportunity ahead by serving customers as the world’s work marketplace.”