Latest news with #ScottDevitt
Yahoo
10 hours ago
- Automotive
- Yahoo
CarMax pops on Q1 earnings: The journey to catch up to Carvana
CarMax (KMX) stock gains after reporting an earnings beat driven by strong demand for used vehicles. Wedbush Securities managing director of equity research Scott Devitt outlines the results and the used car retailer's efforts to catch up to Carvana (CVNA). To watch more expert insights and analysis on the latest market action, check out more Catalysts here. CarMax is rising after topping first quarter expectations with sales rising nearly 6% from a year earlier boosted by strong demand for used vehicles. Joining me now, we've got Scott David, who is the Vedbush Security's managing director of equity research. Great to have you here with us. So, you have an outperform rating and a $90 price target on the stock. How are you looking at CarMax right now? I thought it was a good quarter. You know, retail units were up 9%. Um, it was a record high gross profit dollar per unit. Um, so it was a good quarter. You know, this company is uh constantly playing catch up with Carvana. And um, I think Carvana is making it a better company, but it's a slow progression. You know, and they've shown some some signs here of strength. I think the asset long-term is mispriced favorably, but um, you know, but it but it's uh it's kind of a steady as she goes and they have to keep executing. You know, we're continuing to look across this gross profit and and I wonder your evaluation of their gross profit and it did increase by 13% in the most recent quarter driven by higher unit volumes, strong unit margin performance here. But so much of this business is making sure that when they are purchasing cars as well that they're purchasing cars that are favorable enough for them to then be able to flip and add on that margin. What's your own assessment of the margin run rate that they're going to be able to achieve over time here and and grow to even get more shareholder value returned? So what's happened in the past 12 months is that retail prices have been rising faster than wholesale prices, which is good for a retailer like CarMax because they capture that spread. I think what you're going to see potentially over the next 12 months is that um, that that gap tightening a little bit, which will be, you know, somewhat of a headwind, but from a sourcing standpoint and a scale standpoint, it's really kind of a two-player game. You know, 90% of this industry is sold by small mom and pop still. And CarMax and and particularly Carvana, you know, are consolidating the industry at the at the kind of head of the industry. Um, what's notable, you know, is within the next three years that Carvana is going to start to approach and potentially exceed CarMax units. So that'll be important to watch. I think both companies can win. Um, but there's one, you know, performing at an A+ level and and and that's Carvana. And I think, you know, CarMax is probably a BB+ right now and the rest of the industry is a C.
Yahoo
12 hours ago
- Automotive
- Yahoo
CarMax pops on Q1 earnings: The journey to catch up to Carvana
CarMax (KMX) stock gains after reporting an earnings beat driven by strong demand for used vehicles. Wedbush Securities managing director of equity research Scott Devitt outlines the results and the used car retailer's efforts to catch up to Carvana (CVNA). To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
31-05-2025
- Business
- Yahoo
Why Shares of Uber Are Sinking Today (Hint: It Has to do With Tesla)
Bloomberg is reporting that Tesla's robotaxis will soon debut in Austin. A Wall Street analyst is concerned about what this could mean for Uber. Uber has positioned itself as a partner for the autonomous driving revolution. 10 stocks we like better than Uber Technologies › Shares of the ride-hailing giant Uber (NYSE: UBER) traded roughly 4.5% lower in the final half-hour of trading today after a Wall Street analyst cited a potential threat to Uber's business model and long-term strategy. In a research note, Wedbush analyst Scott Devitt maintained a "neutral" rating on Uber and an $85 price target but noted that Tesla's soon-to-launch robotaxis present a threat to the company's long-term vision. The news comes after Bloomberg reported that Tesla plans to launch robotaxis in Austin on June 12. In the note, Devitt said that a fully autonomous ride-hailing fleet could significantly disrupt Uber's human-powered fleet. Tesla's CEO Elon Musk has also indicated that Tesla may try and set up its own ride-hailing network rather than partnering with an existing player. Meanwhile, Uber has positioned itself as the strategic partner for autonomous vehicle companies, having already formed partnerships with Waymo and Pony AI, among others. Uber believes that its