Stock investors have had to wrestle with an increasingly complex combination of factors affecting markets, as the fallout from measures taken against Russia following its invasion of Ukraine continues to ripple around the world. Bond markets surged, taking Treasury yields sharply lower as investors sought safer investments. As of 8 a.m. ET, futures on the Dow Jones Industrial Average (^DJI 0.69%) were down 254 points to 33,586. S&P 500 (^GSPC 1.20%) futures had dropped 34 points to 4,334, while Nasdaq Composite (^IXIC 1.59%) futures had sunk 120 points to 14,109.
One bright spot on a gloomy market day was Target (TGT -0.36%), which announced quarterly results that affirmed the ongoing strength of the U.S. consumer economy. However, GoodRx Holdings (GDRX 4.66%) wasn't as fortunate, as its latest financial report prompted shareholders to sell off the drug discount provider's stock. Below, you'll learn more about both companies and their latest news.
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A bull's-eye for Target
Shares of Target soared almost 11% in premarket trading on Tuesday morning. The department store retail giant reported robust results in its fiscal fourth-quarter results and predicted that the coming fiscal year could be stronger than many Target shareholders had expected.
Target's numbers showed the health of its core business. Comparable sales for the fourth quarter rose 8.9%, which was particularly impressive given the greater-than-20% rise in comps in the year-ago period. Adjusted earnings of $3.19 per share marked an all-time high for Target. The results closed a year in which revenue weighed in at $106 billion, up 35% in just two years.
Target saw strength across its business. Digital sales have played a key role in bolstering Target's performance, representing about half of the gain in total revenue since 2019. Meanwhile, all five of Target's core merchandise categories showed double-digit comps gains.
Investors weren't expecting Target to be able to keep up the stunning pace of its growth over the past two years in fiscal 2022, but what the company projected was still encouraging. Target believes it will see low- to mid-single-digit percentage gains in revenue for the year, with high-single-digit percentage growth in adjusted earnings. Despite some near-term headwinds that will keep operating margins down early in the year, the retailer expects conditions to improve as the year progresses. That came as welcome news for investors, and Target is setting a standard it intends to follow for years to come.
GoodRx has a bad reaction
Meanwhile, GoodRx Holdings didn't get the same warm welcome that Target did. Shares of the drug discount program provider dropped 35% in Tuesday morning's premarket session, following fourth-quarter financial results that raised questions about the company's prospects.
At first glance, GoodRx's numbers didn't seem all that bad. Revenue for the quarter rose 39%, helping the company post a 35% sales gain for the full 2021 year. Net losses narrowed considerably, and on an adjusted basis, net income rose 26% year over year for the quarter and 10% in 2021 compared to 2020. However, the rate of those gains was lower than what shareholders wanted to see.
Moreover, GoodRx doesn't see its growth accelerating in the coming year. First-quarter guidance calls for revenue to come in around $200 million, which would be just 25% higher than in the year-earlier period. Full-year 2022 sales gains could be even lower, at approximately 23%.
Investors have been hoping that GoodRx could ride strong demand for years to come. Unfortunately, GoodRx seems to be reining in long-term growth projections, and that is forcing investors to reassess their views on how big a player the drug discounter can become.
