Charged Alpha Stock Encyclopedia

Charged Alpha Stock Encyclopedia

By Colton ThomasBusinessInvesting
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Charged Alpha Stock Encyclopedia episodes

  • Alibaba (BABA): The 92% Earnings Miss That Wasn’t - And The One That Was
    Alibaba Group (BABA) Q1 FY2027 — Q1 FY2027 (June quarter 2026, ended June 30): revenue RMB268,953M / $39.64B, +8.6% and ahead of a $38.63B bar. Non-GAAP EPS per ADS $1.26 vs $1.85 expected, -31.9% and down 42.2% y/y. Adjusted EBITA RMB27.3bn, -29.6%. Released pre-market August 20: the shares gapped -4.21%, bought back 130% of that gap and closed +1.26% at $130.53. The next session opened -3.97% and closed -8.57% at $119.34 - the worst session of the last twelve months, on 15.8% more volume, below the reaction day's low.
    Two numbers in this quarter round to 92%, and only one is real. The data-screen miss of -91.8% ($0.16 actual vs a $1.94 estimate) is an 8-to-1 units error: $0.16 is per ORDINARY share and the bar is per ADS. Corrected, it is $1.26 against $1.85, a 31.9% miss. But 92.4% of the actual adjusted-profit decline really did come from ONE segment - AI Labs and Applications, a reporting line created this quarter.
    THE CALL: AVOID (3/5, THE MISS WAS SMALLER THAN THE SCREEN SAID AND THE SPENDING IS LARGER THAN THE RETURN) — base-case value ~$101.50 vs ~$119.34 today.
    KEY METRICS:
    - THE UNITS ERROR: the vendor carries epsActual $0.16 against epsEstimated $1.94, a 91.8% miss. Alibaba's release prints all four figures in one bullet - RMB3.71 and RMB0.46 statutory, RMB8.52 and RMB1.07 non-GAAP - and footnote 5 states each ADS represents eight ordinary shares. Divide either pair and you recover 8.07x and 7.96x. In the same unit the comparison is $1.26 delivered against a $1.85 bar: -31.9%, or 2.9x smaller than the screen. Revenue BEAT on the same day, $39.64B against $38.63B.
    - WHERE THE PROFIT WENT: group adjusted EBITA fell RMB11,515M. AI Labs and Applications accounts for RMB10,637M of that (92.4%) as its loss went RMB3,224M to RMB13,861M - 4.2x its own revenue. All others contributed RMB4,030M (35.0%) including a RMB4.5bn goodwill writedown. Alibaba E-commerce Group, which CONTAINS the quick-commerce subsidy war everyone blamed, moved RMB239M - 2.1%. AI Cloud OFFSET RMB3,209M. Excluding AI Labs, group adjusted EBITA went RMB42.1bn to RMB41.2bn: -2.1%, not -29.6%.
    - WHAT THE FORECAST REQUIRES: annualise this quarter's non-GAAP income and Alibaba earns $5.06 per ADS. Take the whole AI Labs loss to zero and tax the difference at 20% and it earns $7.76. The Street's fiscal 2028 row is $9.18 from 18 forecasts - 1.18x the full-breakeven figure. Our cases are $5.60 at 11.0x, $7.00 at 14.5x and the Street's own $9.18 at 17.0x, weighted 30/45/25 for a fair value of $103.16. Three houses acted on the print, all three MAINTAINED, two RAISED targets.
    What to watch: UP: AI Cloud adjusted EBITA grew 133% to RMB5.6bn on revenue up 44.9%, AliExpress turned profitable, and net cash plus unconsolidated stakes are worth $25.09 per ADS - 21% of the share price. DOWN: capex of RMB67.7bn (+75.0%) is 4.5x the RMB15.0bn of incremental cloud revenue it bought, free cash flow was an OUTFLOW of RMB44.7bn, and depreciation - inside the adjusted number - is up 71.4% y/y.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    15 min
  • OSI Systems (OSIS): They Beat By A Penny And The Backlog Didn’t Grow
    OSI Systems (OSIS) Q4 FY2026 — Q4 FY2026 (quarter and year ended June 30, 2026): non-GAAP EPS $3.78 vs a $3.77 bar, a one-cent beat, on Q4 revenue of $484.1M that FELL 4.1%. Full-year revenue $1.79B (+4.25%) and non-GAAP EPS $10.35 (+10.6%). The shares gapped -10.13% at the open on August 21, made a fresh 52-week low at $186.50, then bought back 49% of the gap to close -5.21% at $206.73 on 8.4x median volume.
