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 27 · 13 min
HDL Stock Q2 2026: A 10% Headline On Falling Same-Store Sales
Super Hi (HDL) Q2 2026 — Q2 2026 (three months ended June 30, 2026): revenue $218.8m vs $198.9m, up 10.0%; Haidilao restaurant revenue $197.8m, up 4.6%; same-store sales $179.4m vs $180.9m, down 0.8%; income from operation $8.1m vs $3.7m, margin 3.7% vs 1.9%; loss for the period $1.9m against a $16.4m profit. The 9658 ordinary line fell 6.93% on August 27 on 1,745,400 shares; the ADS closed $13.275, down 6.05% on 1,157 shares. Super Hi International, which operates the Haidilao hot pot restaurants outside China, reported Q2 2026 at 07:00 Eastern on August 26: revenue $218.8m, up 10.0%, and an operating measure the company defines itself that more than doubled to $8.1m. Five pages later the same release prints the same-store table. Across the 111 restaurants open through both quarters, sales fell 0.8% - $179.4m against $180.9m - after rising 1.7% across the full half. The comparison rolled over inside the half. THE CALL: BEARISH (3/5, A REAL MARGIN GAIN ON A DEMAND LINE THAT TURNED NEGATIVE INSIDE THE HALF) — base-case value ~$10.88 vs ~$13.275 today. KEY METRICS: - THE SPINE: revenue +10.0%, Haidilao restaurant revenue +4.6%, and same-store sales -0.8%. Each layer is smaller than the one above it. - THE MIX: delivery $7.6m (+105.4%) and condiments $13.4m (+119.7%) added $11.2m of the $19.9m the group added. The restaurants added $8.7m. - NO PRICING: average spend per guest was $24.30 in both quarters. Guest visits rose 5.2% to 8.1m. All of the growth is volume and mix. - NORTH AMERICA: same-store sales -8.5%, table turnover 4.0 to 3.6 turns a day, spend per guest $41.00 from $39.10. Fewer guests, higher ticket. - THE CONCESSION: restaurant level margin 6.4% to 10.7% over the half, +430bp, and income from operation $11.8m to $22.1m, up 86.7%. Real. - THE LOSS: a $20.6m currency swing and $4.7m of tax on $2.8m of pre-tax profit made it a $1.9m loss. There is no hedging policy at all. - THE CASH: $269.9m of cash and no borrowings, but $234.4m of leases take about $56.2m a year out below operating cash flow. - OUR CALL: BEARISH, 3/5, fair value $10.88 vs $13.28. Bear $8.54, base $11.30, bull $15.87. Five Hong Kong analysts average $18.45 an ADS. What to watch: UP: restaurant level operating margin went from 6.4% to 10.7% across the half, a 430 basis point gain, and restaurant level profit rose from $24.8m to $44.4m. Staff cost fell to 34.3% of revenue from 35.3%. There are no bank borrowings and cash plus pledged deposits of $269.9m is 31.3% of the market value. DOWN: same-store sales are negative, North American comps fell 8.5% with table turnover down from 4.0 to 3.6 turns a day, average daily revenue per restaurant fell to $17.4k from $17.6k, and 56.3% of the quarter's growth came from delivery and condiments, which are 9.6% of sales. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 13 min
FORTY Stock Q2 2026: A Record Quarter That Was Mostly The Shekel
Formula Systems (FORTY) Q2 2026 — Q2 2026 (three months ended June 30, 2026): revenue $782.4m vs $602.7m, up 29.8%; gross margin 20.2% vs 20.4%; operating profit $71.6m, up 41.3%, margin 9.2% vs 8.4%; group continuing profit $51.6m of which 54.9% is minority; attributable $23.3m vs $8.8m; diluted continuing EPS $1.47 vs $0.56. Shares closed August 25 at $117.51, up 1.96% on 608 shares, and $121.36 on August 26. Formula Systems reported Q2 2026 before the open on August 25: revenue $782.4m, up 29.8% to a second-quarter record, and diluted continuing EPS of $1.47 against $0.56. Both comparisons are like-for-like - the 2025 columns were restated under IFRS 5 with Sapiens as discontinued operations. But Formula earns in shekels and reports in dollars, and the average rate went from 3.5719 to 2.9511 across the same three months. At last year's rate this quarter is $646.5m, or +7.3% - close to the +6.3% Matrix reported in its own currency. THE CALL: HOLD (3/5, A REAL RECORD ON A CURRENCY TAILWIND, AND AN ASSET DISCOUNT WITH NO CATALYST) — base-case value ~$128.30 vs ~$121.36 today. KEY METRICS: - THE SPINE: revenue +29.8% reported, but the dollar bought 3.5719 shekels in Q2 2025 and 2.9511 in Q2 2026. At last year's rate: $646.5m, or +7.3%. - THE CROSS-CHECK: Matrix is 91.8% of group revenue and reported +6.3% in shekels. Two routes to the same constant-currency answer. - THE OTHER HALF: attributable profit $8.8m to $23.3m. Formula's slice of group profit went 30.5% to 45.1% - worth $7.6m; growth gave $6.9m. - WHY THE SLICE MOVED: net financial expense halved, $11.1m to $5.6m, on interest earned at the parent where there are no minorities. - THE CONCESSION: operating profit $71.6m up 41.3%, margin 9.2% from 8.4% - up 74bp on cost lines 94bp lower. Currency cancels out of a ratio. - THE ASSET: Matrix closed at NIS 99.92 on 92.54m shares = $3.12bn. The filed 47.68% is $1.49bn against a $1.86bn value for all of Formula. - THE DISCOUNT: net asset value $154.46 vs a $121.36 tape, 21.4% off. The market implies $980.2m for the Matrix stake, 34.1% below its quote. - OUR CALL: HOLD, 3/5, fair value $128.30 vs $121.36. Bear $101.28, bull $149.35. No sell-side board: four vendor endpoints return empty. What to watch: UP: at constant currency the group still grew 7.3% and the operating margin widened 74 basis points, which currency cannot explain because costs are earned in shekels too. Net financial debt to capitalisation is negative 27.08% against a 65% covenant. And Formula's filed 47.68% of Tel Aviv listed Matrix is worth $1.49bn against a $1.86bn market value for the whole company. DOWN: a shekel reversal takes reported dollar revenue down about a fifth with no operational change. Formula keeps only 45.1% of group profit, the holding-company discount has no mechanism to close, and 608 shares moved on results day. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
STRT Stock Q4 FY2026: Record Year, Entire Gain Booked By December
Strattec Security Corporation (STRT) Q4 FY2026 — Fiscal Q4 and FY2026 (periods ended June 28, 2026): Q4 sales $151.8m vs $152.0m; Q4 gross margin 15.6% vs 16.7%; Q4 profit from operations $6.2m, down 27.5%; Q4 adjusted EBITDA $12.5m vs $13.0m; Q4 adjusted EPS $2.06, identical to a year earlier, against a $1.36 estimate; Q4 GAAP EPS $0.95 vs $2.01. FY sales $579.4m, up 2.5%; FY adjusted EBITDA $50.5m, up 15.3%. Shares closed August 26 at $72.76, down 7.98% from $79.07 on 274,608 shares, 3.4x the 30-day median. Strattec Security reported fiscal Q4 and full-year 2026 adjusted EPS of $2.06 against a $1.36 estimate - a 51% beat - and the stock fell 7.98% the next session. Two things explain it. First, that $2.06 is EXACTLY what the company earned on the same adjusted basis a year earlier, to the cent, while profit from operations fell 27.5%. Second, the company's own per-quarter reconciliation shows the full-year improvement was entirely a first-half event: profit from operations ran +$5.4m and +$2.7m against the prior year in the September and December quarters, then -$2.0m and -$2.3m in March and June. The first half added $8.1m; the second half gave $4.4m back; the whole year gained $3.7m. THE CALL: HOLD (3/5, A GENUINELY BETTER YEAR WHOSE ENTIRE IMPROVEMENT WAS EARNED IN THE FIRST HALF) — base-case value ~$75.99 vs ~$72.76 today. KEY METRICS: - THE SPINE: profit from operations against the prior-year quarter ran +$5.4m, +$2.7m, then -$2.0m and -$2.3m. First half +$8.1m, second half -$4.4m, full year +$3.7m. - THE EXIT RATE: adjusted EBITDA by fiscal 2026 quarter $15.6m, $12.3m, $10.1m, $12.5m. Margin 10.2% to 8.3%, under the 8.5% of the year-ago quarter. - THE BEAT: adjusted EPS $2.06 vs a $1.36 estimate is +51%. It is also identical to the $2.06 of a year earlier. GAAP EPS was $0.95 vs $2.01. - THE TAX: Q4 effective rate 62.4% vs 21.2%. Pre-tax profit fell only 6% but tax expense rose to $6.0m, and a $2.4m discrete tax item is 