Stocks rose Friday to end their best week of 2019. Bad news turned out to be good today, as a weak jobs report strengthened hopes that the Federal Reserve will cut interest rates. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) both gained 1%, and the Nasdaq Composite added 1.7%. Technology was the strongest sector.
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As for individual stocks, two of the year's hottest initial public offerings (IPOs), Beyond Meat (NASDAQ:BYND) and Zoom Video Communications (NASDAQ:ZM), reported their quarterly results, helping their shares continue their winning streaks.
Potential big deals keep investors salivating over Beyond Meat
Beyond Meat played the Wall Street expectations game deftly, having given "estimates" of Q1 results on May 3, a month after the quarter ended, and then reporting actual numbers yesterday that just topped those ranges. Revenue increased 215% to $40.2 million, above its guidance of $38 million to $40 million. Gross profit was $10.8 million, exceeding the estimate of $9.5 million-$10.5 million. The company lost $0.95 per share compared with a loss of $0.98 per share in the period a year ago.
Making a big impression on the analysts was Beyond Meat's guidance for 2019 revenue of $210 million. The company said on the conference call that the number was the floor of its expectations, that its products are in trials with some national quick-service restaurant chains, and that the revenue guidance doesn't include those potential deals. When an analyst asked whether Beyond Meat could increase manufacturing capacity enough to supply a deal with, for example, McDonald's, company officials said they saw no obstacles to that.
Zoom posts a profit
Shares of Zoom Video Communications rose 18.4% after the company reported better-than-expected first-quarter results and gave guidance that was well ahead of Wall Street forecasts. Revenue grew 103% to $122 million, easily topping estimates for $111.8 million. Zoom eked out a profit of $200,000, or $0.00 per share, about what analysts had predicted.
Strong customer growth drove the company's performance. Subscription services to new customers accounted for 64% of the revenue increase, while 36% came from existing clients. Customers with more than 10 employees soared 86% to 58,800. Larger customers that contributed more than $100,000 in revenue numbered 405, a 120% increase year over year and growth of 18% from the 344 reported last quarter.
Looking forward, Zoom forecast full-year revenue between $535 million and $540 million and non-GAAP EPS between $0.02 and $0.03. Analysts had been expecting the company to lose $0.04 per share on revenue of $526 million.