Daily Update - February 28, 2023

Selected highlights of the day

By: Matthew Otto

Workday

A provider of HR and financial software for large companies, has reported results that exceeded expectations for its fourth fiscal quarter ending on January 31. The company’s overall revenue was $1.65 billion, increasing by 19.6% in comparison to revenue of the previous year. This can be attributed to subscription revenue, which was especially notable with growth at 21.7%, affording a total 24-month backlog amounting to $9.68 billion – a 21.3% jump from last year’s figures, surmounting projections for only 19% augmentation and thereby driving premarket trading stock interests higher. Although venturing an agreeable outlook for the January 2024 fiscal year, Workday securely remains conservative in predictions which has led recently to descent in premarket stock values yet again.

In addition to the previously announced revenue figures, Workday reported a non-GAAP profit exceeding Street consensus, with a mark of 99 cents per share for the fourth quarter of the fiscal year. However, their GAAP earnings were far less impressive which amounted to 49 cents per share. For the whole year, Workday’s revenue saw an impressive 21% increase at $6.22 billion, with subscription revenue soaring even higher at 22.5% to $5.57 billion. On an adjusted basis, results were more positive with the company posting an annual profit at $3.64 a share; compared to these figures, their GAAP earnings equaled a loss of $1.44 per share. Despite these good numbers already detailed though workday’s premarket trading dipped 1.1%. Looking to next year’s projected performance and Workday activity maintained its conservative approach forecasting between 17 and 18 percent growth in Subscription Revenue for 2024 yielding estimated annual income midway between 6.525 and 6.575 billion dollars respectively.

Wall Street Action

• BMO Capital analyst Daniel Jester has upped the price target from $195 to $205, but kept his Outperform rating.
• DA Davidson analyst Robert Simmons increased the target from $205 to $220, yet maintained his Buy rating.
• Wells Fargo’s Michael Turrin raised his target from $145 to $220 and stayed with an Overweight rating.
• Cowen & Co. analyst J. Derrick Wood increased his price target from $225 to $230 with an Outperform rating.
• Oppenheimer’s Brian Schwartz raised the price target to $220 and an Outperform rating.
• Canaccord Genuity analyst David Hynes set a Buy recommendation and upgraded his price target from $200 to $210.
• Morgan Stanley analyst Keith Weiss has increased his price target from $220 to $230 while maintaining an Overweight rating.
• Stifel analyst Brad Reback revised his price target to $210 while keeping a Buy rating.
• Mizuho analyst Siti Panigrahi raised his price target from $200 to $225 and kept a Buy rating.
• Baird analyst Mark Marcon downgraded from $223 to $220 as he maintained an Outperform rating.
• Citigroup analyst Steven Enders raised his price target from $185 to $203 while remaining Neutral.
• Barclays analyst Raimo Lenschow downgraded his price target from $220 to $216 with an Overweight rating.
• Needham analyst Scott Berg reiterated a Buy rating and upped the price target to $220.
• Piper Sandler’s Brent Bracelin raised his price target from $184 to $215 and kept an Overweight rating.

BioMarin

Has announced record total revenues for the fourth quarter and full year of 2022, driven by strong global demand for VOXZOGO and steady growth of its enzyme business. Total revenues for the fourth quarter were $537.5 million, up 19% compared to the same period in 2021. The increase in total revenues was attributed to higher VOXZOGO commercial sales due to continued global market expansion, higher NAGLAZYME and ALDURAZYME product revenues, and lower KUVAN product revenues due to generic competition. The company expects more than 15% growth in total revenues and approximately 30% growth in net income in 2023, with VOXZOGO revenues expected to more than double. The European commercial launch of ROCTAVIAN is underway, and U.S. launch preparations are ongoing. BioMarin’s GAAP net loss decreased to $0.2 million for the fourth quarter of 2022, and non-GAAP income increased to $67.4 million, primarily driven by higher gross profit due to increased sales volume.

VOXZOGO

Is a revolutionary new brand name for BioMarin’s investigational gene therapy intended to treat hemophilia A. This help can provide hope to those with deficiency in their body’s Factor VIII protein, something a single infusion into the bloodstream of sufferers could address and ameliorate long term symptoms from this debilitating disorder. In 2020 Subsequent to the VOXZOGO therapy receiving Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA), FDA approval of its use was bestowed in December 2021.

