Daily Stock Update: May 25, 2023

Welcome to today’s stock update! In this post, we will be discussing the recent financial reports of five companies: CSW Industrials, GDS Holdings Limited, NVIDIA, EnerSys, and StepStone Group. We’ll take a closer look at their results from the fourth quarter and full year of fiscal 2023, as well as any noteworthy announcements from these companies. Let’s dive in!

CSW Industrials Reports Record Results for Fiscal 2023: Should You Buy?

CSW Industrials, Inc. is a company that provides a range of industrial products to various sectors including agriculture, building and construction, energy, and mining industries. The company has reported record results for fiscal 2023 in its fourth quarter and full year periods ended March 31, 2023.

In the fiscal 2023 fourth quarter, CSW Industrials’ total revenue increased 12.9% to $195.7 million, with an organic growth rate of 10.5%. The net income attributable to CSWI increased by 46.7% to $27.1 million, and earnings per diluted share (EPS) increased by 48.7% to $1.74. Additionally, the company’s EBITDA increased by 32.8% to $49.4 million.

In the fiscal 2023 full year, CSW Industrials’ total revenue increased by 21.0%, with an organic growth rate of 15.3%. The net income attributable to CSWI increased by 39.1%, and EPS of $6.20 increased by 41.2%. The company’s EBITDA also increased by 30.6% to $174.1 million.

CSW Industrials has been investing in acquisitions and organic capital expenditures while returning cash to shareholders through share repurchases and dividends. The record operating cash flows of $121.5 million and balance sheet strength with a leverage ratio of approximately 1.3x have further strengthened the company’s position.

In my opinion, CSW Industrials’ impressive performance in fiscal 2023 and its consistent investments in acquisitions and organic capital expenditures are indications of a well-managed, robust company. Therefore, I would recommend buying the stock.

GDS Holdings Limited sees increased net revenue and area committed by customers

GDS Holdings Limited, a leading developer and operator of high-performance data centers in China and Southeast Asia, announced its unaudited financial results for the first quarter ending March 31, 2023. Despite a net loss of RMB474.6 million (US$69.1 million), the company’s net revenue increased by 7.4% year-over-year to RMB2,409.0 million (US$350.8 million). Service revenue also increased by 7.4% to RMB2,408.4 million (US$350.7 million) in the first quarter, compared to the previous year.

Adjusted EBITDA increased by 7.5% year-over-year to RMB1,130.0 million (US$164.5 million) in 1Q2023. While the Adjusted EBITDA margin remained the same as the previous year (46.9%), total area committed and pre-committed by customers increased by 2,895 square meters (net of churn of 8,774 sqm) in the first quarter of 2023. This brought the total area committed and pre-committed by customers to 633,611 sqm as of March 31, 2023, an increase of 10.2% year-over-year.

As for operating highlights, area in service increased by 2,730 sqm to 518,517 sqm as of March 31, 2023. Area under construction was 196,858 sqm, with a pre-commitment rate of 74.4%, while area utilized by customers increased by 6,085 sqm (net of churn of 6,488 sqm).

The company’s commitment rate for area in service was 93.9% as of March 31, 2023. All these data show promising growth for GDS Holdings Limited, indicating that the company is headed in the right direction. Based on this positive press release, we recommend buying GDS stock.

NVIDIA Reports Record Data Center Revenue and Increases Supply to Meet Surging Demand

NVIDIA, a leading producer of graphics processing units and AI chipsets, has reported a record revenue of $7.19 billion for the first quarter of 2024, up 19% from the previous quarter. The company has returned $99 million in cash dividends to shareholders during the first quarter and has announced the next quarterly cash dividend of $0.04 per share.

The record-breaking revenue for NVIDIA is driven by the surging demand for its data center products. The company is significantly increasing the supply of H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand, and BlueField-3 DPU to meet this demand. Founder and CEO, Jensen Huang, states that the computer industry is undergoing two simultaneous transitions – accelerated computing and generative AI. The company is poised to benefit from these technology trends as enterprises rush to incorporate generative AI into their products and services.

NVIDIA’s gross margin increased by 1.3 pts., while its operating expenses decreased by 3% during the quarter. The GAAP earnings per diluted share for Q1 FY24 was $0.82, up 44% from the previous quarter, and non-GAAP earnings per diluted share were $1.09, up 24% from the previous quarter.

As a shareholder in NVIDIA, I am delighted to see the company’s strong financial performance. The increasing adoption of accelerated computing and generative AI presents a significant opportunity for the company to continue growing its revenue and profits. With the record data center revenue and a positive outlook for Q2 FY24, I recommend holding onto the stock.

Overall, NVIDIA’s strong financial performance shows that it is a solid long-term investment. Its technological dominance in the data center chip market and the vast potential of generative AI solidify its prospects for sustained growth in the coming years.

EnerSys (ENS) Delivers Record Revenue and Earnings in Q4 2023

EnerSys (NYSE: ENS), the global leader in stored energy solutions for industrial applications, has announced its Q4 and FY 2023 results, registering a record net sales of $990 million, a 9% increase YoY. The company also achieved record operating earnings of $95 million, a 114% increase YoY, and a 24.9% GM, including a $17 million reduction to COGS from Inflation Reduction Act tax credits.

The company’s backlog eased by 7% from the previous year, reaching $1.3B, and net leverage was reduced to 1.8X EBITDA. Besides, EnerSys earned the Better Practice Award from the US Department of Energy’s Better Plants Program, published its 2022 Sustainability Update, and announced Shannon Thomas’s appointment as Chief Human Resources Officer.

EnerSys delivered record net sales of $3.7 billion, a 10% increase YoY, generated record operating earnings of $278 million, a 35% increase YoY, and a record diluted EPS of $4.25, a 26% increase YoY.

Considering EnerSys’ impressive Q4 and FY 2023 results, I recommend buying this stock. The company’s record revenue, earnings, and diluted EPS, coupled with the Better Practice Award and a reduction in global greenhouse gas emissions, indicate a strong performance and positive outlook. Additionally, the appointment of Shannon Thomas as CHRO is expected to bring a fresh perspective to the company’s human resources practices.

As an innovative leader in stored energy solutions, EnerSys’ organic growth and strong price realization position the company to capture growth opportunities in the industry. Furthermore, with a backlog of $1.3B and stable demand trends, the company is well-positioned to maintain its growth momentum.

In conclusion, EnerSys’ Q4 and FY 2023 results highlight the company’s strength in the stored energy solutions industry. Thus, I recommend buying this stock to benefit from the company’s growth prospects.

StepStone Group Inc. Reports Strong Fiscal Year 2023 Results, Declares Cash Dividend

StepStone Group Inc. (Nasdaq: STEP) has reported Q4 and full fiscal year ended March 31, 2023 results, with net income up over 20% year-over-year. The company also declared a quarterly cash dividend of $0.20 per share of Class A common stock, and a supplemental dividend of $0.25 per share of Class A common stock, both payable on June 30, 2023. CEO Scott Hart said in a statement that “our talented teams continue to deliver strong results for our clients which we believe positions us well for further growth.”

As a private markets investment firm, StepStone offers customized investment solutions and advisory services to clients worldwide. Its data and administrative services have gained a favorable reputation in the industry. These positive results show that StepStone continues to thrive in the current market. Based on the press release’s positive news, I would recommend buying this stock.

Investors are also invited to a conference call on May 24, 2023 at 5:00 pm ET for further discussion led by upper management. Overall, this is a strong demonstration of StepStone’s ability to adapt to changing market conditions and provide solutions to investors.

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