53% of the whole GAAP-to-adjusted bridge. - THE YEAR, CONCEDED: sales $579.4m up 2.5%, gross margin 16.5% wider by 149 basis points, adjusted EBITDA $50.5m up 15.3%, adjusted EPS $6.88 vs $5.38. - THE BALANCE SHEET: $108.2m cash, $0.0m borrowings, enterprise value $208.0m = 4.12x. Free cash flow $39.0m = $9.80 a share, a 13.5% yield. - BASIS PROVED: all four filed quarters sum exactly to the filed year on sales, operating profit, adjusted EBITDA and both earnings measures. - OUR CALL: HOLD, 3/5, fair value $75.99 vs $72.76. Bear $63.45, base $77.03, bull $86.46. The only sourced Street target is $89.00, set 107 days before this print. What to watch: UP: fiscal 2026 was genuinely better - sales $579.4m up 2.5%, gross margin 16.5% wider by 149 basis points, adjusted EBITDA $50.5m up 15.3%. ZERO borrowings after repaying $8.0m, and $108.2m of cash - $27.21 a share, 37% of the price - leaving an enterprise value of $208.0m, or 4.12x. Free cash flow $39.0m, $9.80 a share, a 13.5% yield, and clean: working capital added just +$0.5m against +$37.5m last year. The board bought $7.4m of stock at $67.10 and authorised a new $40.0m programme. DOWN: the exit quarter margin of 8.3% is below the 10.2% the year opened with AND the 8.5% of the year-ago quarter; the second half annualises at $45.3m against a $50.5m year; fiscal 2027 was guided with the three largest customers down ~6% and a peso move worth ~100 basis points of gross margin; capital spending ran at 49% of depreciation. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
TUYA Stock Q2 2026: Profit Up 48%, Cash Flow Down 66%
Tuya Inc. (TUYA) Q2 2026 — Q2 2026 (three months ended June 30, 2026): revenue $92.9m, up 16.0%; net profit $18.6m, up 48.0%; non-GAAP net profit $18.9m, DOWN 5.8%; EPS $0.03 per ADS on both a GAAP and a non-GAAP basis, in line with a $0.03 bar; gross margin 46.3% vs 48.4%; operating cash flow $6.2m vs $18.2m. Shares closed August 25 at $1.79, up 1.70% from $1.76 on 1,721,865 shares. Tuya Inc. reported net profit of $18.6m for the June quarter, up 48.0% from $12.6m, on revenue of $92.9m, up 16.0%. The stock closed up just 1.70%. The reason is in the company's own non-GAAP reconciliation. Tuya defines non-GAAP profit by adding back share-based compensation - and that expense collapsed 92.0%, from $7.479m to $0.602m, as equity awards granted at 2021 IPO valuations finished amortising. On the company's OWN non-GAAP measure, net profit FELL 5.8%, from $20.1m to $18.9m. The $6.877m fall in stock compensation is 84% of the entire $8.220m rise in operating profit. And of the pre-tax profit that remains, financial income of $10.556m - interest on a $976.1m cash pile - exceeded the $9.308m the whole operating business earned. THE CALL: HOLD (3/5, A HEADLINE PROFIT JUMP THAT WAS AN AMORTISATION SCHEDULE EXPIRING) — base-case value ~$1.94 vs ~$1.79 today. KEY METRICS: - THE SPINE: GAAP net profit rose 48.0% to $18.6m, but the company's OWN non-GAAP net profit FELL 5.8%, $20.1m to $18.9m. Same quarter, same filing. - THE CAUSE: share-based compensation fell 92.0%, $7.479m to $0.602m. That $6.877m fall is 84% of the $8.220m rise in operating profit. - THE PROOF: G&A fell $4.670m in total, but the stock compensation inside it fell $5.265m - so every other administrative cost actually rose. - THE BANK: financial income $10.556m vs operating profit $9.308m - 1.13x. Interest is 56.0% of pre-tax profit, and it fell 13.4% across the half. - THE CASH: operating cash flow $18.2m to $6.2m, down 66.1%. Inventory $30.9m to $63.8m (70 to 124 days); fixed assets $15.7m to $35.0m. - THE COUNTER: revenue +16.0% and accelerating four quarters running. Strip the cash out and the enterprise is $127m - just 4.2x non-GAAP operating profit. - THE BOOK: $976.1m of cash and ZERO borrowings against a $1,103m market value. Net cash is $1.58 of the $1.79 share price - 88% of it. - THE CALL: HOLD 3/5, fair value $1.94 vs $1.79 (+8.4%): cash at a 20% haircut plus 16x after-tax operating profit. Bull $2.62, bear $1.39. The only live Street target is $3.69 (Jefferies, 3 March 2026, set 175 days before this print). What to watch: UP: revenue growth accelerating for a fourth straight quarter, +1.2%, +3.4%, +8.3%, +16.0%; PaaS revenue $67.9m, up 16.9%; non-GAAP operating profit up 11.7% to $9.6m; ZERO interest-bearing borrowings; $976.1m of cash, deposits and treasuries against a ~$1,103m market value, so an enterprise value of only ~$127m, or 4.2x trailing non-GAAP operating profit and 0.37x trailing revenue; premium PaaS customers 285 to 318; a $37.0m dividend paid in April. DOWN: non-GAAP net profit fell 5.8% and non-GAAP net margin went 25.1% to 20.4%; gross margin fell 2.0 points to 46.3% so gross profit grew only 11.1%; operating cash flow fell 66.1% to $6.2m as inventory doubled from $30.9m to $63.8m (70 to 124 days) and fixed assets doubled to $35.0m; interest income fell 13.4% across the half as the pile went $1,017.3m to $976.1m; no buyback and the diluted share count rose 0.97%. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
SFL Stock Q2 2026: The $3.8B Backlog Shrank, Spot Paid The Bill
SFL Corporation Ltd. (SFL) Q2 2026 — Q2 2026 (three months ended June 30, 2026): total operating revenues $200.8m vs $174.5m in Q1; net income $33.8m; basic and diluted EPS $0.25 vs a $0.14 consensus bar; adjusted EBITDA $129.9m including $7.8m from associates, up 19.9% on the quarter; 90th consecutive quarterly dividend of $0.22. Shares closed August 26 at $12.03, down 1.55% from $12.22 on 2,339,022 shares. SFL Corporation beat on both lines: EPS $0.25 against a $0.14 bar and revenue $200.8m against $179.7m expected, with adjusted EBITDA up 19.9% sequentially to $129.9m. The stock opened higher, ran to $12.75 intraday, then closed down 1.55% at $12.03. The reason is in the six-month interim report rather than the press release. SFL sells a $3.8bn fixed-rate charter backlog with 6.2 years of weighted term - and contracted TIME CHARTER revenue, the line that backlog actually describes, fell 13.8% year on year, from $312.5m to $269.4m. A $43.1m hole. Total revenue barely moved because VOYAGE CHARTER AND POOL revenue - the spot line, in no backlog, repriced every voyage - went from $9.4m to $46.3m and filled 86% of it. Two Suezmax tankers earning $133,000 a day did that. THE CALL: HOLD (3/5, A REAL BEAT DELIVERED BY THE QUARTER OF THE FLEET THAT IS IN NO BACKLOG) — base-case value ~$10.26 vs ~$12.03 today. KEY METRICS: - THE SPINE: six-month contracted time charter revenue fell 13.8%, $312.5m to $269.4m - a $43.1m hole in the one line the $3.8bn backlog describes. - THE FILL: spot voyage and pool revenue rose 4.9x, $9.4m to $46.3m, covering 86% of that hole. Total six-month revenue moved just -1.1%. - THE RATE: two Suezmax tankers averaged $133,000/day spot TCE; two Kamsarmax bulkers $16,000/day. Tanker charter hire jumped $16m on fewer operating days. - THE RIGS: Energy took $24.3m of revenue to $1.1m of adjusted EBITDA (4.7%) and a $19.3m net loss at 50% utilisation. Shipping: $176.5m to $121.0m (68.6%). - THE BRIDGE: Shipping earned $0.39/sh and Energy handed back $0.14/sh, to the filed $0.25. Basis proved: Q1 $0.20 + Q2 $0.25 = the filed half-year $0.45. - THE BOOK: net debt $2,271m vs a $1,668m market value; EV $3,940m = 8.38x normalised adjusted EBITDA of $470m; book value $7.47/sh, so 1.61x. - THE CALL: HOLD 3/5, fair value $10.26 vs $12.03 (-14.7%). An 8.0x asset multiple gives $10.74 and a dividend discount on $0.88 gives $9.78. Bull $14.17, bear $5.91. What to watch: UP: a genuine beat on both lines; adjusted EBITDA +19.9% sequentially; a 68.6% Shipping segment adjusted EBITDA margin; 65% of the backlog to investment grade counterparties over 6.2 years; the 90th consecutive dividend, covered 1.14x by earnings and 2.97x by operating cash flow; $273m of liquidity after redeeming a $150m bond and tapping $78m more at a 6.8% implied yield. DOWN: contracted time charter revenue -13.8% year on year; the spot line that replaced it is four vessels and a $133k/day rate that does not annualise; the Energy segment turned $24.3m of revenue into $1.1m of adjusted EBITDA and a $19.3m net loss at 50% utilisation; net debt of $2,271m against a market value of $1,668m; the share count rose 4.27% in one quarter; first newbuild delivery is 2028. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 13 min
