Author: Cornelio Ash

Cornelio Ash is a senior equity analyst and member of the U.S. Focus List and the Global Focus List Committees, which approves all equity recommendations for developed, emerging, and frontier markets. He is also a lead for the Technology sector and specializes in the Americas region. Cornelio joined the firm in 2005 and received his B.A. in Finance from California State University, Northridge. He holds a Series 65 securities license.

ServiceNow

Posted on by Cornelio Ash

Key points from this report:

 

  • Strong Q2 FY20 results, beat across all metrics. Reported adjusted EPS of $1.23 (+73% y/y) and revenue of $1.071B (+28% y/y), both above expectations of $1.01 and  $1.048B, respectively.
  • Subscription revenue increased 30% y/y to $1.016M (95% of total revenue) and is on pace for an annualized run rate of +4B. The subscription revenue segment has higher gross margins, which aids overall expansion. In Q2, adjusted gross margin expanded 200bps y/y to 83% while operating margin expanded 900bps to 28%, mainly driven by strong subscription gross margin.
  • As of Q2, ServiceNow’s total number of deals with an annual contract value (ACV) greater than $1M stands at 964 (+26% y/y; +3% q/q). The company plans to increase the number of deals of that size to 2K+ by 2023.
  • ServiceNow raised full-year subscription revenue guidance by $60M and subscription billings guidance by $50M, which includes $18M and $22M FX tailwinds, respectively. Also raised operating margin by 100bps.

CoStar Group

Posted on by Cornelio Ash

Key points from this report:

 

  • The stock gapped up through its pivot of $747 on better-than-expected Q2 FY20 results. Allow the stock to consolidate as moving averages catch up to price.
  • Countercyclical strength: During the quarter, traffic on Apartments.com and LoopNet reached new highs, exceeding pre-pandemic levels.
  • Reinstated FY20 guidance: For FY20, CoStar sees EPS of $9.32 (-9%) and revenue of $1.63B (+17%), both above consensus of $9.28 and $1.62B, respectively. Ten-X is expected to contribute $27.5M to revenue. It expects adjusted EBITDA of $520M (+3% y/y), above consensus of $508M.

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: MDU Resources ( MDU ), Bank of New York Mellon (BK), Integra Lifesciences ( IART ), Coherent ( COHR ), J2 Global ( JCOM ), Aspen Technology ( AZPN ).

 

Developed: Oji Holdings ( OJIH.JP, 3861 JP ), Optorun Co Ltd ( ORUN.JP; 6235 JP ), Central Japan Railway ( JRCE.JP; 9022 JP ), Salmar ( SALM.NO; SALM NO ), AAK ( AAK.SE; AAK SS ), MS&AD Insurance Group ( MSAD.JP; 8725 JP ), H. Lundbeck ( LUN.DK; LUN DC ), Matsumotokiyoshi ( MAYI.JP; 3088 JP ), Hennes & Mauritz ( HMBF.SE; HMB SS ), China Mobile ( CHT.HK; 941: HK ), MTR ( MTRC.HK; 66 HK ).

 

Emerging:  Formosa Petrochemical ( FPC.TW; 6505 TT ).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Heico (HEIA), Mastec (MTZ), Hess (HES), Assurant (AIZ), Select Medical (SEM), Motorola (MSI), Amdocs (DOX), FireEye (FEYE).

 

Developed: Shimizu (SZ@N.JP;1803 JP), Technopro (TPRO.JP; 6028 JP), Toho (TOHO.JP; 9602 JP), Nagoya Railroad (NGYR.JP; 9048 JP), British American Tobacco (BATS.GB; BATS LN), Ramsay Health Care (RHC.AU; RHC AU), T-Gaia (TPRK.JP; 3738 JP), MTR (MTRC.HK; 66 HK).

 

Emerging: Formosa Petrochemical (FPC.TW; 6505 TT), President Chain Store (PCS.TW; 2912 TT).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Kratos Def & Sec Sol (KTOS), Xylem Inc (XYL), Willscot (WSC), Manpower (MAN), Fox (FOX), Marriott International (MAR), Cabot Oil & Gas (COG), Capital One Financial (COF), Jazz Pharmaceuticals (JAZZ), Motorola (MSI).

