Charged Alpha Stock Encyclopedia

Colton Thomas

⚡ Charged Alpha — The S&P 500 Stock Encyclopedia Data-driven deep dives into every stock in the S&P 500 after every earnings report. Each episode breaks down one company from open to close: what they do, how the numbers look, what Wall Street thinks, the bull case, the bear case. 🛠️ Check out our free beginner-friendly screening tools for stocks, ETFs, options, crypto, bonds, REITs & more at https://chargedalpha.com — no signup, no paywall. 📊 What you get in every episode: Company overview & competitive moat Full financial breakdown — valuation, revenue, margins, cash flow Analyst consensus & price targets Bull case vs. bear case Peer comparison, options flow & insider activity Key metrics to watch ⚠️ Not financial advice. For educational purposes only. Episodes are researched, written, and produced using AI-assisted tools. All data aggregated from publicly available sources. #stocks #investing #S&P500 #stockanalysis #chargedalpha #financialdata #earningsreport #earnings

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August 31 · 14 min
NTNX Stock: HOLD Call - EPS Up 8x On A Tax Entry, FY27 Guide Flat Q4 FY2026
Nutanix (NTNX) Q4 FY2026 — Shares gapped 8.9% ABOVE the prior close on the reaction session, reached +13.8% intraday, then closed 6.2% under their own session high at $69.84, +6.81% on the day - and one session later they sit at $69.16, +5.77% against the pre-print close. Nutanix reported GAAP diluted EPS of $5.17 for fiscal 2026 against $0.65 a year ago. Approximately $1,208M of that - $4.14 per diluted share - is the release of the valuation allowance on its US deferred tax assets, an item Nutanix names itself as adjustment seven of its own GAAP reconciliation. Net income of $1,507M sits on pre-tax income of $327M, and cash actually paid in income tax for the year was $30M against $33M last year. Strip only that item and reported EPS is $1.03, real growth of +59.2%. The company's own adjusted figure is $2.04 against $1.62, up +25.9%. Meanwhile FY2027 revenue is guided to $3.18B-$3.23B, or 12.3% at the midpoint, against 12.4% just delivered - and the FY2027 operating margin ranges imply 23.7% for the last nine months, below both the 27% Q1 guide and the 26.2% Q4 just printed. We rate NTNX a HOLD at a fair value of $59.39 against $69.16. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$59.39 vs ~$69.16 today. KEY METRICS: - Q4 revenue $757M, +15.9% YoY - a beat vs the $738M estimate; FY2026 revenue $2.85B, +12.4% - Q4 adjusted EPS $0.60 vs a $0.49 consensus - a beat of 22% - EPS basis PROVEN: the four filed adjusted quarters $0.41, $0.56, $0.47, $0.60 add to $2.04, the filed annual figure - GAAP diluted EPS $5.17 vs $0.65 - but $4.14 per share of it is the valuation allowance release - Net income $1,507M on pre-tax income of $327M - 4.6x more after tax than before it - Cash paid in income tax $30M vs $33M last year; the booked benefit is 39x the cash - Ex-release reported EPS $1.03 vs $0.65 a year ago; adjusted EPS $2.04 vs $1.62, +25.9% - Q4 adjusted operating margin 26.2% vs 18.3%; FY2026 23.7% vs 21.1% - ARR $2.55B, +15.8% (methodology re-cut in Q1 FY26, priors restated); RPO $3.44B, +27.8% - FY2027 revenue guide $3.18B-$3.23B = 11.4% to 13.2% growth, 12.3% at the midpoint vs 12.4% delivered - FY2027 margin: Q1 guided 26%-28%, full year 24%-25% - the last nine months imply 23.7% - FY2027 FCF guide $850M-$950M = +7.1% at the midpoint, against +12.1% growth this year - FY2026 free cash flow $841M, +12.1%; stock comp $358M (12.5% of revenue); owner earnings $483M - Buyback $484M exceeded stock comp by $126M; diluted share count FELL 0.65% - Equity flipped from a $695M deficit to $703M - 86% of the swing is the deferred tax asset - Fair value $59.39: DCF $57.96, 26x adjusted EPS $60.15, 30x owner earnings $60.62 - all BELOW the $69.16 close - Bear $35.17 to bull $86.04 - a 2.45x range; Street median $80.00 is ABOVE the price What to watch: A quarterly update lifting the FY2027 revenue guide above 14% growth, a FULL YEAR of adjusted operating margin above 26% rather than a quarter of it, or owner earnings (free cash flow less stock compensation, $483M today) clearing $600M, would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 31 · 14 min
NVDA Stock: HOLD Call - Record Quarter, $105B Guarantee Q2 FY2027
NVIDIA (NVDA) Q2 FY2027 — Shares gapped 6.3% ABOVE the prior close and closed 1.1% under their own session high at $227.98, +8.74% on the day - the best session of the twelve months on 2.6x the thirty session median volume. One session later they sit at $217.55, +3.76% against the pre-print close, with 57% of the move handed back. NVIDIA reported Q2 FY2027 revenue of $96.2B, +106% year on year, at a gross margin of 75.0%, and beat the bar with adjusted EPS of $2.22 against $2.09. We dispute none of it. What changed is the FUNDING of that quarter. Operating cash was $24.1B against $59.7B of net income - 40 cents per dollar of profit, from 58 cents a year ago - because receivables absorbed $22.3B, or 23% of everything sold. Days sales outstanding went 45 to 60 on terms the 10-Q says run to ONE YEAR for investment-grade buyers, and five customers now owe 70% of a $63.1B book. NVIDIA issued $24.9B of senior notes and disclosed $108.5B of guarantees, $105B of it on twenty-year leases at one Ohio campus. We rate NVDA a HOLD at $190.48 against $217.55. THE CALL: HOLD (3 / 5/5, MODERATE) — base-case value ~$190.48 vs ~$217.55 today. KEY METRICS: - Revenue $96.2B, +106% YoY and +18% QoQ; data center $89.0B (+117%), edge computing $7.2B (+27%) - Adjusted EPS $2.22 vs a $2.09 bar (a 6.2% beat) - and the bar was RAISED into this print, from $1.76 for the April quarter - Reported EPS $2.46 is ABOVE adjusted $2.22 - the adjusted figure REMOVES $7.8B of gains on equity stakes NVIDIA holds in other companies - Operating cash $24.1B on $59.7B of net income = 40 cents per profit dollar, from 58 cents a year ago and 86 cents last quarter - Free cash flow $21.3B, -56% QoQ and only +59% YoY against revenue +106%; FCF margin 22% vs 29% a year ago - Accounts receivable $63.1B from $38.5B in January; DSO 45 to 60; terms disclosed at 90 days up to ONE YEAR for investment-grade buyers - Five direct customers hold 22/14/13/11/10 = 70% of the receivable book (three at 25/18/13 = 56% in January) - Supply and capacity commitments $119B to $279B in one quarter ($160B added, primarily memory); total commitments $422B - Guarantees $108.5B: $105B on the SB Energy PORTS-Pike campus in Ohio, leased 20 years to OpenAI, plus $3.5B for other AI clouds - 47% of shareholders equity - Issued $24.9B of senior notes ($33.5B outstanding) while returning $25.8B to shareholders and buying $15.8B of equity stakes on $24.1B of operating cash - Q3 FY2027 guide $108B (+12% QoQ) with NO China data center compute assumed; gross margin guided DOWN to 74.0% from 75.0% - Fair value $190.48: cash-flow route $170.74, earnings route $219.93, exit-multiple route $180.78, weighted equally; bear $108.91, bull $304.43 - Five targets published the morning after: $300 to $465, median $315 - our bull case sits within $4.43 of the LOWEST of them What to watch: Days sales outstanding holding at 60 or coming back toward 50, operating cash conversion back above 60 cents on the profit dollar (it was 40 cents this quarter), or the Ohio phases entering service with the leases paid, would each move this call Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
