Acquisition News Has Sent This Biotech Stock Soaring By 65% 🚀

Good morning. Today is August 7th, and we’re going to look at Lyft’s first net profit, Airbnb’s poor revenue forecast, and a biotech stock that is rallying 65%.

Previous Close 📈

The markets rebounded yesterday after three consecutive days of decline. All three indices were in the green.

Futures

Futures are also up today, with futures tied to the Dow Jones Industrial Average up by 0.6%, the S&P 500 by 0.8%, and Nasdaq 100 futures by 1.1%.

What to Watch

Walt Disney and CVS Health will report their earnings before markets open today.

The June Consumer credit report will be released at 3:00 p.m.

After the market closes, Monster Beverage will also share its quarterly numbers.

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Technology

Record Earnings Give Lyft Its First Net Profit, But Future Outlook Softens

Lyft reported its first-ever net profit today, driven by a thriving ride-share market and significant cost-cutting measures implemented last year.

The company earned a net income of $5.0 million for the quarter ending June 30th, a marked improvement over the $114.3 million net loss from the same period last year.

This turnaround was also bolstered by a 41% increase in revenue to $1.44 billion, surpassing analysts' expectations of $1.39 billion.

Under CEO David Risher's leadership since last year, Lyft has implemented extensive cost-cutting measures, including significant job reductions, which have helped narrow losses and stabilize fare increases.

Despite the strong quarterly performance, Lyft's outlook for the current quarter is less optimistic. The company is forecasting gross bookings between $4.0 billion and $4.1 billion, slightly below the estimated $4.13 billion.

Additionally, its adjusted core earnings guidance of $90 million to $95 million falls short of the Street target of $104.3 million.

Travel

Economic Worries Impacting Airbnb's Q3 Revenue Forecast and Booking Trends

Airbnb shares are falling by 15% so far in premarket trading today after projections of Q3 revenue between $3.67 billion and $3.73 billion, which is lower than the anticipated $3.84 billion.

Since the beginning of the year, domestic travel in the United States has been under pressure as Americans grow cautious about travel expenditures amid concerns about the economy.

For the second quarter, Airbnb reported a profit of 86 cents per share, missing analysts' expectations of 92 cents per share.

The company notes a global trend of shorter booking lead times, with travelers waiting until the last minute to book due to increased uncertainty and cautious spending.

Airbnb's average daily rate (ADR) for the quarter is up by about 2% and is likely to continue growing in the third quarter.

Despite these challenges, Airbnb reported a 9% increase in nights and experiences booked year-over-year, with significant growth in Latin America and Asia-Pacific regions at 17% and 19%, respectively.

Total revenue for the quarter that ended June 30th is $2.75 billion, slightly above analysts' estimate of $2.74 billion. However, the net income margin is 20%, down from 26% a year ago.

Electric Vehicles

Rivian Shares Dipping as Q2 Results Fall Short, But Profitability in Sight

Rivian is dropping by over 5% in premarket trading today after announcing mixed second-quarter results.

For the second quarter, Rivian reported revenue of $1.158 billion, slightly below the expected $1.165 billion. The company’s adjusted loss per share of $1.13 is narrower than the projected $1.20.

The electric vehicle maker is maintaining its full-year loss and production forecasts and is still anticipating a "modest gross profit" by year-end.

Rivian also reaffirmed its adjusted EBITDA loss forecast of $2.7 billion for 2024, with capital expenditure outlays reaching $1.2 billion.

Retooling upgrades at Rivian’s factories have impacted Q2 deliveries. Last month, the company reported producing 9,612 vehicles and delivering 13,790 vehicles, both figures down from Q1.

Despite this, Rivian reaffirmed its guidance for the annual production of 57,000 total vehicles.

Rivian ended the second quarter with $7.867 billion in cash and cash equivalents, significantly up from $5.98 billion at the end of Q1.

This boost comes partly from a joint venture deal with Volkswagen, which includes an initial $1 billion investment and up to $4 billion more through 2026, aimed at developing next-generation EV architectures.

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G1 Therapeutics, Inc. [GTHX] - Last Close: $4.25

G1 Therapeutics is rallying by nearly 65% in premarket trade due to the announcement that Pharmacosmos Group will acquire the firm for $405 million (a 68% premium).

This merger will bring together G1’s COSELA, the only FDA-approved drug to reduce chemotherapy-induced myelosuppression, with Pharmacosmos's expertise in hematology.

The transaction is expected to close in late Q3 2024.

Lumen Technologies, Inc. [LUMN] - Last Close: $5.00

Lumen Technologies is again surging by 37% in premarket trading, continuing from its strong run yesterday, when it grew by 93%.

The gains are driven by a robust full-year guidance and new AI deals.

During its earnings report, Lumen shared that it has secured $5 billion in new AI deals and announced a partnership with Microsoft, which is the primary reason behind the rally.

Inogen, Inc. [INGN] - Last Close: $8.15

Inogen is rising by more than 25% so far in premarket trading today after it announced yesterday a 6.1% increase in Q2 2024 revenue to $88.8 million, driven by higher demand in international and domestic B2B sales.

The company’s gross margin improved to 48.1%, and the net loss decreased to $5.6 million from $9.8 million in Q2 2023.

Adjusted net loss was $1.6 million, with adjusted EBITDA turning positive at $1.3 million.

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Everything Else

• Sony outperformed expectations with strong gains in its music and gaming divisions.

• SoftBank's Vision Fund is seeing gains after the company unveiled a significant share buyback.

• Novo Nordisk lowered its profit forecast amid a Q2 earnings miss.

• Chinese export growth slowed in July, while imports saw an unexpected increase.

• The U.K. Tech Minister criticized Elon Musk's response to the recent race riots.

• Excess capacity and stiff competition have led to a profit decline for Air Canada.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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