We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
Coinbase (COIN)
-26%
Shares of Coinbase traded down 20% on Monday and 26% on Wednesday before rising 17% on Friday––a volatile week caused by Coinbase's first-quarter earnings, its decision to increase investment at the expense of short-term earnings and, perhaps more important, the crash in TerraUSD stablecoin. Importantly, Coinbase had no exposure to Terra or Luna. That said, during the first quarter, the company increased its verified users by 75% on a year-over-year basis to ~100 million, expanded its share of global spot trading volume from ~11% in 2021 to nearly 14%, and increased the number of monthly transacting users by 51% year-over-year to 9.2 million. Since the beginning of the coronavirus crisis, Coinbase’s net income margin has fluctuated between 17% and 72%. Given its inherent profitability, competitive position, and massive opportunities, we believe the company is right to focus on investing in its derivatives offerings, NFT platform, and international expansion. During this week, Coinbase's enterprise value fell to less than $10 billion, four times less than the valuation of private crypto exchange FTX, and less than the valuation of crypto exchange Blockchain.com and NFT platform Opensea, which were valued at $14 billion and $13 billion earlier this year in the private markets. Coinbase is a premier, regulatory-compliant crypto trading platform active in more than 100 countries around the world.
Shares of SomaLogic traded down 15% on Monday and recovered 21% on Friday after the company reported higher than expected earnings for the first quarter. SomaLogic is a leading proteomics and molecular diagnostic company that we believe has built and refined its platform, enabling a lower cost-of-goods-sold (COGS) for its proteomics assays for both research and clinical end-markets.
Shares of Unity Software traded down 38% on Wednesday and rebounded ~16% on Thursday after the company reported first-quarter results in which it reduced guidance for full-year revenue growth from 34-36% to 22-26%. Management noted that its Audience PinPointer tool ingested faulty data that impacted Unity's Operate Segment. Now the company is prioritizing the cleaning of its training data and retraining targeting products under Unity Monetization. Aside from that bad news, management noted that Unity's Create segment’s revenues grew 65% year-over-year thanks to surging demand for its real-time 3D rendering tools. We maintain high conviction in Unity's longer-term ability to execute, our confidence reinforced by Create’s exceptionally strong growth. We also expect Operate’s growth to reaccelerate. Unity provides solutions for the creation of real-time 2D- and 3D-content across the entire creation-to-monetization pipeline.
Shares of 908 Devices fell 23% on Wednesday after the company reported better than expected quarterly revenue and earnings. 908 Devices is an analytical life science tools company focused on point-of-need mass spectrometry tools to accelerate low-cost biological manufacturing methods.
Shares of Roblox rebounded 19% on Thursday after the company reported first quarter earnings. While total bookings declined 3% year-over-year against tough COVID-related comps of 160% growth during the first quarter of 2021, other metrics are highlighting Roblox’s underlying strength. Total daily active users grew 25% year-over-year, powered by 94% growth in the Asia Pacific region. Total hours spent on the platform and total revenue grew 22% and ~39% year-over-year, respectively. In our view, Roblox will continue to scale globally as a user-first digital experience and gaming platform. Roblox provides an online entertainment platform that allows third-party creators and developers to create and monetize experiences and games.
Shares of Endeavor appreciated nearly 20% today after the company reported first-quarter earnings that surpassed revenue and earnings estimates. Consolidated revenue grew ~38% year-over-year, powered by 53% growth in its Events, Experiences, and Rights Segment and 44% in its Representation Segment. Endeavor provides entertainment, sports, and content creation and management services internationally.
Shares of Genius Sports appreciated 18% today after the company reported first-quarter earnings that surpassed all consensus estimates except GAAP EPS. Management reported that revenue surged 60% on a year-over-year basis as its Media Technology, Content, and Services Segment and Sports Technology and Services Segment grew 157% and 123%, respectively. Management reaffirmed Genius's full-year guidance of $340 million in revenue and $15 million in adjusted EBITDA, adding to our conviction that it is a premier sports data intermediary in sports-related betting, content, and advertising.
