Charged Alpha Stock Encyclopedia

Daktronics (DAKT) Q1 FY2027 — The stock opened $21.50 and touched $21.82, then closed at $19.13 - down 1.2% from the $19.36 prior close - on 2.86 million shares against a roughly 470 thousand average.

Daktronics posted its highest diluted EPS in twelve quarters, 40 cents against 33, on sales up 7.1% and a 10.6% operating margin. It also booked $191.8m of new orders against $234.6m of sales - a book-to-bill of 0.82 against 1.09 in the same quarter last year - and the product backlog fell $44.9m in thirteen weeks to $311.3m. The 10-Q states the mechanism in its own words: backlog fell on the conversion of existing backlog into revenue at a pace that exceeded order intake.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$19.00 vs ~$19.13 today.

KEY METRICS:

- Net sales $234.6m, up 7.1%. Operating income $24.9m, up 7.2%. Net income $19.4m, up 18.0%. Diluted EPS $0.40 against $0.33, and it beat the $0.35 consensus. Highest quarterly EPS in twelve quarters

- New orders $191.8m against $238.5m - down 19.6% - so book-to-bill was 0.82 against 1.09 in the same quarter last year. Daktronics shipped $42.8m more than it booked

- Product backlog $311.3m, down $44.9m in the quarter and $49.0m year on year. Six consecutive quarter-ends above $300m, and this is the smallest of the six. Coverage fell from 1.65 quarters of shipping to 1.33

- Live Events, the largest unit at 37% of sales, shipped $86.4m and booked $47.2m - a 0.55 book-to-bill. Its $45.0m order decline is 96% of the $46.7m company total. Commercial, Transportation and International all booked MORE

- 13 weeks against 14 last year, because FY2026 was a 53-week year. On a per-week basis sales rose 15.4% and orders fell 13.4% - a 28.8-point spread between selling and replacing

- Gross margin 30.5% against 29.7%, and the gain includes tariff refunds the company does not size. Operating expense rose 11.6% on sales up 7.1%. Operating margin was 10.63% against 10.628% - flat

- Pre-tax income rose $3.444m, of which $1.780m - 51.7% - came from below the operating line: interest income and a smaller FX loss. Effective tax rate 24.3% against 25.9%

- Cash $154.6m against $10.6m of gross debt. Net cash $143.9m, 15.6% of market value. Operating cash flow $31.4m, free cash flow $27.5m. $4.4m of buybacks against $10.7m a year ago

- Trailing twelve months: sales $854.3m, operating income $62.5m (7.3% margin), EPS $0.99. At $19.13 that is 19.3x earnings and 12.4x EV/EBIT on a $920m market value and $776m EV

What to watch: Q2 new orders and closing backlog, in the same table of the early-December release. Above $235m of orders confirms the slipped-contract explanation. Below $200m for a second straight quarter, with backlog through $300m, and this was not timing

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Sprinklr (CXM) Q2 FY2027 — The stock fell 8.6% the same session, from $7.60 to $6.95, on 8.2 million shares against a 3.6 million average.

Sprinklr grew subscription revenue 3.4% and the cost of delivering that subscription grew 17.8%, so subscription gross profit went BACKWARDS year on year. Operating expense moved 0.27%. The gross line explains 86% of a $6.3m fall in operating income, and 75% of the fall in gross profit came from professional services - a segment that is 8.8% of revenue and lost 25 cents on every dollar it billed.

THE CALL: BEARISH (3/5, MODERATE) — base-case value ~$5.19 vs ~$6.95 today.

