The notion of a recovery is not as leftfield as I thought. Since the beginning of the pandemic, I have entertained the idea that automobile demand may be a late-stage beneficiary of the pandemic and now there are some signs of this. The net result of this trend is likely to be a worsening of traffic (Beijing is already gridlocked...
Jio is making a play to finally create a home-grown digital ecosystem. General Atlantic and Saudi PIF look set to follow Facebook, Silverlake and Vista Equity Partners in investing substantial amounts in Jio Platforms but earning a return on a $58.6bn valuation will require a long wait. Jio Platforms is the leading mobile phone service provider in India and while...
Uber is a master at numerical storytelling. Uber produced mixed results but has benefitted substantially from the pick-up in demand for food delivery which helped it to paint a rosy picture of its outlook with numbers. Q1 2020 revenue / net income was $3.54bn / LOSS$2.94bn ahead of revenue forecasts of $3.28bn but below net income estimates of LOS$0.93bn. To...
One winner and one loser from the pandemic. Peloton Q1 2020 – Hardware heroin. Peloton reported excellent results as the virtual gym trend is accelerated by the pandemic but its dependence on hardware is worrying as Peloton is not Apple and competition here is going to be brutal. Q1 2020 revenues / EBIT were $525m / LOSS$58m far ahead of...
HelloFresh’s ability to execute under pressure is its greatest asset. Far from helping food delivery, the current pandemic seems to be accelerating the consolidation with HelloFresh emerging triumphant as it has been able to execute extremely well greatly boosting its brand and reputation with its customers. HelloFresh reported excellent Q1 2020 results as it is one of the few companies...
Intel further broadens its position in digital transportation. Determined not to miss out on digital transportation the way it missed out on mobile, Intel is moving again to build a position and this time, I think it may be getting it right. On top of a series of other transactions, Intel has agreed to buy Moovit, a transit data and...
Lack of a vaccine will hurt for some time. Amazon reported good results but disappointed shareholder by committing all of its profits in Q2 2020 to COVID-19 related spending sending a warning that costs are likely to remain higher until a vaccine is found. Q2 2020 revenues / EBIT were $75.4bn / $4.0bn ahead of revenue expectations of $72.6bn but...
Withdrawal of guidance unsettles the market. Apple reported good results but withdrew its guidance offering instead an olive branch comprised of a dividend increase and share buyback. FQ2 2020 revenues / EPS were $58.3bn / $2.56 ahead of consensus of $54.25bn / $2.26. Apple has real exposure to China and saw a lot of fluctuation in its business during...
Facebook surprises more than Microsoft. Microsoft FQ3 2020 – The obvious beat Microsoft ticked all the right boxes in its FQ3 2020 earnings report with the exception that it saw weakness from one-time software sales which are typically purchased by small businesses which is where the virus hammer is falling the hardest. FQ3 2020 revenues / EPS were $35.0bn /...
Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.
Food delivery – End of the beginning.
Uber taking out Grubhub is exactly what is needed. Uber has proposed to take over Grubhub which would create an entity slightly larger than DoorDash, setting the scene for intense competition between the two and the exit of all of the others. I have argued (see here) that the impact of the pandemic will be to accelerate consolidation in the...