CTRN Stock Q2 FY2026: 94% Of The Profit Goes Back Into The Stores
Citi Trends, Inc. (CTRN) Q2 FY2026 — Q2 FY2026 (thirteen weeks ended August 1, 2026): net sales $211.632m vs $190.750m; comps +10.5%; gross margin 40.6% vs 40.0%; operating loss $1.707m vs income of $3.517m; net loss $0.931m vs income of $3.818m; EPS -$0.11 vs $0.48 basic. Released before the open on Tuesday Aug 25 (8-K accepted 06:52 ET). The shares gapped -12.07% to $65.38, made that the day's low, and closed $69.71, -6.24%, on 6.8x the twelve-month median volume. Citi Trends posted its eighth consecutive quarter of comparable store sales growth: comps +10.5%, sales up 10.9% to $211.6m, gross margin 60bp wider, adjusted SG&A leveraged 260bp. The shares opened 12.07% lower. Two reasons. The sales line was already public - pre-announced on August 10, fifteen days early - and store capital spending has gone $10.1m to $22.7m to a guided $35m-$40m, which is 93.8% of the $38m-$42m of adjusted EBITDA those stores are meant to earn. THE CALL: HOLD (3/5, A REAL EIGHT-QUARTER TURNAROUND WHOSE PROFIT IS ALREADY SPOKEN FOR) — base-case value ~$58.67 vs ~$69.71 today. KEY METRICS: - THE SPINE: capital expenditure went $10.108m in FY2024 to $22.7m in FY2025 to a guided $35m-$40m in FY2026 - 3.71x in two years. Against a guided $38m-$42m of adjusted EBITDA that is 93.8% at the midpoints; FY2025 was 132.1%. Cumulatively the stores have cost $60.2m and produced $57.2m - the store bill runs $3.0m AHEAD of the profit it exists to create. - SO FREE CASH FLOW IS NEGATIVE ON THE COMPANY'S OWN TWO GUIDED RANGES: $40.0m of adjusted EBITDA, less the $5.75m of equity compensation that measure adds back, less $37.5m of capital expenditure = -$3.25m, before working capital and before any cash tax. - AND MANAGEMENT REALLOCATED INSIDE IT: new stores CUT from 25 to 20, remodels RAISED from 50 to 60-65, the capital line left unchanged. At that pace 594 stores cycle every 9.5 years - a running cost, not a project. 26 remodels were done in the quarter, 51 in the half. - THE SALES WERE PUBLISHED 15 DAYS EARLY: on August 10 the company pre-announced Q2 sales of $211.6m and comps of +10.5% at an investor conference. It filed $211.632m on the 25th. The stock traded to $77.91 that day - its twelve-month high - and set its highest close, $76.18, the next session. - THE PRIOR YEAR'S PROFIT WAS A BUILDING: Q2 FY2025 net income of $3.818m included an $11.0m gain on the sale of the Savannah office building - 287% of the whole of it. Ex-gain the comparative operating line was -$7.443m, so the merchandise business improved $5.7m in a quarter in which the printed line fell $5.2m. - THE BUYBACK STOPPED AND A SHELF ARRIVED: $6.315m (250,555 shares) repurchased in the Feb-May 2025 quarter and nothing in the five since, with $40.0m still authorised. The weighted share count ROSE 1.87%. At 08:39 ET on print day - 51 minutes before the open - a $100,000,000 Form S-3, 17.2% of the market value, the first since 2007. - THE STREET: only TWO sell-side targets could be sourced AND dated in all of 2026 - D.A. Davidson (Michael Baker) Buy $81 on Aug 26, and Craig-Hallum Buy $67 dated Mar 17, which pre-dates both quarters of this fiscal year. We value CTRN at $58.67 against $69.71: HOLD, 3/5. Bull $86.45, bear $32.30. What to watch: UP: eight straight quarters of comps, +19.7% two-year; a 46.0% incremental gross margin and 31.6% flow-through to adjusted EBITDA; guidance raised a third time; no debt and $55.9m of cash. DOWN: guided free cash flow of -$3.25m; two years of capex ($60.2m) exceeding two years of adjusted EBITDA ($57.2m); a $100m shelf filed 51 minutes before the open, the first since 2007; short interest 11.7% of float. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
JOYY Stock Q2 2026: 53% More Ad Revenue, Zero More Profit
JOYY Inc. (JOYY) Q2 2026 — Q2 2026 (three months ended June 30, 2026): net revenues $590.8m vs $507.8m; operating income $13.8m vs $5.8m; non-GAAP operating income $49.1m vs $38.3m; non-GAAP net income $63.5m vs $77.0m; non-GAAP diluted EPS $1.24 per ADS vs $1.44. Released after the Tuesday Aug 25 US close, with the call at 9:00 PM ET Tuesday - 9:00 AM Wednesday in Singapore - so Wednesday Aug 26 was the reaction session. It gapped +1.59%, printed $80.90 (+7.87%) inside six minutes, traded down to $72.99 and closed $74.81, -0.25%. JOYY's Q2 2026 revenue rose 16.3% to $590.8m, the fastest growth in five quarters and a genuine inflection after revenue FELL 5.1% across the whole of 2025. Both lines beat and the full-year profit guide was raised. But the segment doing the accelerating earned nothing on it. BIGO Ads revenue rose 53.1% to $133.7m - $46.4m of new revenue - and its gross profit went from $27.420m to $27.400m. Down $20,000. A 100.0% flow-through to third-party traffic cost, with segment gross margin falling 31.4% to 20.5%. THE CALL: HOLD (3/5, A REAL REVENUE INFLECTION, A GROWTH ENGINE THAT EARNED NOTHING) — base-case value ~$73.90 vs ~$74.81 today. KEY METRICS: - THE SPINE: BIGO Ads revenue rose 53.1% to $133.7m - $46.4m of new revenue - and segment GROSS PROFIT went $27.420m to $27.400m. Down $20,000. A 100.0% flow-through to cost. Segment gross margin 31.4% to 20.5%; group gross margin 36.5% to 34.1% on mix alone. - THE CROSSOVER: non-GAAP operating income of $49.1m beat interest and investment income of $39.5m by $9.6m - the FIRST time on file. Q1 2026 was $1.8m behind, Q4 2025 was $30,000 behind, FY2025 $11.8m behind and FY2024 $39.5m behind. - AND IT IS PARTLY SUBTRACTION: net cash fell $3,258.0m to $3,059.3m over the half while $358.8m went to shareholders. Interest income was $162.6m in 2025 and is annualising $158.5m now. Part of the crossover is the business rising, part is the bank falling. - ON A REPORTED BASIS NOTHING CROSSED: GAAP operating income was $13.8m on $590.8m of revenue and 277.1m monthly users - a 2.3% margin - while the deposits earned $39.5m, or 2.9x the entire operating business. - THE PROFIT FALL IS NOT OPERATIONAL: non-GAAP EPS fell 13.9% to $1.24 per ADS, but currency swung $14.7m against the company ($0.29 per ADS) and the tax rate went 9.3% to 24.2%. On last year's currency line it would have been $1.53, ABOVE last year's $1.44. - THE BALANCE SHEET, COUNTED PROPERLY: cash and cash equivalents is only $337.0m. Net cash on the company's own seven-line definition is $3,059.3m, rebuilt from the filed balance sheet to within $15,000. That is $62.47 per ADS, 83% of the price. - THE STREET: only TWO targets could be sourced AND dated - J.P. Morgan Overweight $98 (Aug 12, an upgrade from Neutral) and Citi Buy $78 (Jan 13, reaffirmed Jul 22) - averaging $88.00. We value JOYY at $73.90 against $74.81: HOLD, 3/5. What to watch: UP: adjusted operating income rose 28.2% and beat interest income for the FIRST time ever, by $9.6m; the full-year guide was RAISED to about 20% growth; net cash is $62.47 per ADS against a $74.81 close; and $358.8m was returned in under eight months. DOWN: the growth engine runs at 20.5% gross margin, group gross margin fell 240bp, stock compensation went $4.0m to $16.6m, and interest income is annualising 2.5% below 2025 as the pile is paid out. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
Woodside (WDS) H1 2026: The $1.7B Cheque Behind Both Headlines
