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Today in the Market (11/8/2022)

Good Evening. As investors anticipated the conclusion of the U.S. midterm elections, stocks rose on Tuesday.

The S&P 500 rose by 0.56%, while the Dow Jones rose by 1.02%. After fluctuating throughout afternoon trade, the Nasdaq Composite inched 0.49% higher.

REALLY WORKED OUT THESE EARNINGS

Planet Fitness (PLNT) shares increased on Tuesday after the firm published financial results for the third quarter of 2022 that exceeded analysts’ forecasts. In addition, management boosted its profit forecast for the remainder of the year, which further enthused investors.

  • Revenue: $244 Million, up 58% YoY
  • Net Income: $30.7 Million, up 65% YoY
  • Same Store Growth: 8.2% YoY

It doesn’t stop there… Planet Fitness’ management increased their projection for the remainder of 2022. It had previously projected revenue growth in the mid-50% area but now anticipates it to be in the high-50% range. Moreover, it originally anticipated that its adjusted net income would climb by around 90% year-over-year, but it now anticipates that it would more than double.

Also noteworthy, Planet Fitness approved a fresh $500 million share buyback program, which represents about 8% of outstanding shares at current levels. This repurchase program is excellent and certainly contributed to today’s market excitement.

USED CAR MARKET

In only two trading sessions, half of Carvana’s (CVNA) market value has been wiped away, with the company’s stock price reaching an intraday record low of $7 per share.

The vehicle dealer’s losses have continued since it reported poor third-quarter results on Thursday, with almost every area of the company declining. In 2017, Carvana’s market capitalization reached $60 billion. After its recent decline, its current market value is around $1.4 billion, which is an enormous warning signal for the whole business.

What’s going on? Well, it’s going to sound like a broken record but… Supply chain concerns result in fewer automobiles, prices increase (the current average price of a used car is $28,000), inflation, the Fed boosts interest rates to fight inflation, and purchasers, who typically finance car purchases, decide not to buy.

Did you know… The Manheim Used Vehicle Value Index, which measures used automobile values, fell for the sixth month in a row in October. It is down over 11% from the previous year, the largest decline in 28 years.

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