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SUMMARY
Jeremy Lefebvre discusses significant movements in the stock market, highlighting his $71,000 investment in Celsius Holdings and providing analysis on companies such as Honest, ELF, AMD, and Meta. The video covers earnings reports, market sentiment, and the broader impact of AI-driven growth across sectors.
MAIN POINTS
- Honest Company posts strong results, prompting speculation about reaching a $10 share price and potential as a buyout candidate.
- ELF Beauty is projected to end the year between $100 and $140 per share, with a focus on long-term holding due to its robust business model.
- Jeremy reveals he purchased 3,000 shares of Celsius Holdings at $23.67 per share, totaling $71,000, following an 18% drop in the stock.
- Celsius' earnings show revenue up 11% and cost of revenue up 18%, with a one-time distributor termination fee impacting reported net income.
- Market analysts debate the sustainability of S&P 500 earnings growth, with consensus forming around robust organic EPS expansion across sectors.
- Meta's earnings challenges are discussed, with projections that new business lines like compute sales will not materially impact revenue until 2029 or later.
- AMD's recent results are reviewed, noting strong performance but lacking the 'shock and awe' guidance seen from Nvidia in previous years.
- Lisa Su highlights AMD's transformation from a $2 stock to a market leader, emphasizing the company's broad product portfolio and AI-driven demand.
DETAILED ANALYSIS
The session opens with an overview of recent dramatic movements in the stock market, notably the Honest Company's 40% surge and ELF Beauty's continued climb. Honest is positioned as a fundamentally strong, debt-free company with over $100 million in cash and a trajectory toward $50 million in annual net income. Its current market cap is approaching $1 billion, and its organic business growth makes it a potential acquisition target for larger firms, though the speaker expresses a preference for a higher buyout price if such a scenario arises.
ELF Beauty is described as a long-term holding, with projections for the stock to finish the year between $100 and $140 per share. The company's strategy of acquiring and growing brands, exemplified by the successful Road acquisition, supports its stable growth outlook. The speaker emphasizes the rarity of finding companies like ELF that are suitable for extended holding periods.
Attention then shifts to AMD, which has experienced momentum following its earnings report. While the initial guidance was not particularly exciting, comments from CEO Lisa Su during the conference call hinted at stronger-than-expected growth in the data center segment. This led to renewed optimism for AMD's performance in upcoming quarters, with expectations of the stock potentially reaching higher price points.
The analysis draws a comparison to Nvidia's previous pattern of exceeding expectations and delivering impressive guidance, noting that AMD has yet to deliver a similar 'shock and awe' moment.
The focal point of the discussion is the $71,000 investment in Celsius Holdings, executed at $23.67 per share for a total of 3,000 shares. This significant purchase follows an 18% drop in Celsius' stock, which the speaker attributes to weaker-than-expected earnings and market sentiment leading into the report. Despite missing analyst expectations and facing increased costs—revenue rose 11% while cost of revenue climbed 18%—the company maintained flat SG&A expenses and recorded an $80 million distributor termination fee, which is reimbursed by Pepsi and thus not a true cash expense.
Adjusting for this, income from operations would have been $155 million, an improvement over the previous year.
The analysis draws parallels between Celsius and Monster Beverage, highlighting how concerns about competition, margins, and market share have historically accompanied high-growth beverage companies. Despite periodic volatility, Monster proved to be a lucrative long-term investment, and Celsius is seen as following a similar path. With a current market cap around $6 billion, Celsius is viewed as having the potential to become a major player in the beverage industry, with substantial room for growth in both domestic and international markets.
The company's ability to remain profitable during challenging periods is cited as a key strength.
The discussion then broadens to the macroeconomic environment, focusing on the S&P 500's earnings growth. Analysts note that even after excluding extraordinary gains from companies like Google and Amazon, organic earnings growth remains robust. Upward revisions to earnings estimates are occurring at an unprecedented rate, with all 11 sectors reporting year-over-year sales growth. The consensus is that the market is being driven by genuine revenue increases rather than accounting maneuvers.
AI-driven spending by major technology companies is identified as a central theme, with downstream effects benefiting companies such as Caterpillar and Corning. However, there is caution about the sustainability of this spending, as some purchases may have been accelerated into the current year, potentially reducing future growth rates. Inflation and Federal Reserve policy are also discussed, with the expectation that upcoming data will influence market direction but is unlikely to prompt immediate rate hikes.
Meta Platforms is analyzed in the context of its earnings challenges, with the assertion that new ventures such as compute sales will not significantly impact revenue or earnings per share until the end of the decade. The company's heavy capital expenditures are expected to weigh on profitability in the near term, despite long-term optimism for its stock price.
The video concludes with a detailed review of AMD's transformation under Lisa Su, who took the company from near bankruptcy and a $2 share price to a market leader in AI and high-performance computing. AMD's broad product portfolio and leadership in both CPU and GPU markets are highlighted, with ongoing demand for AI compute expected to drive further growth. The overall sentiment is bullish on the long-term prospects of the companies discussed, with an emphasis on disciplined, long-term investing strategies.
LINKS
- Application page for Jeremy Lefebvre's Private Stock & Wealth Group and access to 1000xStocks.
- Patreon page for supporting Jeremy Lefebvre and accessing weekly stock buys.
- Free workshops on various investing topics offered by Jeremy Lefebvre.
- Jeremy Lefebvre's official Instagram profile.
- Jeremy Lefebvre's official X (formerly Twitter) profile.
- Jeremy Lefebvre's official Facebook profile.
- Jeremy Lefebvre's personal website.
- Instagram profile for 1000xStocks.
- X (formerly Twitter) profile for 1000xStocks.