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Financials
Enrique Lores replaces John Donahoe as Independent Board Chair. Lores has overseen more than 98% alpha destruction as a member of PYPL’s board since he joined in 2021 and has not created alpha as a CEO nor a board member in his career. In 2023 he received a "Bad Compliance Record" tag because of his "Level 3" Disclosure Controls and Internal Controls F.L.A.G. (Financial, Legal, Audit, Governance) Risks at HP Inc. Paragon also cautions about his incentive compensation - after only hitting 56% of his incentive targets from 2020-2022, Lores was able to convince the board to materially lower his 2023 incentive thresholds...and he was able to meet or beat all of those targets last year.
Edition: 192
- 09 August, 2024
Technology
HPQ's 3Q23 revenue of $13.2B fell $180M short due to weak PC and printing sales. Earlier, management's $3.5B FCF projection for FY23 was skeptical. Now they have revised it to $3.0B, requiring a challenging $1.8B 4Q23 FCF. Management's explanations were perplexing. Reasons for the EPS and FCF cut included weak Chinese demand, falling printer sales, cautious enterprise spending, and high PC inventory pressuring prices, hinting at future margin issues. Despite this, management claimed 4Q23 margins would be high due to cost reductions. The call lacked AI emphasis, and management admitted a lasting 20% Y/Y printer sales drop's impact.
Edition: 168
- 01 September, 2023
Decoding the Financial World: 10Q/10K text analysis
Utilising AI, NLP, data analytics and qualitative analyst oversight, 280First can rapidly glean material / actionable insights on companies.
Qorvo (QRVO) - Concerns about large customers. The following wording was added to its risk factor in 10K 2022 “The loss of one or more of these customers could have a material adverse effect on our business, financial condition and results of operations”.
HP Inc (HPQ) - Pricing issues. Changed wording in 2Q 10Q vs. prior quarter; “We expect the pricing environment to get more competitive”.
Cavco Industries (CVCO) - Seeing early signs of increasing cancellations?
Ralph Lauren (RL) - Worried about increasing prices and its impact on demand.
Edition: 138
- 24 June, 2022
Technology
How long can HPQ keep raising ASPs while bleeding unit share? For the second quarter in a row PC revenue growth was driven far more by ASPs than volume. While management argues that this is the result of its strategy of targeting premium market segments, OWS notes that operating margins don’t appear to be benefiting. When supply chain problems become less of an issue, how will HPQ grow revenue or operating margin? Meanwhile, the Poly acquisition looks more like an attempt to forestall revenue declines than a brilliant strategic move. TP $19.50 (50% downside).
Edition: 132
- 01 April, 2022