Woodside Energy Group Ltd (WDS) H1 2026 — H1 2026 (six months ended June 30, 2026): operating revenue $7,446m vs $6,590m; NPAT $1,672m vs $1,316m; underlying NPAT $1,334m vs $1,247m; basic EPS 88.2 US cps vs 69.4. Released to the ASX on the morning of Aug 25 Australian time - 19:00 US Central on Mon Aug 24, four hours after the NYSE close - so the ADSs gapped -4.62% on Aug 25 and closed -4.03% on 1.95x 20-day volume, then added 0.17% on Aug 26. Woodside's H1 2026 revenue rose 13% to $7,446m and profit rose 27% to $1,672m. Free cash flow rose 159% to $352m and capital expenditure fell 36% to $1,637m. Both of those last two turn on one figure: $1,725m of capital contributions received from Stonepeak and Williams for the Louisiana LNG terminal. The report states the $352m free cash flow INCLUDES it, and the company's own reconciliation on page 67 SUBTRACTS the same $1,725m from capital additions of $3,362m to reach the reported $1,637m. Strip it out and free cash flow was -$1,373m, and gross spending fell 24%, not 36%. THE CALL: HOLD (3/5, A GOOD PRODUCING BASE, A HEADLINE HALF PAID FOR BY PARTNERS) — base-case value ~$24.22 vs ~$22.90 today. KEY METRICS: - THE SPINE: $1,725m of partner capital contributions is ADDED into the reported $352m free cash flow and SUBTRACTED from reported capital expenditure. Both treatments are disclosed. Neither is cash the business earned. - WITHOUT IT: free cash flow was -$1,373m (from -$1,734m a year ago, so it did improve). On the plainest definition - operating less investing cash - the half consumed $1,273m while paying $1,122m of dividends. - THE CEILING: Stonepeak committed up to $5,700m and had paid $4,262m by June 30 - 74.8% - against a Louisiana LNG terminal 28% complete with first cargo targeted 2029. Only $1,438m is left and it cannot be topped up. - FRONT-LOADED BY DESIGN: Stonepeak owns 40% of Louisiana LNG Infrastructure but contributes 75% of expected project capex, in 2025 and 2026 only. On the call an analyst noted the contribution is fixed, so overruns fall on Woodside. - A NON-CASH HALF: statutory NPAT of $1,672m EXCEEDS underlying $1,334m because $507m post-tax of deferred tax assets were recognised. That is 30% of reported profit; cash tax PAID rose to $825m. - MORE REVENUE FROM FEWER BARRELS: production fell 13% to 86.5 MMboe while the realised price rose 20% to $74.0/boe. The July 29 Q2 report had already published $4,185m of quarterly revenue. - THE STREET: seven named, dated Australian targets average A$31.54, or $22.58 - below the tape. All three notes published on results day are Hold and two were cuts. We value WDS at $24.22 against $22.90: HOLD, 3/5. What to watch: UP: Scarborough is 98% complete with first cargo targeted this quarter, guidance implies a bigger second half than the first, reliability ran 98.7% / 99.5% / 99.1%, and a $350m cost-out target starts in 2028. DOWN: only $1,438m of the $5,700m partner ceiling is left against a terminal 28% built, $9,699m of contracted spending is still to come, and gearing is 20.6% against a 10-20% target. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 13 min
Cadeler (CDLR) H1 2026: Cash Profit Doubled, Profit Halved
Cadeler A/S (CDLR) H1 2026 — H1 2026 (six months ended June 30, 2026): revenue EUR 407.5m vs EUR 298.5m; EBITDA EUR 207.6m; profit EUR 87.9m vs EUR 167.7m; basic EPS EUR 0.24 vs EUR 0.48. Published 08:00 CET on Aug 25, six hours before the US open: the ADSs gapped +8.47% and closed +8.64% on 1.54x median volume, then gave back 3.23% on Aug 26. Cadeler's H1 2026 revenue rose to EUR 407.5m and its EBITDA to EUR 207.6m - both more than doubled once you strip the EUR 111.0m of termination fees out of the comparative half. Yet profit fell from EUR 167.7m to EUR 87.9m and EPS halved. The explanation is one line below EBITDA: depreciation went from EUR 44.5m to EUR 86.3m and the net financing line swung from EUR 3.2m of income to EUR 34.5m of cost. Together the cost of OWNING the fleet rose EUR 79.4m against a EUR 79.8m fall in profit - 99.5% of it. THE CALL: HOLD (3/5, THE FLEET STOPPED BEING BUILT AND STARTED BEING OWNED) — base-case value ~$25.01 vs ~$25.20 today. KEY METRICS: - THE SPINE: depreciation plus net financing cost rose EUR 79.421m. Profit fell EUR 79.832m. That is 99.5% of the entire fall, explained by two lines that contain no trading decision at all. - THE MECHANISM: borrowing costs capitalised into hulls fell from EUR 29.0m to EUR 12.5m - at a CHEAPER capitalisation rate, 2.5% against 3.6%, so it is a quantity effect, not a rate effect. - THE TRIGGER IS A DATE: EUR 390.2m of steel left assets under construction, taking the balance from EUR 600.1m to EUR 352.9m. The fleet is only 9.7% depreciated - this schedule is just starting. - WHAT REACHED A SHAREHOLDER: adjusted EBITDA rose EUR 106.1m; depreciation took EUR 41.8m and financing EUR 37.7m; tax gave back EUR 4.5m; EUR 31.2m arrived. 29.4 cents in the euro. - THE COUNTER-ARGUMENT, AT FULL STRENGTH: gross profit per contracted day ROSE 18.6%, to EUR 134.4k. Contracted days went 770 to 1,198 and June-quarter utilisation was 85% against 76%. - IT GROWS AGAIN: EUR 228m drawn on Wind Ace in July, a EUR 380m facility for the EUR 501m Menck purchase in August, and EUR 805m of T-class vessels ordered for 2030 and 2031 delivery. - THE VENDOR 'BEAT' IS A RESIDUAL: Cadeler files no standalone Q2 income statement. The quoted $1.16 EPS and $330.2m revenue are H1 minus the filed Q1, converted and divided by the 4:1 ADS ratio. What to watch: UP: a EUR 2,487m order book with 77% behind a client FID, an equity ratio of 50%, and a foundation-vessel shortage the company's own supply chart puts from 2030. DOWN: EUR 1,110m of committed steel is unpaid, the funding slide ends at EUR 150m of net liquidity, and 2026 guidance still excludes Menck. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 13 min
TORM (TRMD) Q2 2026: A Record Quarter That Was Already Sold
TORM plc (TRMD) Q2 2026 — Q2 2026 (quarter ended June 30, 2026): revenue $662.8m, UP 110.28%; TCE earnings $512.0m; net profit $338.3m vs $58.7m; basic EPS $3.31, diluted $3.25. TCE per ship per day $59,301 vs $26,672. Announced BEFORE the bell Aug 26 (6-K accepted 06:06 ET, call 09:00 ET); shares opened -0.16% and closed -4.42% on 3.55x median volume. TORM plc reported the largest quarter in its 137-year history: TCE per ship per day of $59,301 against $26,672, net profit of $338.3m against $58.7m, and NO gain on selling ships in it at all. Then the shares fell 4.42%. The reason is on page two of the same document: as of August 18, TORM had already fixed 73% of the September quarter - 6,431 of 8,834 available days - at $38,606 a day, 34.90% BELOW the rate that produced the record. Only 2,403 days are still open. THE CALL: HOLD (3/5, THE NEXT QUARTER IS ALREADY 73% SOLD AT A THIRD LESS) — base-case value ~$30.30 vs ~$30.08 today. KEY METRICS: - THE FORWARD BOOK: as of August 18, 6,431 of the September quarter's 8,834 available days were already fixed at $38,606/day - 73% of the quarter, at 34.90% below the $59,301/day that made the record. Every class: LR2 -26.5%, MR -38.2%, LR1 -43.3%. - THE CEILING: only 2,403 days remain open. If they repeat the record exactly, September still blends to $44,235/day, 25.4% under June. To MATCH June they must average $114,686/day - 1.93x the $59,296 record spot rate. - THE GUIDANCE AGREES: raised $200m to TCE of $1,400-1,600m. Strip out the $798.0m already delivered and the RAISED range implies a second half of $34,230-$45,602/day, a midpoint 32.7% below the June quarter. - THE RECORD IS CLEAN: profit from selling ships was ZERO, there was no impairment, and non-recurring items were -$1.7m on a $338.3m result. Tax was $0.8m on $339.1m of pre-tax profit - a 0.24% rate under tonnage tax. - THE PAYOUT IS A RESIDUAL: $2.40/share, $245.7m, described as 73% of net profit. The stated policy pays liquidity above $1.8m per vessel (=$174.6m on 97 ships) PLUS a Board discretionary element - and the Board held back $383.8m beyond the rule, 2.20x the rule itself. - THE SHIPS: valuers marked the fleet at $4,056m on June 30, 39.0% above the $2,918.8m carrying value, against 13.8% six months earlier. Per ship that is $41.8m vs $33.4m in December, +25.0% in half a year. Stated NAV $36.50/share. - EPS BASIS PROVED TWICE: $1.21 + $3.31 = $4.52 basic and $1.18 + $3.25 = $4.43 diluted, both exactly the filed half-year. The widely quoted 'EPS miss' compares the diluted actual to a figure that IS the basic line. What to watch: UP: the strait shut again in early Q3, the Houthis resumed attacks, rerouting Saudi barrels could nearly double voyage distances, and net debt is 22.4% of ship values. DOWN: the RAISED guidance itself implies a second half 32.7% below June, and the $4,056m valuer mark was set at the top of the same cycle. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 13 min