massive fleet, operational platform, and regulatory expertise make it an ideal partner for self-driving companies looking to scale. While the market seems to be taking Wedbush's concerns seriously, I think it's still too early to say that Uber is in trouble. It will take Tesla time to scale, and it could still take awhile for autonomous ride-sharing to gain widespread traction. Plus, Musk and Tesla have never run a ride-hailing fleet before. They may still end up partnering with Uber. Uber has transformed itself financially, becoming profitable and generating significant free cash flow. I also think there will likely be more than one winner in the autonomous space. Interested investors can buy the dip here. Before you buy stock in Uber Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Uber Technologies 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 $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% 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 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy. Why Shares of Uber Are Sinking Today (Hint: It Has to do With Tesla) was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
09-05-2025
- Business
- Yahoo
Airbnb Stock (ABNB) Teeters Like a House of Cards as U.S. Travel Slumps
Airbnb's (ABNB) lackluster stock performance isn't anything new for investors who've been following it for a while. This year alone, it's down nearly 8%. Over the last 12 months, it's down 22%, and in the past five years, the company has lost around 13% of its value. Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Late last week, Airbnb reported disappointing Q1 results with accompanying weak guidance for Q2. This raised concerns about travel demand potentially affecting the company's growth story, particularly for a stock that's arguably priced for growth. Domestic travel in the U.S. is softening with economic uncertainty affecting long-term booking lead times. Moreover, a decrease in foreign travelers impacts overall travel demand and undermines Airbnb's core business. While Airbnb's bullish thesis has relied on its ability to expand market share, remain more resilient than its peers in tough macro conditions, superior pricing power, and upcoming product launches, I believe the current share price leaves little room for upside, especially if consumer spending weakens as the market expects. For now, I would take a more neutral stance on ABNB. Despite the EPS miss and modest headline numbers, Airbnb's latest quarter was clearly soft but still showed some undeniable positives. Some of the highlights included revenue growing 6% year-over-year, slightly ahead of estimates, while EPS came in at $0.24, which was right in line with expectations. For the coming quarters, Airbnb made it clear that it expects growth in nights and experiences booked to slow a bit compared to Q1, and ADR (average daily rate) on a year-over-year basis came in just a bit light versus what the market was hoping for. Further demonstrating Airbnb's fortitude is the company's nights and experiences bookings, which grew 8% in Q1, while ADR fell 1% year-over-year to $171 from $173. In other words, the online marketplace squeezed sales revenues from existing businesses even while macro conditions deteriorated marketwide. That said, if you strip out foreign exchange headwinds, ADR would've actually risen 1% across all regions, mostly due to pricing power. Now, while analysts like Scott Devitt at Wedbush saw this as a red flag and downgraded the stock to Neutral (citing slowing travel demand), others like D.A. Davidson's Tom White are sticking with a Buy rating. His take is that Airbnb's model is still more resilient than that of traditional travel players like hotels and airlines, especially in an uncertain macro backdrop. What's helping? The long-term trend of travelers shifting from offline to online booking platforms. That tailwind still has momentum, and in tougher economic conditions, platforms like Airbnb could continue to benefit as travelers hunt for more affordable, flexible options. There are two more reasons to feel optimistic about better days ahead for Airbnb. First is the company's continued focus on affordability. Over the last two years, Airbnb has kept its average daily rates (ADR) flat, even as hotel prices keep climbing. In other words, Airbnb is maintaining a clear edge regarding cost-effectiveness—an advantage that is becoming more meaningful as consumers grow more price-sensitive. The second point is Airbnb's upcoming product cycle. On May 13, the company will unveil its 2025 Summer Release, which is expected to include the launch and expansion of new offerings. In fact, back in Q4, CEO Brian Chesky mentioned that Airbnb plans to roll out one to two new products each year, with each aiming to generate more than $1 