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A Recap of February’s Business Breakdowns Podcasts

In February 2022, Visible Alpha was a proud sponsor of Business Breakdowns, a podcast that dives deep into a single company with investors and operators that know it best. Visible Alpha deep consensus data on each company aligns with just how in-depth the conversations go in each episode.

Below is a link to each episode along with a short report highlighting a key revenue driver of the featured company using Visible Alpha consensus data.

 

VA-Breakdowns-TwitterFebruary 2, 2022 |Twitter: Towing the Clown Car out of the Goldmine

In this episode, listeners find that the investment debate is about much more than just revenue and EPS. The majority of the conversation focused on KPIs is Twitter’s business model, including mDAUs and ARPU. Through our unique consensus dataset, we are able to provide the market perspective on these two KPIs.

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VA-Breakdowns-UPSFebruary 9, 2022 |UPS: Leaders of the Package

During this episode, listeners find that operating margins are the “guiding light” that drives the parcel delivery industry, specifically UPS, FedEx and Amazon. Historically, e-commerce has hurt operating margin quite substantially for UPS and FedEx, but recent investments in automation have helped to improve operating efficiency. Visible Alpha consensus shows that analysts expect that these businesses will at least maintain this margin.

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VA-Breakdowns-Basic-FitFebruary 16, 2022 |Basic-Fit: Increasing Returns to Scale

During the episode, listeners learn that the Netherlands-based gym operator is running a similar playbook to U.S.-based Planet Fitness. By using economies of scale, and cutting out expensive but rarely used amenities, Basic-Fit offers a gym membership that undercuts mid-market gym rivals as well as capturing significant demand from traditional non-gym goers. Visible Alpha consensus data highlights two KPIs discussed in the podcast: number of gyms and operating income per club.

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VA-Breakdowns-NYT February 23, 2022 |The New York Times: The Empire Strikes Back

During the episode, listeners learn how The New York Times embarked on a strategy in 2014 to shift from declining print subscriptions with a free-ad supported model to a digital and subscription-based model. This resulted in a material uptick in digital subscriptions. This strategy, bolstered by factors such as the coronavirus pandemic and the U.S. presidential election, resulted in digital revenue surpassing print revenue in 2020. According to Visible Alpha consensus data, digital revenue and digital-only subscribers are expected to continue to grow with a continued decline in print.

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Analysts Predict a Bumpy Ride for Lumber and Used Car Prices

Along with the economy reopening, and accompanying financial and monetary stimulus, comes a pent-up demand for goods and services. Of course, that doesn’t necessarily align with the readiness of the supply chain to meet that demand in a timely manner. Within this environment, prices have begun to rise across the economy as evidenced by an increase in the Consumer Price Index (CPI). A key debate that is playing out in the media, as well as among investors and policymakers, is how much inflation we’ll experience and for how long. The latest CPI data for the month of June, issued by the U.S. Bureau of Labor Statistics, indicates a 5.4% increase from last year – the biggest surge of consumer prices since 2008.

In this article, we examine Visible Alpha’s granular consensus from several different angles to explore analysts’ expectations with regard to lumber and used car pricing.

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On October 27, 2020, Visible Alpha’s Research and Innovation Lab hosted a webinar with Andrew Lobbenberg, HSBC’s European Equity Research Sector Head of Transport, to discuss the dramatic impact of Covid-19 on airlines this year and the industry’s rocky recovery trajectory. 

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The global impact of Covid-19 on the travel industry (and across all sectors) has been quite significant, especially as consumers and businesses are still wary of travel risks. Airlines in particular continue to encounter headwinds and the road to recovery is expected to be long and rocky.

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The novel coronavirus pandemic was timed poorly for major European airport operators (Aena, Fraport and Aéroports de Paris) that were already facing headwinds from regulators seeking to decrease the landing fees they charge airlines after years of strong tourism growth and high returns.

The world-wide lockdown brought most international traffic to a virtual standstill, and over 180 countries are still either completely or partially closed to travelers. Aena, Fraport and Aéroports de Paris now risk increasing pressure from regulators aiming to help struggling airlines, many of which received government assistance, such as Lufthansa, who accepted a $10B bailout from the German government in exchange for a 20% equity stake. Lufthansa is expected to seek lower landing fees from Fraport, the owner of the Frankfurt Airport where Lufthansa’s main hub is located. In addition to tariff risk, reduced air traffic and lower consumer spending are causing the retail, hotel and concession businesses to also seek rent negotiations with the airports.
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Wall Street analysts believe the four largest U.S. airlines – Delta (DAL), United (UAL), American (AAL) and Southwest (LUV) – will lose 50-60% of their revenue from Covid-19 as they struggle with unfathomable demand shock and restricted travel conditions. Many analysts also point out the risk of a structural change to corporate travel going forward as companies reevaluate their return on travel expenses since many businesses have adapted well to working remotely. Read more

Earnings season is here, and companies are expected to update full-year guidance to reflect the impact of the COVID-19 crisis. As events have unfolded since the start of the year some analysts have made revisions to their estimates accordingly.

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Intel Investors Focused on Data Center Outlook by Visible AlphaIntel (INTC): Investors Focused on Data Center Outlook

Intel’s Data Center Group (DCG) is a major focus for investors as it has historically posted strong, double-digit revenue growth and has largely offset flat to negative growth in its Client Computing Group (CCG) segment. The DCG segment also has higher operating margins, which further bolsters overall earnings for the company. Read more…

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When Navistar reported 2Q17 results, investors were surprised at the company’s guidance. Navistar had just reported 2Q results that were well-below expectations. Adjusted EBITDA came in at $65 million, well-below the consensus of $130M. The company had also missed adj. EBITDA consensus estimates in 1Q. However, management maintained their guidance of full-year adj. EBITDA to be above the $508M reported in 2016. This implies 2H adj. EBITDA of at least $388M, which would be over 3x what they just reported in 1H17.

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