Thursday Afternoon Earnings Roundup: DOCU RH SWBI


Three companies I follow reported earnings Thursday afternoon: Docusign (DOCU), Restoration Hardware (RH) and Smith & Wesson (SWBI).

DOCU was a pandemic darling as everybody used their esignature platform during social distancing. However, the stock has lost 5/6ths of its value over the last two years – and even Cathie Wood bailed out. But the fundamentals are starting to be there. Current quarter billings of $711 million blew away guidance of $646-$656 million. DOCU also raised full year billings guidance to $2804-$2824 million from $2737-$2757 million. DOCU has always been highly profitable and with fundamentals starting to turn I think shares could catch a bid. DOCU shares are currently +4% in the after hours.

Like DOCU, RH shares have been hammered over the last couple of years – though they ran up hard into the today’s earnings report on hopes the luxury home market is in recovery mode. However, RH’s 3Q23 guidance looks to be quite weak – especially operating margins of 8.0%-10.0%. RH shares are currently -9% in the after hours.

SWBI shares have also been a roller coaster over the last few years – trading as high as $37 and as low as $8. Gun sales surged during the pandemic, propelling the stock, but have since tailed off. Nevertheless, I continue to believe that the demand for guns for self defense is in a secular uptrend due to rising crime (consider, for example, all the retailers cutting operating margins due to increased “shrink” i.e. theft of late). SWBI is an unloved and cheap way to play this. SWBI shares are currently +11% in the after hours.

Disclosure: Top Gun is long shares of DOCU and SWBI.

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