What A Tough Quarter For Snap

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Riley Wealth Management, said in an interview. - “Yet there’s a ubiquitous feeling large-cap tech did a great job managing their businesses — it’s a sigh of relief the market is breathing.” But not all companies were able to withstand the stormy weather. Intel reported results, and its EPS plunged by 133% year over year. Revenue dropped by nearly 36%. It was a huge swing to a net loss of $2.8 billion from a net profit of $8.1 billion last year. The semiconductor sector is having tough months after an incredible boom during the pandemic, as this quarter was Intel’s 5th straight quarter of falling sales. Snap is having a tough time, as well. Earnings reports haven’t been kind to the social media app, as the earnings report led to a drop in the stock price by as much as 20% after hours. The app’s first quarter revenue missed analysts’ expectations with a 7% delince. And it expects revenue to drop by 6% year over year for the next quarter. - “We are working to accelerate our revenue growth and we are using this opportunity to make significant improvements to our advertising platform to help drive increased return on investment for our advertising partners,” Snap CEO Evan Spiegel said in a statement. The problem with Snap was that it had a small presence around the world. Meta improved the recent quarter with a 3% y-o-y revenue growth due to Chinese companies spending money on Facebook to show ads to people around the world. A mixed bag economic data: When the GDP declines, it is typically the result of a cooling labor market. The logic is simple. If the economy is bad, there will be less jobs for everybody. But it is not happening right now. The GDP growth slowed in the first quarter, but jobless claims actually fell. Dana Peterson, chief economist at The Conference Board, pointed out that it is a strange combination, as “typically when you have recessions, the labor market collapses with GDP, and we’re not seeing that.” - “We’re probably going to dip into a recession, maybe starting right now in the second quarter, but we really need to see data,” she said. “Our leading indicators index suggests that it’s starting to happen now, and consumers and CEOs have been anticipating recession for some time.” Notably, inflation data re-accelerated despite the falling GDP growth. That’s what makes the Federal Reserve’s job so difficult. It cannot just rely on one economic data. Even if the economy slows down, inflation is still running hot. So, they may have no choice but to keep hiking rates. (Source: Bloomberg) Top Beaten-Down Tech Stock To Buy Right Now Today’s Stock Pick: Okta, Inc. ([OKTA](~/AASl5QA~/RgRmLh46P0R4aHR0cHM6Ly9kYXNoYm9hcmQudHJhZGVhbGdvLmNvbS9jb21wYW55L09LVEE_X2t4PVRKRngtMDZyYnh4NlVhSmNfTGdfanYtSTljYWxkbVI1VDVPY0RFSGIydk1HVzZXNVpZUWtaTDhJT1paT2ZBVG8uVzVwQVpXVwNzcGNCCmQ-OplLZPkWXUFSG3RyaXN0cmFtYmFsZHdpbjkxQGdtYWlsLmNvbVgEAAQLVg~~)) Here is one of the most underrated quotes by Warren Buffett: - "The best thing that happens to us is when a great company gets into temporary trouble, we want to buy them when they're on the operating table," said Buffett. Indeed, you have an opportunity to buy one of the hottest software stocks on the “operating table.” Okta, an identity and access management company, made products and services that ensure employees are “who they are” and prevent hackers from accessing critical data in the cloud. So, trust is everything in this business. Unfortunately, a hacker group named LAPSUS$ broke into Okta and published screenshots of an internal access to Okta’s platform on March 22, 2022. Customers were shocked. Okta was supposed to prevent this from happening! And to make the matter worse, the actual breach happened two months earlier on Jan. 20. Okta didn’t disclose this hack as soon as it detected it in Jan, attracting sharp criticisms from security experts and executives. Tenable CEO Amit Yoran was one of them, writing on LinkedIn: - "This compromise should have been disclosed when Okta detected it in January or after a competent and timely forensic analysis,” said Yoran. Okta said around 2.5% of its customers have potentially had their data viewed. However, the hackers were limited to viewing data and triggering a password reset for users but couldn’t log into the service. No matter what. The stock nosedived by 17% from March 22 to March 25. Little impact on the revenue: Despite the P.R. nightmare, Okta CEO Todd McKinnon said the hacking fiasco had little impact on its second-quarter results. He said that the customers have regained their confidence in the company after new security upgrades: - "We spend less time discussing the details of the incident with customers and prospects with each passing month. In fact, many customers have expressed their increased confidence in Okta after we implemented a series of additional security measures as part of our security action plan." Okta’s dollar-based net retention rate (DBNRR) came in at above 120%, indicating that customers are still loyal to Okta: (Source: Okta) Second problem: It merged with Auth0 which was a leader in customer identity and access management (CIAM). Okta focused on the workplace identity solutions while Auth0 focused on the consumer side. As a result, this merger could turn Okta into the dominant leader in the identity and access management industry. Management boasted long-term growth projections for the combined company of $4 billion in revenue by the fiscal year 2025. The result was not a smooth sailing, as the merger had a rocky start. Integrating both companies’ sales teams were complicated. Each team targeted a different group of people. Okta targeted C-level executives like Chief Information Officer and Chief Security Officer. However, Auth0 salespeople dealt with developer teams within a company. This complication caused management to admit that it may not be able to meet its $4 billion guidance. The ultimate result of two missteps: The stock plummeted by 76% off its all-time high in 2021. Can you imagine?! The stock is now trading at the level of 2019. And this presents a buying opportunity. Powerful revenue growth: Okta’s recent earnings report showed a strong momentum. Revenue grew 43%, beating estimates, and it raised its guidance. (Source: Okta) Massive TAM: Okta operates in an $80 billion addressable market, while the company projects to earn less than $2 billion in revenue this year. This implies a HUGE growth potential. The company will not need to require a new S-curve to maintain its growth pace. All it has to do is to continue growing in its current market. (Source: Okta) Bottom line: You have a chance to buy Okta when the stock is severely beaten up. With its massive TAM that it hasn’t fully penetrate, the stock looks like a long-term winner. Buy this while the price is cheap. FREE LIVE TRADING SESSIONS & TRAINING USING THE MOST COMPREHENSIVE DARK POOL MONITOR AVAILABLE TO THE RETAIL INVESTOR Join our LIVE Trading Sessions throughout the day where we will focus on how you can learn to master the markets through the use of advanced algorithms and AI to trade like the institutions. BEFORE THE BELL Starts 6am PT / 9am ET Our newest LIVE session starts when the big institutions and elite traders do, well before the market opens. We'll look at realtime dark pool data as the market movers position themselves for the tra ding day in the secret off market exchanges. LIVE TRADING SESSION Starts 8am PT / 11am ET Take advantage of Trade Algo's proprietary advanced algorithms for anticipating big market swings in our daily LIVE trading session. Trade Algo's Senior Analyst Luke Russell will walk you through the key tools and strategies that the institutional investors and top traders use to profit from high volatility in the market. THE FINAL HOUR Starts Noon PT / 3pm ET According to Wall Street Journal approximately 20% of the trading volume happens at the last 30 minutes of the day. Institutions make the majority of these trades in private dark pool exchanges -- away from the public’s eyes. The timing happens for two reasons: 1) Index funds make their trades to mimic the closing price of a stock. 2) Billionaires trade near the end of the day because they anticipate major news that will be released during after-hours. Because they trade in dark pools, the public doesn’t know about these trades until one day later. 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