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Yahoo
4 days ago
- Business
- Yahoo
Why Docusign Stock Got Devastated Today
Docusign doubled its GAAP profits and beat earnings last night -- but free cash flow delined. Growth is slowing at the e-signatures stock, and investors are nervous. 10 stocks we like better than Docusign › Docusign (NASDAQ: DOCU) stock plunged 19.3% through 11:11 a.m. ET this morning despite "beating earnings" on both top and bottom lines last night. Heading into the company's fiscal Q1 2026, analysts forecast the e-signatures company would earn $0.81 per share on just under $750 million in sales. In fact, Docusign earned $0.90 per share, "adjusted," on sales of nearly $764 million. Sales grew 8% year over year, but billings were up only 4% -- which may foreshadow a slowdown in growth ahead. Gross profit margins, on the other hand, improved 50 basis points to 79.4%. And diluted earnings as calculated according to generally accepted accounting principles (GAAP) more than doubled to $0.34 per share. Not quite as good as "$0.90," but still a big improvement. All this being said, Docusign's free cash flow belied the growth in both sales and earnings. FCF for the quarter was only $227.8 million in Q1, versus $232.1 million a year ago. It didn't double. It didn't grow even 8%. It... went down. Should this worry investors? Perhaps. Docusign's Q2 guidance sees sales growth slowing to 6%, $779 million in revenue or thereabouts. Growth for the full year is likewise forecast at about 6%, $3.15 billion or $3.16 billion in annual sales. That's not a lot of growth for a supposed growth stock, and reinforces the impression we get from slow billings growth. That said, Docusign stock sells for an unchallenging valuation of only 16.6 times trailing FCF -- cheaper than that when you factor in net cash on the balance sheet. If Docusign can just find a way to goose its growth rate again, this stock could still be a buy. Before you buy stock in Docusign, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Docusign wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Docusign. The Motley Fool has a disclosure policy. Why Docusign Stock Got Devastated Today was originally published by The Motley Fool
Yahoo
5 days ago
- Business
- Yahoo
Why MongoDB Stock Popped Today
MongoDB crushed earnings expectations last night, and its stock is soaring. MongoDB is still only "profitable" on a non-GAAP basis, but its free cash flow is positive and growing nicely. Guidance for Q2 and for all of fiscal 2026 looks strong. 10 stocks we like better than MongoDB › MongoDB (NASDAQ: MDB) stock, provider of cloud-based database services, soared 15.8% through 11:15 a.m. ET Thursday after announcing tremendous earnings last night. Heading into its fiscal Q1 2026 report, analysts forecast MongoDB would earn $0.66 per share on sales of $527.5 million. Instead, MongoDB reported sales of $549 million -- and EPS $1 on the nose. Not all the news was good. Sales surged 22% year over year at MongoDB, but the gross profit margin the company earned on those sales contracted, from 73% to just 71%. Moreover, the $1 "profit" MongoDB reported was only an adjusted, non-GAAP number. Actual earnings as calculated according to generally accepted accounting principles (GAAP) remained negative, with MongoDB reporting a $0.46 GAAP loss for the quarter. Still, that was less than half last year's Q1 GAAP loss of $1.10 per share. Even better, MongoDB grew its free cash flow 74% year over year, to $105.9 million in the quarter. Thus, while still GAAP-unprofitable (MongoDB has never reported a GAAP profit) and lacking a P/E ratio, MongoDB has now generated nearly $166 million in free cash flow over the last 12 reported months, a new record. Granted, this still gives MongoDB stock a very expensive-looking price-to-free cash flow ratio of 114 -- but at least it's a positive number. And MongoDB is still growing. Management says sales will probably exceed analyst estimates at $548 million to $553 million next quarter, and more than $2.25 billion for the year. Non-GAAP earnings forecasts also came in ahead of expectations. Now, if only someone could convince MongoDB to give guidance in the form of free cash flow, maybe we could figure out if this stock is a buy! Before you buy stock in MongoDB, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and MongoDB wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MongoDB. The Motley Fool has a disclosure policy. Why MongoDB Stock Popped Today was originally published by The Motley Fool
Yahoo
30-05-2025
- Business
- Yahoo
Why Costco Stock Just Popped
Costco beat analyst forecasts for both sales and earnings last night. Costco's merchandise costs rose more slowly than sales despite recent tariffs turmoil. Costco stock is expensive. Very expensive. 