Welcome back to Fast Market here on the Schwab network. I'm Diane King Hall alongside Tom White in our Chicago studio. Time now for our cash tag segment on Salesforce. For that, we want to bring in our next guest and that's Landon Swan, co-founder of Likefolio. Uh Landon, I know you've got a couple charts with you and uh the comparison to me, I'm not surprised to see uh a Salesforce, but there are, you know, by the comparison, some things stand out to me in terms of both the leadership and the laggers. But ...

Quick Read MercadoLibre (MELI) revenue hit $8.76B and beat estimates by 10%. EPS missed by 8.8% at $11.03. MercadoLibre’s operating margin compressed 5 to 6 percentage points from investments in free shipping, cross-border trade, retail and credit expansion. MercadoLibre’s credit portfolio surged 90% to $12.5B. Fintech monthly active users grew 28% to 78M. A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more her ...

Management attributes the current performance downturn to a 'perfect storm' of macroeconomic headwinds, specifically unforecastable interest rate levels and volatile tariff policies impacting core markets. The company successfully reduced net debt by 67% year-over-year to $18.7 million, reaching its lowest level since 2021 despite receiving 'little or no cooperation' from end markets. Arcadia's margin compression was driven by a 55% year-over-year spike in aluminum costs and a 'gloomy' West Coast arch ...

Durham, North Carolina-based IQVIA Holdings Inc. (IQV) provides healthcare research services. Valued at $28 billion by market cap, the company offers analytics, technology solutions, and clinical research services to the life sciences industry which helps them in the clinical development and commercialization of medical treatments that improve healthcare outcomes for patients. Shares of this contract research giant have underperformed the broader market over the past year. IQV has declined 11.4% over thi ...

Core Insights - The market has entered 2026 with instability, as the S&P 500 is breakeven for the year and the Magnificent 7 stocks have an average return of -7.3% [1] - Concerns are rising among investors regarding margin compression due to significant capital expenditures in AI by tech giants [2] Small-Cap Opportunity - Capital is shifting towards smaller companies that support AI development rather than the major tech leaders, with Franklin Templeton suggesting that suppliers and adopters may present better opportunities [3] - Small-cap teams are focusing on firms producing semiconductor components, power infrastructure, and engineering services related to data-center expansion, which are benefiting from increased spending but still have modest valuations compared to larger tech companies [4] AI-Resilient Group - Despite the selloff in large-cap software, JPMorgan believes that not all incumbents will be negatively impacted by AI, indicating that the recent market reaction has been overly broad and has created opportunities in "AI-resilient" companies [5] - The bank's strategist notes that the current market positioning is overly bearish, suggesting a potential for a rebound in these resilient names [5]

Core Insights - Chipotle Mexican Grill, Inc. (CMG) is facing a pricing-to-inflation dislocation as it enters 2026, with management expecting a full-year pricing increase of about 1% to 2% against an overall inflation projection of 3% to 4%, leading to approximately 150 basis points of year-over-year restaurant-level margin pressure in 2026 [1][7] Pricing and Margin Pressure - The most significant imbalance is anticipated in the first quarter, where pricing is expected to contribute about 70 basis points to comparable sales while inflation is near 4%, resulting in an estimated 250 basis points of restaurant-level margin pressure [2][7] - Management acknowledges that the pricing-to-inflation gap will narrow throughout the year, but margins are still expected to remain under pressure [2] Cost Factors Impacting Margins - Additional cost pressures are affecting margins, particularly in beef, avocados, and cooking oils, with full-year cost of sales inflation expected to be in the mid-single-digit range [3] - Tariff impacts are decreasing, from approximately 30 basis points in Q4 2025 to an anticipated ongoing effect of about 15 basis points in 2026, but other costs, including marketing expenses projected in the low-3% range of sales, are adding to margin strain [3] Long-term Margin Outlook - Management views the current margin compression as cyclical rather than structural, with expectations that productivity initiatives, operational efficiencies, equipment enhancements, and scale benefits will support a gradual recovery towards high-20% margins [4] Stock Performance and Valuation - Chipotle's stock has decreased by 37.2% over the past year, contrasting with a 6.6% decline in the industry, while competitors like Starbucks, Sweetgreen, and CAVA have seen declines of 14%, 81.1%, and 51.4%, respectively [5] - From a valuation perspective, CMG trades at a forward price-to-sales (P/S) multiple of 3.56, which is below the industry average of 3.75, while competitors have P/S multiples of 2.81, 0.8, and 5.14 [9] Earnings Estimates - The Zacks Consensus Estimate for CMG's 2026 earnings per share has declined over the past 30 days, with projections indicating a 2.6% decrease in earnings for 2026, while competitors like Sweetgreen and CAVA are expected to see increases of 12.7% and 6.7%, respectively [11][14]

