【Investment Talk】How do you see the results of Inweida? Short Line Stock Price Focus on this indicator!

One of the best tech giants to rise in US stocks in two years, including$NVIDIA (NVDA.US)$。 A near two-fold increase since the start of the year has brought Inweida's market earnings valuation close to 100 times again.

The big rise in Indyta may to some extent reflect the market's expectations for its new results. After the IPO on May 22, Inweida will release Q1 2025 results.

So, what about Inweida's performance? What factors can cause a greater impact on short line stock prices? Let's take a look at the 4 main points of concern.

1. Comparison of actual results/performance guidance with expectations

The previous chip industry has experienced a downward spiral of nearly two years, driven by the demand for precision chips brought about by the AI boom, and the logic of reversal has emerged. whileNVIDIA, the father of the power chip, has also had the greatest reversal and performance flexibility in recent seasons.

As a result, Wall Street analysts' forecasts and the actual results achieved by the Wall Street analysts can produce a huge difference. On the Futu APP, we can see analysts on the outlook for the performance of the UK.If the actual results are significantly higher than expected, the short line share price may be more profitable. Conversely, if the actual performance is below expectations, a short line gap is formed.

SO WHAT IF INGWEDA'S PERFORMANCE EXCEEDS EXPECTATIONS? There may also be some margin, as the market has high expectations for Indira and has already reflected this expectation in the share price. To want to further inflate the share price may not be enough.

In addition to observing actual performance, the performance guidance given by the management hierarchy is also important.Significantly higher than expected performance guidance may trigger a blowout, while lower than expected performance guidance may be more empty for short line prices.

For example, Inweida's previous Q3 report for 2024 showed revenue of $18.2 billion, well above market expectations of $161 billion, and earnings per share of $3.71, well above expectations. In terms of performance guidance, Envy achieved Q3 revenue guidance of approximately US$200 billion, slightly above expectations. However, after the announcement of the results, the market may have thought that the performance of Inweida was not strong enough, and the stock price fell the next day.

By Q4 2024, Indah had actual revenue of $221 billion, significantly exceeding previously given performance guidance and market expectations, and the company's revenue guidance for Q1 2025 reached US$240 billion, which also exceeded expectations, and its share price also rose shortly after the results were released.

Therefore,For Indyda's latest financial quarter, we need to focus on how the actual results and performance guidance compare with the forecasts of Wall Street analystsTo see if Inweida can deliver an answer sheet that satisfies the market.

2. Data center revenue

ENVIDA'S DATA CENTRE BUSINESS HAS BEEN A MAJOR GROWTH ENGINE IN THE PAST, WITH REVENUES OF ONLY 37% IN Q1 OF FY21, UP FROM 80.1% IN Q3 JUST THREE YEARS AGO.Data center business growth is also expected to be stronger as the AI industry continues to boom, with Inweida as a “shovel seller”.

Starting in Q4 2023, data centre revenues at Honda began to reverse their previous downward trend and resumed year-on-year and quarter-on-quarter growth. Over the past four fiscal quarters, the revenue of the data center has accelerated quarterly, driven by the demand for algorithmic chips such as large language models, recommendation engines, and generative AI application training.

Data center revenues of approximately US$184 billion, up 409% year-on-year and 26.9% quarter-on-quarter, continued to be the main driver of revenue growth, reaching a new all-time high of 83.3% in total revenue, according to data center Q4 results data for 2024.

For Indyda's upcoming results, we still need to focus on accelerating growth in our data center business.

3. Availability

In addition to the performance of the profit sheet, for an industry with cyclical fluctuations such as the chip industry,Inventory levels are also a very important indicator for measuring cyclical changes and growth expectations。 Because when industry demand falls and when there is excess supply, company inventory levels rise and selling pressure increases, putting pressure on share prices. Conversely, when the cycle reverses and demand is in a good direction, the company's inventory level will also drop rapidly, and the sales outlook will also improve.

For changes in inventory levels,A more suitable metric is inventory/revenue. The larger the ratio indicates that the higher the inventory level and the greater the selling pressure.For example, in Q4 of FY 2022, Inweida began to rise continuously in inventory/revenue, and the share price has been declining since then.

In FY2024 Q1-Q4, Inweida returned to growth and inventory depletion was also evident, with inventory/revenue falling from 85.3% at the end of FY 2023 to 23.9% in Q4 2024, at an all-time low.In the future, we can continue to see if Inweida's inventory/revenue will continue to be downtrend, and perhaps we should remain cautious if there is a significant rebound.

4. PROFITABILITY

During the cycle's continued upward trend, the improved profitability of Inweida is also one of the key areas of the market's attention.

In terms of gross profit margin, its gross margin level has been climbing over the past few financial quarters, and reached a high of 74% in Q3 2024 as it gradually exits the cyclical trough. In Q4 2024, due to the explosion of demand for real estate chips in the period, Indyad was able to negotiate strong prices, and its gross margin increased further to the level of 76%.

In terms of net interest rates, Indyda has also been on a rapid upward trend in recent financial quarters, reaching 51% in Q3 2024, and in Q4, NVIDIA's net profit margin climbed further rapidly to reach an all-time high of 55.6%.For the upcoming Q1 results of FY2025, we can continue to observe whether or not the net interest rate at Incorporated will remain at historically high levels.

Writing here, you may have some new appreciation for how to read Inweida's performance. It's worth mentioning that every time many star companies post results, it can mean a tough trading opportunity for different types of investors.

For example, if an investor interprets past performance and incorporates recent progress,Investors may consider doing more to feel that the latest performance of a company will release some positive signals and benefit short-term stock pricesAnd there are many ways to do this by thinking about buying positive stocks, or thinking about buying bullish options, etc.

In turn,If investors feel that a company's recent performance will be less than optimistic and put pressure on short-term stock prices, investors may consider doing nothing, the way to go blank can be to consider short selling securities, or consider buying bearish options, etc.

Of course,If investors feel that the direction of a company's performance is not very clear, but the stock price may fluctuate significantly up or down after the results are released, then investors may consider doing more of its share price volatility, consider a cross-cutting strategy of buying both bullish options and bearish options to seize potential opportunities.

Finally, let's summarize:

During the cycle's continued upward cycle, Inweida's performance has been very resilient and its results have a significant impact on short line stock prices. We need to focus on 4 key points.

First, the actual results and performance guidance are compared with expectations. The gap between expectations and facts will greatly affect the short line price of Inweida.

Second, the revenue status of the data center. This business is at the heart of Inweida and its main focus is on accelerating growth.

Third, inventory levels. Observe whether Inweida's inventory/revenue remains low.

Fourth, profitability. Observe that the gross margin and net profit ratio of Indira cannot continue to remain at high levels.

Each time a company publishes results, it may bring potential trading opportunities. Investors can consider the right types of trades based on their individual risk tolerance.

Finally, bring a small benefit and send your $200 plus code card voucher to start investing big! Add a reward of up to $2000 for new guestsNamesake！

*Event Target: Participation of Special Depositary Users in Hong Kong Region who have registered Futu APP for over 18 years with unregistered securities accounts

119K Views