News and Views

The Official Blog of WhaleWisdom.com

Alibaba Group Holding Ltd. ADR (BABA) has seen volatility in its stock over the past year and ultimately has underperformed the S&P 500. Alibaba rose just 0.5% as of June 11, 2021, compared to the S&P’s gain of approximately 31.2% since 2020 started. Despite the stock’s struggles, Alibaba rose on the WhaleWisdom Heatmap, achieving a ranking of 24, a nice upward boost from its previous rank of 45.

Alibaba is a Chinese-based online commerce company that hosts merchants and businesses catering to millions of users. The company has a considerable presence worldwide through its three main sites: Taobao, Tmall, and Alibaba. The company has a history of shopping events that garner vendor additions and increased sales from customers. Alibaba’s mid-year online shopping festival has already begun to gather new vendors and brands, with boosts in sales expected to continue into late June.

Alibaba also provides internet infrastructure and content services. The e-commerce company offers a range of high-performing cloud products that bring storage resources and significant data processing capabilities. Additionally, Alibaba sells information technology equipment such as fiber optics and telecommunication tower routers.

Hedge Funds and Institutions Are Selling

The first-quarter activity brought disappointing actions by hedge funds and institutions. Overall, institutions decreased their aggregate holdings by about 12.5% to approximately 886 million from 1 billion. The aggregate 13F shares held by hedge funds decreased to about 229.7 million from 249.7 million, decreasing approximately 8.0%. Of the hedge funds, 53 created new positions, 161 added to an existing holding, 69 exited, and 151 reduced their stakes. The long-term 13F metrics demonstrate that despite less favorable recent changes in hedge funds’ core positions, belief in Alibaba’s investment potential has continued to grow over the past seven years.

(WhaleWisdom)

Cloud of Regulatory Concerns Lingers

The United States continues to examine companies believed to fund China’s military, which may prohibit Americans from investing in such companies. However, Susquehanna analyst Shyam Patil maintains a Positive rating on the stock, with a $350 price target. Patil noted that Alibaba has excellent growth opportunities despite regulatory and listing concerns.

(WhaleWisdom)

Optimism for Future Growth

Alibaba’s investment potential continued to grow over the past seven years, demonstrating a positive track record. The company currently holds a favorable WhaleWisdom ranking of twenty-four. While Alibaba still faces scrutiny as the United States continues to add to its list of companies supporting the Chinese military, growth opportunities beyond 2021 remain attractive for loyal investors.

Snowflake Begins Rebound

Posted on June 7th, 2021

Snowflake, Inc. (SNOW) has experienced fluctuations in its value over the past eight months, despite overall solid earnings and a rebound in the past few weeks. The company has underperformed the S&P 500, declining approximately 6.1% compared to the S&P’s gain of about 23.9%. Despite a dip in performance, hedge funds and institutions were actively buying the stock in the first quarter. The cloud-based data warehousing company achieved a ranking of four on the WhaleWisdom Heatmap.

Snowflake provides software solutions to customers worldwide and is known for its data warehouses, database architecture, and query optimization. After an impressive initial public offering in 2020, Snowflake continued an upward climb. However, while the company continues to expand its customer base, the shares fell sharply.

Hedge Funds and Institutions Are Active

Snowflake, Inc. has received positive attention from both hedge funds and institutions. Hedge funds increased their aggregate 13F shares held to approximately 110.0 million from about 46.2 million in the first quarter, an impressive increase of about 138.3%. Of hedge funds, 80 created new positions, 47 added to existing holdings, 19 exited, and 22 reduced their stakes. Institutions raised their aggregate holdings to about 176.4 million from 75.9 million, an overall increase of approximately 132.4%.

(WhaleWisdom)

Mixed Multi-year Estimates

Analysts expect to see revenue rise over the next four years, increasing growth from 2022 to 2025, spanning approximately 48.0% to 88.3%. These estimates would generate roughly $1.1 billion in revenue by January 2022 and $4.4 billion by January 2025. In addition, year-over-year earnings growth is predicted between 2022 and 2024. However, estimates are not quite as favorable as earnings slowly move toward the positive. Earnings are expected to narrow to a loss of $0.14 by 2024, improving from a loss of $0.58 in 2022.