• Wedbush analyst Andreas Argyrides has lowered his price target from $83 to $74 while maintaining a Neutral rating.
• Canaccord Genuity analyst Whitney Ijem has reduced her price target of the company from $119 to $112 with affirmed her Hold rating.
• Morgan Stanley analyst Matthew Harrison adjusted the price target to $131 from $132 while keeping an Overweight rating.
• Credit Suisse analyst Tiago Fauth raised his price target from $110 to $127, keeping his Outperform rating.
• Stifel analyst Paul Matteis held his Buy recommendation and raised his price target from $114 to $118.
• Guggenheim analyst Debjit Chattopadhyay stayed with Buy rating and a price target of $125.

I-BONE

A medical device company dedicated to treating musculoskeletal disorders, has released its financial results for the fourth quarter and entirety of 2022. The worldwide revenue reported garnered an impressive 32.0 million, signifying a 27% improvement when compared with the same period in the previous year. As a result of thriving consumer demand, the full year takings rose by 18%, exceeding 106.4 million. In the U.S $30.0 million  was made in earnings in the fourth quarter alone, which constitutes a 28% increase; this figure extended even higher in the entirety of 2022 at 98.8 million, which equally experienced an extensive 19% boost on prior year figures. Valuable yet merited gross margins were achieved in both instances: 84% during Q4 and 85% the year round. Together with the evident success story that have become integral in I-BONE’s identity, further preservation has guaranteed future longevity as one look down refinancing avenues; evidenced via arranging a new $51 million credit package comprising of $36 million set aside for loans, complemented by an undrawn reservoirs of $15 million for distributed overdraft reliances.

• Cantor Fitzgerald analyst Ross Osborn has raised his price target from $22 to $24 and kept an Overweight rating.
• Canaccord Genuity analyst Kyle Rose has lifted his price target from $21 to $24 with a Buy rating retained.
• Drew Ranieri of Morgan Stanley set a $22 target price while maintaining an Overweight rating.
• Needham analyst David Saxon kept his target price at $24 and Buy rating.
• Truist Securities’ David Rescott set $26 while maintaining a Buy rating.

Trex Company

Has announced its fourth quarter and full year 2022 results. The company reported net sales of $192 million for the quarter and $1.1 billion for the year. The fourth-quarter gross margin was 34.1%, up 960 basis points sequentially from the third quarter of 2022. The quarterly net income was $10 million, and the diluted earnings per share were $0.09. For the full year, net income was $185 million, and diluted earnings per share were $1.65. The company returned $395 million to shareholders through share repurchases in 2022 and completed the channel inventory recalibration by year-end 2022. Trex Commercial Products have been divested, and the company has provided 2023 financial outlook. The adjusted quarterly net income was $25 million, and the adjusted quarterly EPS was $0.23, excluding one-time non-cash loss on the sale of Trex Commercial and non-executive retention compensation. Adjusted fourth-quarter EBITDA was $46 million, and the adjusted fourth-quarter EBITDA margin was 24.1%, excluding the aforementioned adjustments.

Outlook

According to Trex Company’s CEO Bryan Fairbanks, the company completed its channel inventory recalibration by year-end 2022, allowing the company to focus on its residential business in 2023. Trex plans to drive accelerated wood conversion, reinforce its market leadership position, and invest in the Trex brand while commercializing new products. The company’s product line-up for 2023 offers products at every price point designed to resonate with consumers seeking to optimize their outdoor living experience. Trex anticipates first quarter 2023 net sales to be in the range of $230 million to $240 million and expects full year 2023 EBITDA margin to be in the 26% to 27% range. The company’s plants were building to an annual revenue rate of $1 billion in the first two months of the 2023 first quarter, with capital expenditures for 2023 anticipated to be in the $130 million to $140 million range.

Wall Street Action

• Credit Suisse analyst Dan Oppenheim set his price target from $43 with an Underperform rating.
• B. Riley Securities analyst Alex Rygiel reduced his price target from $65 to $62 while maintaining a Buy rating.
• Timothy Wojs of Baird stuck to his Neutral rating while increading his price target to $58 up from $52.
• Matthews Bouley of Barclays adjusted the Equal-Weight rating and raised a new price target to $53 up from $51.
• Trey Grooms kept his Overweight rating and increase his price target from $53 to $65.
• Jeffrey Stevenson kept his Hold rating and lifted the price target to $55 up from $52.

MRNA