Marzetti (MZTI) Q4 FY2026: One Restaurant Chain Is 30% Of The Company
The Marzetti Company (MZTI) Q4 FY2026 — Q4 FY2026 (quarter and fiscal year ended June 30, 2026): Q4 net sales $465.0m, DOWN 2.19%; adjusted diluted EPS $1.46 vs a $1.40 bar; GAAP $1.76. FY2026 net sales $1,929.8m, adjusted EPS $6.83. Reported BEFORE the bell Aug 25 (8-K accepted 07:38 ET); shares gapped +2.74%, closed +1.37%, then fell 3.32% on Aug 26. Marzetti (formerly Lancaster Colony) reported adjusted EPS of $1.46 against a $1.40 bar and net sales of $465.0m against $479.0m. But the fact that reframes the business is in the 10-K: one privately held restaurant chain, Chick-fil-A, is 30% of consolidated net sales ($575.7m of $1,929.8m), up from 29% and 28%, and Marzetti sits on BOTH sides of it - licensee of the brand in the grocery aisle, private-label supplier to the kitchens. In FY2026 the licensed half (Retail) saw operating profit FALL 3.79% to $203.7m while the private-label half (Foodservice) grew it 17.70% to $131.3m. We value MZTI at $136.61 against $113.45 and rate it BUY, conviction 3/5. THE CALL: BUY (3/5, THE PROFIT ENGINE MOVED TO THE UNBRANDED HALF) — base-case value ~$136.61 vs ~$113.45 today. KEY METRICS: - CONCENTRATION: Chick-fil-A is $575.7m of $1,929.8m of FY2026 net sales - 30%, up from 29% and 28% - across BOTH a Foodservice supply relationship and an exclusive Retail licence. Its sales grew $27.5m; the company grew $20.7m, so the other $1.35bn FELL 0.50%. - THE TWO HALVES: Foodservice operating profit +17.70% to $131.3m at a 14.17% margin, best of five filed years; Retail -3.79% to $203.7m at 20.31%. Segment profit rose $11.7m and Foodservice supplied $19.8m of it - 168.5%. - THE BRANDED PREMIUM: Retail's margin advantage over Foodservice was 1,002bp in FY2024, 878bp in FY2025 and 614bp now - 38.7% of it gone in two filed years. - EPS BASIS, PROVED: the four filed FY2026 quarters of GAAP diluted EPS (1.71+2.15+1.35+1.76) sum to $6.97 vs a filed annual $6.98. The $1.46 reported as 'actual' is ADJUSTED; GAAP Q4 was $1.76 on an $18.5m land-sale gain in operating income. - THE MISS WAS PRE-ANNOUNCED: $465.0m against a $479.0m bar is a $13.9m shortfall, and $12.2m of it - 87.5% - is a supply agreement the company said in May had already ended. - THE DEAL: Bachan's closed May 1 for $399.3m, the largest in company history and 27% of total assets, adding $15.4m in two months - 4.31x annualised sales against 1.61x for MZTI itself. $161.5m of net cash became $174.9m of net debt. - THE MODEL: owner earnings $182.2m (midpoint of a $193.8m cash build and a $170.5m profit build), 6.97% WACC carrying a full point of concentration premium, blended 50/50 with 12.0x EBITDA = $136.61. Street average $131.67, all holds. What to watch: UP: a 63rd straight year of dividend increases, a 3.48% yield covered 1.90x by free cash flow, Foodservice margin at a five-year high, and a $170.04 bull case. DOWN: Retail pounds fell 3.2% ex-Bachan's and the licence agreements can end on short notice. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
Gold Fields (GFI) H1 2026: The Earnings Were Public 14 Days Early
Gold Fields Limited (GFI) H1 2026 — H1 2026 (six months ended June 30, 2026): revenue $5,936.9m from continuing operations, UP 79%. Profit attributable to owners $1,854.6m, or $2.07 a basic share, UP 81%. Interim payout 1,625 SA cents, UP 132%. Released on SENS in Johannesburg on Aug 25; the ADSs closed +3.25% on 1.11x median volume. Gold Fields reported profit attributable to owners of $1,854.6m for the six months to June 30, 2026 - up 81% - and more than doubled its interim payout to 1,625 SA cents. But paragraphs 6.26-6.33 of the JSE Listings Requirements had already forced it to publish that earnings range on August 11: headline earnings of $1.98-$2.18 a share. The print was $2.08, the EXACT midpoint. We value GFI at $38.05 against $47.82 and rate it SELL, conviction 3/5. THE CALL: SELL (3/5, A GREAT HALF THE COMPANY DID NOT CREATE) — base-case value ~$38.05 vs ~$47.82 today. KEY METRICS: - PRE-ANNOUNCED: the JSE-mandated trading statement of August 11 guided headline earnings to $1.98-$2.18 a share. The print, 14 days later, was $2.08 - the exact midpoint. Basic earnings guided $1.97-$2.17 and printed $2.07. - SO WAS THE CASH FLOW: adjusted free cash flow before discretionary growth was guided to $2,385m-$2,636m. Midpoint $2,510.5m; filed $2,510.0m - 0.02% away. Output guided 1,260koz, printed 1,267koz; AISC guided $1,900/oz, printed $1,893/oz. - SO WAS THE PAYOUT: policy is a fixed 35% of that cash flow. 35% of $2,510.0m is $878.5m, or 98.3c a share; the declared 1,625 SA cents is 99.1c at the filed June 30 rate of R16.39. The only new number was $500m added to the returns programme - 1.17% of market value. - PRICE, NOT PERFORMANCE: revenue per ounce $3,089 to $4,681, AISC $1,682 to $1,893, on 1,126koz to 1,292koz sold. The cash margin pool rose $2,017.8m: metal +$1,792.6m, volume +$233.6m, unit cost -$237.6m, interaction +$229.2m. Volume less cost is MINUS $4.0m. - SEVEN OF NINE MINES PRODUCED LESS GOLD: Gruyere -17%, St Ives -8%, Agnew -15%, South Deep -1%, Tarkwa -18%, Damang -57%, Cerro Corona -42%. Salares Norte alone added 213.3koz against a group increase of 131koz. Eight of nine saw dollar AISC rise; six by more than 30%. - NO SUPERLATIVE INHERITED: H2 2025 reported $2,540.7m of attributable profit against this half's $1,854.6m, because it holds a $808.2m NON-CASH gain on remeasuring the prior 50% of Gruyere. On headline earnings, $1,854.7m IS the largest half filed. - THE VALUATION: 2.5Moz a year at $2,011/oz of all-in cost outside Windfall, inflating 2.5%, taxed 32%, discounted 9% over 18 years, gold held FLAT at $4,598/oz. Fair value $38.05 vs $47.82 - and $47.82 implies a flat $5,183/oz forever, 12.7% above spot. What to watch: UP: net cash of $22.4m excluding leases, 0.06x leverage, $2,225.3m of adjusted free cash flow in six months, and a $51.59 bull case if gold keeps pace with inflation. DOWN: seven of nine operations produced LESS gold and the price already discounts a flat $5,183/oz. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
J.M. Smucker (SJM) Q1 FY2027: 80% Of The Raise Was A Tariff Refund
