Investing

Big Morning Movers: Block (SQ), Expedia (EXPE), Bill Holdings (BILL), Fortinet (FTNT)

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Before markets opened on Friday, the Bureau of Labor Statistics issued its report on October non-farm payrolls and unemployment. The hot demand for labor cooled sharply month over month, from 297,000 new jobs to 160,000. The unemployment rate rose from 3.8% to 3.9%. Higher levels of unemployment typically indicate that inflation is coming under control. That gives investors hope that the Fed will start lowering interest rates again.

In early trading on Friday, the Dow Jones industrials are up 0.54%, the S&P 500 up 0.94% and the Nasdaq Composite up 1.05%. Five stocks traded down by more than 10% in premarket trading this morning, while just two were trading up more than 10%.

Among notable stocks not making huge moves Friday morning was Apple Inc. (NASDAQ: AAPL). Apple reported solid earnings Thursday night, but the forecast was uninspiring and Apple stock traded down about 1% early Friday.

Here’s a look at some of today’s big movers.

Block

After markets closed on Friday, Block Inc. (NYSE: SQ) reported fiscal third-quarter results that beat consensus estimates on both the top and bottom lines.

Estimate Actual Surprise
Revenue $5.42 B $5.62 B 3.7%
Adjusted EPS $0.47 $0.55 17.0%

Year over year, revenue rose by 24.4%, largely due to a jump in bitcoin revenue. Excluding $2.42 billion in revenue from bitcoin sales, Block’s total revenue for the quarter was $3.19 billion.

Quarterly gross profit totaled $1.9 billion, including $45 million from bitcoin sales. Gross profit on bitcoin sales was 2%.

For the fourth quarter, Block expects to report gross profit of $1.96 to $1.98 billion, reflecting an increase of 18% to 19% year over year. The company forecast gross profit for 2023 at $7.44 to $7.46 billion, up 24% year over year.

Block forecast adjusted EBITDA for the 2024 fiscal year at $2.4 billion, in line with the consensus estimate.

Shortly after Friday’s opening bell, Block’s stock traded up 14.5%  at $50.35 in a 52-week range of $38.85 to $89.97.

Expedia

Online travel company Expedia Group Inc. (NASDAQ: EXPE) also reported top-line and bottom-line beats after markets closed on Thursday.

Estimate Actual Surprise
Revenue $3.86 B $3.93 B 1.8%
Adjusted EPS $5.00 $5.41 8.2%

Revenue was up 9% compared to the third quarter of 2022–Expedia’s highest total ever for any quarter. Adjusted net income of $778 million was also the highest quarterly total the company has ever had. EPS rose 33% year over year.

The company reported that it had spent $1.8 billion in share buybacks for the year to date. Expedia’s board has also authorized a new $5 billion share repurchase plan.

Sales and marketing expenses continued to rise, reaching $1.86 billion in the quarter, a year-over-year increase of more than 11%. Operating incoming slipped by 18.7% to $607 million.

Expedia also reiterated full-year guidance for double-digit revenue growth and margin expansion compared to the prior year.

The stock traded up more than 16% at around $110. 15 in a 52-week range of $82.39 to $124.95.

Bill Holdings

Financial automation software provider Bill Holdings Inc. (NYSE: BILL) beat the consensus top and bottom line estimates, but that didn’t tell the full story.

Estimate Actual Surprise
Revenue $298.7 M $3.05 M 2%
Adjusted EPS $0.50 $0.54 8%

Revenue increased by nearly 33% year over year, and profit rose by nearly 80%. Gross margin rose by 1.2 percentage points to 81.6%.

Bill.com’s operating loss was $56.6 million, and the net operating loss on a GAAP basis was $0.26 per share, or $27.9 million. Free cash flow came in nearly 300% higher than in the year-ago quarter at $47.6 million.

The bad news was lodged in the company’s second-quarter and full-year guidance. Second-quarter revenue is forecast at $293 to $303 million, up 13% to 17% year over year, a long way from the 32.6% increase reported for the first quarter. The mid-point of the company’s full-year guidance is in line with the consensus estimate for growth of around 16%. But compared to revenue growth of nearly 65% in the 2023 fiscal year, that’s a sharp decrease.

The stock traded down about 33% at around $60.00 in a 52-week range of $59.00 to $139.50. The low was posted this morning.

Fortinet

Cybersecurity provider Fortinet Inc. (NASDAQ: FTNT) reported mixed third-quarter results after markets closed Thursday.

Estimate Actual Surprise
Revenue $1.35 B $1.33 B -1.5%
Adjusted EPS $0.36 $0.41 13.9%

Revenue rose 16.1% year over year in the first quarter, and adjusted EPS was up by 24.2%. Operating cash flow rose from $483 million to $551.2 million, and free cash flow rose by 21.8% to $481.1 million year over year.

As has been the typical case this earnings season, Fortinet’s guidance rules. The mid-point of fourth-quarter revenue guidance is below the consensus estimate of $1.44 billion, and adjusted EPS guidance is only in line. For the full fiscal year, revenue guidance is slightly below the consensus estimate, and growth of around 20% is well below 2023 revenue growth of 32.2%.

Fortinet stock traded down about 17.6% shortly after Friday’s opening bell, at $47.60, in a 52-week range of $44.15 to $81.24.

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