XYZ –26.73%: A wild trading session seeing the stock whipsaw after a disappointing 1st quarter result that beat on earnings but was soft on revenue; more concerning was the outlook for the year ahead with guidance downgraded as a weakening consumer comes into focus.
- Net revenue $5.77 billion, -3.1% y/y, estimate $6.22 billion
- Adjusted Ebitda $812.8 million, +15% y/y, estimate $794 million
- Downgraded FY25 earnings before interest and tax (EBIT) to $1.9 billion from $2.1 billion vs consensus $2.13 billion
The key risk for XYZ is the macroeconomic environment in the US, particularly as it relates to core customer demographic as well as small and medium enterprise business. Having disappointed the market in today’s quarterly, the stock remains vulnerable to further downgrades.
MM is neutral toward XYZ
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