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.
Accolade (ACCD)
+16%
Shares of Accolade, a pioneer in hyper-personalized healthcare benefit management for employers of all sizes, rose nearly 16% on Monday after last week’s sharp selloff. During its earnings call last week, Accolade reduced its revenue guidance by ~5% but maintained its intermediate and long-term EBITDA guidance. In our view, Accolade’s data-driven, third party-audited ROI has positioned it as a premier benefits manager. As the digital health market undergoes rapid, structural change, we believe Accolade's cash position, brand, and diverse customer/product portfolios will help shape the self-insured employer market.
Shares of Etsy traded down nearly 17% on Thursday after the company reported first quarter earnings during a broad market selloff. Despite beating Wall Street consensus estimates, Etsy did guide to a slowdown in growth similar to other companies in the consumer internet space. Etsy’s revenue increased 5% thanks to 3.5% growth in consolidated gross merchandise sales (GMS), 63% growth in active sellers, and ~5% growth in active buyers. We believe that growth in Etsy's vendor ecosystem highlights its leading position as a niche marketplace platform. Etsy operates marketplace platforms internationally through Etsy.com, Reverb.com, and Depop.com.
Shares of NIO fell 15% on Thursday after the company disclosed its inclusion on the list of companies at risk for delisting under the US Holding Foreign Companies Accountable Act (HFCAA). NIO is exploring options for reducing the potential impact of any delisting, including additional listings in Hong Kong and Singapore. NIO is a leading manufacturer of electric vehicles in China.
Shares of Veracyte traded down roughly 15% on Thursday in a broad market sell-off after it reported better than expected revenue and earnings. Veracyte’s revenue increased 85% in the first quarter as its net loss dropped sharply. Sell-side analysts do not seem to understand dynamics in the oncology space or the operating leverage that Veracyte should enjoy after completing its vertical integration with two acquisitions, HalioDx and NanoString’s FLEX platform. Veracyte is a global leader in minimally invasive, molecular cancer testing.
Shares of Bill.com traded down almost 21% on Friday after the company reported first quarter results that missed expectations. Despite strong net customer additions, Bill.com reported lower than expected growth in revenue and total payment volume (TPV). Bill.com is a software and business-to-business payments provider for small and medium businesses in the US.
Shares of Burning Rock traded down 17% on Friday in a broad market sell off. The company is a leader in precision oncology and molecular diagnostics in China. Its commercial channels, business model, and technology cater to the three-tiered hospital system in China.
Shares of CareDx traded down nearly 19% on Friday after the company reported earnings that beat revenue expectations and then reiterated previous guidance. CareDx’s suite of testing products is moving into new organs and insured populations, both of which have slightly lower Average Selling Prices (ASP). That said, in our view, the company has a decade-long track record of securing reimbursement in commercial populations with robust clinical evidence that ultimately bolsters ASPs. CareDx is modernizing transplant medicine with deep genomics expertise, machine learning, and longitudinal patient management. The company employs multi-modal testing––including donor-derived cell-free DNA (dd-cfDNA) liquid biopsy, gene expression profiling (GEP), and prognostic AI-based software––to assess the risk of organ rejection.
Shares of Cloudflare fell nearly 16% on Friday in a larger sell-off of high-growth technology stocks. During its first quarter earnings call, Cloudflare announced a better-than-expected 54% increase in revenue, an increase in dollar-based net retention from 125% to 127%, and a 30% increase in the number of paying customers to more than 150,000. We believe Cloudflare should continue to gain meaningful share in cloud-based computing, security, and infrastructure solutions.