Core Insights - Arm Holdings (ARM) reported adjusted earnings of 43 cents per share for Q3 fiscal 2026, exceeding estimates by 4.9% and increasing 7.5% year over year, marking the fourth consecutive quarter of earnings beats [2][5] - Revenues rose 26.4% year over year to $1.24 billion, slightly above market expectations, indicating sustained operating momentum [2][5] - Following the earnings report, ARM shares increased by 16%, reflecting investor confidence in the company's earnings durability and forward visibility [4][6] Financial Performance - ARM's adjusted EPS increased by 7.5% year over year, supported by strong execution [5] - Revenue growth of 26.4% to $1.24 billion signals sustained demand from advertisers and developers [8] - Operating margins declined due to strategic reinvestment, with GAAP operating margin at 14.9% (down from 17.8%) and non-GAAP operating margin at 40.7% (down from 45.0%) [10] Strategic Outlook - Management's guidance suggests continued revenue expansion and stable earnings performance, driven by sustained advertiser engagement and improved ad optimization [6] - The post-earnings price behavior indicates ARM is increasingly viewed as a mature, earnings-driven advertising platform rather than a purely growth-driven entity [7] - The company's focus on long-term earnings durability over short-term margin maximization is evident in its reinvestment strategy [12] Market Position - ARM's revenue exceeding $1 billion reinforces its scale, indicating that growth is no longer purely cyclical or experimental [8] - The company demonstrates effective cost management and improved monetization efficiency, appealing to investors focused on quality growth [9] - The current market response suggests a balanced risk-reward profile, with a Hold stance being appropriate as investors await clearer signals on margin normalization [13]

Core Insights - The Hershey Company (HSY) is set to announce its fiscal fourth-quarter earnings for 2025 on February 5, with a market cap of $38.3 billion and a focus on confectionery and pantry items [1] Earnings Expectations - Analysts predict HSY will report a diluted profit of $1.40 per share, a decrease of 48% from $2.69 per share in the same quarter last year [2] - For the full fiscal year, EPS is expected to be $6, down 36% from $9.37 in fiscal 2024, but projected to rise 15.7% year-over-year to $6.94 in fiscal 2026 [3] Stock Performance - HSY stock has underperformed the S&P 500 Index, which gained 17.7% over the past 52 weeks, with HSY shares up 16.6% during the same period [4] - However, HSY outperformed the Consumer Staples Select Sector SPDR Fund, which returned 2.4% [4] Business Challenges - The company's underperformance is attributed to challenges in its seasonal business, particularly around Halloween, influenced by timing, weather, and changing consumer behavior, along with margin compression from higher cocoa prices and increased brand investments [5] - Despite some successful innovations like REESE'S Oreo, HSY anticipates moderate volume declines and is cautiously optimistic about cocoa cost inflation and tariff relief, focusing on margin rebuilding and growth [5] Recent Financial Results - On October 30, 2025, HSY shares fell over 2% after reporting Q3 results, with adjusted EPS of $1.30 exceeding expectations of $1.09, and revenue of $3.2 billion surpassing forecasts of $3.1 billion [6] - The company expects full-year adjusted EPS to be in the range of $5.90 to $6 [6] Analyst Ratings - The consensus opinion on HSY stock is cautious, with a "Hold" rating overall; out of 23 analysts, four recommend "Strong Buy," one "Moderate Buy," 17 "Hold," and one "Strong Sell" [7] - The average analyst price target for HSY is $194.41, indicating a potential upside of 2.8% from current levels [7]

Core Insights - Nike reported fiscal second-quarter results that exceeded analyst expectations for both earnings and revenue, but shares fell over 9% intra-day due to margin pressure and weakness in China [1][2] Financial Performance - Earnings per share were $0.53 on revenue of $12.43 billion for the quarter, surpassing analyst expectations of $0.37 per share on revenue of $12.2 billion [1] - Revenue strength was primarily driven by North America, where sales increased by 9% year over year to $5.6 billion [2] Regional Performance - China sales declined by 17% to $1.42 billion, missing analyst expectations of $1.6 billion, indicating a weak spot for the company [2] Margin Analysis - Gross margin decreased by 300 basis points to 40.6%, impacted by increased promotional activities to clear excess inventory, especially in North America, and higher tariffs that raised input costs [2]

Core Viewpoint - Nike's stock is experiencing a significant sell-off following a disappointing earnings report, with a notable decline of over 25% since Labor Day, despite a previous 15% increase after earnings six months ago [1][5]. Financial Performance - Nike reported revenue of $12.43 billion, surpassing the market expectation of $12.1 billion, and adjusted earnings per share of 53 cents, exceeding the anticipated 37 cents [5]. - However, the company faced a reduction in margins by 300 basis points for Q2, with guidance indicating a potential further decline of 175 to 225 basis points in Q3, raising concerns about profitability [6]. Market Reaction - The stock is down approximately 8% following the earnings announcement, although it has seen a slight recovery of about 3.8% from pre-market lows [4][5]. - Other athleisure brands are also experiencing downward pressure in the market, reflecting a broader impact from Nike's performance [2][8]. Analyst Sentiment - Analysts remain cautiously optimistic about Nike's long-term prospects, with Bernstein lowering its price target from $90 to $85 while maintaining an outperform rating, and Bank of America reducing its target from $84 to $73 but keeping a buy rating [6][7].