    A one-cent beat carries no information. So we read the backlog instead - and there are two of them. The release leads with a record $1.9B. The audited ASC 606 measure in Note 5 of the 10-K reads approximately $1.8B at June 2026 AND at June 2025: one sentence, one figure, both dates, on a scope that got WIDER this year. Only 59% converts inside twelve months.
    THE CALL: HOLD (3/5, THE PRINT WAS NOISE, THE AUDITED BACKLOG IS FLAT, AND THE PRICE HAS ALREADY DONE MOST OF THE WORK) — base-case value ~$211.17 vs ~$206.73 today.
    KEY METRICS:
    - THE TWO BACKLOGS: headline $1.9B (company-defined, unaudited, 5-year horizon) vs remaining performance obligations of ~$1.8B in BOTH FY2026 and FY2025. 59% converts within 12 months = $1,062M against a $1.903B revenue guide, so the guided year is 56% contracted and $840M must be won AND shipped inside it. Book-to-bill reads 1.06x, but both endpoints are rounded to $0.1B so anything from 1.00x to 1.11x fits the disclosure.
    - THE SEGMENTS: Optoelectronics and Manufacturing carried the year - revenue +9.40%, non-GAAP operating profit +10.72%, margin 13.1% to 13.3%. Security leaked - revenue +4.33% but operating profit +0.54% and margin 18.5% to 17.9%. In Q4 Security revenue fell 7.42%, a larger dollar decline than the whole company's. Healthcare revenue fell 3.35% for the year but its Q4 margin went 0.9% to 10.0%.
    - THE DENOMINATOR: the 10-K cover shows 15,941,968 shares against a weighted diluted 17,280,000. Hold non-GAAP profit completely flat and EPS still rises from $10.35 to $10.94, +5.7%, from the share count alone - against a guide of +7.5% to +11.0%. On that conservative count the guide implies profit growth of +1.7% to +5.0% versus revenue guided +5.0% to +8.1%: slower than revenue at every point.
    What to watch: UP: the delayed Middle East shipments are described as deferrals, not cancellations, and remain in backlog with revised schedules - if they simply ship, revenue lands at the top of the guide and the bull case is $300. DOWN: Security is 70% of revenue, grew 4.33% and delivered 0.54% more operating profit as its margin fell 67bp; the FY2027 guide's entire revenue range sits below consensus.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    15 min
  • AAP Stock Q2 2026: Advance Auto Parts Earnings - The Turnaround Clock Ran Out
    Advance Auto Parts (AAP) Q2 2026 — Advance Auto Parts reported Q2 fiscal 2026 on an 8-K accepted 06:31:32 ET on Thursday August 20, BEFORE the open, so Thursday August 20 is the reaction session. Shares closed USD42.39 against USD56.18, DOWN 24.55 pct, on 16,664,900 shares, 10.93x the 30-session norm. The stock GAPPED to a USD46.85 open then kept falling all day to a USD40.66 low at 13:30. Friday closed USD42.58, up only 0.45 pct. The vendor EOD row reads MINUS 9.52 pct, measured off the OPEN.
    Advance Auto Parts (NYSE: AAP) is an automotive aftermarket parts retailer serving professional installers and do-it-yourself customers, operating 4,311 company stores plus 786 independently owned Carquest locations, headquartered in Raleigh, North Carolina. It sold Worldpac in 2024 and has spent USD1.0 billion on a restructuring that closed about 500 stores.
    THE CALL: AVOID (3/5, MODERATE - THE MARGIN TREND IS REAL BUT THE PLAN IS GUIDED BACKWARDS) — base-case value ~$35.04 vs ~$42.58 today.
    KEY METRICS:
    - Q2 fiscal 2026, 12 weeks ended 18 July 2026: net sales USD2,000M against USD2,010M, roughly flat, on comparable store sales of MINUS 0.5 pct. Gross margin 46.2 pct from 43.5, including USD26M of IEEPA tariff refunds. Adjusted operating income USD112M, a 5.6 pct margin from 3.0. GAAP diluted EPS USD0.90 against USD0.25; ADJUSTED diluted EPS USD1.03 against USD0.69 and a USD0.81 bar, a 27.6 pct beat. About USD0.31 of that USD1.03 is the tariff refund.