billion in revenue within three to four years. This could include broader travel experiences offered directly through the platform, potentially bundling services like car or boat rentals, flights, or other travel-related features in one place. The release may also include new tools for hosts and guests. This aligns with Airbnb's long-term strategy to enhance the user experience and expand beyond just accommodations. Innovation has always been central to the company's approach, and it continues to show signs of staying ahead of the curve. In short, there's a clear near-term catalyst here—the product launch—that could potentially shift the market's expectations for Airbnb's long-term growth. Analysts are projecting a 5-year EPS CAGR of 16.3% and a 5-year revenue CAGR of 8.5%. If the new initiatives land well, those estimates could move meaningfully higher, but there is a big 'if' here for potential investors. Airbnb's current share price warrants a closer look from a valuation standpoint. Consider the company's ability to generate profits relative to its enterprise value. Airbnb has produced $2.5 billion in operating profits over the past 12 months. An enterprise value of $68.1 billion translates to an earnings yield of about 3.6%. For comparison, risk-free investments yield around 4.3%, meaning investors are paying a premium for Airbnb's future growth potential, even though current profits are relatively modest. That premium might be justified by the company's strong operational leverage, as seen in its high projected EPS growth (16.3%) compared to more moderate revenue growth (8.5%). However, those projections are based on the current analyst consensus. If Airbnb can continue growing at a healthy pace, gaining market share, improving operations, or launching successful new products, then the relatively low earnings yield might be attractive. Still, even though Airbnb has shown resilience despite a tough macro backdrop, it's unlikely to be completely immune to a slowdown in travel spending. The company has already guided to a more modest Q2. These factors suggest that Airbnb appears to be richly priced. There's a limited margin of safety in the current setup, and while short-term tailwinds are on the horizon, it still might be too early to tell whether the long-term growth will fully justify the current valuation. At present, Wall Street analysts are more undecided than confident about Airbnb stock. Over the past three months, out of 37 analyst ratings on ABNB, 14 were bullish, 19 were neutral, and four were bearish. That said, ABNB's average price target is $146.39, implying a 20% upside from the current share price. Fundamentally, Airbnb's long-term story still looks solid. The company is arguably better positioned than many of its peers to weather a slowdown in travel demand, thanks to its pricing power and relatively healthy growth outlook. The big question is whether now is the right time to own the stock, especially given its high exposure to cyclical travel trends. Valuation doesn't look particularly compelling, and while some short-term catalysts are coming up, it's still uncertain how sustainable the growth story is at current price levels. That's why, for now, I think the best move is to stay on the sidelines and maintain a neutral stance on ABNB. Disclaimer & DisclosureReport an Issue
Yahoo
08-05-2025
- Business
- Yahoo
Uber Rating Cut to Neutral at Wedbush
Uber (NYSE:UBER) slides to a Neutral rating at Wedbush as its risk/reward profile is now viewed as balanced after years of share gains. Analyst Scott Devitt noted that Uber's post-pandemic recovery is largely priced in, with the magnitude of earnings beats shrinking as the business model stabilized. While management has executed well across mobility and delivery initiatives, the lack of fresh catalystscoupled with shares trading at a premium to peersleaves limited upside if demand softens. Warning! GuruFocus has detected 6 Warning Sign with UBER. Devitt pointed out that Uber's premium valuation versus the broader mobility group could be hard to defend in a cyclical downturn, especially as near-term growth drivers like new service launches and pricing tweaks lose luster. With 44 Buy-equivalent ratings on Wall Street but few obvious growth surprises ahead, Wedbush pegged the 12-month price target at $85, implying modest upside from current levels. Why it matters: A Neutral rating signals that investors should temper expectations for outsized gains and focus on demand stability, cost controls and margin resilience instead of hoping for standout beats. Investors will be watching upcoming quarterly results and guidance updates to see if Uber can unearth new growth levers or if it must settle into a more mature, cyclical trajectory. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