10 stocks we like better than Costco Wholesale › Costco Wholesale (NASDAQ: COST) stock jumped 3% through 10:30 a.m. ET Friday after the company beat analyst forecasts for fiscal third quarter 2025 sales and earnings. Heading into last night's report, analysts forecast Costco would earn $4.23 per share on $63.1 billion in quarterly sales. In fact, Costco earned $4.28 per share, and sales were $63.2 billion. Costco's sales grew 8% to $62 billion. With $1.2 billion in membership fees added in, total revenue was $63.2 billion -- also up 8%. Selling, general, and administrative expenses outran sales growth, rising more than 10%, which isn't great. But surprisingly, despite all the tariffs turmoil of the last few months, merchandise costs rose less than 7.5%, allowing Costco to grow its operating income nicely -- up 14%. On the bottom line, Costco's $4.28 in per-share profit increased 13%. Free cash flow (FCF) grew nicely as well, and is now up 13% to $5.9 billion for the fiscal year to date, eclipsing reported earnings of $5.5 billion over the last nine months. Tallying up the latest numbers, financial data provider S&P Global Market Intelligence tells me this is an improvement. Over the past 12 months, Costco's FCF was only $6.9 billion, so less than reported net income of $7.6 billion. Relative to the stock's $459.2 billion market cap, this means Costco stock costs 66.6 times trailing FCF, but only 60.4 times trailing earnings. Is that too expensive to buy, considering the stock is only growing profits and free cash flow in the mid-teens? In my humble opinion, it is too expensive, which is why I don't own Costco stock. It's also why I'm not benefiting from Costco stock going up 3% today. Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Costco Wholesale wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy. Why Costco Stock Just Popped was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
Why Okta Stock Plunged on Wednesday
Okta stock beat on sales and earnings last night. Guidance was good as well, with Okta forecasting better-than-expected earnings in Q2 and for all of fiscal 2026, too. However, the growth rate is slowing, and investors are nervous. 10 stocks we like better than Okta › Cybersecurity specialist Okta (NASDAQ: OKTA) took a tumble Wednesday, falling 14.6% through noon ET. The crazy thing is, Okta's news looked pretty good. Wall Street anticipated Okta would report fiscal Q1 2026 profits of $0.77 per share, adjusted for one-time items, on sales of $680.1 million. In fact, Okta said it earned $0.86 per share on sales of $688 million. What's not to like about that? Well, there are a few caveats and quibbles. Revenue grew a respectable 12%, which is good. However, while Okta beat on "adjusted" earnings, its actual earnings, as calculated according to generally accepted accounting principles (GAAP), were a lot less than the adjusted figure -- just $0.35 per share. Still, that number was a lot better than last year's Q1, when Okta lost $0.24 per share. What's more, Okta reported positive free cash flow of $238 million for the quarter, roughly four times its reported "profit," and up 11% year over year, in line with revenue growth. Turning to guidance, Okta told investors its sales will grow about 10% in Q2, and 9% to 10% for fiscal 2026 as a whole. The company didn't give GAAP earnings numbers, couching guidance in "adjusted" terms again. Still, the company's predictions of an $0.83 or $0.84 profit in Q2, and anywhere from $3.23 to $3.28 per share for the year, were all comfortably ahead of analyst estimates. So why are investors selling Okta stock today? I can only imagine it's the valuation that's spooking them. Priced at 24.5 times trailing free cash flow, Okta stock looks a bit rich for low-teens sales and FCF growth. And growth is slowing, too. It's not a great look for a supposed growth stock. Before you buy stock in Okta, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Okta wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Okta. The Motley Fool has a disclosure policy. Why Okta Stock Plunged on Wednesday was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-05-2025
- Business
- Yahoo
Why Novo Nordisk Stock Just Popped
President Trump threatened to levy a new 50% tariff on E.U.-imported goods last week. Novo Nordisk manufactures much of its GLP-1 drugs in Denmark. The president delayed implementation of the tariff over the weekend. 10 stocks we like better than Novo Nordisk › Over the weekend, President Trump offered to delay implementation of a new 50% tariff on imports from the European Union. The tariff, which was supposed to begin on June 1, now won't take effect until July 9. Shares of Ozempic and Wegovy manufacturer Novo Nordisk (NYSE: NVO) reacted positively to the news and are up 4.9% as of 10:20 a.m. ET. America has caught Ozempic fever, and 25% of Novo Nordisk's assets are located here in the U.S., where the company produces much of its drugs. The company also announced last year that it would spend $4.1 billion building out U.S. production facilities for Ozempic and Wegovy. Still, according to data from S&P Global Market Intelligence, 75% of Novo's assets are still located back in its home country of Denmark. That means a lot of the GLP-1 drugs that Novo sells here in the U.S. are actually produced abroad, and could be subject to the threatened 50% Trump tariff. If implementation of that tariff is delayed, that's good news for Novo. If E.U. and U.S. negotiators make use of the delay to negotiate a deal that will lower or remove tariffs entirely, that would be even better news for Novo Nordisk stock -- and it's probably what investors are actually hoping for today. Whichever way the tariff winds blow (and I've no special knowledge of that), Novo Nordisk stock remains arguably the cheapest play on the rising popularity of GLP-1 drugs. At less than 19 times earnings, Novo stock sells for a P/E ratio only one-third that of Eli Lilly (NYSE: LLY), which costs 58 times earnings. That makes Novo Nordisk stock the least risky way to play this trend. Before you buy stock in Novo Nordisk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Novo Nordisk wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. Why Novo Nordisk Stock Just Popped was originally published by The Motley Fool
