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Fresh Take On Freshpet
Freshpet's Earnings Fall Short
Americans are increasingly ready to splash out on their furry friends. And Freshpet's (FRPT) premium preservative-free dog and cat food products have been capitalizing on that trend. But can it continue?
Despite being the top dog in the gourmet pet food world, Freshpet's shares slumped nearly 24% this week, after its Q4 revenue and earnings missed analyst estimates.
Even so, Freshpet CEO Billy Cyr described 2024 as a "breakout" year — and Barron’s believes the risk is overblown.
All Bark and Some Bite
The company recorded Q4 net sales of almost $263 million — a 22% increase from the year before. Net income was up 18% for the same period.
On top of that, Freshpet commands the lion's share of the fresh pet food market. According to Barron's, it accounts for 95% of all brick-and-mortar sales. It has also established a loyal customer base with very high repeat rates.
Plus, the company has made it hard for competitors to get a look in: With its own manufacturing plants and network of refrigerators in stores across the country, Freshpet has consolidated its position as a pet's best friend.
Fresh Take
For Freshpet to stay in investor's good books, it needs to maintain momentum. Consumer staples lagged last year due to economic concerns.
Most believe Freshpet can buck that trend. 11 of 17 analysts ranked Freshpet a Buy, per the Wall Street Journal.
But that may change in the coming weeks as investors digest its less-than-fresh results. TD Cowen's (TD) Robert Moskow had been upbeat prior to the report, but afterward, the brokerage warned it could be difficult to evaluate the risk of decelerating growth.
Investors will want to pay close attention to see whether Freshpet will continue to be the cat that got the cream — or tilt more toward being a dog's dinner.
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Wynn Resorts’ Winning Streak
Betting Big on Growth
Wynn Resorts (WYNN) has been on a winning streak lately. The company posted strong results last quarter and subsequently surged more than 10%. But Jefferies (JEF) thinks the casino operator’s luck hasn’t run out yet.
Analyst David Katz recently upgraded the stock from Hold to Buy and boosted his price target to $118, implying a 30% upside from current levels.
Macao Recovery Adds Momentum
The analyst believes Wynn is well-positioned for long-term growth, thanks to its stable core business and expansion plans. Katz sees the company's upcoming resort, Wynn Al Marjan Island in the UAE, as a major catalyst for the stock price.
Katz adds that Wynn is benefiting from a strong rebound in Macao. The company’s exposure to high-end VIP and premium customers helped drive a 23% year-over-year increase in EBITDAR last year.
The company’s performance in China also adds to the bullish sentiment. Early results for the current quarter from the Chinese New Year period indicated strong performance with full hotel occupancy and solid VIP turnover.
Wall Street Is All In
Despite the recent surge, the stock is still lagging behind the broader market and is down more than 11% over the last 12 months.
Still, Wall Street thinks Wynn is a winner. According to LSEG, 16 of the 19 analysts covering Wynn rate it a Buy or Strong Buy.
If the analysts are right and Wynn continues to execute its growth plans and stay on track in key markets, the company’s hot streak just might continue.
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BYD's Electric Personality
3 Smart Drive Plays
BYD Company (BYDDF) recently hit an all-time high after it launched DiPilot — an assisted driving system for all its cars. BYD founder and Chairman Wang Chuanfu called it a "new era" for smart driving.
The company, which had previously stalled on autonomous driving, has shifted gears. Now it's all-in on the tech. It has even incorporated Chinese AI DeepSeek into its systems.
Analysts from Nomura (NMR) and Goldman Sachs (GS) are positive about the electric vehicle giant and beyond. They say the companies that supply driver assist components could also be heading for the fast lane.
In the Driver’s Seat
Nomura argues that more manufacturers will upgrade their smart driving functions. This could translate into higher demand for sensors, chips, and other autonomous driving components.
The research said BYD Electronics, Horizon Robotics (HRZRF), and Hesai Technology (HSAI) are well-positioned to meet accelerated demand.
BYD Electronics is a Hong Kong-listed subsidiary of BYD that manufactures electronic components.
Horizon Robotics is a chipmaker that launched on the Hong Kong stock exchange in October last year. It specializes in automated driving computing.
Hesai Technology is a lidar leader that makes autonomous driving sensors. This month it announced it would provide lidar for more than 10 BYD models.
On the Horizon
According to Investing.com, 26 of 29 analysts rate BYD Company a Buy. Similarly, MarketScreener says 6 of 9 analysts rate Horizon Robotics a Buy.
Hesai Tech is ranked a Buy by 10 of 12 analysts, per Wall Street Journal. This strong rating comes even as the firm challenges the US Defense Department's claims that it works with the Chinese military.
Though it's still early days for the technology, as of now, it seems a lot of smart money is on smart cars.
Are you bullish or bearish on Sonos (SONO) over the next 12 months?
🟨🟨🟨🟨🟨⬜️ 🐂 Bullish
🟩🟩🟩🟩🟩🟩 🐻 Bearish
And, in response, you said:
🐂 Bullish — “Always had a solid product until the upgrade. Have confidence in the new reorg.”
🐻 Bearish —
“The app upgrade made my $1k speaker completely worthless. Threw it in the trash because I couldn’t control volume. I will NEVER buy SONOS again. ”
“The US economy is not telling people to buy high-end audio gear. It is a totally discretionary purchase and people are having a hard time buying groceries and housing ”
Are you bullish or bearish on International Business Machines (IBM) over the next 12 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨🟨🟨🟨🟨⬜️ 🐻 Bearish
And, in response, you said:
🐂 Bullish — “It's the original AI stock...”
Are you bullish or bearish on Compass (COMP) over the next 12 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨🟨🟨🟨⬜️⬜️ 🐻 Bearish
