June 8th, 2023: Stocks Update – FuelCell Energy, LAVA Therapeutics, Rent the Runway, Stitch Fix, and Dave & Buster’s

Welcome back! Today’s update on the stocks I own includes some exciting news from FuelCell Energy, LAVA Therapeutics, Rent the Runway, Stitch Fix, and Dave & Buster’s. Let’s jump right into it and see how these companies are doing

FuelCell Energy Reports Strong Revenue Growth in Q2 Fiscal 2023

FuelCell Energy, a global leader in decarbonizing power and producing hydrogen through its proprietary, state-of-the-art fuel cell platforms, has reported strong financial results for its second quarter ending on April 30, 2023.

The company reported revenues of $38.3 million, more than double that of the comparable year-ago quarter. The revenue growth was largely driven by revenues from long-term service agreements, primarily relating to the new module exchanges at the plant owned by Korea Southern Power Company in Korea. The company’s Toyota project in Long Beach, for which directed biogas was secured during the quarter via a contract with Anew Climate, is progressing towards achieving commercial operations, which is expected in the third fiscal quarter. Both projects being constructed in Derby, Connecticut, are advancing on schedule, and the company anticipates commercial operations on the combined 16.8 megawatt installations in Q4 2023.

The CEO of FuelCell Energy, Mr. Jason Few, said, “We are progressing our manufacturing of solid oxide platforms, including commencing manufacturing of the solid oxide electrolysis unit to be delivered to Idaho National Laboratory, while also working on expanding our footprint in our Calgary facility. We continue to make strategic investments in R&D to drive growth and further cement our position as a global leader in the decarbonization and clean power space.”

As a shareholder of FuelCell Energy, I am excited to see the company’s strong financial results in Q2 fiscal 2023 and the progress of their projects. I believe that FuelCell Energy has a promising future, and I recommend buying the stock.

LAVA Therapeutics Announces Lead Development Candidate Selection by Janssen Biotech

LAVA Therapeutics N.V. (Nasdaq: LVTX) has recently announced the selection of a lead development candidate by Janssen Biotech, which triggers a milestone payment to LAVA and is expected to provide the cash runway into 2026. LAVA is a clinical-stage immuno-oncology company focused on developing its proprietary Gammabody platform of bispecific gamma-delta T cell engagers. Additionally, the company has announced favorable safety profiles as well as preliminary signs of anti-tumor activity with disease stabilization and PSA reduction during dose escalation in heavily pre-treated patient populations in a Phase 1/2a study of LAVA-1207. In other pipeline highlights, LAVA-051 is a Gammabody designed to target CD1d-expressing tumors, including multiple myeloma, chronic lymphocytic leukemia, and acute myeloid leukemia.

As a shareholder of LAVA Therapeutics, I am pleased to see a strengthened leadership team, and I am enthusiastic about the productive year ahead. The recent corporate highlights and milestone payment from Janssen signify continued progress towards the development of innovative treatments for cancer patients. Based on the positive pipeline highlights, I recommend accumulating or holding onto LVTX stocks.

Rent the Runway: Quarter Over Quarter Growth Leads to Optimistic 2023 Outlook

Rent the Runway (NASDAQ: RENT), the world’s leading shared designer closet platform, revealed its Q1 2023 financial results that showed impressive growth in its active subscriber count, revenue, and adjusted EBITDA. The company’s active subscriber count for Q1 2023 reached a record high of 145,220, with a quarter-over-quarter growth of 15%. Moreover, Rent the Runway achieved $74.2 million in revenue, an increase of 10.6% YoY. The company managed to narrow down its losses to $(30.1) million, compared to $(42.5) million in Q1 2022, and increase its adjusted EBITDA margin to 6.1%.

Jennifer Hyman, CEO and Co-Founder of Rent the Runway, is proud of the momentum the business is continuing to drive and attributes this growth to Rent the Runway’s agility and continuous improvement. The company is in a strong position to invest the majority of resources into improving the customer experience. CFO Sid Thacker also revealed that they were pleased with the strong start to fiscal 2023 and exceeded both revenue and adjusted EBITDA guidance.

Overall, the Q1 2023 financial results are optimistic and signal that Rent the Runway is moving closer towards its goal of becoming free cash flow positive. With increasing subscriber count and an optimistic outlook for the year, I recommend holding on to this stock.

Stitch Fix Announces Fiscal Q3 Results: Focusing on Efficiency and Driving Profitability

Stitch Fix, Inc. (NASDAQ:SFIX) is an online personal styling service that combines data science and AI algorithms to send personalized apparel choices to clients, chosen by human stylists. The company has announced its financial results for the third quarter of fiscal year 2023 ended April 29, 2023.

The results show that Stitch Fix continues to maintain profitability and cash flow. The company achieved an adjusted EBITDA of $10.1 million, which surpassed its guidance range while expanding its free cash flow.

Despite net revenue of $394.9 million, which is a decrease of 20% year over year, Stitch Fix has maintained its focus on driving efficiencies across its business. This has resulted in cost controls, further strengthening the balance sheet, positive free cash flow of $21.9 million, as well as ending the quarter with $244 million of cash and investment and no bank debt.

As an investor, this news is positive and I would recommend holding onto the stock. Stitch Fix has shown that it is capable of maintaining profitability during a difficult operating environment. This gives me confidence in the company’s management and strategy, which has always been centered around data science and AI.

While the active client base decreased by 11% year over year, Stitch Fix continues to personalize its service and offer innovative apparel choices to clients. Consequently, it remains a competitive and distinctive business that people rely on for styling advice. This is evident from the company’s net revenue per active client (RPAC) of $502, which only decreased by 9% year over year.

With a strong balance sheet and a capable management team, Stitch Fix has a promising future in the online personal styling industry. The company’s focus on efficiency and maintaining profitability is a positive sign of good corporate governance, which will translate into long-term shareholder value. Therefore, my recommendation to investors would be a buy.

Dave & Buster’s Entertainment, Inc. (PLAY) reports record revenue in Q1 2023

Dave & Buster’s, an owner and operator of entertainment and dining venues, has announced its financial results for the first quarter ended April 30, 2023. The company had a record revenue of $597.3 million in the quarter, an increase of 32.4% from the first quarter of 2022. This growth was mainly due to the pro forma contribution of Main Event in the first quarter of 2022. The company also reported a record net income of $70.1 million, or $1.45 per diluted share, an increase from the first quarter of 2022.

However, the pro forma combined comparable store sales (including Main Event branded stores) decreased by 4.1% compared to the same period in 2022, and increased by 10.3% compared to the same period in 2019. The company repurchased 5.7 million shares totaling $200.0 million, representing 11.8% of the outstanding shares as of the end of fiscal 2022.

Dave & Buster’s has also opened a new store in Puerto Rico and three new Main Event stores in Little Rock, AR, Tucson, AZ, and Lexington, KY. The company has also signed two international franchise agreements for up to 15 stores in India and up to 5 stores in Australia.

In my opinion, despite the drop in comparable sales, this is positive news for the company and its shareholders. The record revenue and net income show that the company’s initiatives to enhance customer experience, including offering new games, menus, and events, have been successful. The repurchase of shares is also a positive sign that the management sees the value in the company and is committed to returning value to shareholders. Furthermore, the new store openings and franchise agreements show that the company is focused on expanding its reach and diversifying its revenue streams.

Overall, I recommend buying the stock, as the company’s financial performance and growth strategies demonstrate its potential for further success in the future.

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