The J.M. Smucker Company (SJM) Q1 FY2027 — Q1 FY2027 (quarter ended July 31, 2026): net sales $2,219.3m, UP 5.02%. GAAP diluted EPS $3.03; adjusted $3.24 against a $2.22 bar. FY2027 guide raised to $10.50-$11.00 from $9.75-$10.25. Reported BEFORE the bell Aug 26 (8-K header 07:02 ET); shares opened +7.45% and closed +4.34%. Smucker reported adjusted earnings of $3.24 a share against a $2.22 consensus bar - up 71% - and raised its full-year guidance midpoint by $0.75. The shares rose 4.34%. But $0.84 of that quarter is a refund of import duties Smucker had already paid: $115.0m landed in cost of products sold, plus $4.0m of interest, under IEEPA claims filed in April 2026. That is 82.35% of the entire beat - and the company says $0.60 of the $0.75 raise is the same money, so 80.00% of the raise is a customs refund the 10-Q says has now been substantially all collected. We value SJM at $125.56 against $130.90 and rate it HOLD, conviction 3/5. THE CALL: HOLD (3/5, A DEPENDABLE DIVIDEND, A BORROWED EARNINGS YEAR) — base-case value ~$125.56 vs ~$130.9 today. KEY METRICS: - THE REFUND, DERIVED: $115.0m of IEEPA duty refunds in cost of products sold plus $4.0m of interest = $119.0m pre-tax; at the filed 24.2% rate on 107.1m diluted shares that is $0.8422 a share. The company says $0.84. - THE BEAT: adjusted EPS $3.24 vs a $2.22 bar = a $1.02 beat, of which $0.84 (82.35%) is the refund. Ex-refund the quarter earned $2.40 - growth of 26.32%, not 71% - and beat by $0.18. - THE RAISE IS SMALLER THAN THE WINDFALL: the FY2027 midpoint went $10.00 to $10.75, up $0.75, against $0.84 already banked in Q1. The company states $0.60 of the range is the tariff benefit = 80.00% of the raise; $0.15 is the business. - THE SPEND: the SD&A guide moved from +5.0% to +8.0% on a filed $1,496.6m base = $44.9m of new planned spending - the $0.24 a share difference between the $0.84 received and the $0.60 retained. - THE MARGIN GUIDE FELL: adjusted gross margin guided 38.00% to 38.75%, but the release says the new figure now includes the $115.0m of refunds. Ex-refund it is 37.46%, DOWN 54bp - and the $181.0m of revenue added to the guide earns 11.41 cents on the dollar. - COFFEE IS A CYCLE: segment margin 37.14% vs 18.71% (+1843bp), best of five filed quarters, and 87.49% of the rise in segment profit. But across fiscal 2026 coffee sales rose 17.75% while coffee profit FELL 11.77%. - THE BALANCE SHEET: net debt $6,694.6m, leverage 2.92x trailing EBITDA vs 3.76x in April - but 3.07x with the refund stripped out. Dividend $4.48 (3.42%), 41.67% payout, covered 2.29x by guided free cash flow. What to watch: UP: a $4.48 dividend, a 3.42% yield covered 2.29x by guided free cash flow, net debt down $210.5m in the quarter, and a $151.42 bull case if the 37.14% coffee margin is a new level. DOWN: net sales are still guided to FALL 1-2% and the ex-refund gross margin guide fell 54bp. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
Semtech (SMTC) Q2 FY2027: Paid $1.24B, Selling It For $62M
Semtech Corporation (SMTC) Q2 FY2027 — Q2 FY2027 (quarter ended July 26, 2026): net sales $341.9m, UP 32.73%, an all-time quarterly record. GAAP diluted EPS $1.59; adjusted $0.71 against a $0.614 bar. Q3 guided to $410.0m and $1.05. Reported AFTER the close Aug 25 (8-K header 16:06 ET); shares closed +10.41% on Aug 26 on 5.17x median volume. Semtech filed the largest quarter in its history - net sales of $341.9m, up 32.73% - and guided the third quarter to $410.0m and $1.05 a share. The shares rose 10.41%. But reported EPS of $1.59 sits ABOVE adjusted EPS of $0.71, which is backwards for a semiconductor company: pre-tax income was $54.7m and the tax line was a $101.4m BENEFIT, 63.34% of net income, on a $112.4m non-cash release of a U.S. valuation allowance carried since fiscal 2024. And twelve days before the print, Semtech agreed to sell 14.07% of its revenue for $62.0m. We value SMTC at $140.07 against $140.80 and rate it HOLD, conviction 3/5. THE CALL: HOLD (3/5, A REAL INFLECTION AT A FAIR PRICE) — base-case value ~$140.07 vs ~$140.8 today. KEY METRICS: - THE ROUND TRIP: $1,240.8m paid for Sierra Wireless; $847.9m of goodwill written off (68.34%); $62.0m agreed sale price to Compal Electronics = 5.00% of the purchase price. - TWO PRICES FOR REVENUE: the disposal group did $48.1m of sales (14.07% of the company) at a 22.66% gross margin. Compal pays 0.322x annualised revenue; SMTC trades at 10.59x - a 32.9x gap. - NO LOSS ON SALE: assets held for sale $132.2m less liabilities held for sale $70.7m = $61.5m net book value against a $62.0m price. - THE TAX ENTRY: pre-tax income $54.7m, tax line a $101.4m BENEFIT (63.34% of net income), from a $112.4m non-cash valuation allowance release. At an 18% rate the quarter earns ~$0.49. - WHAT WORKS: Signal Integrity +64.32% to $126.2m at 65.3% gross margin - 58.6% of the entire revenue increase. Infrastructure +68.70%; IoT +10.70% with gross margin -550bp. - THE GUIDE: Q3 net sales $410.0m (+19.92% seq), adjusted EPS $1.05 (+47.89%), adjusted operating margin 31.0% vs 24.40%; incremental margin 63.73%. - THE TAPE: +10.41% on Aug 26, 5.17x median volume, 3rd heaviest of 256 sessions. +190.49% in twelve months and still 19.42% below the $174.73 closing high of June 22. What to watch: UP: the guided quarter implies a 63.73% incremental adjusted operating margin against a 24.40% base, and Signal Integrity grew 64.32% at a 65.3% gross margin. DOWN: the case spread is 312%, the bear values the company near where it traded twelve months ago, and the divestiture still needs regulatory approval. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
Williams-Sonoma (WSM) Q2 FY2026: A 6.2% Comp That Moved The Stock 1%
Williams Sonoma (WSM) Q2 FY2026 — Q2 FY2026 (13 weeks ended August 2, 2026): net revenues $1.96bn, UP 6.70%, comparable brand revenue +6.2%. GAAP diluted EPS $2.84; non-GAAP $2.10 against a $2.08 bar. Outlook RAISED. Shares opened -4.58% and closed +1.15% at $237.43 on 2.34x median volume. Comparable brand revenue grew 6.2%, the best of the eight filed quarters we assembled, and every brand was positive. But $123.0m of new revenue produced only $10.4m of new operating profit on the company's own adjusted basis - 8.47 cents on the dollar, against a base business earning 17.3 cents. Occupancy (+40bp) and supply chain (+30bp) both levered; merchandise margin, which the release attributes to tariff costs, took 230bp. That is why the RAISED margin guide of 17.8%-18.2% still has a midpoint BELOW the 18.1% fiscal 2025 delivered. THE CALL: SELL (4/5, AN EXCELLENT RETAILER AT A FULL MULTIPLE) — base-case value ~$177.58 vs ~$237.43 today. KEY METRICS: - THE INCREMENTAL DOLLAR: $123.0m of new revenue produced $27.0m of new non-GAAP gross profit (21.96 cents) and $10.4m of new non-GAAP operating profit - 8.47 cents on the dollar against a 17.3% base margin, 48.98% of the base rate. Over the half: 5.75 cents. - THE DEMAND SIDE IS FINE: comparable brand revenue +6.2%, the best of eight filed quarters, on revenue +6.70% to $1.96bn. Pottery Barn (39.33% of the quarter) went from -2.3% two quarters ago to +5.1%. West Elm +6.4%, Williams Sonoma +7.6%, Kids and Teen +3.5%. - THE COMPANY'S OWN BRIDGE: occupancy leverage +40bp and supply chain efficiency +30bp against merchandise margin -230bp, which the release attributes to tariff costs - about $45.1m at this quarter's revenue. The two scale wins covered 30.43% of the tariff bill. - THE INVERTED GAAP SPREAD: reported EPS $2.84 sits ABOVE non-GAAP $2.10 because of a $167.8m IEEPA tariff refund inside cost of goods sold plus $6.3m of interest, less a $47.5m vendor provision and a $10.0m one-off 401(k) cost - $116.7m pre-tax, $0.74 a share. - THE RAISE IS A REVENUE RAISE: the margin band went 17.5%-18.1% (18 March), was reiterated word for word (21 May), and became 17.8%-18.2% (26 August) - a 20bp midpoint move against 125bp on revenue. FISCAL 2025 DELIVERED 18.1%, above the 18.0% midpoint. - THE PRICE: 23.94x trailing earnings against a 15.80x median we measured across 25 quarterly observations. Since March 2023 the shares are up 4.06x and trailing earnings 1.18x - 88.1% of the return is re-rating. At 9.5% the price needs 5.52% growth forever. - THE COUNTERWEIGHT, WHICH IS REAL: zero borrowings, $1,028.9m of cash, a filed 42.3% return on invested capital and the best operating margin on our board. Fiscal 2025 returned $1.17bn - 110.9% of that year's free cash flow. Our bull case $244.59 clears the tape. What to watch: UP: merchandise margin recovering as the tariff comparison laps - management called Q2 the peak quarter of tariff pressure. DOWN: the raised guide needs second-half margin EXPANSION after a first half in which it fell 60bp, at 23.94x against a 15.80x six-year median. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 14 min
Intuit (INTU) Q4 FY2026: They Changed What Earnings Means
