Stock Updates: May 31, 2023

Welcome back to my daily blog post. Today, I’ll be sharing updates on the latest financial results of companies whose stocks I own. These companies include Hovnanian Enterprises, Evaxion, Reservoir Media, JOYY, and HP Inc. Let’s take a closer look at their recent fiscal quarter and first quarter results

Hovnanian Enterprises exceeds adjusted pretax income guidance by 32%

Hovnanian Enterprises (NYSE: HOV) reported second quarter and six-month results for fiscal year 2023. The company, a leading national homebuilder, achieved an income before income taxes of $46 million, 32% higher than the high-end guidance for adjusted pretax income. Net contracts per community rose by 100% versus the first quarter of 2023, and consolidated community count increased by 12% year over year.

During the second quarter, sales of homes revenues decreased by 2.2% to $670.7 million for 1,225 homes compared with the previous year’s second quarter. Homebuilding gross margin reduced by 5.5% compared to the previous year’s quarter. Meanwhile, during the first six months of fiscal 2023, sale of homes revenues decreased by 5.4% to $1.17 billion for 2,163 homes.

From an investor’s perspective, the company has shown a rise in net contract and increase in community count – a positive sign for future revenues. However, the decline in sales and gross margin could be a concern. It’s worth monitoring these trends to determine if they’re just a short-lived anomaly or if they indicate a longer-term problem. Currently, I recommend holding on to the stock until there is more clarity.

Evaxion Biotech (EVAX) presents positive clinical trial results and advances in AI technology

Evaxion Biotech (NASDAQ: EVAX), a clinical-stage biotechnology company developing AI-driven immunotherapies, announced positive clinical trial results and advances in their proprietary AI technology in their Q1 2023 financial results.

In April 2023, the company presented a full read-out of their Phase 1/2a trial of EVX-02 in 10 patients with completely resected melanoma, meeting primary endpoints and demonstrating relapse-free survival in all EVX-02 completers. Additionally, recent R&D Day highlighted Evaxion’s proprietary genetic adjuvant technology enhancing the efficacy of DNA and mRNA vaccines.

The company also announced a novel AI-platform for the identification of a new source of therapeutic targets, ERVs (endogenous retroviruses), potentially enabling treatment of patients who are currently considered unresponsive to cancer immunotherapy. Moreover, a full read-out of the Phase 1/2a trial of EVX-01 in 12 patients with metastatic melanoma will be presented at the American Society for Clinical Oncology (ASCO) Meeting in June 2023.

While the cash and cash equivalents of $10.2 million at the end of March 2023 funded the operations into early December 2023, Evaxion’s progress towards advancing AI-powered immunotherapies is encouraging.

As an AI-driven biotech company, Evaxion’s focus on developing personalized cancer vaccines is a potential game-changer in the field of cancer immunotherapy. The positive clinical trial results and advances in AI technology highlight the company’s potential as a long-term investment.

Therefore, we recommend buying the stock, EVAX, as Evaxion’s approach to AI-driven immunotherapies could revolutionize the way we treat cancer in the future.

Reservoir Media Reports Strong Fiscal Year Growth and Positive Outlook for 2024

Reservoir Media, Inc. (NASDAQ: RSVR), an independent music company, announced strong financial results for the fiscal year 2023, ended March 31, 2023. The company reported a revenue growth of 13%, exceeding its full-year revenue outlook, and achieved operating income of $21.1 million, a year-over-year increase of 9%. The adjusted EBITDA also increased by 12%, reaching $46.3 million.

The company’s music publishing revenue increased by 9% year-over-year, while recorded music revenue increased by 18%. Reservoir expanded its portfolio by adding Arab superstar Mohamed Ramadan, Indian rappers MC Altaf and D’Evil, among others, and debuted the iconic catalog of Grammy-winning trio De La Soul on streaming platforms, broadening its emerging markets reach and diversifying its catalog.

Reservoir issued its fiscal outlook for 2024, including 4% to 8% revenue growth and 6% to 12% adjusted EBITDA growth. This outlook reflects the company’s confidence in its diverse portfolio and its commitment to the digital landscape.

My personal thoughts on Reservoir’s performance are positive. The company has showcased its ability to grow and diversify its portfolio, and its achievements in the emerging markets are notable. The positive outlook for 2024 is a statement of the company’s confidence to continue on this trajectory.

As a result, I recommend buying Reservoir Media’s stock. Its successful track record and positive outlook align with the company’s long-term potential for growth.

JOYY Inc. Releases Q1 Financial Results and Operational Highlights

JOYY Inc., a global technology company, released its unaudited financial results for the first quarter of 2023. The company reported net revenues of US$583.6 million, compared to US$623.8 million in the corresponding period of 2022. JOYY also reported net income attributable to controlling interest of US$28.0 million, compared to a net loss of US$27.5 million in Q1 2022. Additionally, the company reported an increase of 19.0% in average mobile MAUs of Bigo Live, but a decrease of 27.4% and 36.5% in average mobile MAUs of Likee and Hago, respectively.

Despite the decrease in mobile MAUs for Likee and Hago, JOYY’s Q1 Operational Highlights showed an increase of 7.8% in the total number of paying users of BIGO (including Bigo Live, Likee and imo), and an average revenue per paying user of US$244.8. The decrease in average revenue per paying user was attributed to the reduced spending on user acquisition via advertisement.

As an investor in JOYY, I am encouraged by the positive financial results and growth in paying users for BIGO. Although the decrease in mobile MAUs for some of the company’s apps is a concern, JOYY’s strategic priorities and commitment to growth suggest a bright future for the company.

I recommend holding onto JOYY stock at this time, as I believe the company’s financial results and operational highlights signal a positive outlook for the future.

HP (HPQ) beats Q2 earnings estimates

HP (NYSE: HPQ), a leading provider of personal computing and other access devices, announced Q2 FY23 net revenue of $12.9 billion, down 21.7% from the previous year. However, despite facing a tough macro-economic environment, the company beat earnings estimates with Second quarter GAAP diluted net earnings per share of $1.07, above the previously stated outlook of $0.40 to $0.50 per share. The non-GAAP diluted net EPS of $0.80 was within the previously provided outlook of $0.73 to $0.83 per share.

Enrique Lores, HP’s CEO, credited the company’s disciplined execution and strong innovation for the better-than-expected results. With various strategic investments and improved R&D efforts, HP is well-positioned for continued growth.

As an investor, I believe HP’s strong leadership, continued investments, and solid financial performance make it a worthwhile stock holding. I recommend maintaining or potentially increasing your investment if you currently hold shares. The company’s ability to beat earnings estimates during a difficult economic environment is a positive sign for long-term sustainability.

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