Stocks’ Details

Datadog, Inc.

Extension of Strategic Partnership with Google into New Regions: Datadog, Inc. (NASDAQ: DDOG) provides monitoring and security platform for cloud applications. As on 10 November 2020, the market capitalization of the company stood at ~$28.08 billion. DDOG and Google Cloud has recently extended their strategic partnership from EMEA to North America. The new partnership will give the customers the access to over 400 integrations on Google Cloud and continued investment into product co-innovation with more native joint solutions.

Datadog Releases Monitoring Features: The company has announced new features for observing DNS, which will allow engineers to troubleshoot DNS issues that affect the performance and availability of web applications.

Quarterly Highlights (For the Period Ended 30 September 2020): For the third quarter ended 30 September 2020, the company reported decent results with an increase in customers to 1,107 up from 727 in the pcp and a YoY increase of 61% in revenue to $155 million. In the same time span, the company reported GAAP operating loss of $9.3 million. Over the quarter, the company provided additional product innovations and announced 8 new products.

Quarterly Highlights (Source: Company Reports)

Stock Recommendation: The company expects to report revenue in the range of $162- $164 million and non-GAAP operating income between $3 million and $5 million in the fourth quarter of 2020. As per NASDAQ, the stock of DDOG is inclined towards its 52-weeks’ high levels of $118.23. The stock of DDOG gave a return of 22.35% in the past three months but a negative return of 17.16% in the last one month. On a technical front, the stock of DDOG has a support level of ~$85.09 and a resistance level of ~$97.34. Considering the current trading levels, volatile returns in the past one month, key investment risks, and softer market conditions, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the closing price of $92.6, down by 2.41% on 10 November 2020.

Nikola Corporation

Quarterly Highlights (For the Third Quarter Ended 30 September 2020): Nikola Corporation (NASDAQ: NKLA) is a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, components, energy storage systems, and hydrogen station infrastructure. As on 10 November 2020, the market capitalization of the company stood at ~$6.83 billion. During the third quarter ended 30 September 2020, the company announced a strategic partnership agreement with General Motors Co. and also began assembling the first five Nikola Tre BEV prototypes at IVECO's industrial complex. During the quarter, the company reported a net loss of $117.29 million but ended the quarter with a healthy cash position of $908 million.

Quarterly Financial Highlights (Source: Company Reports)

Legal Claims of Investors: Kyros Law Offices is filing legal claims against the company on behalf of investors on the grounds that it may have misrepresented its technology and business, potentially causing the financial prospects to be overvalued.

Outlook: The company is committed to its goal of potential collaboration partners concerning electricity procurement and is focused on the rollout of hydrogen fueling infrastructure. The company also expects to progress on the development of the Tre BEV and construction of the Coolidge in the fourth quarter. 

Stock Recommendation: The company is working to complete the remaining four Nikola Tre prototypes with IVECO and anticipates the completion by the end of 2020. As per NASDAQ, the stock of NKLA is inclined towards its 52-weeks’ low levels of $10.20 but retains limited potential for growth. The stock of NKLA gave a negative return of 56.13% in the past three months and a negative return of 26.88% in the last one month. On a technical front, the stock of NKLA has a support level of ~$14.67 and a resistance level of ~$23.89. On a TTM basis, the stock of NKLA is trading at a price to book value multiple of 8x, higher than the industry median (Consumer Cyclicals) of 1.4x. Considering the increasing losses, legal claims by Kyros Law Offices, volatile returns, and softer market conditions, we suggest investors to keep an eye on the business activities and ‘Avoid’ the stock at the closing price of $18.03, down by 3.22% on 10 November 2020.

Gores Metropoulos, Inc.

Luminar to be Listed on NASDAQ through Merger: Gores Metropoulos, Inc. (NASDAQ: GMHI) is a special purpose acquisition company, sponsored by an affiliate of The Gores Group, LLC. As on 10 November 2020, the market capitalization of the company stood at ~$509.50 million. The company has recently signed an agreement to merge with Luminar Technologies, Inc., wherein the combined company will be named Luminar Technologies, Inc. and will be listed on Nasdaq under the symbol -LAZR. Under the transaction, stockholders of Luminar will receive ~271.8 million shares of GMHI common stock. The combined entity will have an implied pro-forma enterprise value of ~$2.9 billion and an equity value of ~$3.4 billion. Both companies expect to close the proposed merger transaction in Q4 2020.

Daimler Trucks and Torc Partner with Luminar: Luminar Technologies, Inc. announced a strategic partnership with Daimler Truck AG to enable highly automated trucking. The autonomous trucks are expected to yield improvements in efficiency and safety of logistics. With new OEM deals and increased existing customer volume outlook, Luminar has increased its target 2020 order book to ~$1.3 billion from $1 billion.

Forward Looking Order Book (Source: Company Reports)

Stock Recommendation: The partnership agreement of Luminar with the largest global truck OEM is accelerating the leadership position of LAZR in trucking autonomy. As per NASDAQ, the stock of GHMI is inclined towards its 52-weeks’ low level of $9.45. The stock of GHMI gave a negative return of 5.20% in the past three months and a negative return of 3.41% in the last one month. On a technical front, the stock of GHMI has a support level of ~$9.8 and a resistance level of ~$11.78. Based on the stock performance and other key updates covering the merger update, we suggest investors to ‘Avoid’ the stock at the closing price of $10.19, up by 0.3% on 10 November 2020.

Daily Comparative Chart (Source: Refinitiv, Thomson Reuters)

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