KEY METRICS:

- Total revenue $213.7m, up 0.8%. Subscription $194.8m, up 3.4%. Gross profit $139.2m, DOWN 3.7%. GAAP operating income $10.0m against $16.3m - a 39% fall on a flat top line

- Subscription cost of revenue rose 17.8% to $50.9m while subscription revenue rose 3.4%, so subscription gross profit FELL, $145.3m to $144.0m. Margin 73.9% against 77.1%

- Subscription gross margin by fiscal year: 82.6% (FY2024), 80.4% (FY2025), 76.4% (FY2026), 73.9% now. At the FY2024 margin this quarter earns $17.1m more gross profit

- Professional services: revenue $18.9m, down 19.8%; cost of delivery $23.7m, down 2.4%. A $0.7m gross loss became $4.8m - 75% of the fall in gross profit on 8.8% of revenue

- Operating expense is flat: research, sales and admin went $129.3m to $129.7m, up 0.27%. The gross line explains 86% of the $6.3m operating income decline

- The FY2026 10-K said so in writing: gross margin 'will decline in the near term due to higher data and hosting costs, coupled with higher service delivery costs'

- FY2026 subscription cost carried '$33.3 million' more of third-party data, cloud and network infrastructure. $70.9m of non-cancellable hosting commitments fall due in FY2027

- Non-GAAP operating income $31.3m, down 18.2%, margin 14.6% against 18.0% - but it BEAT the $29.5-30.5m guided in June. Revenue missed its own $214-215m guide

- Guidance since March: non-GAAP operating income $144-146m cut to $139-141m; revenue $869-871m cut to $866.5-868.5m. Profit moved $5.0m, revenue $2.5m

- $452.9m cash and securities, no borrowings. $200m buyback authorised March 2026, $125.8m executed in H1. Diluted shares down 9.6% to 237.8m

- Free cash flow $78.9m in the half against $110.5m, down 28%. Total RPO grew 11% to $1.03bn while revenue grew 1% - the strongest argument against our call

- Our model: FY2027 revenue $868m, gross margin held at 65.5%, opex $527m, 9% discount rate. Bear $3.10, base $4.96, bull $8.13, weighted 30/45/25 = $5.19

What to watch: Subscription gross margin back above 76% - the FY2026 level - for two consecutive quarters, or professional services back to breakeven. The Q3 release in early December carries both

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Brown-Forman (BFB) Q1 FY2027 — The stock rose 3.9% the same session, from $26.36 to $27.38, on 4.0 million shares against a 2.9 million average.

Brown-Forman grew organic operating income 4% and reaffirmed its full-year outlook - an outlook that calls for organic operating income to FALL 3% to 5%. Q1 is about a quarter of the year's profit, so the remaining nine months have to fall roughly 5% to 8%: a 9 to 12 point deceleration the company printed without ever writing down. The shares rose on the reaffirmation.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$26.28 vs ~$27.38 today.

KEY METRICS:

- Net sales $911m, down 1% reported and organic. Gross margin EXPANDED 40bp to 60.2%, but operating margin fell 50bp to 27.7% and operating income fell $8m to $252m

- Organic operating income +4% against a REAFFIRMED full-year guide of -3% to -5%. On Q1's 23-26% share of the year, the remaining nine months must fall about 5% to 8%

- Diluted EPS $0.38, up 6%, entirely from below the operating line: non-operating postretirement expense fell $19m to $1m and diluted shares fell 2.8% to 459.5m

- Advertising fell 5% to $114m on what the release calls 'the timing of spend' - roughly 2.5 of the 4 points of organic profit growth is a cost deferred, not saved. SG&A +4%

- The prior-year base was flattered about $6m net: an $18m substitution drawback benefit (all claims now collected) against a $12m restructuring charge that did not repeat

- Depletions +8% and shipments +7% while net sales fell 1% - revenue per case down about 8.3% on our arithmetic. Mix, not destocking: shipments did not fall below depletions

- Brand write-downs three years running and compounding: $7m FY2024, $47m FY2025, $132m FY2026 - 13% of that year's $1,001m operating income

- DUAL CLASS: 168.5m voting A at $27.92 plus 290.4m non-voting B at $27.38 is $12,655m of equity, not the $12,768m one price on a blended count gives. Net debt $2,140m

- Free cash flow $161m, but $28m of the $32m gain is capex cut to $12m. CEO Lawson Whiting is retiring on appointment of a successor; none named

- Owner-earnings DCF: bear $15.79 (7.5% rate), base $25.34 (7.0%), bull $40.54 (6.5%), weighted 30/45/25 to $26.28. Half a point of discount rate moves the base case 11%

What to watch: Organic operating income in the October quarter, filed in early December, comes in flat or better - which would mean the reaffirmed full-year decline cannot happen without a collapse in the back half

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Dell Technologies (DELL) Q2 FY2027 — The stock rose 15.8% the next session, from $425.00 to $492.20, on 6.2x normal volume.

Dell grew revenue 58% to $46.97bn, trebled non-GAAP EPS to $7.04 against a $4.91 Street bar, expanded every margin it reports, and added $25bn to its own full-year guide. Free cash flow still fell 47%, to $986m. The record $8,149m of 'adjusted free cash flow' in the headline is that $986m plus $6,667m of financing receivables - money owed by customers for equipment Dell financed itself.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$436 vs ~$492.20 today.

KEY METRICS:

- Revenue $46,971m (+58%), non-GAAP EPS $7.04 (+203%), GAAP EPS $6.34 (+273%). Beat its own 28 May guide by 5.6% on revenue and 46.7% on EPS - the bar was RAISED first, not cut

- Free cash flow $986m, DOWN 47% year over year, while reported net income rose 255% to $4,133m. Operating cash flow fell 13% to $2,225m

- The record $8,149m 'adjusted free cash flow' is $986m plus $6,667m of financing receivables plus $496m of equipment under operating leases - 88% of it is the add-back (FY2026: 26%)

- Financing receivables went from $13,950m at 1 May to $20,430m at 31 Jul - $6,480m in ONE quarter, against $2,858m across the SEVEN quarters before it

- We tested AI margin dilution and it is NOT present: gross margin 18.3% to 20.9%, non-GAAP operating margin 7.7% to 12.6%, ISG segment margin 8.8% to 15.0%

- ISG revenue $31,782m (+89%); AI-optimised servers $16,401m (+100%); traditional servers and networking $10,531m (+122%); storage $4,850m (+26%); CSG $15,034m (+20%)

- FY2027 revenue guide: $140.0bn on 26 Feb, $167.0bn on 28 May, $192.0bn now. Non-GAAP EPS guide $12.90, then $17.90, then $25.50

- AI orders $60.9bn booked in the quarter (April: $24.4bn) but recognised AI revenue only went $16.1bn to $16.4bn; backlog $95bn, management's figure

- Balance sheet: inventory $10,437m to $21,290m, payables $33,630m to $49,723m, book equity NEGATIVE $1,427m, total debt $34,466m against $11,569m cash

- Reverse DCF: the $492.20 close needs about $21.0bn of steady-state free cash flow - 2.5x what this year is tracking and 1.26x the whole year's guided non-GAAP profit

- Twelve post-print targets, all twelve raised, nine buy-equivalent and not one sell. Mean $586, range $499 (Morgan Stanley) to $735 (Melius). We are 26% below

What to watch: The October-quarter financing receivable balance adds less than about $2bn while AI revenue keeps growing - OR two consecutive quarters print more than $4bn of PLAIN free cash flow, putting the year near $12bn

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

FuelCell Energy (FCEL) Q3 FY2026 — The stock fell 15.7% on the print, from $17.08 to $14.40, on 1.9x average volume.

FuelCell Energy tripled its order book to $3.65bn and signed its first data-centre power agreement - and the stock lost about a sixth of its value in a single session. The reason is four lines into the cost statement: product revenue of $18.0m against product cost of revenues of $37.1m, a product gross margin of -106.1%. Note 7 of the 10-Q explains it - a $17.0m charge, $4.0m writing inventory to net realisable value and $13.0m for losses on firm purchase commitments, booked because contractual pricing under the Fit Energy agreement sits below what it costs to manufacture. That charge covers Phase 0 alone: 30 MW of a 380 MW agreement. Strip it out and the product margin is -11.7%, against -11.9% a year ago. Meanwhile $2.35bn of the new backlog is 'Awarded Capacity' the customer may take at its sole option, and FuelCell handed that customer warrants over 12,000,000 shares with a $141.6m grant-date fair value that will come back out as a reduction of revenue. Our call is AVOID, conviction 4/5, fair value $8.30.

THE CALL: AVOID (4/5, HIGH) — base-case value ~$8.3 vs ~$14.4 today.

KEY METRICS:

- Revenue $33.0m, down 29% YoY and about 15% below the $38.8m consensus

- Loss per share $(0.64) against a $(0.41) bar - roughly 56% wider than expected

- Gross loss $(24.5)m vs $(5.1)m - gross margin -74.2% against -11.0% a year ago

- Product revenue $18.0m against product cost of revenues $37.1m: product margin -106.1%

- Note 7 charge $17.0m = $4.0m inventory NRV + $13.0m losses on firm purchase commitments

- Ex-charge product gross margin -11.7%, versus -11.9% a year earlier - no improvement

- 14th consecutive quarter without a gross profit; the last was the quarter ended 31 Jan 2023

- Adjusted EBITDA $(36.7)m vs $(16.4)m - 124% worse, while the operating loss halved

- Backlog $3.65bn total, but $2.35bn is customer-optional Awarded Capacity, not orders

- Warrants over 12,000,000 shares at $26.44 issued to the customer; $141.6m grant-date fair value

- Cash $658.1m unrestricted; total debt $153.6m; 79,954,196 shares on the 10-Q cover

- Shares outstanding +73.5% in nine months, from 46,075,237 to 79,954,196

- Annualised production rate 37.1 MW against a Torrington plant planned for 500 MW

What to watch: product gross margin turns positive in any single quarter while product revenue is growing, OR Fit elects Phase 1 and the non-refundable deposit is actually received

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Palo Alto Networks (PANW) Q4 FY2026 — The stock fell 9.3% the next session, from $362.09 to $328.48.

Palo Alto beat every line of its own guidance, grew revenue 34.5% to $3.41bn, and guided fiscal 2027 above consensus on both revenue and earnings - and the shares still fell 9.3%. The reason sits in a table the company published three months earlier: on a pro forma basis, as though it had always owned CyberArk and Chronosphere, the combined business grows about 16%, not 34.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$231 vs ~$328.48 today.

KEY METRICS:

- Revenue $3,410m (+34.5%) and adjusted EPS $1.02 - both above the TOP of the 2 June guide ($3.345-3.355bn, $0.96-0.98). The bar was not lowered first; we checked

- The company's own pro forma table (April 10-Q, Note 7) puts combined growth at +16.1% for the quarter and +17.4% for nine months

- The two quarters that closed before either deal grew +15.7% and +14.9%; the two after grew +31.2% and +34.5%

- FY2027 guide: revenue +23.3% but adjusted EPS +8.7% - diluted shares go from 764m to about 845m (+10.7%)

- Adjusted operating margin 28.76% (FY25) to 29.23% (FY26) to 29.50% guided - 74bp in three years on 54% more revenue

- GAAP: Q4 operating income $172m vs $497m, a net LOSS of $282m (-$0.35); FY2026 GAAP EPS $0.40 vs $1.60

- Cash is the strong part: operating cash flow $4,553m, adjusted free cash flow $4,414m (38.4% margin), net cash $6,132m

- But adjusted FCF is struck before $1,712m of share-based compensation (14.9% of revenue) - owner earnings about $2,702m

- CyberArk closed 11 Feb 2026 for $21.06bn, $18.49bn of it in 112 million NEW shares; Chronosphere closed 29 Jan for $2.95bn cash

- Goodwill $22,010m plus intangibles $7,017m is 59.9% of a $48,460m balance sheet; tangible book value is negative $1,535m

- Reverse DCF: the $328.48 close needs about 24.7% a year of owner-earnings growth for five years; the Street's $397 mean needs 28.4%

What to watch: July-quarter fiscal 2027 revenue grows more than 20% year over year - the first quarter with CyberArk fully inside both years - OR fiscal 2028 is guided to grow adjusted EPS faster than 18% on a share count that has stopped rising

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Credo Technology (CRDO) Q1 FY2027 — The stock fell 20.0% the next session, from $206.63 to $165.22.

Revenue rose 9.6% sequentially and adjusted earnings beat. But the $1,251m DustPhotonics acquisition closed on 28 May, inside this quarter, and neither the release nor the Form 10-Q filed the next day discloses one dollar of the acquired revenue - Credo judged the acquisitions immaterial to its results.

THE CALL: AVOID (3/5, MODERATE) — base-case value ~$134.98 vs ~$165.22 today.

KEY METRICS:

- Revenue $479.0m, +9.6% sequentially and +114.7% year on year; non-GAAP EPS $1.20 vs a $1.17 bar

- GAAP EPS fell to $0.67 from $0.88; operating income fell $35.1m while revenue grew $42.0m

- DustPhotonics closed 28 May for $1,251.1m: $769.6m cash, $169.1m shares, $310.0m contingent

- Goodwill $92.8m to $986.4m in one quarter; goodwill plus intangibles is 45.3% of total assets

- No acquired revenue and no pro forma in the 10-Q - Credo states the acquisitions were immaterial

- Working capital absorbed $123.2m, 95% of net income; the acquired balance sheet explains only 7%

- Consensus needs $732m a quarter after October, a 38% step above the $530m Credo actually guided

What to watch: Credo discloses the acquired revenue since 28 May, or an October print at the top of guidance with organic growth broken out

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

GitLab (GTLB) Q2 FY2027 — Shares closed at $49.59 on September 2, up 9.98% on the print - but they opened at $55.20 and handed back more than half the move before the close, on 28.9M shares against a 5.4M daily norm.

GitLab's revenue rose 21.3% to $286.3M and beat its own guide by $13.3M. Gross profit grew only 16.0%. Gross margin fell to 84.1% from 87.9% - the SIXTH consecutive quarterly decline, 513 basis points over eighteen months. The 10-Q names the cause in its own words: of the $17.1M rise in cost of revenue, $11.0M was 'third party hosting costs for SaaS and cloud usage', and another $3.4M and $3.6M of the same hosting sits in selling and engineering. That is $18.0M of the $50.3M of new revenue - 36 cents in every new dollar - going straight back out as rented compute. The marginal gross margin is 66% against 84% on the average book, and subscription cost of revenue grew 75.9% against subscription revenue up 21.5%. Demand is fine and we say so. The problem is that FY2027 adjusted free cash flow of about $240M sits against $255M of stock compensation, so the owner's cash is negative. Our fair value is $23.50 and we rate GitLab a SELL against a $49.59 close.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$23.5 vs ~$49.59 today.

KEY METRICS:

- Revenue $286.3M +21.3%, $13.3M past the guided midpoint; gross profit $240.6M, up only 16.0%

- Gross margin 84.1% vs 87.9% - the sixth straight quarterly fall (89.2 to 84.1, 513bp since Q4 FY2025)

- 10-Q: $11.0M of the $17.1M cost-of-revenue rise is 'third party hosting costs for SaaS and cloud usage'

- Add $3.4M in selling and $3.6M in engineering: $18.0M of hosting against $50.3M of new revenue = 35.8%

- Marginal gross margin 66% against 84.1% on the average book

- Subscription cost of revenue +75.9% against subscription revenue +21.5%

- Non-GAAP diluted EPS $0.24 vs the $0.18 bar; GAAP a LOSS of $0.22 - a $0.46 per-share gap, $75.0M of it stock comp

- EPS basis PROVEN: Q1 $0.23 + Q2 $0.24 = the filed six-month $0.47; $42.093M over 173.949M shares = $0.24

- The JiHu minority earned +$0.712M, so the loss owned by shareholders is $(36.844)M, worse than the group's $(36.132)M

- Receivables swung $61.2M against a $52.5M fall in operating cash flow; DSO 82.0 days vs 76.5

- FY2027 modelled: revenue ~$1,151M +20.5%, adjusted operating margin 15.2% vs 17.0% last year

- Stock compensation ~$255M = 22.2% of revenue; operating margin after grants is MINUS 6.9%

- Adjusted free cash flow ~$240M less $255M of grants = MINUS $16M of owner's cash

- $1,257M of cash and investments, zero borrowings; $7.27 a share of net financial assets after the minority

- Fair value $23.50 = 60% of a DCF charging stock comp in full ($19.49) + 40% at half rate ($29.55); ignored entirely it is $37.33

- Reverse DCF: the $49.59 close needs a 48% terminal operating margin AFTER grants - GitLab has never posted a positive one

What to watch: One flat gross-margin quarter breaks the six-quarter run and we would say so; a marginal gross margin back above 75% would mean the new pricing is finally catching the compute bill

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

MongoDB (MDB) Q2 FY2027 — The stock fell 13.5% the next session, from $434.21 to $375.40.

The contracted backlog nearly doubled to $1.52bn and the tape read that as visibility. The 10-Q says 70.5% of it has never been invoiced to anybody and converts at the customers' own discretion - and only 18% of first-half revenue was sitting on the balance sheet when the half began.

THE CALL: SELL (3/5, MODERATE) — base-case value ~$282 vs ~$375.40 today.

KEY METRICS:

- Revenue $771.8m (+30.5%), the fastest in years; cleared its own 28 May guide midpoint by about $40m

- Remaining performance obligations $1,519.2m (+91%) - but $1,071.5m has never been invoiced (70.5%)

- Deferred revenue FELL to $447.7m from $470.7m at the January year end (-4.9%) while revenue grew 28%

- Only 18% of first-half revenue came from deferred revenue held at the start of it, down from 21%

- Adjusted operating margin 24% vs 15%; GAAP operating income $28.4m - guided NEGATIVE for Q3 and FY27

- FY27 guided stock compensation $628.9m EXCEEDS guided adjusted operating income of $616-636m

- H1 free cash flow $335.2m; $317.9m went to buybacks plus vesting tax - and the share count still rose

What to watch: deferred revenue grows faster than revenue for two straight quarters, OR the reported operating line stays positive through a quarter guided to a loss

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

HealthEquity (HQY) Q2 FY2027 — The stock fell 10.6% the same day, from $104.42 to $93.39.

Records on every line, guidance raised - and the filing shows the company has fixed the rate on $3.04bn of future HSA cash at 3.93%, a position now $91.5m underwater that Note 10 feeds back through custodial revenue.

THE CALL: HOLD (3/5, MODERATE) — base-case value ~$101.27 vs ~$97.00 today.

KEY METRICS:

- Revenue $350.7m (+7.6%); custodial/interest revenue $175.9m (+10.0%) = 50.2% of the company

- Net income $65.6m (+9.7%) but comprehensive income $28.3m (-52.8%)

- Non-GAAP EPS $1.24 (+14.8%); GAAP EPS $0.78 (+14.7%)

- Adjusted EBITDA $167.0m at a record 48% margin; service costs FELL to $73.2m

- Hedge book: 23 Treasury bond forwards, $3.04bn notional at 3.93%, $91.5m unrealised loss

- FY27 guide: revenue +$1m, adj EBITDA +$3m, non-GAAP EPS UNCHANGED at $4.66-$4.73

- HSA assets $37.9bn (+14%); 10.7m accounts (+8%); $231m of buybacks in H1

What to watch: the hedge notional stops growing AND the second half beats $2.25 adjusted EPS

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.