 

Developed: MMC Norilsk Nickel (MNOD.GB; MNOD LI), Sohgo Securities (SOSE.JP; 2331 JP), Brilliance China Automotive (CBA.HK; 1114 HK), Bandai Namco (N@MB.JP; 7832JP), Bank Hapoalim BM (POLI.IL; POLI IT), Sonova (SOON.CH; SOON SW), T-Gaia (TPRK.JP; 3738 JP), Zensho (ZENS.JP; 7550 JP).

 

Emerging:  Feng Tay (FEN.TW; 9910 TT), Formosa Petrochemical (FPC.TW; 6505 TT).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Grace W R & Co (GRA), Hubbell Inc (HUBB), Xylem Inc (XYL), CSG Systems (CSGS), Fox Corporation (FOX), Columbia Sports (COLM), U D R (UDR), Public Storage (PSA), ICU Medical (ICUI), Urban Outfitters (URBN), Vishay Intertechnology (VSH).

 

Developed: Oji Holdings (OJIH.JP; 3861 JP),  Sohgo Securities (SOSE.JP; 2331 JP), Aisin Seiki (ZQ@N.JP; 7259 JP), CTS Eventim (EVDX.DE; EVD GR), Swiss Prime Site (SPSN.CH; SPSN SW), Sonova Holding (SOON.CH; SOON SW), Toho Holdings (TOHP.JP; 8129 JP), Konami Holdings (KONA.JP; 9766 JP).

 

Emerging: Fomento Economico Mexicano (FMU.MX; FEMSAUBD MF), Pick N Pay stores (PIKJ.ZA; PIK SJ).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: M D U Resources Group (MDU), Curtiss-Wright (CW), Weibo (WB), Vail Resorts (MTN), Glacier Bancorp (GBCI), HCA Healthcare (HCA), Core Mark Holdings (CORE), Motorola Solutions (MSI), Commvault Systems (CVLT), Ambarella (AMBA).

 

Developed: MMC Norilsk Nickel PJSC (MNOD.GB; MNOD LI), Ck Hutchison Holdings (CHGK.HK;1 HK), Sega Sammy Holdings (SESA.JP; 6460 JP), Mowi (MHG.NO; MOWI NO), Sawai Pharmaceutical (SAWI.JP; 4555 JP), Toho Holdings (TOHP.JP; 8129 JP), Konami Holdings (KONA.JP; 9766 JP).

 

Emerging: Tenaga Nasional (TENN.MY; TNB MK), Pick N Pay Stores (PIKJ.ZA; PIK SJ).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: A G C O Corp (AGCO), Fox Corporation (FOX), Post Holdings (POST), UGI Corp (UGI), AFLAC (AFC), Integra Lifesciences (IART), Plexus Corp (PLXS), Perspecta (PRSP).

 

Developed: Securitas B (SUBF.SE; SECUB SS), Saab B (SAAB.SE; SAABB SS), SGS SA (SGSN.CH; SGSN SW), Japan Tobacco (ABOT.JP; 2914 JP), Sumitomo Realty Development (CK@N.JP; 8830 JP), Straumann (STMN.CH; STMN SW), T-Gaia (TPRK.JP; 3738 JP), NTT Docomo (TTMO.JP; 9437 JP).

 

Emerging: KT&G (KTB.KR; 033780 KS), Tenaga Nasional (TENN.MY; TNB MK), Samsung Securities (SSR.KR; 016360 KS).

Global Laggards

Posted on by Cornelio Ash

Highlighted Charts

 

U.S.: Lennox International (LII), Weibo (WB), Post Holdings (POST), American Financial Group (AFG), Invitae (NVTA), Vishay Intertechnology (VSH), CDK Global (CDK).

 

Developed: Oji Holdings (OJIH.JP; 3861 JP), Kyowa Exeo (KYEX.JP; 1951 JP), Amada Holdings (AM@N.JP; 6113 JP), NTT Docomo (TTMO.JP; 9437 JP), Ajinomoto (AJ@N.JP; 2802 JP), Sumitomo Realty Development (CK@N.JP; 8830 JP), Orpea (ORP.PR; OPRR EB), Toho Holdings (TOHP.JP; 8129 JP), Bureau Veritas (BVI.FR; BVI FP), Mtr (MTRC.HK; 66 HK).

 

Emerging: Telefonica Brasil (TCL.BR; VIVT4 BZ).