Republic Services Continues to Price Ahead of Inflation
April 30, 2025
Image: Republic Services’ shares have done quite well the past few years. By Brian Nelson, CFA On April 24, trash taker Republic Services (RSG) reported mixed first quarter results with non-GAAP earnings per share outpacing the consensus forecast, but revenue coming in a bit light compared to what the Street was looking for. Total revenue growth was 3.8%, including 2.9 percentage points of organic growth and the balance coming from acquisitions. Revenue growth from average yield increased 4.5%, above the rate of cost inflation, while volume decreased revenue by 1.2%. Management had the following to say about the quarter: We are off to a solid start to the year, and our business continues to perform well even with increased volatility
What Causes Fair Value Estimates to Change?
April 29, 2025
Image: A screenshot of the discounted cash-flow model learning tool for individual investors. By Brian Nelson, CFA If you’ve been a member of Valuentum for a while, you’ll notice that when we update a stock report, our estimate of a company’s fair value and the firm’s Valuentum Buying Index ratings can change. This is completely normal and should be expected (over time, companies generate cash and stock prices change). But sometimes the changes can be confusing, particularly if they are material (i.e. 10%, 20%, or more). In this article, let’s talk about why changes are standard operating procedure for investment research publishers. First, some background. Our estimate of a company’s fair value is driven by myriad factors. To derive a
Alphabet Remains a Top Consideration for Long Term Capital Appreciation
April 28, 2025
Image Source: TradingView By Brian Nelson, CFA On April 24, Alphabet (GOOG) (GOOGL) reported blockbuster results for the first quarter, with both GAAP earnings per share and revenue exceeding the consensus forecast. Consolidated Alphabet revenues increased 12%, or 14% in constant currency. Google Services revenue increased 10%, while Google Cloud revenues advanced 28%. Total operating income increased 20%, while its operating margin expanded 2 percentage points to 34% in the quarter. Net income increased 46%, while GAAP earnings per share increased 49%, to $2.81. Management had the following to say about the quarter: We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI.
Domino’s Pizza Misses First Quarter U.S. Same Store Sales Consensus Estimate
April 28, 2025
Image Source: Domino’s By Brian Nelson, CFA On April 28, Domino’s Pizza (DPZ) reported mixed first quarter results with GAAP earnings per share exceeding the consensus estimate, but revenue falling short of what the Street was looking for. Excluding foreign currency impacts, global retail sales growth came in at 4.7%, but U.S. same store sales declined 0.5% in the period, missing the consensus estimate. International same store sales growth was 3.7%, excluding foreign currency impacts, beating the consensus estimate. Domino’s experienced a global net store decline of 8 in the quarter, consisting of 17 net store openings in the U.S and 25 net store closings internationally. Management had the following to say about the quarter: Domino’s Q1 results demonstrate
Chipotle’s Comparable Restaurant Sales Fall in First Quarter
April 24, 2025
Image Source: Valuentum By Brian Nelson, CFA On April 23, Chipotle (CMG) reported mixed first quarter results with non-GAAP earnings per share exceeding the consensus forecast, but revenue coming up a bit short relative to expectations. Total revenue increased 6.4%, to $2.9 billion, but comparable restaurant sales fell 0.4%, a disappointment. Chipotle’s operating margin came in at 16.7% in the quarter, an increase from 16.3% in the prior year period. Restaurant level operating margins fell, but the company still grew diluted earnings per share 7.7%, to $0.28, in the quarter. Adjusted diluted earnings per share increased 7.4% year-over-year. Management spoke of concerning consumer spending trends in the press release: While our first quarter results were impacted by several headwinds including weather
Philip Morris Hits Record High!
April 23, 2025
Image Source: TradingView By Brian Nelson, CFA On April 23, Philip Morris (PM) reported excellent first quarter results with revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Total net revenues advanced to $9.3 billion, which was up 5.8% on a reported basis and 10.2% on an organic basis. Gross profit increased to $6.3 billion, up 11.8% on a reported basis and 16% on an organic basis. Operating income increased to $3.5 billion, up 16.4% on a reported basis and 16% organically. Adjusted diluted earnings per share increased 12.7%, to $1.69, in the quarter. Management was optimistic in the earnings report: We achieved exceptionally strong performance in the first quarter, with continued volume growth supporting an
Tesla’s Revenue Falls in First Quarter, Pulls 2025 Outlook
April 23, 2025
Image Source: Tesla By Brian Nelson, CFA On April 22, Tesla (TSLA) reported dismal first quarter results with revenue and non-GAAP earnings per share coming in below expectations. Total revenue fell 9% in the period, as total automotive revenues dropped 20%, while energy generation and storage revenue increased 67%. Services and other revenue increased 15%. Income from operations fell 66%, while adjusted EBITDA slid 17%. Adjusted EBITDA fell 17% in the quarter on a year-over-year basis. Management spoke of uncertainty in the quarterly update: In Q1, we accomplished an industry first: simultaneously changing over production lines across all factories for the world’s best-selling vehicle4 – the Model Y. The Tesla team successfully ramped our production lines across four factories while
Verizon’s Dividend Is Nice But Its Debt Keeps Us on the Sidelines
April 22, 2025
Image Source: TradingView By Brian Nelson, CFA On April 22, Verizon (VZ) reported mixed first quarter results that showed revenue and non-GAAP earnings per share exceeding the consensus forecast, but total postpaid phone net losses coming in at 289,000 in the period. Total operating revenue increased 1.5% in the quarter year-over-year, while adjusted earnings per share excluding special items advanced to $1.19 compared to $1.15 in the first quarter of 2024. Cash flow from operations totaled $7.8 billion, up from $7.1 billion in last year’s quarter, while free cash flow came in at $3.6 billion, up from $2.7 billion in the first-quarter 2024. Management had the following to say about the quarter: Verizon plays an essential role in our customers’
Lockheed Martin Reaffirms 2025 Outlook
April 22, 2025
Image: Lockheed Martin’s shares have been on a wild ride the past few years. By Brian Nelson, CFA On April 22, Lockheed Martin (LMT) reported better than expected first quarter results with revenue and GAAP earnings per share exceeding the consensus forecast. Sales increased 4%, while net earnings came in at $1.7 billion, or $7.28 per share, compared to $1.5 billion, or $6.39 per share, in the same period a year ago. Cash flow from operations came in at $1.4 billion compared to $1.6 billion in last year’s quarter, while free cash flow dipped to $955 million from $1.3 billion in the year-ago period. Management was optimistic in the press release: The momentum we created last year continued into the
Netflix’s Operating Margin Continues to Delight
April 22, 2025
Image: Netflix has a long runway of growth given market share opportunities. By Brian Nelson, CFA On April 17, Netflix (NFLX) reported strong first quarter results with revenue and GAAP earnings coming in ahead of the consensus estimates. Revenue and operating income advanced 12.5% (16% on a foreign exchange neutral basis) and 27.1% on a year-over-year basis, respectively. Netflix’s operating margin increased to 31.7% from 28.1% in the year-ago period, while net income leapt to $2.89 billion from $2.33 billion in last year’s quarter. Diluted earnings per share increased 25.2% to $6.61 from $5.28 in the same period last year. Netflix’s performance was in part propelled by membership growth and higher pricing. Management continues to execute on its 2025 priorities:
