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So good, so good, so good.
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Spring styles are at Nordstrom Rack stores now and they're up to 60% off. Stock up and save on Rag and Bone, Madewell, Vince, All Saints, and more of your favorites.
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How did I not know Rack has Adidas?
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Why do we rack for the hottest? Still just so many good brands. Join the Nordy Club to unlock exclusive discounts. Shop new arrivals first and more. Plus, buy online and pick up at your favorite Rack store for free. Great brands, great prices. That's why you rack. One small step for man, one giant leap for commercializing the moon. We look at one company that's hunting for money in space. Tesla. Visions of a car with no steering wheel, no pedals, no manual controls, but timing, as everything is everything. The stock drops as regulators scrutinize its autonomous systems. We break it all down and an activist sinks its teeth into Invisalign. We follow the money for the latest in this healthcare technology stock for Thursday, March 19th. It's Brew Markets Daily and I'm Ann Barry. More market details to come. But first, align technology. Nearly $13 billion of market cap trading under the ticker AL GN on the NASDAQ and now with activist investor Elliott Management reportedly holding a real portion of its equity. This is the maker of Invisalign, the orthodontic treatment company, or as I describe it, the braces replacement business, with the tagline quote, we believe a better smile has the power to create a better future. So we create digital technology and experiences to help people move forward in life. Well, Align is older than you might think because I went back through the company investor relations materials to try to map out its journey. It's nearly 30 years old, and the business was founded in the bay area in 1997 with the aim of leveraging technology to straighten teeth. And within two years, it pioneered the invisible orthodontics market with the introduction of the Invisalign system. So by 2001, the year at IPO'd, Align had manufactured a million unique clear Aligners, helped treat hundreds of patients, and trained over 10,000 doctors. And on top of organic growth, Align has used acquisitions to bolster capabilities, buying Cadent, maker of intraoral scanners and 3D imaging software. That was in 2011, and it paid $190 million for that one. And then in 2020, the company paid just over 375 million euros for Exocad, a leader in dental CAD and CAM software. Well, that last acquisition marked almost the peak of alliance halcyon days. The company shares have fallen more than 75% since hitting almost 730 bucks in 2021, the result of sluggish consumer demand for discretionary dental products and increased competition. That's compressed margins. Well, while latest earnings showed a bit of improvement in growth, there has been a geographic shift to lower priced countries with trends in the key North American market remaining depressed. And so when you look at the stock, it's been trading recently at 10 year valuation lows, down from a 30 times forward PE multiple, which is sort of the 10 year average, to only about 13 times. So today's report from Bloomberg that Elliott Management has built a quote, significant stake in aligned technology caught our eye. And while the company and Elliot not commented, unidentified sources told Bloomberg that the activist does plan to engage with the line for ways to lift the share price and that the stake makes it one of the line's largest investors. And just as an interesting side note, I wanted to flag that this particular activist has been on absolute tear. Now the Economist, which I just happen to read today, I do like reading the Economist, but I don't get a chance to read it during the week. It just published an article today, so very timely, titled Elliot Management and the Art of Telling Bosses They're Wrong. And the subtitle of this is quote, the Hedge fund has Industrialized Shareholder activism, which is pointing to the scale of the activist well activity. Well, just to sum it all up, I wanted to just read the opening passage of this article. It really paints a picture of what Elliot's been up to and may provide a glimmer of insight into what a line might have coming for it now that Elliot is at its cap table. So here's that opening passage. Managers get up to all sorts when shareholders aren't paying attention. Many hoard assets, some even commit fraud, and very rarely one will hire Katy Perry to perform on a cruise ship. When they do. The job of reimposing capitalism's Protestant ethic falls to Elliott Management, a hedge fund based in West Palm beach that's in Florida. In February, Elliott denounced the largesse of Norwegian Cruise Line, which had hired Ms. Perry to christen a new vessel and demanded the replacement of its board. It's pushing for a new boss at Lul German, which makes leggings and has just squeezed Toyota to pay more for a supplier in which the Japanese car maker and Elliott hold minority stakes. Pepsi said recently that it would cut a fifth of its products. Naturally, the Coca Cola of shareholder activism was again involved. I'm going to post a link to that article. It's worth the read for the substance of it. And I also found the star pretty amusing, but definitely, definitely one worth watching. And align technology shares, which will also keep on watching, up nearly 3% today. Coming on up, NASA contracts, space exploration, moon infrastructure, all the buzzwords, why they're sending one stock on a roller coaster ride. And Uber announces yet another robotaxi partnership. Do the constant rollouts have investors hitting the brakes? But first, a word from our presenting sponsor, CME Group. 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Learn more@cmegroup.com podcast that's cmegroup.com podcast well,
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now let's take a look at the rekindled American space race. And one of the players that's Intuitive Machines, a space technology infrastructure and services company with the following slogan, quote, we're creating a blueprint to commercialize our solar system. The moon is our north star market cap, 2 and a half billion dollars. And the company, having been founded in 2013, went public via SPAC about 10 years. So that was in February of 2023. We're going to get into Intuitive Machines as numbers in a moment. But first, John, give us a little bit of context around what's happening in space.
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That's right. Well, apparently the United States is back in the space race. And so I was on NASA.gov today reading about the Artemis program. That's the name of the overall program and quote, under Artemis, NASA will send astronauts on increasingly difficult missions to explore more of the Moon for scientific discovery, economic benefits, and to build our foundation for the first crewed mission to Mars. And I thought that was interest and just as a backdrop because we think about the press to be the first country on the moon or the scientific advancement that comes through NASA. This is the first time I've seen the economic benefit of getting onto the moon. I thought that was interesting.
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And doubling down on getting people to Mars. Yes. Which I thought was. It was just fascinating. But yes, underlined here is economic benefits, emphasis on that. We get commercialization of space.
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So Artemis1 sent up a new transportation. And then this April, Artemis 2 will be a test flight, will be NASA's first mission with crew along the Orion spacecraft. And then in 2028, the target is for the first Artemis lunar landing with a crew. So Artemis 1 got Orion off the ground, then they added a crew and then two years from now there might be people on the moon, actually walking
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on the surface of the moon. That's so exciting. Actually, that's something. If it's only two years from now, that's the kind of thing I would love to make sure I've got my eyes peeled.
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And for any company we're looking at, this is an interesting backdrop that this is happening.
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Yeah, absolutely. And there is so much going on in. Well, with the goal of sustained human lunar presence, NASA is awarding contracts to build out infrastructure on the moon for the moment when we finally get there a little bit more en masse. So it's sending payloads, securing resources and installing communications up there. And that's where Intuitive machines comes in. So just to look a little bit at recent history at the company, in February 2024, so this is a year after it's gone public by SPAC, the company, as part of the contract for NASA's Payload Services Initiative, launched its Odysseus lander to the moon. So that's Intuitive Machines, Odysseus lander. And it did land. It had a soft landing, but it was wonky, it was unstable, it got there on the lunar surface and ultimately it sort of tipped over and entirely lost communications back to Earth. So it didn't meet many of its mission objectives, but it did hit a milestone. It was the first American spacecraft to land on the surface of the moon since the Apollo program. So that was a real moment for the company.
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Yeah, I think that's fascinating. And we were talking about this around the office today thinking, you know, 60 years later, 60 plus years later, that's the first time that there's something back on the moon. It's, it's interesting.
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That would be like England winning World cup football again. Do you know what I mean? It's that kind of long awaited moment when every year you hope it's happening as a Brit and then it never does and it's always sort of devastating or every four years rather. Well, anyway, roll forward to March of 2025 and then the Athena mission was launched. And in this case the lunar lander was equipped with a drill and the purpose was to go look for water on the moon because of course if you're going to send humans up there, we need to have our H2O. Unfortunately though, suffered the same fate. So mission not quite accomplished with the Athena program again. That was last year.
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Exactly. It tipped over. And this is what's so interesting about this stock is that it rises when the company gets one of these NASA products. There's a lot of potential there. And then look at how the market reacted with the stock dipping 40% in the two days following that failed Athena mission.
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Well, these are binary outcomes, aren't they? And actually this reminds me, and I'm teasing, something for the end of the show, this reminds me a bit of biotech stocks.
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Yes.
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Because those are sort of binary outcomes to things like clinical trials. So these early stage technologies are so much on, riding on specific milestones being hit. This kind of volatility makes a ton of sense, but they keep going.
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Yeah. So that's in terms of payload, that's one category now for communications. In September 2024 Intuitive Machines received an award from NASA for the Near Space Network services that the NS&S contract. And I'm keeping track of all these little acronyms.
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Yeah, I think they're going to come to acronym on a sticker at some point.
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Yeah, that's good. And that's the goal of creating in space communications and navigation. So getting a GPS sort of up on the moon. I love this. NASA wants to create the communication system and monetize it, eventually charging per minute fees for data transfer. So once people are up on the moon, maybe they want to send a message back home or over to Mars. NASA wants to monetize that.
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This reminds me of my old cell phone plan.
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Yes.
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Pay per minute, like tech and paper sms.
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I had the same thought. Call me back on the weekend when it's cheaper. When it's cheaper.
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The voice of my grandmother in my head, like only run your dishwasher at nighttime. Electricity is cheaper. Exactly, exactly.
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And so intuitive machines also want other NASA contracts like one to develop this lunar terrain vehicle that may one day be on the moon.
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I love looking at these. I like. You know, actually I went to Intrepid. Have you been to Intrepid?
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Yes, over on the west side, over
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on the west side here in New York. And it's an old. It's USS Intrepid and it's got this amazing part of it where there are lots of military aircraft that have been used over the decades. Sitting there on the deck, it's very cool. And one part of it you remember, there's a lunar spacecraft that's in there that was used in one of the space missions. So I love, I'm a total nut. I love this stuff and you get me going on like space related movies. I love those gravity and all that good stuff. So yeah, no it's good. It's. I'm about to be recruited for a trivia team on this. Like that's John Croteau's face as like found his trivia teammate. Well we did have earnings out of the company today so let's just take a quick peek at those. The company highlighted its 10 year award from the United States Missile Defense Agency that encompasses a broad range of work areas in the national security space program. So a bit of diversification and just worth pointing out this is a pre profit company but it does have a little bit of visibility into how that may change over time. So in this latest earnings did report an operating loss of $33 million for the quarter on revenue of 45 which came in below estimates and was down 18% year over year. However, as it looked towards full year 2026 financials the company did project revenue of between 900 million and a billion dollars which surpassed estimates. That was good news. And its contract backlog which is the critical metric to look at because that gives you a sense for how the forward is going to roll out it did exceed $943 million. Again that's projects in the pipeline in the market felt you know that was a pretty decent outcome. Nevertheless a little bit of volatility over the course of today and folks also having eyes on competitors in the space
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absolutely is so forward looking. There's so many competitors. Rocket Lab, RK lb.
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Yeah, people love that one.
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I've heard of these tickers because folks on Reddit love to debate, you know and they they want to buy in before the launch and then see how the launch goes. So there's a lot going on in this space and it is a race. Shares were down 9% this morning after earnings but they finished the day up four and a half percent and shares are up 86% over the last six months and up over 150% year over year.
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You know the one place that they didn't touch on or at least that we didn't discuss is this idea of putting data cent space because when you think about commercializing the solar system, there's just one theme that does keep coming up. Private companies looking at it, some of the hyperscalers lending credence to it as a thesis and that's this idea that we're sending rockets up there to power data centers because perhaps there will be insufficient energy and capacity here on planet Earth. So we'll have to come back to
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that one and that it's cool up there.
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It's. Well, it's. I don't know if there's solar warming. I don't know. You know, global warming to get solar warning. Anyway, let's take a break. When we come back, spin through the headlines that are moving the markets today. John, can you turn the phrase semiconductor suppliers growing revenue over 20% year over year into an investable index for me right now?
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Off the top of my head, no.
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EBGLIS Lebricizumab LBKZ a 250mg per 2ml injection, is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema, also called atopic dermatitis, that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. EBGLIS can be used with or without topical corticosteroids. Don't use if you're allergic to Eglis. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EBGLIS before starting. Tell your doctor if you have a parasitic infection.
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Ask your doctor about ebglis and visit epglis.lily.com or call 1-800-lilyrx or 1-800-545-5979. There it is the closing bell 4pm on the east coast, the market's wrapping up for the day and we don't have a ticker tape, but we're going to throw it over to our human ticker, our producer, John that's right.
