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.
Monday.Com Ltd (MNDY)
Shares of Monday.com traded up ~18% on Monday after the company announced second-quarter earnings and increased full year revenues by roughly 5%. In the quarter, revenue increased 75% year-over-year, while net dollar retention exceeded 125%. ARK’s conviction is increasing that Monday.com is a leader among modern productivity and collaboration suites.
Shares of Nextdoor traded down ~25% on Wednesday after the company reported second-quarter earnings and reduced guidance. On a year-over-year basis, revenue grew 20% and weekly active users (WAUs) increased 26% to 37 million. Management guided to revenue growth of 16% for the year. While ARK expects growth to decelerate across social media platforms as consumers and small businesses adjust to a post-COVID normal, we also believe that Nextdoor could become the hyper-local platform of choice. Nextdoor is a social media platform that connects local consumers, businesses, and public services.
Shares of Velo3D traded up ~42% on Wednesday after the company reported that second-quarter sales more than doubled year-over-year. Velo3D is a leading additive manufacturing and 3D-printing company specializing in support-free powder bed fusion. SpaceX is its largest customer and a strategic investor.
Shares of Vuzix traded up ~16% on Wednesday after the company reported second-quarter results. Management announced that Vuzix has signed fifteen contracts across the defense, consumer, and enterprise sectors, including four Fortune 100 retailers. Thanks to one of the contracts, Vuzix has begun to scale production of its M400 smart glasses to satisfy increased demand from Amazon’s warehouses. We have high conviction in Vuzix's ability to expand across verticals as the demand for augmented reality (AR) hits inflection points. Vuzix designs and manufactures AR glasses as well as related software and hardware for both consumers and enterprises globally.
Shares of Butterfly Network traded up ~28% on Thursday, participating in a broad-based biotech rally. Butterfly Network is an innovative medical imaging company focused on commercializing a portable, low-cost point-of-care ultrasound (POCUS) system.
Shares of Invitae traded up ~280% on Thursday after the company announced second-quarter earnings. We believe a combination of factors drove the stock price surge: a detailed and constructive quarterly earnings call, better-than-anticipated macro inflation reports, and a short squeeze impacting 22% of the liquid shares, or float, held short. The stock then traded down ~47% on Thursday before appreciating ~19% on Friday.In our view, Invitae’s recent portfolio consolidation and staff reductions have tilted the company toward profitability. While it still intends to offer one of the broadest and highest-quality molecular diagnostic testing menus and unique, population-scale digital health tools, unsettled market conditions are preventing Invitae from investing as aggressively in the genomic revolution as it had intended. That said, we are encouraged by the sustained improvements across key performance metrics, including revenue/patients, operating expenses as a percent of revenue, and gross margins. Invitae is a leading medical genetics testing company, thanks to its scalable variant interpretation engine, suite of digital and clinical services, and innovation in liquid biopsy.
Shares of Pacific Biosciences traded up ~15% on Thursday in a broad-based biotech rally propelled by better-than-anticipated inflation data. Despite foreign exchange and pandemic-related headwinds, we were encouraged that PacBio’s revenue increased more than 50% in the Americas region this quarter—the highest growth rate of any sequencing company during this period––and are confident that its new long- and short-read systems will stimulate more revenue growth and profitability. According to our research, PacBio is the only sequencing company with two sensing platforms and chemistries, which should generate best-in-class data for any sequencing application. Pacific Biosciences is a leading provider of accurate and comprehensive sequencing solutions.