Weekly Stock Market roundup: Insights on Alibaba, Lululemon, Micron Technology, and Evgo (March 27-31)

Alibaba Group Holdings, Lululemon Athletica, Micron Technology, and Evgo were in the spotlight this week. Below is a review of how their shares reacted to recent developments.

Lululemon Athletica report: fourth-quarter revenue increased by 30%

Lululemon Athletica Inc. (NASDAQ: LULU), a Canadian and US retailer of sportswear, shoes, and accessories, released its fourth-quarter and full-year 2022 report on Tuesday 28 March. On the next day, its stock price rose by 12.72% to 361.04 USD per unit.

The November to January period saw a revenue increase of 30.19% to 2.77 billion USD from the same period of the previous fiscal year. The management had expected the figure to reach 2.66 billion USD. The full-year revenue amounted to 8.11 billion USD, rising by 29.63%.

At the same time, the net profit decreased substantially: the quarterly net profit lost 72.43%, reaching 119.81 million USD or 0.94 USD per share, while the yearly profit decreased by 12.36% to 854.8 million USD or 6.68 USD per share. Lululemon Athletica Inc. forecasts revenue to reach 9.3 billion USD in fiscal 2023 and reach 12.5 billion USD by 2026.

Micron Technology report: revenue lost 53%

Micron Technology Inc., the US manufacturer of semiconductor products, reported its second-quarter fiscal 2023 earnings on Tuesday. December to February revenue saw a decline of 52.57% to 3.69 billion USD, nearly matching the consensus forecast of 3.7 billion USD. Net loss amounted to 2.31 billion USD or 2.12 USD per share; A year earlier, the company’s net profit was 2.26 billion USD or 2 USD per share.

Micron Technology Inc. management expects revenue in the third quarter of fiscal 2023 to reach 3.7 billion USD, while the adjusted loss could reach 1.58 USD per share. As for the long-term outlook, the decline in the inventory levels from large customers and an increase in the demand for technical capacity, driven by the AI market boom, are expected to have a positive impact on the corporation’s business and the whole semiconductor sector.

Investors probably took the company’s positive financial results as a signal that the worst was over. On the next day following the release of information about the 53% decline in the quarterly revenue, the stock price of Micron Technology Inc. (NASDAQ: MU) grew by 7.19% to 63.54 USD per unit.

Alibaba shares rise on its plans for restructuring

Alibaba Group Holdings Ltd, the Chinese technology giant, announced on Wednesday 29 March that it is planning the largest restructuring in its history to increase its competitiveness in the market and its shareholder value. The business of the company will be split into six separate groups:

1. Alibaba Cloud Intelligence will work with cloud services and AI technology.
2. Taobao Tmall Commerce Group will deal with digital commerce platforms, including Taobao and Tmall.
3. Local Services Group will unite the Ele.me food delivery service and its mapping.
4. Cainiao Smart Logistics will house the logistics division.
5. Global Digital Commerce Group will unite international electronic commerce businesses, including AliExpress and Lazada.
6. Digital Media and Entertainment Group will work with streaming services and the movie business.

The plan implies that each business group is run by its own CEO and board of directors. Also, each group will be able to raise funds independently, and conduct IPOs. The exception is Taobao Tmall Commerce Group, which will remain under the full control of Alibaba Group Holdings Ltd. This news triggered a 0.26 per cent rise in the company's value, sending Alibaba Group Holdings Ltd (NYSE: BABA) stock up 14.26% to 98.40 USD per unit. According to the CNBC channel, Morgan Stanley analysts believe that the restructuring of the holding and the lifting of quarantine restrictions in China could lead to the value of these shares rising 100%.

Evgo report: fourth-quarter revenue skyrocketed 284%

Evgo Inc. (NASDAQ: EVGO) which owns a large network of charging stations for electric vehicles in the US, presented its fourth-quarter and full 2022 financial results on Thursday 30 March. On the same day, the stock quotes rose by 22.09% to 7.02 USD thanks to its strong financial statistics.

Fourth-quarter revenue skyrocketed 283.47% to 27.3 million USD, and the net loss fell 63.19% to 17.05 million USD or 0.06 USD per share. Evgo Inc.’s full-year revenue increased by 145.74% to 54.59 million USD, the net loss saw an increase of 83.93% to 106.24 million USD, and the loss per share decreased by 344.44% to 0.4 USD.

The total number of charging stations increased by 180 units in the fourth quarter and by 670 stations over the year. This figure currently exceeds 2,800 units. During the October to December period, the number of registered customers increased by 59,000, and over the full year by 224,000, reaching a total of 553,000 customers.

Summary

Lululemon Athletica Inc., Micron Technology Inc., and Evgo Inc. reported their quarterly earnings this week, which sent their shares up. Alibaba Group Holdings Ltd announced its plans for large-scale restructuring, splitting the business into six independent business groups.