Intuit (INTU) Q4 FY2026 — Q4 FY2026 (year ended July 31, 2026): Q4 revenue $4,354m (+13.65%) vs a $4,266.8m bar; Q4 adjusted EPS $4.03 vs $3.58 - a 12.6% BEAT. Full year: revenue $21,448m (+13.90%), adjusted EPS $24.27 (+20.45%). Shares gapped -9.51% and closed -3.24% at $345.88. Effective August 1, 2026 - day one of the year it was guiding - Intuit stopped excluding share-based compensation from non-GAAP. FY2026's reported $24.27 contained $7.42 a share of added-back stock pay. The FY2027 guide of $22.88-$23.12 INCLUDES $5.81 of it, so the printed figure FALLS 5.2% while the release advertises +23% to +24% growth - against a restated base of $18.63 printed nowhere in the document. THE CALL: BUY (3/5, CHEAP ON THE GUIDE IT WROTE, NOT THE ONE THE STREET READ) — base-case value ~$413.13 vs ~$345.88 today. KEY METRICS: - THE DEFINITION CHANGED ON DAY ONE OF THE GUIDED YEAR: from Q1 FY2027 non-GAAP no longer excludes share-based compensation. FY2026's $24.27 added back $2,056m of stock pay - $7.42 a share pre-tax, 30.6% of the reported figure. The FY2027 guide includes $5.81 of it. - SO THE GUIDE IS SMALLER THAN LAST YEAR AND STILL CALLED GROWTH: $22.88-$23.12 is 5.2% BELOW the $24.27 just reported, yet the release prints '+23% to 24%'. Reconstructed: $2,056m at the company's own 24% non-GAAP rate over 277m shares is $5.64; $24.27 less $5.64 is $18.63 - a base never printed. - A 21.3-POINT SWING IN ONE NUMBER: against the Street's $27.30 FY2027 bar the headline guide reads -15.8%, a miss. Add the $5.81 back and it reads +5.5%, a beat. Proof the bar is on the old basis: Q1 guidance of $2.46 plus its own stated $1.48 of stock pay is $3.94 vs a $3.99 consensus. - THE REVENUE LINE HAS NO ACCOUNTING DEFENCE: Table E shows GAAP revenue IS non-GAAP revenue. FY2027 guided $23,279-$23,512m = +8.5% to +9.6% against +13.9% delivered, and 1.4% under the $23.72bn Street figure. The three-year GBS target was cut on the call from 15-20% to 10-15%. - TURBOTAX GREW ON PRICE, NOT PEOPLE: US federal units FELL 2.3% to 39.0m and desktop fell 6.8%, while TurboTax revenue rose 7% to $5.3bn. FY2027 guides TurboTax +2.2%. Mailchimp was carved into its own segment in the same release that guides it to -1% to 0%. - A 17% WORKFORCE CUT MOVED THE STOCK-PAY BILL 1.8%: the May 20 8-K estimated $300-340m of charges; the charge landed at $293m, BELOW its own low end, all in Q4 - 61.7% of that quarter's $475m of GAAP operating income. Yet FY2027 stock pay is guided $2,020m vs $2,056m. - THE BALANCE SHEET TAKES ALMOST NOTHING OFF THE TABLE: $7.2bn cash and investments vs $7.7bn debt, so net debt is $469m. Operating cash flow $8,838m (+42.4%), but $1,279m is deferred tax, so normalised free cash flow is $7,338m - a 7.76% yield. What to watch: UP: the October quarter, guided +11% against a full year of 9-10%, and TurboTax units turning positive after falling 2.3%. DOWN: another year of falling federal units, or the cut 10-15% GBS target being cut again on September 17. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 27 · 13 min
Abercrombie & Fitch (ANF) Q2 FY2026: Up 36% On A Zero Comp
Abercrombie and Fitch (ANF) Q2 FY2026 — Q2 FY2026 (13 weeks ended August 1, 2026): net sales $1,266.7m, UP 4.81%, a second-quarter record, against a $1,247.9m bar. Diluted EPS $4.17 against a $1.99 bar and $2.32 adjusted a year ago. CONSOLIDATED COMPARABLE SALES: +0%. Shares closed +35.67% at $147.75 on 12.27x median volume. The two brands traded places. Abercrombie brands comped +4% against -11% a year ago; Hollister comped -3% against +19%. A 15-point swing one way, a 22-point swing the other, and the consolidated comparable sales line came out at exactly 0% - so all 4.81% of the net sales growth is square footage and channel. Strip the company's own $1.75 a share of IEEPA tariff refund and net income FELL 5.43%, while EPS still rose 4.31% on a 9.27% smaller share count. THE CALL: HOLD (3/5, A GOOD BUSINESS AT A PRICE THAT ASKS FOR MORE) — base-case value ~$142.18 vs ~$147.75 today. KEY METRICS: - THE HANDOFF: Abercrombie brands comped +4% (from -11%) and Hollister -3% (from +19%) - a +15 and a -22 point swing that cancel, leaving CONSOLIDATED COMPARABLE SALES at exactly +0%. Hollister is the LARGER brand at 52.88% of net sales. - SO THE GROWTH IS SPACE: net sales +4.81% to $1,266.7m with a zero comp, so all 4.81 points are new square footage, channel and currency. Guidance is ~30 net openings (50 openings, 20 closures) plus 80 remodels on roughly 850 stores. - STRIP THE REFUND: ~$100m of IEEPA tariff refunds landed inside cost of sales, worth $1.75 a share after tax on the company's own arithmetic - 41.96% of net income. Ex-refund net income was $106.6m against $112.8m adjusted, DOWN 5.43%. - BUT EPS STILL ROSE 4.31% ($2.42 vs $2.32) because diluted shares fell 9.27% to 44.05m. The 9.74-point wedge between falling profit and rising per-share earnings is entirely the buyback: 3.2m shares retired this year at an average of $88.13. - THE UNDERLYING MARGIN CONTRACTED: on the company's own quarterly tariff table the year-on-year swing was 690bp, so operating margin ex-tariffs was 13.05% against 13.91% adjusted last year - DOWN 86bp. Selling expense rose 18.3% and G&A 16.8% on sales up 4.81%: a 566bp rise in the cost ratio. - THE RAISE, DECOMPOSED: the full-year EPS midpoint went $10.60 to $13.35, a $2.75 raise - of which the company's own full-year refund estimate, inclusive of interest, is $2.10. That is 76.36%. The underlying raise is $10.60 to $11.25, or +6.13%, against a +35.67% day: a 5.82x ratio. - THE PRICE: at $147.75 that is 13.13x the recurring $11.25 against 10.27x paid for the old forecast the day before - a 27.8% re-rating. Net cash is $638.0m with nothing drawn, inventories DOWN 0.2% on sales up 4.81%, and $500m of buyback is ~7.87% of market value. What to watch: UP: Hollister comps turning positive while Abercrombie holds, and the selling and administrative cost ratio - up 566bp this quarter - stopping its climb. DOWN: a second negative Hollister quarter takes the consolidated comp negative, and fiscal 2027 is the first year with no refund in it. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 26 · 14 min
DICK’S Sporting Goods (DKS) Q2 FY2026: The Worst Day In 5,000 Sessions
DICK'S Sporting Goods (DKS) Q2 FY2026 — Q2 FY2026 (13 weeks ended August 1, 2026): net sales $5,586.8m, UP 53.2%, against a $5,642.9m bar. Operating income $440.8m, DOWN 2.5%. Non-GAAP EPS $3.53 against a $3.74 bar and $4.38 a year ago; GAAP $3.50 against $4.71. DICK'S Business comps +4.9%; Foot Locker proforma comps -3.6%. The shares closed at $124.31, down 30.68% on 38,849,960 shares. One ticker now holds two retailers moving in opposite directions. The DICK'S Business comped +4.9%, grew segment profit 2.16% to $485.2m and had its full-year comparable-sales outlook left untouched. Foot Locker, 31.1% of the quarter's sales, comped -3.6% and LOST $31.9m. Full-year operating profit guidance came down $260.5m at the midpoint and 73.08% of that cut is Foot Locker, from a business that is 33.79% of the guided revenue. The shares fell 30.68% - the worst session in 5,000 of price history. THE CALL: BUY (3/5, A HEALTHY TWO-THIRDS BEING GIVEN AWAY WITH A SICK THIRD) — base-case value ~$155.39 vs ~$124.31 today. KEY METRICS: - THE SPINE: non-GAAP operating income IS the sum of the two segment profits, to the dollar, in both years: $485,204k of DICK'S plus a $31,876k Foot Locker LOSS = $453,328k. DICK'S ADDED $10.3m (+2.16%); Foot Locker SUBTRACTED $31.9m. No attribution argument is available. - THE GUIDANCE CUT: full-year non-GAAP operating profit $1.77bn -> $1.51bn, a $260.5m midpoint cut. DICK'S gave back $70m; Foot Locker swung from a guided +$130m PROFIT to a -$60m LOSS = $190m, 73.08% of the cut on 33.79% of guided revenue. The DICK'S comp outlook was MAINTAINED at +2.5% to +4.0%. - THE DILUTION, MEASURED: non-GAAP EPS fell $0.85, $4.38 to $3.53. Holding earnings constant and moving only the share count, $0.3964 - 46.89% - is nothing but the 9.6 million shares issued to buy Foot Locker. Diluted shares went 81.0m to 90.1m. - THE PRIOR-YEAR DISTORTION: the $4.71 GAAP comparison contained $49.7m pre-tax of non-cash gains on DICK'S pre-bid stake in Foot Locker equity - $0.4542 a share, 37.54% of the GAAP decline. 