(WhaleWisdom)

Analysts Focus on both Short and Long Term

Despite first-quarter revenue and a favorable long-term product revenue forecast, analysts are cautious regarding Snowflake’s current valuation. Morgan Stanley’s Keith Weiss acknowledged a significant opportunity in the cloud-based data management market and gave Snowflake a $270 price target and Equal-Weight rating. Brent Thill of Jefferies Group raised Snowflake’s price target to $250 from $235 due to the considerable customer growth seen in the first quarter.

Optimism Beyond 2021

After many highs in 2020, so far, 2021 brought its share of tough months for Snowflake. However, hedge funds are buying, and analysts are optimistic for the long-term future. Year-over-year growth is anticipated to continue, and a strong market for cloud services is encouraging for patient investors.

Roku Is Forecast To See Strong Momentum

Posted on June 1st, 2021

Roku Inc (ROKU) saw substantial growth over the past six months. The digital media and streaming pioneer recently slid on the WhaleWisdom Heatmap but saw hedge funds buying. Overall, Roku outperformed the S&P 500, rising by approximately 146.9% compared to the S&P’s gain of about 28.6% since the beginning of 2020.

Roku manufactures streaming media players and television-related audio devices, providing marketing services that allow advertisers to engage consumers. Roku offers access to streaming media content from various online services such as Netflix and Disney Plus. Roku’s television (TV) models are also available through licensing arrangements. Roku offers several free TV and movie channels, including its namesake, the Roku Channel. Roku continues to benefit from the accelerated consumer shift to streaming that occurred during the coronavirus pandemic. As coronavirus vaccinations increase and the economy continues to open, some investors are cautious of the impact on the streaming entertainment factor.

Mixed Results from Hedge Funds and Institutions

Hedge funds are buying, in contrast to institutions. Looking at first-quarter activity by the top hedge funds, the aggregate 13F shares held increased to about 21.8 million from 20.6 million, a change of approximately 5.8%. Of the hedge funds, 34 created new positions, 62 added to an existing holding, 26 exited, and 66 reduced their stakes. In contrast to hedge funds, institutions decreased their aggregate holdings by about 2.0% to approximately 80.1 million from 81.7 million. Roku dropped slightly on the WhaleWisdom Index to a ranking of 38 from 37.

(WhaleWisdom)

Revenue Estimates Are Encouraging

Analysts expect to see revenue growth from 2021 through 2022, rising to $3.8 billion by December 2022 from $2.7 billion in 2021. Earnings estimates are forecast to increase to $1.02 per share in 2022, up from a 2021 estimate of $0.37.

(WhaleWisdom)

Analysts Share Mixed Ratings

While most analysts appear to agree on Roku’s growth potential, price targets show movement in both directions. Evercore ISI analyst Shweta Khajuria raised Roku’s price target to $430 from $400 and kept an Outperform rating on shares. Khajuria noted that active Roku accounts increased, and various initiatives align with a three-year growth forecast. Meanwhile, Justin Patterson of KeyBlanc Capital Markets, Inc. lowered his firm’s price target on Roku to $460 from $518 while maintaining an Overweight rating on shares. Citigroup Inc. analyst Jason Bazinet also lowered the price target on Roku to $450 from $460 and kept a Buy rating.

Favorable Long-term Outlook

Roku’s impressive year-to-date growth is encouraging for investors. For as long as consumers continue to shift to streaming content instead of paying for traditional TV or view the Roku device as a convenient, centralized alternative to access channels they have already purchased, the company stands to see favorable returns. While Roku has experienced mixed ratings from investment firms, multi-year estimates speak to the stock’s long-term potential.

Intuitive Surgical Inc (ISRG)experienced strong growth over the past year, outperforming the S&P 500 and rising by approximately 39.6% compared to the S&P’s gain of about 28.6%. Hedge funds were actively buying the stock in the first quarter, and it reached a ranking of three on the WhaleWisdom Heat Map.

Intuitive Surgical develops, manufactures, and markets robotic products, systems, and other medical instruments to improve surgical outcomes. Intuitive’s da Vinci Surgical System was one of the first robotic-assisted, minimally invasive surgical systems. Its Ion endoluminal system offers a platform for minimally invasive lung biopsies. Intuitive Surgical has had steady growth over the past years as it continues to innovate and catch the attention of investors.

