Earnings are having a major impact on stock prices on Tuesday after a disastrous start to the week saw stocks tumble to 13-month lows. However, Monday’s selloff led stocks to recover today, with US markets opening higher. With investors anxious about the Fed’s lack of assertiveness in combatting rampant inflation, there is little guarantee that this upward momentum shall be sustained.
Gold and Bitcoin are in the green, but oil is weaker.
Tuesday’s trending stocks include:
Biohaven Pharmaceuticals (NYSE: BHVN)
This commercial stage biopharmaceutical business has seen its share price rocket after confirmation that it is on course to be snapped up by industry giant Pfizer. The proposed transaction includes the acquisition of Biohaven’s calcitonin gene-related peptide (CGRP) programs.
A press release from Biohaven confirmed that its common shareholders will receive $148.50 per Biohaven share in cash, plus 0.5 of a share of a new publicly traded company that retains the business’ non-CGRP pipeline compounds. The company’s share price had sat at $83.14 when the market closed on Monday.
As such, the company’s share price was up by more than 70% following the market open.
Peloton Interactive (NASDAQ: PTON)
Exercise equipment specialist Peloton has found its stock price heading in the other direction on Tuesday morning. The company’s third quarter earnings showed a decline in revenue from more than $1.2bn to $964.3m when comparing the period to the same time frame last year.
Investors seem concerned that the business, which did so well during the pandemic when people were often unable to leave their homes, will have trouble sustaining anything like its prior subscriber base now that life is returning to something resembling normality.
Essentially, the reopening of gyms and other fitness facilities, along with emerging competitors, may have thrown a spanner in the works. Peloton CEO and President Barry McCarthy said:
“Turnarounds are hard work. It’s intellectually challenging, emotionally draining, physically exhausting, and all consuming. It’s a full contact sport.”
At the time of writing, the company’s share price was down by 18.75%.
Upstart Holdings (NASDAQ: UPST)
Another business taking a beating in early trading on Tuesday is Upstart Holdings. This comes after the company said it expected second quarter revenue to be below that achieved in the first three months of the year. The company also cut its full year sales guidance to $1.25bn from $1.4bn previously. The reasoning for the revision is climbing interest rates and the risk of a recession.
Co-founder and CEO Dave Girouard said:
“Upstart just delivered our seventh consecutive profitable quarter and our fourth straight quarter with triple-digit year-on-year revenue growth. While this year is shaping up to be a challenging one for the economy, we know the drill and are confident that we can navigate whatever 2022 and beyond might hold."
Meanwhile, CFO Sanjay Datta cited “general macro uncertainties and the emerging prospect of a recession later this year" as the reason for the company's "higher degree of conservatism in our forward expectations”.
The company’s shares were down by more than 50% on Tuesday morning. The stock has been bearish for some time now, having traded at over $400 during the last 12 months before dropping sharply since October 2021. Since its earnings call on Monday the stock is trading as low as $29.71.
Builders FirstSource (NYSE: BLDR)
This building products supplier is in the green on Tuesday following a positive set of first quarter earnings. Builders FirstSource reported 36% net sales growth during the period, while net income rocketed up by 270%.
The company acquired the Texas Panel Truss and East Panel Truss businesses during the period for around $150m and has also boosted its outlook. President and CEO Dave Flitman commented:
“Looking ahead, we believe the housing industry remains resilient and underbuilt, and we have seen strong underlying demand in new housing construction into the second quarter.
“Furthermore, we are maintaining our focus on allocating resources to outpace market growth in our higher margin value-added products while investing further in our digital solutions platform to advance our goal of transforming the homebuilding industry. For 2022, we have increased our expectations for growth and significant free cash flow generation.”
The Dallas-based business has seen its share price rise by almost 5% after the opening bell.
Aterian Inc (NASDAQ: ATER)
Another company that has seen its share price steered by an earnings release on Tuesday is Aterian.
This technology-enabled consumer products platform reported that its revenue dipped below expectations in the three-month period, coming in at $41.7m. This also represented a reduction from revenues of $48.1m in the comparable period in 2021.
The company noted that it had experienced “challenging macroeconomic conditions” during the period. However, the company expressed confidence that its financial strength, infrastructure and personnel would help it to tough its way through current supply chain instability.
Aterian’s share price was down by more than 15% in early trading on Tuesday.
Vroom (NASDAQ: VRM)
This online used-vehicle seller opened today up 35% but has since pulled back slightly. Even so, the stock is still up over 23.85% at the time of writing.
This comes after the company posted a lower than anticipated loss and revenue growth of 56% to $923.8m, beating analysts’ expectations $874.1m. Vroom’s loss for the period came in at $0.71 per share against the Zacks Consensus Estimate of a loss of $1.03.
Additionally, the business announced the appointment of new CEO Tom Shortt, who has come onboard to guide the company's realignment plans.
The company is still quite a bit off its 52-week high of $46.30 trading at $1.34 at the time of writing. Its 52-week low is $1.08, so we see this a highly volatile stock to get into but on the right track if the latest reports are anything to go by.