Three-Stock Lunch: Shopify, Anheuser-Busch InBev SA, & Electronic Arts

Time for today’s 3 stock lunch. And today it’s all about earnings. Here with our trades is Ava Otto’s. She’s Chief Investment Strategist with UH shares. Ava, welcome to you. Let’s start with Shopify. I mean this earnings topped estimates, but the shares are down nearly 20% on weak guidance for a company that usually beats and raises poster child of growth stock, at least up until now. Ava, what’s the trade? Well, it’s a hold. We actually own the stock. It this was a great company, great growth story during COVID, the revenue growth was 85%. The company is coming down to earth now. So they’re important slower growth going forward. Their margins are expected to drop by .5%. But let’s face it, this is a, this is a company that has a revenue growth which is double their peers. And if you, if you have taken the 20% hit, I think you should hold on to it. All right. So there’s the trade on Shopify. Let’s talk about beverage alcohol because it’s 5:00 somewhere. Kelly Anheuser Busch in Bev shares, they’re higher after topping first quarter earnings estimates. As you can see, they’re up about 4%. Still though, this is the maker of Bud Light. That’s the question here. They’re seeing a decline in demand from the boycott that started in April of last year. There’s still a carryover there. Ava. It’s not just Bud Light, There’s positivity elsewhere in the portfolio. But what’s the trade overall for AB and Bev? It is a hold. I agree with you. It’s not everything bad about it. Let’s face it, this is Bud Light and their beer sales came down 1%. Their US revenue came down by 9%. That was mostly attributed to the controversial commercial bad light commercial, which had a significant. Conservative backlash? Now the company is putting that in the rearview mirror. The focus now is the Summer Olympics where Michelob Ultra will be the exclusive sponsor of Team USA. That’s expected to boost sales. It’s creating a lot of excitement I would say given the fact that they’re that their margins are double their peers and the company has great potential going forward. I would continue to hold. It’s a solid hold. They see them pushing Mccultra all the time. Athletes, beer. Exactly. Athletes, beer. Finally, Electronic Arts forecast full year bookings below estimates as gamers cut spending. Shares are down more than 2% today. Ava, what would you do with a name like this? I would sell it. It’s it’s been dead money for many years. The company has come down 10% in six years. You have actually lost money if you owned it in the last six years. So the future does not look bright either. The company is reporting that there that they will have pure games released in the future. That’s coupled with the fact of their relatively high valuation which is 2 times peers on APE basis. Basis and the revenue growth that’s half beer. So when you enter a market where GDP growth is coming down, we have a significantly high higher relative valuation and also revenue growth that’s half your peers. It doesn’t look that good. It’s a sell.