Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether it’s a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 👇
*Click the image to enlarge it
After reporting mixed results, the $48B apparel retailer, Ross Stores $ROST, had a positive earnings reaction, but the reaction score was -0.56.
They posted revenues of $5.53B, versus the expected $5.54B, and earnings per share of $1.56, versus the expected $1.54.
The $59B software stock, Workday $WDAY, had a -3.01 reaction score after reporting a double beat.
Their report showed revenues of $2.35B, versus the expected $2.34B, and earnings per share of $2.21, versus the expected $2.12.
And after reporting a double beat, the software giant, Intuit $INTU, suffered a -4.55 reaction score.
They cranked out revenues of $3.83B, versus the expected $3.74, and earnings per share of $2.75, versus the expected $2.66.
Now let's dive into the data and talk about the most important beats 👇
WDAY has been punished for 3 of its last 4 earnings reports 🩸
Workday fell 2.8% after this earnings report, and here's what happened:
Their subscription revenue (the vast majority of total top-line) grew 14.7% year-over-year.
The company is undergoing a significant restructuring, which includes shrinking the workforce and acquiring companies.
In addition to the strong quarterly report, the management team raised its forward revenue and earnings guidance.
Despite double-digit top-line growth, the market has been consistently punishing this stock for reporting earnings.
The management is doing its best to turn the ship around by shrinking the workforce and acquiring companies, but the market isn't buying the turnaround story.
They need to prove it first.
Backing the poor fundamentals is one of the nastiest charts in the software space. The price is carving out a textbook distribution pattern amidst a raging bull market for software stocks like Palantir $PLTR.
In addition, the stock is printing fresh all-time lows relative to its peer group, the iShares Software ETF $IGV.
Until we see a meaningful shift in the fundamentals and/or technicals, we want to stay a country mile away from this name.
If and when WDAY closes below 200, the path of least resistance will decisively shift from sideways to lower for the foreseeable future.
INTU snapped a 2-quarter beat streak 🩸
Intuit fell 5% after this earnings report, and here's what happened:
Revenues increased by 20% year-over-year, led by the TurboTax Live segment, which surged 47% over the same timeframe.
The Credit Karma segment is also performing well, growing at 34% year-over-year.
In addition to the strong quarterly results, the management team called for further double-digit growth in future quarters.
Like Workday, this company has been struggling to trend higher, despite posting great top and bottom-line growth.
The last 2 earnings reactions were fantastic, some of the best in the stock's history. However, the bulls failed to hold their ground, and now the price is back in the penalty box.
We expect this damage to take at least another quarter to repair, if not longer.
Over longer timeframes, we're still bullish on the technical and fundamental story. But for now, this isn't something we want to touch.
So long as INTU is below 715, the path of least resistance is sideways for the foreseeable future.
Thank you for reading
-The Beat Team
P.S. Don’t miss Jeff Macke and JC LIVE Tuesday at 1 p.m. ET.
They will cover earnings insights, M&A rumors, and a peek at the brand-new Macke 30 Index.