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The S&P 500 and the Nasdaq both finished down three tenths of a percent today and the Dow finished down around 410 of a percent. Some other market headlines, shares in Tesla ticker TSLA fell over 2.5% after the Wall Street Journal reported that US safety regulators are expanding an investigation into the company's driver assistance systems, specifically how the technology performs when roadway visibility is poor. Regulators first opened the investigation in 2024 after multiple crashes, including one fatal accident. The charge is that Tesla's self driving technology failed to alert drivers about reduced visibility conditions that includes sun glare, fog or airborne dust. So I had to think through this. I guess the idea is the car is driving itself and the car is supposed to say wait, wait, wait, I can't see there's some problem. It's supposed to alert the driver. The expanded probe comes right as Tesla moves closer to launching a fully autonomous robotaxi. That's a car designed to rely entirely on the self driving function that we talked about. That means no steering wheel, no pedals and no manual controls.
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Yeah, It'll be interesting to see what the regulator's response is and their findings come to and what that actually means in terms of again that fully autonomous rollout. Well, switching lanes. EV maker Rivian Automotive saw shares rise more than 3% today. And that was after Uber announced plans to invest up to one and a quarter billion dollars in the company. Now as part of the deal, Uber will deploy 50,000 robotaxis across multiple countries to 2031. And to execute on that, Uber or its fleet partners are expected to purchase 10,000 autonomous versions of Rivian's upcoming R2 electric vehicle. Well, if this feel like Groundhog Day in terms of news and headlines, that would be completely fair. And that's because Uber has been striking a series of partnerships across the autonomous and EV ecosystem. So recently we've seen deals announced with companies like Lucid Motors and Amazon, Own Zoox, and just earlier this week, one with Nvidia as well. So the strategy is clear. Uber wants to position itself as the go to marketplace for autonomous mobility regardless of who builds the car. So the Switzerland when it comes to the procurement decision, well, Uber shares falling more than 1% today. Investors not quite sure that they're buying it.
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And finally 5 below ticker 5 reported earnings this morning, sending shares almost up 10%, hitting a 52 week high. The company beat Wall street expectations on both earnings and sales and issued strong guidance for the current quarter. The results also capped off Five Below's strongest holiday season since going public in 2012. We've seen other discount retailers. Part of that growth, growth comes from higher prices. The retailer continues to expand beyond its traditional $5 model.
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Well, just as a final thought, there's something that we've been talking about here on the show and that's the importance of diversification because it is no longer automatically happening in the big, big indexes like the S P500. And as we talked about yesterday, we were part of an event for Brew markets. It was here in New York and some of the recurring themes coming from the panelists and speakers was the idea that people need to start proactively looking whether to fixed income or to international or to small caps or to other sectors that are just not the big tech names that are dominating our indexes when they're weighted by market cap. So we have a treat lined up and I'm very excited for this because one area that is worth, I think, spending time exploring and learning about is biotech. And it's one that I can only speak for myself. I have found incredibly intimidating over time. It's filled with jargon, there's tons of acronyms. I don't have a deep science background. And so my assumption is, least for a while was it would just take too much time and work and energy to try to at least be conversant in some of the key themes coming up in the biotech sector. But it's an exciting sector. It's playing an increasing role in our healthcare system. You take a look at where big pharmaceutical businesses have been hunting for acquisition targets and they have been shelling out big, big dollars for biotech companies. So our treat tomorrow we are going to welcome the CEO and founder of Immuneering, which is tackling the treatment of cancer in a listed on the nasdaq. It went public a couple of years ago. Full disclosure, I am a shareholder, but it's a story about how biotech stocks can be roller coasters when you take a look at their share prices and the work that it takes to get behind the stories and the longer term holding periods you need to have. If you think the story's worth it, join us tomorrow for that. That's it for today's Blue Markets Daily.
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Blue Markets Daily is hosted by Ann Berry and produced by John Curto, Tarek Abdelatif Oven, Laroya and Emily Milhardt. Technical direction by Lonnie Fiskin Brittany Dottocco is our audio engineer, and the president of Morning Brew, Inc. Is Devin Emery.
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Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew daily. We'll see you back here tomorrow. Same time, same place.
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