Hedge Funds Are Buying

Hedge Funds were actively buying the stock in the first quarter. The aggregate 13F shares held by hedge funds increased to approximately 21.67 million from 21.66 million, a mild increase of about 0.05%. Overall, 27 created new positions for hedge funds, 94 added to an existing holding, 17 exited, and 58 reduced their stakes. In contrast, Institutions decreased their aggregate holdings by about 2.8% to 98.8 million from 101.6 million.

(Whale Wisdom)

Favorable Estimates

Analysts expect to see revenue grow consistently from 2020 through to 2022, with estimates of approximately $5.3 billion by December 2021 and $6.1 billion by 2022. Earnings estimates are also optimistic, with year-over-year estimated increases that would bring earnings to $15.79 per share in 2022, up from $13.43 in 2021.

(Whale Wisdom)

Analysts Confidently Raise Targets

Analysts show enthusiasm for Intuitive Surgical by raising price targets. Lawrence Biegelsen from Wells Fargo Bank, N.A. raised Intuitive Surgical’s price target to an impressive $892 from $879 and kept an Overweight rating. SVB Leerink analyst Richard Newitter viewed the company as an asset in medical technology and raised its firm’s price target to $860 from $825, maintaining a Market Perform rating on the shares. Deutsche Bank raised the firm’s price target on Intuitive Surgical to $825 from $690, keeping a Hold rating on the shares. Baird & Co. analyst Mike Polark upgraded the shares to Outperform from Neutral and set a $925 price target. Polark referenced Intuitive Surgical’s innovation and recent shipment of close to 300 da Vinci Surgical Systems in the first quarter, a 26% increase from the prior-year period.

Bright Outlook

Intuitive Surgical’s impressive growth is encouraging for investors. This medical technology company continues to push forward as a leader in minimally invasive care and robotic-assisted surgery. Analysts’ enthusiastic price targets and multi-year estimates speak to the opportunity for investors.

Workday, Inc. (WDAY) has experienced soaring growth over the past year, outperforming the S&P 500 and rising by approximately 39.1% as of April 30, 2021, compared to the S&P’s gain of 29.2%. Hedge funds and institutions are actively buying. The stock moved up on the WhaleWisdom Heatmap to a ranking of 26 from 43.

Workday is a provider of on-demand enterprise cloud-based software. Workday specializes in human capital management (HCM), enterprise resource management (ERP), and financial management solutions. Consumer demand for the company’s applications has accelerated during the coronavirus pandemic. During the pandemic, many organizations felt a push to move critical functions such as procurement, payroll, and employee expense management to the cloud. Additionally, many workforces shifted to remote work, impacting talent management as employers placed more importance on the best fit for a position and less focus on talent location. Workday’s applications offer flexible solutions to address businesses’ changing needs.

Hedge Funds Are Buying

Workday’s performance has garnered the attention of hedge fund managers and institutions. Looking at activity by the top hedge funds in the fourth quarter, the aggregate 13F shares held increased to about 61.0 million from 59.4 million, an increase of approximately 2.8%. Of the hedge funds, 29 created new positions, 77 added to an existing holding, 30 exited, and 59 reduced their stakes. With aggregate holdings increasing by about 2.4% to approximately 166.5 million from 162.6 million, institutions were also buying.

(WhaleWisdom)

Encouraging Estimates

Analysts expect to see revenue rise over the next two years for this enterprise cloud applications company, with increases in growth from 2022 to 2023 that could bring earnings to $2.81 by January 2022 and $3.49 by January 2023. This prediction for strong growth could bring revenue to $4.99 billion in 2022 and then continue to rise to approximately $5.9 billion in 2023.

(WhaleWisdom)

Favorable Ratings

Investment firms are optimistic about the stock, raising ratings, and recognizing future growth opportunities. JMP Securities analyst Patrick Walravens raised Workday’s price target to $310 from $296, maintaining an Outperform rating on shares. Also, Alex Zukin of Wolfe Research initiated coverage on Workday with an Outperform rating and $300 price target. The analyst cited opportunities for near-term acceleration and long-term durable growth potential.

Positive Outlook

Workday’s optimistic future estimates and hedge funds that are buying are encouraging metrics for investors. The company has shown strong growth over the past year amidst the pandemic. This leader in enterprise cloud applications appears well-positioned to meet changing customer needs.