BILI Stock: HOLD Call - Server Book Tripled, Margin +10bp Q2 2026
Bilibili (BILI) Q2 2026 — Shares rose +3.84% on the print to $16.77, on 3.0x the thirty session median volume - the 26th best session of the twelve months, not the first. One session later they sit at $16.60, +2.79% against the pre-print close, with 27% of the move handed back. The shares are -29% on the year and 54% under the January high. Bilibili reported Q2 2026 revenue of RMB7.94B, +8% year on year, a record gross margin of 37.2% and net profit +55%. We dispute none of it. What we dispute is the MARGIN RUN behind it. This was the SIXTEENTH consecutive quarter of gross-margin improvement - and it measured 10 bp. The first ten quarters of the same run averaged 210 bp each; the last six have averaged 19 bp. The reason is on the balance sheet: property and equipment went from RMB695M in December to RMB2.08B at 30 June, roughly 2.99x in six months, on the three-year straight-line life the annual report specifies. Research and development rose +16%, which the company attributes to higher expenses related to server depreciation - and that one line is 90% of the entire increase in operating expenses. Headcount fell by 136 over the same six months. We rate BILI a HOLD at $16.00 against $16.60. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$16.0 vs ~$16.6 today. KEY METRICS: - Revenue RMB7.94B, +8% YoY; gross margin a record 37.2% from 36.5% - The 16th consecutive margin gain was 10 bp - the first ten of the run averaged 210 bp - Revenue sharing saved 168 bp of revenue; everything else in COGS took 94 bp back - Property and equipment RMB695M to RMB2.08B in six months (2.99x), three-year life - R&D +16% on server depreciation = 90% of the whole opex rise; headcount -136 - Operating profit RMB373M +48%; net profit +55%; adjusted net profit +25% - Advertising +28% and now the largest line; mobile games -14% - H1 operating cash RMB2.95B vs RMB3.29B while net profit went +161% - Net cash RMB14.79B = $2.18B = 31% of market value; EV $4.77B - EV/reported operating profit 23.1x; EV/adjusted 11.8x - Fair value $16.00 = DCF $15.07, exit multiple $16.54, trailing multiple $16.40, equal weights - Bear $10.83, bull $22.04; three live targets $27 to $30, mean $28.67 - We match consensus on EARNINGS (our RMB8.56 vs RMB8.86 for 2027) and differ on the MULTIPLE: 8.9x vs 18.9x ex-cash - Reported in RMB; price and valuation in USD at RMB6.7851, the company's own June 30 rate What to watch: A September-quarter gross-margin step of 30bp or more (it was 10 bp this quarter), the property and equipment line holding near RMB2.08B instead of doubling again, or six-month operating cash turning back up (it was -10% while profit went +161%), would each move this call Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
NVDA Stock: HOLD Call - Record Quarter, $105B Guarantee Q2 FY2027
NVIDIA (NVDA) Q2 FY2027 — Shares gapped 6.3% ABOVE the prior close and closed 1.1% under their own session high at $227.98, +8.74% on the day - the best session of the twelve months on 2.6x the thirty session median volume. One session later they sit at $217.55, +3.76% against the pre-print close, with 57% of the move handed back. NVIDIA reported Q2 FY2027 revenue of $96.2B, +106% year on year, at a gross margin of 75.0%, and beat the bar with adjusted EPS of $2.22 against $2.09. We dispute none of it. What changed is the FUNDING of that quarter. Operating cash was $24.1B against $59.7B of net income - 40 cents per dollar of profit, from 58 cents a year ago - because receivables absorbed $22.3B, or 23% of everything sold. Days sales outstanding went 45 to 60 on terms the 10-Q says run to ONE YEAR for investment-grade buyers, and five customers now owe 70% of a $63.1B book. NVIDIA issued $24.9B of senior notes and disclosed $108.5B of guarantees, $105B of it on twenty-year leases at one Ohio campus. We rate NVDA a HOLD at $190.48 against $217.55. THE CALL: HOLD (3 / 5/5, MODERATE) — base-case value ~$190.48 vs ~$217.55 today. KEY METRICS: - Revenue $96.2B, +106% YoY and +18% QoQ; data center $89.0B (+117%), edge computing $7.2B (+27%) - Adjusted EPS $2.22 vs a $2.09 bar (a 6.2% beat) - and the bar was RAISED into this print, from $1.76 for the April quarter - Reported EPS $2.46 is ABOVE adjusted $2.22 - the adjusted figure REMOVES $7.8B of gains on equity stakes NVIDIA holds in other companies - Operating cash $24.1B on $59.7B of net income = 40 cents per profit dollar, from 58 cents a year ago and 86 cents last quarter - Free cash flow $21.3B, -56% QoQ and only +59% YoY against revenue +106%; FCF margin 22% vs 29% a year ago - Accounts receivable $63.1B from $38.5B in January; DSO 45 to 60; terms disclosed at 90 days up to ONE YEAR for investment-grade buyers - Five direct customers hold 22/14/13/11/10 = 70% of the receivable book (three at 25/18/13 = 56% in January) - Supply and capacity commitments $119B to $279B in one quarter ($160B added, primarily memory); total commitments $422B - Guarantees $108.5B: $105B on the SB Energy PORTS-Pike campus in Ohio, leased 20 years to OpenAI, plus $3.5B for other AI clouds - 47% of shareholders equity - Issued $24.9B of senior notes ($33.5B outstanding) while returning $25.8B to shareholders and buying $15.8B of equity stakes on $24.1B of operating cash - Q3 FY2027 guide $108B (+12% QoQ) with NO China data center compute assumed; gross margin guided DOWN to 74.0% from 75.0% - Fair value $190.48: cash-flow route $170.74, earnings route $219.93, exit-multiple route $180.78, weighted equally; bear $108.91, bull $304.43 - Five targets published the morning after: $300 to $465, median $315 - our bull case sits within $4.43 of the LOWEST of them What to watch: Days sales outstanding holding at 60 or coming back toward 50, operating cash conversion back above 60 cents on the profit dollar (it was 40 cents this quarter), or the Ohio phases entering service with the leases paid, would each move this call Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 15 min
KSS Stock: HOLD Call - The Beat And The Raise Were Both A Tariff Refund Q2 FY2026