    - THE SPINE: the first half already delivered a 4.55 pct adjusted operating margin on 28 weeks. Reaffirming a 3.80-4.50 pct FULL-YEAR band therefore guides the back 24 weeks to 3.68 pct - 87 basis points BELOW the half just filed. Comparable sales went plus 3.5 pct in Q1, the strongest in five years, to MINUS 0.5 pct. And the EPS raise is not operating: the release says it reflects higher pre-tax INTEREST INCOME, up from about USD80M to USD100M. Store openings were CUT from 40-45 to 30-35.
    - THE BALANCE SHEET: interest expense USD48M against USD19M, after the 7.000 pct 2030 and 7.375 pct 2033 notes, USD975M each, issued 4 August 2025. USD3,421M of principal at about 6.02 pct costs USD206M a year against USD3,120M of cash earning 3.21 pct, or USD100M - a NET DRAG of USD106M on net debt of only USD267M, 97 pct of the USD109M trailing net income. Supplier-finance obligations inside payables USD2.6B. Net leverage 2.1x from 2.4x. Free cash flow guided to about USD100M against a MINUS USD298M outflow in fiscal 2025.
    What to watch: The Q2 fiscal 2026 8-K accepted 06:31:32 ET on 20 August 2026 and its Exhibit 99.1, the Form 10-Q filed the same day, and the fiscal 2025 Form 10-K, read against the guidance tables of 13 February and 21 May 2026. Net sales USD2,000M and adjusted diluted EPS USD1.03 against a USD0.81 adjusted bar. Full-year adjusted EPS guidance went to USD2.60-USD3.30 from USD2.40-USD3.10 while sales, comparable sales, margin and free cash flow were left UNCHANGED.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    15 min
  • ROST Stock Q2 FY2026: Ross Stores Earnings - 78% Of The Beat Was A Refund
    Ross Stores (ROST) Q2 FY2026 — Ross Stores reported Q2 FY2026 on an 8-K accepted 16:11:01 ET on Thursday August 20, so Friday August 21 is the reaction session and it is also the last settled one. Shares closed USD239.04 against USD228.99, UP 4.39 pct, on 6,354,194 shares, 2.65x the 20-session median. The OPEN was USD243.85, up 6.49 pct - and USD243.86 was the high of the entire day, one cent above the opening print. By the 10:25 bar the price was USD234.49, with 63 pct of the gap gone.
    Ross Stores (NASDAQ: ROST) is the largest off-price apparel and home fashion chain in the United States, selling other retailers' excess brand-name merchandise at 20 to 60 pct off. Founded 1957, headquartered in Dublin, California, about 111,000 employees. Two banners: 1,952 Ross Dress for Less stores in 44 states plus 376 dd's DISCOUNTS. Jim Conroy is CEO. The fiscal year ends in late January.
    THE CALL: AVOID (3/5, MODERATE - A REAL QUARTER PRICED AS IF ALL OF IT RECURS) — base-case value ~$218.19 vs ~$239.04 today.
    KEY METRICS:
    - Q2 FY2026 sales USD6.265B against USD5.529B, up 13.3 pct, on comparable store sales up 10 pct driven by traffic, lapping plus 2 pct. Operating profit USD1.104B, margin 17.6 pct from 11.5. Net income USD851M. Diluted EPS USD2.66 on 319,450,000 shares against USD1.56. Ross publishes ONE earnings figure - no adjusted series and no reconciliation table anywhere in the release.
    - THE SPINE: operating profit includes approximately USD253M of IEEPA tariff refunds - 405 of the 610 basis points of margin gain, and about USD0.60 a share. Against the company's OWN guidance midpoint of USD1.89 the beat is USD0.77, so the refund is 77.9 pct of it and operations added USD0.17. Ex-refund the quarter earned USD2.06 on a margin up 205 bps against a plan of 130 to 150.
    - The full-year guide went USD7.02-7.36 (3 March) to USD7.50-7.74 (21 May) to USD8.61-8.77 (20 August). The May-to-August raise of USD1.07 is USD0.60 refund (56.1 pct), USD0.17 of Q2 operating beat and USD0.30 of genuine second-half increase. Ex-refund the year is USD8.01-8.17, up 22.4 pct on USD6.61 rather than 31.5 pct. Q3 guided USD1.75-1.83, Q4 USD2.17-2.26.
    What to watch: The Q2 FY2026 8-K accepted 16:11:01 ET on 20 August 2026 and its Exhibit 99.1, read against the outlook paragraphs of the 8-Ks of 3 March and 21 May 2026. Sales USD6.265B and diluted EPS USD2.66 against a company guide of USD1.85-1.93 and a vendor bar of USD1.95. Full-year guidance went to USD8.61-8.77. The Q2 Form 10-Q had NOT been filed as of 21 August.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    15 min
  • NDSN Stock Q3 FY2026: Nordson Earnings - One Segment Did All The Growth
    Nordson (NDSN) Q3 FY2026 — Nordson reported fiscal Q3 2026 on an 8-K accepted 16:32:10 ET on Wednesday August 19 - 32 minutes AFTER the bell, so Thursday Aug 20 is the reaction session and Friday Aug 21 has also settled. Shares closed USD334.70 against USD309.92, UP 8.00 pct, on 1,255,900 shares, 4.11x the 20-session median. The overnight gap was only a QUARTER of it: the stock opened USD316.00, up 1.96 pct, then built the other 5.92 pct during the session. Friday closed USD332.24, down 0.73 pct.
    Nordson (NASDAQ: NDSN) engineers and sells equipment that dispenses, applies and controls adhesives, coatings, sealants, polymers and biomaterials, and that tests and inspects for quality. Founded 1954, headquartered in Westlake, Ohio, about 8,000 employees, roughly 67 pct of revenue earned outside the United States. Three segments: Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. Sundaram Nagarajan is CEO. The fiscal year ends 31 October.
    THE CALL: HOLD (3/5, MODERATE - THE RE-RATING IS DESERVED AND NOW PAID FOR) — base-case value ~$336.65 vs ~$332.24 today.
    KEY METRICS:
    - Q3 FY2026 sales USD817.667M against USD741.509M, up 10.3 pct - 11.7 points organic, minus 1.2 from a divestiture. Gross margin 55.5 pct from 54.8. EBITDA USD262.483M, 32.1 pct of sales. GAAP EPS USD2.73; adjusted EPS USD3.25 on 56,027,000 diluted shares. The USD0.52 bridge is USD19.345M of acquisition amortisation plus a USD14.892M non-cash loss on minority investments - the same line was a USD12.411M GAIN in the first half.
    - THE SPINE: Advanced Technology Solutions is 26.9 pct of sales (USD219.880M of USD817.667M) and delivered 100.7 pct of the company's ENTIRE EBITDA increase - USD24.149M against a company-wide USD23.972M - because Industrial Precision Solutions went USD0.230M backwards and corporate cost rose USD5.085M. Its sales grew 28.4 pct, its EBITDA 58.1 pct, its margin 24.3 to 29.9 pct. Nine months: 75.2 pct.
    - Backlog is up 35 pct year on year - after plus 4 pct in the January quarter and plus 18 pct in April. Nordson sizes it in DOLLARS once a year: approximately USD600M at 31 October 2025, about 11.2 weeks of shipments. Full-year guidance went USD11.30-11.80 to USD11.80-12.00 a share, a 3.03 pct midpoint move against an 8.00 pct move in the stock. Implied Q4: USD827.0M and USD3.42. Nine-month free cash flow USD530.160M, 125 pct conversion.
    What to watch: The Q3 FY2026 8-K accepted 16:32:10 ET on 19 August 2026 and its Exhibit 99.1, read against the Form 10-Q for the quarter ended 31 July 2026 - which only reached EDGAR at 11:43 ET next morning, by which time 93 pct of the move had printed. Sales of USD817.667M and adjusted EPS of USD3.25 both cleared the TOP of the company's own May range of USD760-790M and USD2.95-3.15. Guidance rose for a fourth straight quarter.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    14 min
  • WOLF Stock Q4 FY2026: Wolfspeed Earnings - The Share Count Doubles Again
    Wolfspeed (WOLF) Q4 FY2026 — Wolfspeed reported fiscal Q4 2026 on an 8-K accepted 16:40:15 ET on Wednesday August 19 (EDGAR filing-index page) - 40 minutes AFTER the bell, so Thursday Aug 20 is the reaction session and Friday Aug 21 has also settled. Shares closed USD26.35 against USD29.09, DOWN 9.42 pct, on 9,751,245 shares, 2.10x the 20-session median. 94.5 pct of that was the overnight gap: it OPENED at USD26.50, down 8.90 pct, before a share traded, then fell only 0.57 pct through the session. Friday closed USD25.76, down 2.24 pct.
    Wolfspeed (NYSE: WOLF) is the pioneer of silicon carbide: substrates and power devices for electric vehicles, industrial drives, renewable energy and, increasingly, AI data-centre power delivery. It reports under US GAAP in US dollars on a fiscal year ending the last Sunday in June, so the year ended 28 June 2026 is fiscal 2026. Two product lines: Power Products and Materials Products. Robert Feurle is CEO; Gregor van Issum is chief financial officer. The company emerged from Chapter 11 on 29 September 2025.
    THE CALL: HOLD (2/5, LOW - THE DISTRIBUTION IS THREE AND A HALF TIMES WIDE) — base-case value ~$22.97 vs ~$25.76 today.
    KEY METRICS:
    - Q4 FY2026 revenue USD149.6M against USD197.0M, down 24.1 pct, and essentially flat on USD150.2M the prior quarter. GAAP gross margin (25) pct from (13) pct; non-GAAP (20) pct from (1) pct. It costs USD1.25 to make a dollar of revenue. GAAP net loss USD145.4M, USD2.81 a share; non-GAAP net loss USD116.9M, USD2.26 a share, both on 51,799,000 diluted shares. Adjusted EBITDA (USD62.4M). Operating cash flow (USD54.1M). Q1 FY2027 guide USD140-160M with gross margin still negative.
    - The capital structure is the story. The Plan cancelled 156,479,390 old shares and issued 25,840,656; existing holders kept 1,306,896 of them, 5.06 pct. By the 10-K cover of 13 August 2026 the count is 52,995,396, up 105.1 pct. Still outstanding: USD849.7M of convertible notes struck at USD12.23, USD18.35 and USD20.14 plus a Renesas warrant at USD23.95 - all below Friday's USD25.76. Convert them and 56,700,673 shares arrive: 109,696,069 in total, up 107.0 pct again.
    - Fresh-start accounting took USD3,006.6M off property and equipment in one entry on 29 September 2025 - 79.6 pct of a USD3.78B carrying value. Quarterly depreciation halved from USD60.4M to USD31.7M, and gross margin got WORSE anyway. The filed fair value of the debt is USD3,465.8M against USD1,782.0M of principal - 194.5 pct of par, and 2.54x the USD1.37B equity. A year earlier the same stack was marked at 39.7 pct. The senior coupon stepped up to 15.875 pct cash on 23 June 2026.
    What to watch: The Q4 FY2026 8-K accepted 16:40:15 ET on 19 August 2026 and its Exhibit 99.1, read against the Form 10-K for the year ended 28 June 2026 - which was itself only accepted at 16:11:16 ET the FOLLOWING evening, eleven minutes after the reaction session closed. So the market priced the press release alone. Non-GAAP loss per share of USD2.26 came in 19 cents SMALLER than a USD2.45 bar and revenue of USD149.6M landed within 0.3 pct of estimate. The stock fell 9.42 pct anyway.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    14 min
  • WMT Stock Q2 FY2027: Walmart Earnings - Guidance Raised, Stock Down 9%
    Walmart (WMT) Q2 FY2027 — Walmart reported fiscal Q2 2027 on an 8-K accepted 06:59:01 ET on Thursday August 20 (EDGAR filing-index page) - a BEFORE-THE-OPEN print, so Thursday Aug 20 is the reaction session and Friday Aug 21 has also settled. Shares closed USD103.84 against USD114.30, DOWN 9.15 pct, the 4th worst of 4,999 close-to-close sessions since October 2006, on 83,633,145 shares, 3.89x the 20-session median. Three quarters of the fall was the overnight gap: it OPENED at USD106.38, down 6.93 pct, before a share traded. Friday closed USD103.70, down 0.13 pct. No bounce.
    Walmart (NASDAQ: WMT) is the largest retailer on earth: roughly 280 million customers a week across more than 10,900 stores in 19 countries, about 2.1 million associates, and USD713 billion of fiscal 2026 revenue. It reports under US GAAP in US dollars on a fiscal year ending 31 January, so the quarter ended 31 July 2026 is the SECOND quarter of fiscal 2027. Its three segments are Walmart U.S., Walmart International and Sam's Club U.S. John Furner is President and CEO; John David Rainey is chief financial officer.
    THE CALL: HOLD (3/5, MEDIUM - THE DE-RATING WAS RIGHT, AND IT IS NEARLY FINISHED) — base-case value ~$99.99 vs ~$103.7 today.
    KEY METRICS:
    - Q2 FY2027 total revenue USD187.937B, up 5.9 pct and 5.1 pct in constant currency, clearing a USD186.641B estimate. Net sales USD186.100B; membership and other income USD1.837B, up 11.2 pct. Operating income USD9.383B against USD7.286B, up 28.8 pct reported and 17.4 pct adjusted cc. Gross profit rate up 96 bps to 25.41 pct. Adjusted EPS USD0.81 against USD0.68 and a USD0.742 bar, a 9.2 pct beat - while GAAP EPS FELL 9.1 pct to USD0.80.
    - Guidance RAISED: FY27 adjusted EPS USD2.80-2.87 from USD2.75-2.85, net sales cc up 4.0-5.0 pct from 3.5-4.5 pct, adjusted operating income cc up 7.0-8.5 pct. But Q3 is set at USD0.62-0.64 against a USD0.67 vendor consensus row, 6.0 pct below it. Capital spending guidance went from about 3.5 pct of net sales to about 4.0 pct, roughly USD3.7B more. Walmart U.S. comparable sales grew 2.6 pct against 4.6 pct a year ago.
    - The de-rating in one line: the guidance midpoint rose 1.25 pct, from USD2.800 to USD2.835, while the multiple fell 10.27 pct, from 40.82x to 36.63x - and those two terms multiply to the exact minus 9.15 pct that printed. Walmart closed fiscal 2022, 2023 and 2024 at 21.8x, 22.9x and 24.9x adjusted earnings, then 39.1x and 45.1x. Six-month capex up 24.3 pct; six-month free cash flow down 20.4 pct to USD5.529B.
    What to watch: The Q2 FY2027 8-K accepted 06:59:01 ET on 20 August 2026 and its Exhibit 99.1, read against the Form 10-K for the year ended 31 January 2026. Adjusted EPS of USD0.81 cleared a USD0.742 bar and revenue of USD187.937B cleared USD186.641B - and the company RAISED full-year adjusted EPS guidance to USD2.80-2.87 from USD2.75-2.85. The shares fell 9.15 pct anyway. Nine sell-side firms then cut their targets by an average of 9.65 pct, and not one cut a rating.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    13 min
  • KEYS Stock Q3 FY2026: Keysight Earnings - Orders +56%, The Book Leads
    Keysight Technologies (KEYS) Q3 FY2026 — Keysight furnished fiscal Q3 2026 results on an 8-K accepted 16:09:53 ET on Tuesday August 18 (EDGAR filing-index page) - an AFTER-THE-CLOSE print, so Wednesday Aug 19 is the reaction session and the last settled one. Shares closed USD319.45 against USD341.00, DOWN 6.32 pct, the 22nd worst of 2,964 sessions since November 2014, on 3,875,294 shares, 3.78x the 20-session median. But the SESSION BEFORE, which ended nine minutes before the filing, was itself DOWN 5.58 pct and ranks 23rd - roughly 48 pct of the two-day 11.55 pct fall pre-dates the filing.
    Keysight Technologies (NYSE: KEYS) sells design, emulation and test solutions to engineers building communications, semiconductor, automotive, aerospace and AI infrastructure products. Spun out of Agilent in November 2014, it reports under US GAAP in US dollars on a fiscal year ending 31 October, serves about 40,000 end customers a year and employed roughly 16,500 people at 30 April 2026. Satish Dhanasekaran is chief executive. Its revenue is a LEADING indicator: engineers buy validation gear during design, years before the equipment it validates ships.
    THE CALL: HOLD (3/5, MEDIUM - A LEADING INDICATOR RUNNING HOT, AND FAIRLY PAID FOR IT) — base-case value ~$306.67 vs ~$319.45 today.
    KEY METRICS:
    - Q3 FY2026 revenue USD1.846B, up 36.5 pct on USD1.352B and beating a USD1.746B estimate by 5.7 pct; orders USD2.091B, up 56.0 pct, above two billion for a second straight quarter. GAAP diluted EPS USD2.30; non-GAAP diluted EPS USD3.07 against USD1.72 and a USD2.48 bar, a 23.8 pct beat. Segment operating margin 33.2 pct against 25.0 pct, above the company's own 31-32 pct long-term range. Free cash flow USD403M.
    - The lead: book-to-bill 1.13x against 0.99x a year ago, and 1.12x across nine months, leaving USD624M of orders booked and not yet shipped on top of a USD2.697B backlog. Core orders grew 52 pct against 56 pct reported, so acquisitions and currency are worth 4 points. The first 6G standard is targeted for March 2029. The 10-K expects most backlog to convert within six months, so visibility is about two quarters.
    - The counterweight: 83.2 pct of April-quarter revenue was recognised at a point in time against 80.9 pct a year earlier; software and services fell to about 33 pct of revenue from 40 pct and recurring revenue is 24 pct; deferred revenue rose 8.3 pct while nine-month revenue rose 30.5 pct; contracted revenue beyond twelve months is USD660M. Revenue FELL 8.9 pct in fiscal 2024 and fiscal 2025 finished below fiscal 2023.
    What to watch: The Q3 FY2026 8-K accepted 16:09:53 ET on 18 August 2026 and its Exhibit 99.1, read against the Form 10-Q for the quarter ended 30 April 2026 and the Form 10-K for the year ended 31 October 2025. Orders of USD2,091M exceeded revenue of USD1,846M - a 1.13x book-to-bill against 0.99x a year earlier - while that 10-K expects most backlog to become revenue within SIX months. Spirent closed 15 October 2025, so it is in this quarter and not in the comparison.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    16 min
  • FN Stock Q4 FY2026: Fabrinet Earnings - Record Year, It Keeps 12 Cents
    Fabrinet (FN) Q4 FY2026 — Fabrinet furnished its Q4 and full-year FY2026 results on an 8-K accepted 16:22:03 ET on Monday August 17 (EDGAR filing-index page), with the call at 5:00pm ET - an AFTER-THE-CLOSE print, so Tuesday Aug 18 is the reaction session and it is fully settled. The shares closed USD482.59 against Monday's USD598.58, DOWN 19.38 pct close to close - the 2nd worst of 2,671 sessions since 2016, behind only minus 21.87 pct in January 2025 - on 3,159,345 shares, 4.27x the 20-session median and the 9th heaviest ever. But the stock had run UP 13.82 pct in the four sessions into the print, so net from Aug 11 to Aug 19 it is down 13.56 pct.
    Fabrinet (NYSE: FN) provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to OEMs. It is a Cayman Islands company operating principally from Thailand, reports under US GAAP in US dollars, and employed 21,521 people at 26 June 2026 - 21,020 of them in manufacturing operations and 21,221 in the Asia-Pacific region. Its customers own the product designs and consign their own production tooling to Fabrinet's floor, and firm purchase orders do not typically extend beyond 13 weeks. Seamus Grady has been chief executive since 2017.
    THE CALL: AVOID (3/5, MEDIUM - A SUPERBLY RUN ASSEMBLER ON A TWELVE-CENT MARGIN, AT THE RICHEST MULTIPLE IN ITS GROUP) — base-case value ~$385.62 vs ~$454.55 today.
    KEY METRICS:
    - Q4 FY2026 revenue USD1,315.8M, up 44.6 pct on USD909.7M, above the guided range; GAAP net income USD139.3M and GAAP diluted EPS USD3.83; non-GAAP net income USD149.1M and non-GAAP diluted EPS USD4.10 against USD2.65, beating a USD3.81 consensus by 7.6 pct on revenue that beat by 3.1 pct. Full year revenue USD4,641.1M, up 35.7 pct; GAAP EPS USD13.05; non-GAAP EPS USD14.09.
    - The margin that does not move: gross profit USD556.5M on a 12.0 pct gross margin, against 12.1 pct last year and 12.4 pct the year before - across which revenue grew 61.0 pct. Cost of revenue is 88.0 pct of sales. Non-GAAP operating margin improved to 10.8 pct from 10.5 pct purely on overhead, with SG&A held to USD93.5M, 2.0 pct of sales against 2.6 pct.
    - Cash and structure: free cash flow USD4.2M against USD207.3M last year, so 0.9 pct of USD473.0M of net income reached cash; operating cash flow fell 21.8 pct to USD256.7M while capital spending more than doubled to USD252.5M. Inventory rose 75.8 pct to USD1,021.2M and receivables 34.1 pct to USD1,017.9M. Purchase obligations to third parties total USD3.15 billion, 5.66x a year of gross profit.
    What to watch: The Q4/FY2026 8-K accepted 16:22:03 ET on 17 August 2026 and its Exhibit 99.1, read against the Form 10-K accepted 07:12:07 ET the next morning. Item 1 of that 10-K names the four customers above 10 pct of revenue - Cisco 19.9 pct, NVIDIA 16.3 pct, Nokia 10.7 pct and Amazon 10.5 pct - against two the prior year, and shows NVIDIA falling from 35.1 pct two years ago. The same 8-K discloses a THB 2.50 billion term loan, about USD75.0M, drawn the day of the print.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    15 min
  • THCH Stock Q2 2026: Tim Hortons China Earnings - Sales Fell 22%, You Own A Third
    Tims China (THCH) Q2 2026 — Tims China furnished its Q2 2026 results on a 6-K accepted 06:52:55 ET on Tuesday August 18 (EDGAR filing-index page), with the call at 8:00am ET - a BEFORE-THE-OPEN print, so Tuesday Aug 18 is the reaction session and it is fully settled. The shares closed USD1.38 against Monday's USD1.70, DOWN 18.82 pct close to close, the 3rd worst of 974 sessions since it began trading as Tims China in September 2022, on 7,802 shares - just 1.00x its own 20-session median. The next session fell a further 7.97 pct to USD1.27 on 48,520 shares, a new twelve-month low. Two sessions: minus 25.29 pct.
    TH International Limited (Nasdaq: THCH), which trades as Tims China, is the exclusive master franchisee of Tim Hortons coffee shops in mainland China, Hong Kong and Macau. It is a Cayman Islands company headquartered in Shanghai, reports under US GAAP in renminbi, and had 1,028 system-wide stores at 30 June 2026 - 544 company-owned and 484 franchised - with 37.1 million registered loyalty club members. Kwok Wah Cheung became chief executive on 15 June 2026. The brand is licensed from Tim Hortons Restaurants International GmbH under a master development agreement running to 2038.
    THE CALL: SELL (3/5, MEDIUM - A RESIDUAL CLAIM BEHIND USD222.7M OF PRIOR CLAIMS, WITH A CONVERSION PRICE AS ITS CEILING) — base-case value ~$0.65 vs ~$1.27 today.
    KEY METRICS:
    - Q2 2026 total revenues RMB273.4M (USD40.3M), down 21.7 pct; company-owned store revenue RMB220.9M, down 21.6 pct; other revenues RMB52.5M, down 21.7 pct; system sales RMB347.8M, down 15.1 pct; adjusted corporate EBITDA a RMB21.0M LOSS against a RMB2.2M profit a year earlier; net loss RMB97.4M; basic and diluted loss per ordinary share RMB3.00 versus RMB2.32, and RMB1.69 on the company's own adjusted basis.
    - Operating data: system-wide same-store sales minus 17.8 pct, after minus 13.2 pct in Q1 and minus 4.8 pct a year earlier; orders at company-owned stores 10.5 million to 8.3 million, down 20.7 pct, on an average ticket down only 0.9 pct; 2 net new stores (15 made-to-order opened, 13 older-format closed); 1,028 system-wide stores versus 1,015; loyalty club members 37.1 million, up 41.7 pct.
    - Capital structure at 30 June 2026: convertible notes carried at RMB1,183.7M (USD174.5M) against a USD42.2M market value of the equity; bank borrowings RMB448.4M, all current; lease liabilities RMB345.1M; cash and restricted cash RMB121.1M; total shareholders DEFICIT RMB1,406.7M. Net debt USD222.7M is 5.3x the equity; enterprise value USD264.9M is 1.50x trailing revenue of USD176.4M.
    What to watch: The Q2 2026 6-K accepted 06:52:55 ET on 18 August 2026, read against the 2025 Form 20-F filed 30 April 2026. Notes 15 and 17 of that 20-F set out a convertible stack of USD166.3M of principal - USD45.0M Series A, USD15.74M Series A-1, USD89.9M senior secured and USD15.62M drawn in July 2026 - all convertible at USD2.7822 a share into 59.77 million ordinary shares against 33.24 million outstanding, and all held by the brand owner, Cartesian and Sona.
    Also on YouTube: @ChargedAlpha
    DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.
    16 min

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