81.6% of the whole pre-tax decline is that one non-operating line. - THE PROPORTIONALITY TEST: enterprise value fell $17.16bn to $12.20bn - $4.96bn in one session - against a $260.5m cut to this year's operating profit. That is 19.04x the cut: 50.9% the earnings reset at Monday's multiple, 49.1% the multiple itself, 9.69x to 8.08x. - THE REVERSE SOLVE: hold the DICK'S Business at 10.0x its own guided $1.57bn of segment profit and it is worth $15.70bn - $3.50bn MORE than the entire enterprise. Foot Locker is worth exactly zero only if DICK'S itself is worth 7.77x. - THE TAPE: $179.33 to $124.31, -30.68%, on 38,849,960 shares = 32.9x the median and 1st of 252 sessions. It gapped -20.62% and closed 1.38% off its own low. Worst of 5,000 sessions since October 2006; the prior worst was -24.15% in August 2023. - CAPITAL RETURN: net debt $992.6m, 0.66x guided operating profit, revolver undrawn. The board declared $1.25 a share on August 24, the day BEFORE the print - an annual $5.00, a 4.02% yield here against 2.79% the day before, 43.5% of guided earnings. The half's buyback went at $196.38, now -36.70%. What to watch: UP: a real repurchase against the $3.00bn unused authorisation, and a Foot Locker proforma comp that stops deteriorating in the November quarter. DOWN: Foot Locker inventory rising into a falling comp, which would take the announced clean-up bill above the current $750m ceiling. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 25 · 13 min
Napco Security (NSSC) Q4 FY2026: A Record Quarter With A Customs Refund Inside It
Napco Security (NSSC) Q4 FY2026 — Q4 FY2026 (three months ended June 30, 2026): net revenue $55.809m, UP 10.03%, an all-time quarterly record. Net income $17.767m, UP 52.74%, also a record. Diluted EPS $0.50 against a $0.3867 Street bar - but the release states $0.09 of it is net tariff refunds. Shares OPENED UP 21.19% at $46.16, printed $51.77, and CLOSED DOWN 1.31% at $37.59 on 6.76x median volume. Napco printed record revenue and record net income in the June quarter, and the stock opened up 21%, printed a 52-week high inside thirty minutes and closed down 1.31%. The reason is in the company's own headline bullet: $0.09 of the $0.50 is a refund of import duty from U.S. Customs after the Supreme Court struck the IEEPA tariffs down. Note 14 of the 10-K puts the figure at $3,353,000, all of it booked to cost of goods sold in one quarter. THE CALL: HOLD (3/5, A GENUINE RECORD QUARTER WITH A CUSTOMS REFUND INSIDE IT, AT A PRICE THAT ALREADY PAYS FOR THE HALF THAT COMPOUNDS) — base-case value ~$34.51 vs ~$37.59 today. KEY METRICS: - THE SPINE: a $3,353,000 IEEPA tariff refund, ALL of it recognised in the June quarter's cost of goods sold. That is 601bp of the quarter's gross margin and $0.09 a diluted share - 79.44% of the entire beat against the $0.3867 Street bar. - SEVEN OF THE NINE CENTS ARE A REVERSAL: only $1,003,000 of the refund relates to a prior year. The other $2,350,000 - 70.09% - gives back duty Napco paid in its own first three quarters, which is why the FULL YEAR benefit is 50bp and $0.03. - AND IT IS NOT CASH: $2,931,000 of the $3,353,000 was still a receivable at June 30 - 87.41% of it, and 49.96% of the entire increase in accounts receivable. Replacement tariffs are already imposed under Section 122 and Section 301. - STRIP IT AND THE BEAT IS TWO CENTS: $0.50 less $0.09 is $0.41 against a $0.3867 bar - a 6.03% beat, not 29.30%. $0.41 is also the figure the newswires printed at 10:22 ET while the screen showed the stock up 14.2%. - THE PRICE RISE THAT LOST ITS COST: 71.67% of the year's 10.0% equipment growth was PRICE (7.14 points) against 2.82 points of volume, on the company's own MD&A percentages. The access alarm division shipped 15.2% FEWER units. - THE HALF THAT COMPOUNDS: recurring service revenue is 48.21% of sales at a 90.3% gross margin and 73.49% of all gross profit. But the company's own exit run rate grew 9.57% ($94m to $103m) while reported recurring revenue grew 12.97%. - THE CALL: HOLD, conviction 3/5, fair value $34.51 against $37.59 (-8.19%). EV of $1.21bn is 19.44x normalised EBITDA of $62.079m, a 34.6% premium to Allegion at 15.77x and Alarm.com at 13.13x. Five named Street houses average $50.80. What to watch: UP: a September-quarter gross margin holding near 55.30% with replacement duties in force, OR next August's recurring run rate implying growth back above 12.97%, OR a resumed buyback. DOWN: Section 122 and Section 301 duties replacing what was refunded, unit volume staying near 2.82%, or the second shareholder class action turning into cash. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
August 24 · 13 min
PDD Holdings (PDD) Q2 2026: Revenue +8%, Earnings -12%, And A $61bn Portfolio
PDD Holdings (PDD) Q2 2026 — Q2 2026 (three months ended June 30, 2026): total revenue RMB112,358m (US$16.6bn), UP 8.05%. Operating profit RMB27,764m, UP 7.64%. Net income attributable to ordinary shareholders RMB27,182m, DOWN 11.61%. Non-GAAP diluted EPS per ADS RMB19.33 (US$2.85); GAAP diluted RMB18.45 (US$2.72). Shares closed at $87.07, DOWN 1.48% after opening UP 2.91%. PDD Holdings grew revenue 8.05% and operating profit 7.64% in the June quarter, and net income FELL 11.61%. Every step between the two sits below the operating line, and one of them - other income, net - swung RMB7,518m in the quarter and RMB12,810m across the half, 2.35x everything operating profit added. Neither the release nor the audited 20-F ever decomposes it. THE CALL: BUY (3/5, A CHEAP PLATFORM, A HUGE PORTFOLIO NOBODY CAN REACH, AND EARNINGS SET BELOW THE OPERATING LINE) — base-case value ~$99.21 vs ~$87.07 today. KEY METRICS: - THE SPINE: operating profit RMB27,764m, UP 7.64%, against net income RMB27,182m, DOWN 11.61%. Across the half operating profit is UP 13.02% and net income DOWN 12.68%. The bridge closes to the RMB million and every step of it is non-operating. - THE LINE NOBODY EXPLAINS: other income, net swung RMB7,518m in the quarter and RMB12,810m across the half - 2.35x what operating profit ADDED. On SEC XBRL it was POSITIVE every year 2020-2025, best ever RMB3,119.8m. The half alone is -RMB9,430m. - HALF THE COMPANY IS A PORTFOLIO: cash, restricted cash, short-term investments and debt securities total RMB630,071m. Less ALL RMB215,620m of liabilities (no borrowing among them) = US$61.08bn, or $42.91 an ADS - 49.29% of the share price. - AND IT HAS NEVER BEEN RETURNED: no dividend has ever been paid and no ordinary share or ADS repurchased - the only repurchases in the 20-F are of its own convertible notes. Every physical asset it owns totals US$1.34bn, 1.08% of market value. - WHAT THE MARKET PAYS FOR THE PLATFORM: strip the portfolio and US$62.85bn is left against US$11.74bn of trailing after-tax operating profit - 5.35x, a 26.24% cash yield. At the Nov 10, 2025 closing high the same sum gave 13.35x: a 59.89% de-rating. - THE EARNINGS BASIS, PROVED NOT ASSUMED: the vendor's epsActual IS the company's non-GAAP diluted per ADS, matching four straight quarters exactly. So $2.85 against a $2.76 bar is a real beat - but GAAP diluted is $2.72, which MISSES it and fell 11.08%. - THE CALL: US$61.08bn of net financial assets at 0.65/0.75/0.85 plus US$11.74bn of after-tax operating profit at 5.5x/8.0x/11.0x. Bear $73.27 / base $98.18 / bull $127.22, weighted 25/50/25 = FAIR VALUE $99.21 vs $87.07, +13.95%. BUY 3/5 - and LESS bullish than the nine dated houses at $102.56. What to watch: UP: the September-quarter other income line back near zero, OR any dividend or buyback - the first in the company's history. DOWN: that line repeating at this size, which would be roughly RMB29.6bn a year against a platform earning US$11.74bn. 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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