Kohl's Corporation (KSS) Q2 FY2026 — Shares gapped 5.8% lower at the open on the print, were marked 9.4% down intraday, then turned and closed +1.47% at $17.94 - and three sessions later they sit at $17.50, -1.02% against the pre-print close. Kohl's raised its full-year adjusted EPS guidance by $0.80 at BOTH ends of the range, restarted its buyback, and reported a 303 bp gross margin expansion. Approximately $150M of tariff refunds landed in the quarter, of which approximately $100M ran through gross margin - that alone is 301 basis points on $3.3B of net sales, or 99% of the entire improvement in the rate. Strip it out and operating income is $161M, the identical figure Kohl's posted as ADJUSTED operating income a year ago, and the gross margin rate is 39.9% against 39.9%. The raised full-year guide implies $0.62 to $1.22 for the second half against $1.18 delivered last year - -22.0% at the midpoint. We rate KSS a HOLD at a fair value of $20.68 against $17.50. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$20.68 vs ~$17.5 today. KEY METRICS: - Net sales $3.318B, -0.9% YoY; comparable sales -0.9% - a small MISS vs the $3.323B estimate - Diluted EPS $1.28 vs a $0.583 consensus - a beat of $0.70. No adjusting items, so GAAP = adjusted - Tariff refunds of ~$150M received; ~$100M flowed through gross margin (company disclosed) - That $100M is 301 bp on net sales - 99% of the ENTIRE gross margin expansion - Ex-refund gross margin 39.9% vs 39.9% a year ago - flat within 2 bp - Operating income $261M reported; $161M ex-refund vs $161M ADJUSTED a year ago - identical - Refund is worth $0.65 to $0.97 per diluted share after tax - the beat was $0.70 - FY2026 adjusted EPS guide raised to $1.80-$2.40 from $1.00-$1.60: $0.80 at BOTH ends - Operating margin guide 3.5%-4.0% from 2.8%-3.4% = $100M more operating income vs a $100M refund - Remove the raise and the midpoint is $1.30 - exactly the OLD midpoint of $1.30 - Implied 2H EPS $0.62-$1.22 vs $1.18 delivered in 2H last year: -22.0% at the midpoint - Buyback restarted at $100M for 2026 under a $3.0B authorization; dividend costs $57M/yr - Those two together are $157M - versus a $150M refund cheque - Net debt $504M from $1,421M; cash $821M from $174M; revolver at zero - Depreciation $700M/yr vs guided capex $375M - spending is 54% of the charge - Normalized levered FCF $409M (20.6% yield); on a maintenance basis $84M (4.2%) - Fair value $20.68: DCF $20.56, 4.5x EV/EBITDA $21.25, 0.55x book $20.22 - all above the $17.50 close - Bear $13.47 to bull $34.29 - a 2.55x range; Street median $16.50 is BELOW the price What to watch: Second-half adjusted EPS clearing the $1.18 delivered a year ago, the gross margin rate widening past 39.9% with no refund in it, or capital spending rising toward the $700M depreciation charge with cash flow held, would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 13 min
MRVL Stock: The 59 Million Shares Marvell Gave Google - Q2 FY2027
Marvell Technology (MRVL) Q2 FY2027 — Shares fell 10.3% to $216.62 the next session, gapping down 6.7% at the open and never trading back - the session high was still 5.2% below Thursday, and it closed within half a per cent of its own low. Revenue grew 36.5% to a record $2.739bn and the adjusted gross margin FELL, to 58.9% from 59.4%. Marvell guides it lower again next quarter. Twelve days after the quarter closed it issued Google a warrant over 59.0m shares - 6.4% of the company - which its own accounting books as a REDUCTION TO REVENUE. THE CALL: BEARISH (3/5, MODERATE) — base-case value ~$123 vs ~$217 today. KEY METRICS: - Revenue $2,739.3M, +36.5% YoY, a record, and $39.0M above the guided midpoint - Data center $2,171.5M, +45.7%, now 79% of revenue vs 74% a year ago - Communications and other $567.8M, +10.1% YoY but -3.0% sequentially - Adjusted EPS $0.94 vs $0.67; reported EPS $0.33; the gap is $0.61 a share - Adjusted gross margin 58.9%, DOWN from 59.4%; Q3 guided to 57.5-58.5% - Adjusted operating margin 36.6% from 34.8%; reported operating margin 16.8% - Stock compensation $326.2M, +112.4%, or 11.9% of revenue vs 7.7% a year ago - That $326.2M exceeds the $308.0M of reported net income by $18.2M - Buybacks $200.0M covered 61% of it; diluted shares +5.8% to 921.2M - Google warrant: 59.0M shares at $206.58, issued August 18, 2026, 6.4% of diluted - It vests in 240 tranches of $500M of custom revenue - $120bn at full vest - Marvell books a customer warrant as a REDUCTION TO REVENUE as it vests - Our estimate of its fair value: $7.49bn, or 6.2% of that revenue - OUR ESTIMATE - One distributor is 44% of revenue, up from 34%; Asia is 84% of revenue - Balance sheet: $3.93bn cash, $4.96bn debt, $13.87bn goodwill of $27.55bn assets - Q3 guide: revenue $3.15bn, adjusted EPS $1.10, diluted shares 921M - Valuation $123 blended - DCF $134, 30x economic EPS $121, EV/EBIT $114 - The price implies 33.8% revenue growth for five years, to $50.7bn What to watch: Adjusted gross margin back above 59% for two prints while custom revenue accelerates, or stock compensation under 7% of revenue, would break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
XPEV Stock: SELL Call - Half The Gross Profit Was Not From Cars Q2 2026
XPeng (XPEV) Q2 2026 — Shares gapped 3.0% BELOW the prior close, never traded back to it, and closed 7.1% under their own session high at $11.15, -8.53% on the day - a twelve month closing low on 4.1x the thirty session median volume. Four sessions later they sit at $11.53, -5.41% against the pre-print close. XPeng reported Q2 2026 revenue of $2,910M, +8.0% year on year, at a gross margin of 20.7% against 17.3%. Underneath, 49.6% of gross profit came from the services line - just 13.7% of revenue - which the company describes as technical research work billed to an unnamed carmaker on milestones. Vehicle gross profit FELL 15.0% to $303M on vehicle revenue that ROSE 1.0%, and deliveries were flat. Operating cash flow for the six months to June was an OUTFLOW of $1.73B against an INFLOW of $1.13B. We rate XPEV a SELL at a fair value of $7.02 against $11.53. XPeng reports in renminbi; every dollar here is converted once at RMB 6.7851, the company's own implied rate. THE CALL: SELL (3/5, MODERATE) — base-case value ~$7.02 vs ~$11.53 today. KEY METRICS: - Q2 revenue $2,910M, +8.0% YoY and +51.5% QoQ - but that QoQ is off a March quarter when deliveries fell to 62,682 - Services revenue $398M (13.7% of revenue) produced $298M of gross profit - 49.6% of the $602M total, vs 23.5% a year ago - Vehicle gross profit -15.0% to $303M from $357M, on vehicle revenue +1.0%; vehicle margin 14.3% to 12.1% - Services margin 75.1% from 53.6% a year ago, 66.5% last quarter - a milestone line, not a run rate - Deliveries 103,295 vs 103,181, +0.1%; H1 deliveries -15.8%, H1 revenue -3.8% - Loss per ADS $0.21 vs a $0.06 estimate - 3.5x the modelled loss; an ADS is TWO ordinary shares - Net loss widened $127M, only $31M of it operating - $96M is below the line (FX $39M, marks $24M, interest $21M, tax $12M) - R&D $430M, +32.1%; SG&A $368M, +15.2% - annualised costs $3.19B vs gross profit $2.41B, or 1.32x - H1 operating cash flow MINUS $1.73B vs PLUS $1.13B a year earlier - a $2.85B swing; inventory +32.3%, payables $336M - Borrowings $1.87B to $2.91B, +55.5%; gearing 41.8% to 73.2% - both reproduce from the filed lines - The $5.97B cash position is NOT balance sheet cash: $2.10B is cash, $1.42B (23.8%) restricted; net cash $1.64B - Q3 2026 guide: deliveries 115,000-121,000 (-0.87% to 4.30% YoY), revenue $3.20B-$3.45B - Robotics round: every tranche at $2.03 a share, reproducing the filed 68.41% retained interest; stake marked $1.84B, $615M of it redeemable against XPeng - Market value $11.03B on 956.7M ADS (Class A + B, filed count); EV $9.39B = 0.85x revenue of $11.07B - Fair value $7.02: parts $9.16, whole company at 0.55x revenue $8.46, DCF $3.64 - weighted 35/35/30 - Bear $4.66 to bull $17.19 - a 3.69x range; the three ROUTES disagree by 152%, wider still - One target since this print - Barclays $14.00, itself +21.4% ABOVE the close; the other four are 91-290 days old What to watch: A quarter in which VEHICLE gross profit grows year on year (it fell 15.0% this time), a half year of operating cash flow that is merely FLAT rather than the $1.73B outflow just reported, or a services line that repeats at scale without a milestone behind it, would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
NTNX Stock: HOLD Call - EPS Up 8x On A Tax Entry, FY27 Guide Flat Q4 FY2026
Nutanix (NTNX) Q4 FY2026 — Shares gapped 8.9% ABOVE the prior close on the reaction session, reached +13.8% intraday, then closed 6.2% under their own session high at $69.84, +6.81% on the day - and one session later they sit at $69.16, +5.77% against the pre-print close. Nutanix reported GAAP diluted EPS of $5.17 for fiscal 2026 against $0.65 a year ago. Approximately $1,208M of that - $4.14 per diluted share - is the release of the valuation allowance on its US deferred tax assets, an item Nutanix names itself as adjustment seven of its own GAAP reconciliation. Net income of $1,507M sits on pre-tax income of $327M, and cash actually paid in income tax for the year was $30M against $33M last year. Strip only that item and reported EPS is $1.03, real growth of +59.2%. The company's own adjusted figure is $2.04 against $1.62, up +25.9%. Meanwhile FY2027 revenue is guided to $3.18B-$3.23B, or 12.3% at the midpoint, against 12.4% just delivered - and the FY2027 operating margin ranges imply 23.7% for the last nine months, below both the 27% Q1 guide and the 26.2% Q4 just printed. We rate NTNX a HOLD at a fair value of $59.39 against $69.16. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$59.39 vs ~$69.16 today. KEY METRICS: - Q4 revenue $757M, +15.9% YoY - a beat vs the $738M estimate; FY2026 revenue $2.85B, +12.4% - Q4 adjusted EPS $0.60 vs a $0.49 consensus - a beat of 22% - EPS basis PROVEN: the four filed adjusted quarters $0.41, $0.56, $0.47, $0.60 add to $2.04, the filed annual figure - GAAP diluted EPS $5.17 vs $0.65 - but $4.14 per share of it is the valuation allowance release - Net income $1,507M on pre-tax income of $327M - 4.6x more after tax than before it - Cash paid in income tax $30M vs $33M last year; the booked benefit is 39x the cash - Ex-release reported EPS $1.03 vs $0.65 a year ago; adjusted EPS $2.04 vs $1.62, +25.9% - Q4 adjusted operating margin 26.2% vs 18.3%; FY2026 23.7% vs 21.1% - ARR $2.55B, +15.8% (methodology re-cut in Q1 FY26, priors restated); RPO $3.44B, +27.8% - FY2027 revenue guide $3.18B-$3.23B = 11.4% to 13.2% growth, 12.3% at the midpoint vs 12.4% delivered - FY2027 margin: Q1 guided 26%-28%, full year 24%-25% - the last nine months imply 23.7% - FY2027 FCF guide $850M-$950M = +7.1% at the midpoint, against +12.1% growth this year - FY2026 free cash flow $841M, +12.1%; stock comp $358M (12.5% of revenue); owner earnings $483M - Buyback $484M exceeded stock comp by $126M; diluted share count FELL 0.65% - Equity flipped from a $695M deficit to $703M - 86% of the swing is the deferred tax asset - Fair value $59.39: DCF $57.96, 26x adjusted EPS $60.15, 30x owner earnings $60.62 - all BELOW the $69.16 close - Bear $35.17 to bull $86.04 - a 2.45x range; Street median $80.00 is ABOVE the price What to watch: A quarterly update lifting the FY2027 revenue guide above 14% growth, a FULL YEAR of adjusted operating margin above 26% rather than a quarter of it, or owner earnings (free cash flow less stock compensation, $483M today) clearing $600M, would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 15 min
KSS Stock: HOLD Call - The Beat And The Raise Were Both A Tariff Refund Q2 FY2026
Kohl's Corporation (KSS) Q2 FY2026 — Shares gapped 5.8% lower at the open on the print, were marked 9.4% down intraday, then turned and closed +1.47% at $17.94 - and three sessions later they sit at $17.50, -1.02% against the pre-print close. Kohl's raised its full-year adjusted EPS guidance by $0.80 at BOTH ends of the range, restarted its buyback, and reported a 303 bp gross margin expansion. Approximately $150M of tariff refunds landed in the quarter, of which approximately $100M ran through gross margin - that alone is 301 basis points on $3.3B of net sales, or 99% of the entire improvement in the rate. Strip it out and operating income is $161M, the identical figure Kohl's posted as ADJUSTED operating income a year ago, and the gross margin rate is 39.9% against 39.9%. The raised full-year guide implies $0.62 to $1.22 for the second half against $1.18 delivered last year - -22.0% at the midpoint. We rate KSS a HOLD at a fair value of $20.68 against $17.50. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$20.68 vs ~$17.5 today. KEY METRICS: - Net sales $3.318B, -0.9% YoY; comparable sales -0.9% - a small MISS vs the $3.323B estimate - Diluted EPS $1.28 vs a $0.583 consensus - a beat of $0.70. No adjusting items, so GAAP = adjusted - Tariff refunds of ~$150M received; ~$100M flowed through gross margin (company disclosed) - That $100M is 301 bp on net sales - 99% of the ENTIRE gross margin expansion - Ex-refund gross margin 39.9% vs 39.9% a year ago - flat within 2 bp - Operating income $261M reported; $161M ex-refund vs $161M ADJUSTED a year ago - identical - Refund is worth $0.65 to $0.97 per diluted share after tax - the beat was $0.70 - FY2026 adjusted EPS guide raised to $1.80-$2.40 from $1.00-$1.60: $0.80 at BOTH ends - Operating margin guide 3.5%-4.0% from 2.8%-3.4% = $100M more operating income vs a $100M refund - Remove the raise and the midpoint is $1.30 - exactly the OLD midpoint of $1.30 - Implied 2H EPS $0.62-$1.22 vs $1.18 delivered in 2H last year: -22.0% at the midpoint - Buyback restarted at $100M for 2026 under a $3.0B authorization; dividend costs $57M/yr - Those two together are $157M - versus a $150M refund cheque - Net debt $504M from $1,421M; cash $821M from $174M; revolver at zero - Depreciation $700M/yr vs guided capex $375M - spending is 54% of the charge - Normalized levered FCF $409M (20.6% yield); on a maintenance basis $84M (4.2%) - Fair value $20.68: DCF $20.56, 4.5x EV/EBITDA $21.25, 0.55x book $20.22 - all above the $17.50 close - Bear $13.47 to bull $34.29 - a 2.55x range; Street median $16.50 is BELOW the price What to watch: Second-half adjusted EPS clearing the $1.18 delivered a year ago, the gross margin rate widening past 39.9% with no refund in it, or capital spending rising toward the $700M depreciation charge with cash flow held, would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
HPQ Stock: HOLD Call - $1.8B More Revenue, $4M Less Profit Q3 FY2026
HP Inc. (HPQ) Q3 FY2026 — Shares gapped 8.7% lower on the reaction session and were marked 12.4% down intraday, then closed -2.9% at $29.63 - and the next session took all of it back to $30.52, which is exactly where they closed before the release. HP added $1,836M of revenue to Personal Systems, up 18.5%, and the division earned $4M LESS than a year ago - an incremental margin of -0.22%. HP files the mechanism itself: average selling prices +40.8% and PC unit volume -15.8%, as a memory and storage cost shock was passed through in price. The only division whose profit rose is Printing, which shrank, and group segment profit only rose at all because a $127M tariff refund sits inside cost of revenue. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$30.23 vs ~$30.52 today. KEY METRICS: - Net revenue $15,677M, +12.5% YoY (+10.9% constant currency) - a record third quarter - Personal Systems revenue $11,767M vs $9,931M - $1,836M added, +18.5% - Personal Systems segment profit $537M vs $541M - DOWN $4M on all that revenue - Incremental margin on the new revenue -0.22%; divisional margin 4.56% from 5.45% - HP files the split: average selling prices +40.8%, PC unit volume -15.8% - Price times volume reproduces the filed +18.5% revenue move to within 0.07 points - Units ran -7.0% in the April quarter and -4.2% across nine months - it is steepening - Printing revenue -2.2% (-$90M) but its segment profit +$28M, +4.1%, on 18.1% margins - Printing is 25% of revenue and 58% of group segment profit - A $127M IEEPA tariff refund is booked as a reduction of cost of net revenue - Group segment profit +$20M as reported; -$107M without that refund - Adjusted EPS $0.83, +10.7%; ex the stated $0.11 of refund it is $0.72, -4.0% - GAAP EPS $0.71 vs $0.80, -11.3%; gross margin 18.8% from 20.5%, 18.0% ex refund - FY26 adjusted guide raised to $3.19-$3.29 from $2.90-$3.10 - $0.19 of it is refund - Q4 adjusted guide $0.69-$0.79 against $0.93 last year: -20.4% at the midpoint - Free cash flow $1,568M in the quarter; FY26 guide raised to $3.0-$3.2 billion - Valuation $30.23 blended - DCF $31.58, 10.5x EV to cash $28.02, 10.5% yield $30.44 - Bear $20.64, bull $36.24; seven dated targets, median $23 - 24.6% BELOW the price - The tape requires only -0.22% perpetual growth against long-run inflation nearer 2.4% What to watch: PC unit volume returning to flat or better, the Personal Systems operating margin recovering above 5.45%, or adjusted EPS clearing $0.75 with no tariff refund in it would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
HRL Stock: HOLD Call - Dividend Now Tops Its Own EPS Guide Q3 FY2026
Hormel Foods (HRL) Q3 FY2026 — Shares fell 10.2% to $21.28 on the print - the worst session of the whole twelve-month tape - gapping 3.0% lower and then losing another 7.5% through the day, before taking back 1.4% on Friday to close at $21.57. Hormel cut its reported EPS guidance to $1.06-$1.12 while raising the adjusted range to $1.45-$1.51. The cut put the $1.17 annual dividend above the top of the company own reported-earnings guide. Underneath it, volume fell 7.4% - 77.5 million fewer pounds - while realised price per pound rose 5.45%, and the adjusted operating profit that rose came out of overhead, not product. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$21.73 vs ~$21.57 today. KEY METRICS: - Net sales $2,961M, -2.4% YoY; organic net sales -1.7% on the company own definition - Total volume 969M lbs vs 1,047M lbs - 77.5M fewer pounds, -7.4% - Realised price per pound $3.06 vs $2.90, +5.45% - price carried the entire top line - Reported operating profit $111M vs $240M; reported operating margin 3.7% from 7.9% - Reported EPS $0.11 vs $0.33; adjusted EPS $0.37 vs $0.35, +5.7% - Adjusted operating profit $266M vs $254M - a $12.0M increase - But gross profit fell $15.8M and adjusted overhead fell $28.4M; the bridge foots - Advertising investment $34M vs $41M, -17.1%, about a quarter of the overhead cut - Retail volume -9.1%, net sales -4.3%; Foodservice net sales +1.6%, 12th straight quarter - International segment swung to a $29M loss on a $48M non-cash impairment - Reported FY26 EPS guide cut to $1.06-$1.12 from $1.28-$1.37; sales guide cut $200M - Adjusted FY26 EPS guide raised to $1.45-$1.51 from $1.43-$1.51 - the top did not move - Dividend $1.17 a year, 5.42% yield - 104% of the TOP of the new reported guide - On the PREVIOUS guide the same rate was 88% of expected reported EPS - Nine-month free cash flow $549M covers $481M of dividends - 88%, with $68M to spare - Nine-month operating cash flow $769M vs $522M, but net earnings fell $135M - The improvement is a $255M working capital swing, larger than the $246M cash gain - Valuation $21.73 blended - DCF $22.22, 9.75x cash earnings $20.54, 5.25% yield $22.29 - Bear $16.91, bull $26.78; street median $26 but four of five targets predate the print - The tape requires only 1.40% perpetual growth against long-run inflation nearer 2% What to watch: Total volume turning flat or better, gross margin recovering above 16.1%, or reported EPS returning above the $1.17 dividend rate would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 14 min
CRM Stock: HOLD Call - $2.7B of the Profit Was a Private Markup Q2 FY2027
Salesforce (CRM) Q2 FY2027 — Shares rose 22.6% to $252.05 the next session - the best day of the whole twelve-month tape - opening 11.9% higher on an opening print that was also the session low, then added another 1.6% on Friday to close at $256.00. Reported earnings per share grew 119% and GAAP operating profit grew nothing: $2,331M against $2,332M a year earlier, on revenue up 10.8%. The difference is $2,613M of gains on strategic investments, $2.7bn of it an unrealised markup on one privately held holding, Anthropic, that Salesforce did not sell. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$260 vs ~$256 today. KEY METRICS: - Revenue $11,345M, +10.8% YoY; subscription and support $10,820M, +11.7% - GAAP operating profit $2,331M vs $2,332M a year ago - flat to the dollar - GAAP operating margin 20.5%, down from 22.8%; gross margin 76.7% from 78.1% - Reported EPS $4.29 vs $1.96; adjusted EPS $5.90 vs $2.91 - Gains on strategic investments $2,613M vs $6M in the year-ago quarter - Of that, $2.7bn relates to one holding, Anthropic, named in the 10-Q - It added $2.43 to reported EPS and $2.53 to adjusted EPS - the company’s own figures - Ex the mark, reported EPS is $1.86 against $1.96 a year ago - it fell 5.1% - Only $179M of strategic investments were sold all quarter; nothing else was realised - $11,169M of the $11,324M portfolio is carried under the measurement alternative - Six-month EPS rose $3.12; the company attributes $2.92 to the mark, $0.57 to buybacks - Salesforce raised $31.0bn of debt in March at coupons of 4.24% to 6.70% - Interest expense $473M vs $67M - a $406M step, about $1.9bn annualised - $25bn accelerated buyback took 103M shares at an average of $198.34 - Diluted shares 821M vs 962M; book equity $38.4bn from $59.1bn in January - Organic revenue growth 6.4% vs 10.8% reported; Informatica added $456M - cRPO $33.5bn, +14% - the same reported rate as last quarter, 13% to 14% in CC - Guidance: FY27 revenue $46.1-46.4bn, free cash flow growth only 4-5% - Valuation $260 blended - owner cash DCF $226, reported FCF DCF $325, 25x EPS $245 - The price needs owner cash compounding 6.5% a year against 4.5% guided What to watch: GAAP operating profit compounding faster than revenue for two prints, organic revenue growth above 9%, or free cash flow beating the 4-5% guide, would each break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 13 min
MRVL Stock: The 59 Million Shares Marvell Gave Google - Q2 FY2027
Marvell Technology (MRVL) Q2 FY2027 — Shares fell 10.3% to $216.62 the next session, gapping down 6.7% at the open and never trading back - the session high was still 5.2% below Thursday, and it closed within half a per cent of its own low. Revenue grew 36.5% to a record $2.739bn and the adjusted gross margin FELL, to 58.9% from 59.4%. Marvell guides it lower again next quarter. Twelve days after the quarter closed it issued Google a warrant over 59.0m shares - 6.4% of the company - which its own accounting books as a REDUCTION TO REVENUE. THE CALL: BEARISH (3/5, MODERATE) — base-case value ~$123 vs ~$217 today. KEY METRICS: - Revenue $2,739.3M, +36.5% YoY, a record, and $39.0M above the guided midpoint - Data center $2,171.5M, +45.7%, now 79% of revenue vs 74% a year ago - Communications and other $567.8M, +10.1% YoY but -3.0% sequentially - Adjusted EPS $0.94 vs $0.67; reported EPS $0.33; the gap is $0.61 a share - Adjusted gross margin 58.9%, DOWN from 59.4%; Q3 guided to 57.5-58.5% - Adjusted operating margin 36.6% from 34.8%; reported operating margin 16.8% - Stock compensation $326.2M, +112.4%, or 11.9% of revenue vs 7.7% a year ago - That $326.2M exceeds the $308.0M of reported net income by $18.2M - Buybacks $200.0M covered 61% of it; diluted shares +5.8% to 921.2M - Google warrant: 59.0M shares at $206.58, issued August 18, 2026, 6.4% of diluted - It vests in 240 tranches of $500M of custom revenue - $120bn at full vest - Marvell books a customer warrant as a REDUCTION TO REVENUE as it vests - Our estimate of its fair value: $7.49bn, or 6.2% of that revenue - OUR ESTIMATE - One distributor is 44% of revenue, up from 34%; Asia is 84% of revenue - Balance sheet: $3.93bn cash, $4.96bn debt, $13.87bn goodwill of $27.55bn assets - Q3 guide: revenue $3.15bn, adjusted EPS $1.10, diluted shares 921M - Valuation $123 blended - DCF $134, 30x economic EPS $121, EV/EBIT $114 - The price implies 33.8% revenue growth for five years, to $50.7bn What to watch: Adjusted gross margin back above 59% for two prints while custom revenue accelerates, or stock compensation under 7% of revenue, would break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 15 min
SNPS Stock: The 19% Segment That Turned - Q3 FY2026 Earnings
Synopsys (SNPS) Q3 FY2026 — Shares rose 13.4% to $464.89 the next session, the best day of the year, then handed 41% of it back to close at $442.61. Design IP - 19% of revenue, and the segment the 10-Q names as the one China export controls hurt - went -6.5%, -5.8%, then +10.8% year on year, with its margin off a 16.3% trough to 26.5%. THE CALL: BEARISH (3/5, MODERATE) — base-case value ~$373 vs ~$443 today. KEY METRICS: - Revenue $2.477B, +42.4% YoY; adjusted EPS $3.91 vs $3.39, above the guided ceiling - Design IP revenue +10.8% to $473.8M after -6.5% and -5.8% in the prior two quarters - Design IP adjusted operating margin 26.5%, off a 16.3% trough, vs 20.1% a year ago - Design Automation +52.7% to $2,003.0M, 80.9% of revenue, at a 45.2% adjusted margin - China revenue $255.5M, +3.3%, vs +48.8% everywhere else; now 10.3% of revenue vs 14.2% - Nine-month reported net income $627.9M, -29.2%, on revenue +49.2% - Adjusted net income +37.1% but adjusted EPS +15.3%; diluted shares +18.9% - Q3 reported EPS $2.84 carries $2.09 of acquisition amortisation and a $2.09 divestiture gain - Restructuring estimate raised to $425-500M from $300-350M in an 8-K/A the same day - FY26 guidance: revenue $9.715B, adjusted EPS $15.07, free cash flow ~$2.6B (from ~$2.0B) - FY26 reported operating margin guided 10.4% against an adjusted 41.5% - Backlog $10.9B including $1.9B of flexible spending commitments; 49% converts in 12 months - Balance sheet: $3.61B cash, $10.04B debt, $38.3B goodwill and intangibles of $47.7B assets - Valuation: owner DCF $373 blended - 40% DCF $311, 35% adjusted P/E $429, 25% EV/FCF $393 What to watch: Design IP holding above 8% growth for two more quarters, with China under 8% of revenue and the total growth rate intact, would break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 15 min
CRWD Stock: CrowdStrike Q2 FY2027 Earnings - A Flawless Quarter At 37x Revenue
CrowdStrike (CRWD) Q2 FY2027 — Shares jumped 20.5% to $227.96 the next session - their best day of the year - then eased to $218.40. Revenue grew 26%, calculated billings 29%, the contracted book 49%. Every test of earnings quality came back clean, and the shares still trade at 37x this year's guided revenue. THE CALL: AVOID (3/5, MODERATE) — base-case value ~$107 vs ~$218 today. KEY METRICS: - Revenue $1,470.9M, +25.8% YoY; subscription revenue $1,400.3M, +27.0% - Subscription ARR $5.84B, +25%; net new ARR $332.8M, +51% against a soft base - Calculated billings $1,590.9M, +29.1% - running ahead of revenue at +25.8% - Remaining performance obligations $10.7B, +48.6%; deferred revenue $4.84B, +26.3% - Non-GAAP EPS $0.31 vs GAAP $0.01; stock comp $399.0M is 27.1% of revenue - Non-GAAP operating income $371.6M - smaller than the $399.0M of stock comp added back - Free cash flow $377.4M, 25.7% of revenue, a Q2 record; H1 FCF $850.1M at 29.8% - H1 owner cash after stock comp $175.5M, a 6.1% margin on $2.86B of revenue - FY27 revenue guide raised $64.4M to $5,991-6,011M, against a $31.9M quarter beat - Our fair value ~$107 vs the $218.40 close; Street median $240; EV 36.6x revenue What to watch: two consecutive quarters of revenue growth back above 30% would break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 30 · 13 min
WDAY Stock: Workday’s AI Sells, But The Order Book Grew 8% - Q2 FY2027
Workday (WDAY) Q2 FY2027 — Shares gapped down, reversed, and closed up 5.8% at $204.72 the next session. AI drove more than 25% of new ACV. Total subscription backlog grew 8.0%, slower than the 13.9% subscription revenue it feeds. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$191 vs ~$205 today. KEY METRICS: - Revenue $2,649M, +12.8% YoY; subscription revenue $2,471M, +13.9% - Total subscription backlog $27.40B, +8.0%; 12-month backlog $9.03B, +14.2% - Backlog beyond 12 months fell to $18.37B from $18.49B in April - Non-GAAP operating margin 31.1% vs 29.0%; non-GAAP EPS $2.75 vs $2.61 consensus - GAAP EPS $2.57 includes $1.52 of one-off IP-transfer tax benefit - Free cash flow $460M, -21.8% YoY; H1 free cash flow $1.08B, +6.6% - Non-GAAP EPS +24.4% but non-GAAP net income +13.2%; diluted shares -8.8% - H1 buyback $2.92B = 2.06x trailing free cash flow; net cash down to $414M - FY27 subscription guide $9.940-9.950B; the $9.950B ceiling is unchanged since May - FY27 non-GAAP operating margin guide raised 30.5% to 31.0% What to watch: total subscription backlog growth back above 10% for two straight quarters would break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 29 · 15 min
Gorilla Technology (GRRR): Revenue Doubled And The Gross Line Went Negative
Gorilla Technology (GRRR) H1 2026 — H1 2026 (six months to 30 June): revenue $78.4M, up 99.3%; gross profit $3.8M, down 71.4%; gross margin 4.9% from 34.2%. IFRS operating loss $47.2M, net loss $46.9M, loss per share $1.74; adjusted EPS -$0.58. The June quarter, derived by subtracting the filed Q1 from the filed half: revenue $50.1M (+138% YoY, +78% QoQ) and gross profit of MINUS $2.11M. Adjusted EPS -$0.40 against a +$0.03 bar. FY2026 guidance raised to at least $200M. The stock fell 11.31% to $14.04 on 25 August and closed the week at $14.41. Gorilla's June quarter was the largest it has ever printed and the first in which it sold goods for less than they cost: gross profit of minus $2.11M on $50.1M of revenue. Every dollar of the growth is a hardware line that did not exist a year ago ($52.5M, against $0 external in H1 2025), while the service business that carried all of the historic margin shrank 34.2%. THE CALL: BEARISH (3/5, THE BIGGEST QUARTER EVER, SOLD BELOW COST) — base-case value ~$12.7 vs ~$14.41 today. KEY METRICS: - CALL: BEARISH 3/5, fair value $12.70 vs the $14.41 close of 28 August (-11.8%). Bear $5.94, base $13.39, bull $26.74, weighted 45/35/20. Street: Buy, $40.50 average (Compass Point $44, Cantor $40, Northland $40, A.G.P. $38) - and every one of those targets predates the release. - THE GROSS LINE: H1 gross profit $13.4M to $3.8M (-71.4%) while revenue doubled. June-quarter gross profit MINUS $2.11M against $7.04M a year earlier. Incremental gross margin on everything added year on year: -24.6% (revenue +$39.0M, cost of sales +$48.6M). - THE MIX: hardware $52.5M from $0 external (H1 2025's $22.9M was 100% eliminated on consolidation); services $25.9M from $39.3M, -34.2%. All hardware is booked at a point in time, all services over time. - THE FUNDING: $232M of 7.50% convertible notes in 63 days ($107M June, $125M July). Of the June $107M only $62.7M is debt - the other $44.3M is the conversion option. Filed effective interest rate 21.59%. Conversion at $25.4826 would add 9.10M shares to 27.24M, +33.4%. - THE RECEIVABLES: receivables plus contract assets $145.3M against $78.4M of half-year revenue (336 days), of which $104.8M is unbilled. 51.2% of invoiced receivables are past due; the credit-loss provision went $0.94M to $5.16M. Unfulfilled contracts -28.2% to $72.7M. What to watch: UP: a September quarter inside the guided $48-50M with gross margin back into double digits; cash actually collected against the $104.8M of unbilled contract assets. DOWN: another quarter of revenue growth on a negative gross margin; the credit-loss provision compounding past $5.2M; contract assets rising again at December. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 29 · 13 min
Materialise (MTLS): One Segment Earns 118% Of The Profit
Materialise (MTLS) Q2 2026 — Q2 2026 (three months to 30 June, filed in EUR): revenue EUR70.1M, +8.1% YoY; adjusted EBIT EUR3.9M, +26.9%; net profit EUR3.3M, EUR0.06 per ordinary share and per ADS. But the REPORTED operating result was EUR2.8M against EUR2.7M - essentially unchanged. Full-year adjusted EBIT guidance RAISED to EUR12-14M; revenue guidance reaffirmed at EUR273-283M. The 6-K landed pre-market on 27 Aug: +11.24% on 8.2x median volume, then 53% handed back the next session to close at $7.02. One of Materialise's three businesses earned more money last half than the entire company did. Materialise Medical produced EUR20.8M of segment adjusted EBITDA in the six months to 30 June; the whole company kept EUR17.6M - 118%, on 51% of group revenue. It is not a quarter: the same ratio was 133% across 2025 and 113% across 2024. Software, the highest-quality revenue in the group, is the only segment shrinking. Manufacturing is a third of revenue and lost EUR6.2M at the segment operating line. THE CALL: HOLD (3/5, ONE SEGMENT IS THE COMPANY, AND NOTHING FORCES ANYONE TO SEPARATE IT) — base-case value ~$7.21 vs ~$7.02 today. KEY METRICS: - CALL: HOLD 3/5, fair value $7.21 vs the $7.02 close of 28 August (+2.7%). Bear $6.01 (discounted cash flow), base $7.40 (group at 8.5x guided adjusted EBITDA), bull $8.44 (sum of the parts), weighted 40/25/35. One dated Street target: Cantor Fitzgerald, Overweight, $10.00, 20 February 2026, set with the ADS at $5.48. - THE SPINE - segment adjusted EBIT, June half: Medical +EUR17.4M, Software +EUR0.8M, Manufacturing -EUR6.2M, unallocated corporate -EUR5.6M. Those four sum to the EUR6.4M of consolidated adjusted EBIT Materialise reported. - THREE YEARS, NOT ONE QUARTER: Medical was 133% of group adjusted EBITDA across 2025 and 113% across 2024. Two-year segment revenue: Medical EUR116.4M to EUR134.2M, Manufacturing EUR106.5M to EUR92.5M, Software EUR43.9M to EUR40.9M. Group revenue barely moved. - BALANCE SHEET AND CAPEX: EUR74.2M of NET CASH, a fifth of the $407.1M market value. But depreciation was EUR11.3M in the half against EUR3.4M of capital spending - 0.31x. - VENDOR ERRORS NAMED ON-SLIDE: FMP's FY2025 revenue is 3.9% BELOW the filed figure; its earnings feed carries a PHANTOM 23 July 2026 print; its market cap is 1.0% high. ONE ADS IS ONE ORDINARY SHARE, proved from note 6.2. What to watch: UP: the medical share of group adjusted EBITDA falling below 100%; two consecutive periods of software revenue GROWTH; any announced separation or disposal of a segment. DOWN: capital spending staying below depreciation; manufacturing losses widening again; the full-year revenue guide being cut in November. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 29 · 13 min
JinkoSolar (JKS): The $212M Operating Loss That Was Reported As $103M
JinkoSolar (JKS) Q2 2026 — Q2 2026 (three months to 30 June): revenue RMB12.36BN / $1,821.2M, -31.3% YoY on module shipments of 15,961MW, -34.4%; gross margin 4.2% from 8.3% in Q1; operating expenses $287.3M against $75.6M of gross profit, so a $211.7M loss from operations. Net loss attributable to ordinary shareholders $102.8M, or $1.94 per ADS - but the company's own ADJUSTED loss is $134.2M, 31% BIGGER. Full-year shipment guidance cut from 75-85GW to 60-70GW. The 6-K landed pre-market on 26 Aug: the ADSs closed -11.87% and made a fresh 12-month closing low the next session. Making and selling solar modules lost JinkoSolar $211.7M in the June quarter. The loss reported to the owners of the ADSs was $102.8M - less than half of it. Both figures are correct and both are printed on the same filed statement of operations. The $108.9M in between is five non-operating items: government grants of $29.7M, the gain on selling 75.1% of the US business ($34.9M), a fair-value mark on a portfolio of private investments ($54.6M), an income tax benefit ($24.1M), and $84.0M of the group loss carried by the MINORITY holders of the majority-owned operating subsidiary. Not one of them is a solar module, and on the same morning the company cut its full-year shipment guidance by 15GW and made its head of strategic investment the chief executive. THE CALL: SELL (3/5, A LEVERED CYCLICAL WHOSE REPORTED LOSS IS HALF THE OPERATING ONE) — base-case value ~$9.90 vs ~$13.54 today. KEY METRICS: - CALL: SELL 3/5, fair value $9.90 vs the $13.54 close of 28 August (-26.9%). Bear $4.94, base $8.89, bull $20.86, weighted 35/45/20. Below both live Street targets: Goldman Sachs cut to $11.00 and Roth Capital to $16.00, both on 27 August. Their average of $13.50 is 4 cents UNDER the last close. - THE BRIDGE: loss from operations $211.7M; net loss attributable to ordinary shareholders $102.8M; ratio 2.06x, against 1.27x in the March quarter. The five items in between total $227.3M of help against $118.4M of drags - net interest $40.3M, an exchange loss on foreign-currency debt of $48.0M, and smaller items. - THE UNIT ECONOMICS: 0.47 cents of gross profit per watt shipped against 1.80 cents of operating cost per watt - 3.8x. A quarter earlier the gross line was 1.10 cents. Gross margin must reach ~15.8% to cover the overhead; it is 4.2%, an 11.6-point gap that WIDENED from 7.7 points a year ago. - THE BALANCE SHEET: $6,617M of total interest-bearing debt less $2,497M of cash = $4,121M of net debt, 5.8x the $716M market value. Cash fell $865M in the quarter (from $3,362M at 31 March) while a $1.50/ADS dividend (~$79M) was declared. Equity attributable to JinkoSolar is $2,152M - 12.3% of $17.5BN of assets. Book value $40.72 an ADS; the tape pays 0.33x book. - TWO VENDOR ERRORS NAMED ON-SLIDE: (1) FMP's epsActual of -2.53 is the company's ADJUSTED loss per ADS, not the filed GAAP -1.94. (2) FMP's market cap of $177.3M is 75% TOO LOW - it carries 13.09M shares where the release prints 211,435,343 weighted ordinary shares, and ONE ADS REPRESENTS FOUR ORDINARY SHARES. The correction makes the stock DEARER, not cheaper. What to watch: DOWN (our case): gross profit per watt staying under 1.80 cents; a second cut to the 60-70GW guide in November; net debt holding above $4BN against a sub-$1BN equity. UP (what would change our mind): two consecutive quarters of gross profit per watt above 1.80 cents; the January 2027 efficiency standard lifting realised prices on 40GW of TOPCon 3.0 capacity; net debt falling toward the equity value. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 29 · 13 min
Gaotu Techedu (GOTU): More Cash Than Market Cap - And Two Thirds Of It Is Prepaid Tuition
Gaotu Techedu (GOTU) Q2 2026 — Q2 2026 (three months to 30 June): net revenues RMB1,670.1M / $246.1M, +20.2% YoY, accelerating from +13.2% in Q1; gross margin 66.5%; operating expenses $185.8M against $163.7M of gross profit, so a $22.1M operating loss, narrowed from $35.6M. Net loss $20.0M, RMB0.57 (-$0.09) per ADS. Operating cash inflow $126.9M, +46.3% - but the six-month figure is $4.8M, -70.6%. The 6-K landed pre-market on 27 Aug: the ADSs gapped +6.9%, faded to $1.74, closed +5.20%, and added +3.30% the next session. Gaotu holds $588.5M of cash, restricted cash and investments against a market value of $441.9M. On a screen that is a negative enterprise value. But $384.9M of that cash is deferred revenue - tuition already collected for lessons that have not been taught - and the filed shareholders' equity of $154.2M has already netted it off for you. Fund the cost of teaching every lesson already sold, at the filed 33.5% cost ratio, and $380.7M survives: $1.62 an ADS, 86% of the share price. That leaves the market paying about $61.2M for a business turning over $1.06BN at a 66.5% gross margin, still growing 20%. THE CALL: SPEC BUY (3/5, A CASH FLOOR UNDER A BUSINESS THAT STILL LOSES MONEY) — base-case value ~$2.35 vs ~$1.88 today. KEY METRICS: - CALL: SPEC BUY 3/5, fair value $2.35 vs the $1.88 close of 28 August (+25.1%). Bear $0.96, base $2.34, bull $4.04, weighted 30/45/25. Street: 10 ratings, consensus Hold, and NO live target - the newest dated note from a named firm is Citigroup's $5.81 of 5 August 2024, 754 days stale. - THE FLOOR: net cash $509.6M ($588.5M less $78.9M of borrowings) against a $441.9M market value. Deducting the whole $384.9M deferred revenue balance leaves $124.7M ($0.53 an ADS); deducting only the 33.5% cost of delivering it leaves $380.7M ($1.62 an ADS, 86% of the price). Filed shareholders' equity is $154.2M. - THE SPINE: operating cash inflow was $126.9M (+46.3%) while deferred revenue rose $120.6M over the same three months - 95% of it. The March quarter was a $122.1M OUTFLOW while deferred revenue fell $114.0M - 93% of it. Both quarters together: $4.8M against $16.4M, -70.6%. Six months of it moved the cash pile $3.0M. - THE ADS RATIO: three ADSs represent two ordinary shares. 156,703,879 ordinary shares outstanding is 235.1M ADSs, so the market value is $441.9M - not the $682.0M published, which uses 362.7M ADSs and is 54% too high. Corroborated independently by the FY2025 20-F depositary disclosure. - THE QUARTER: revenue $246.1M (+20.2%), gross margin 66.5%, operating loss $22.1M vs $35.6M. Operating costs fell to 75.5% of revenue from 83.4% - a 7.9 point move that halved the gap to operating break-even, from 17.4 points to 9.0. Selling costs alone were $134.6M, 82.2% of gross profit. - WHERE WE DISAGREE: guided Q3 revenue, this quarter's gross margin and costs grown at the +8.8% they actually grew give a FY2026 operating LOSS of $46.7M. The vendor consensus has a $5.3M operating PROFIT, on four revenue analysts and one earnings analyst. We agree on revenue to within 0.6%. Our model crosses into profit in 2028. What to watch: UP: March-quarter gross billings above last March's $146.8M; the operating cost ratio falling below 66.5% of revenue; deferred revenue continuing to grow year on year. DOWN: two consecutive quarters of deferred revenue falling year on year; refunds rising inside gross billings; the cost ratio back above 83%. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

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