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FiveNR, Moody's and Wingstop. What three disparate company earnings say about the gig economy, AI and the outlook for the World Cup MRNA that's Moderna scores a U turn from the FDA. We shoot through the share price reaction and the market cheers as Madison Square Garden Sports looks to spin off the New York Knicks from the Rangers. We break it all down for Wednesday, February 18th. It's Brew Markets Daily and I'm Ann Ber. More market details to come. But first, as a Knicks fan, or more specifically a Jalen Brunson fan, the record high today of shares in Madison Square Garden Sports caught my eye like a final second mid range. Well, with a market cap of around $7 billion. The company with ticker MSGs owns the NHL team, the new York Rangers in addition to the Knicks, and it represents one of the very few ways in which public equity investors can actually get exposure to sports team owners. There are some other rare examples out there. There's the Atlanta Braves, which is ultimately owned by a holding company that trades on the Nasdaq under tickers Batra and Batrk market cap $3 billion. Those tickers by the way, a nod to the battery Atlanta, which is a mixed use real estate development that surrounds the Brave stadium Truest park and is also part of the company. Then there's the English soccer team Manchester United listed on the New York Stock Exchange under Ticket Manu, market cap around $3.1 billion. And then there are other so I really do have to say football, Juventus, as Roma, Lazio listed on European stock exchanges. And then the last one that I'll touch on a bit more convoluted, is the Canadian telecoms player Rogers Communications, which trades on the Toronto and New York stock exchanges and counts amongst its vast portfolio of diversified assets. And I'm talking Internet services to radio stations to credit cards. It holds stakes in the Toronto Blue Jays, Maple Leaf, Raptors, Argonauts and fc. So clearly, even among the very limited universe of publicly accessible sports teams, investments out there, true pure plays really just the teams are beyond rare. And that's despite being in really hot demand from investors in a world of rising team valuations. Which is exactly why MSGS announcement today was a big one, stating that its board of directors has approved a plan that will explore spinning off and separating out its New York Knicks business, which includes the Westchester Knicks, from its New York Rangers business, which includes minor league hockey team the Hartford Wolf Pack. Well, a spin off would launch the basketball and then the hockey assets into their own two distinct publicly traded companies the pure play the folks have been looking for. So investors are delighted and I am, though for different reason. It's because I get to nerd out on why. And here it is. It's because this is a classic example of the sum of the parts being greater than the current whole. So analysts have long argued that MSGS trades at a significant discount to the combined stand loan values of the Knicks and the Rangers. And that's partly because the company is controlled through super voting shares by the Dolan family who've shown little prior interest in selling or monetizing those stakes in the teams individually. And as a result it keeps the valuation of the combined locked down as though they'll always just be lumped together irrespective of their individual virtues. Well, in June 2025. So just last year the Boyer Value Group, which is a registered investment advisor and equity research firm, even published an open letter to James Dolan, the executive chair of msgs, urging him to explore exactly the separation of these quote quintessentially trophy assets in the way that the board went out and supported today. Well at the time Forbes valued the Knicks at seven and a half billion dollars and the range is at three and a half billion. So that's a total Even then of $11 billion again June and still combined that would be more than today's value of the conglomerate, the enterprise value trading at around $8 billion. So again that discount there in very real terms to the tune of about 3 billion. This is despite the fact that private valuations have jumped even further since then. We saw that when the Lakers changed hands with a 10 billion dollar price tag late last year. Well in that same letter Boyer Value Group also requested that MSGS at least consider selling the teams to sovereign wealth or private equity funds to get that. But that kind of sale would likely create significant tax bills, whereas the public spin offs announced today being under consideration probably would not. So the devil here is going to be in the details. We're going to see if the Dolan's really will relinquish control and possibly pave the way to outright sale of one of these two franchises at some point. Meanwhile, MSGS stock was up 15% today after by the way, a long time of underperforming the major indices again despite higher private valuations. We are going to keep on watching this and I'm going to keep on watching the Knicks as much as I possibly can. Well, coming up we find the nuggets in today's earnings from Moody's, Fiverr and Wingstop but first, a word from our sponsor, Charles Schwab. Trading at Schwab is powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills, access new online courses, insightful webcasts, articles, engaging videos and more or curated just for traders.
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Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading I do love the
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use of the good use of brilliantly. I do enjoy that that read. Well, we're in the throes of earnings season. As we know, over 120 public companies reported today. And so we did our own sifting on this and decided to try to find a couple that for various reasons just struck us as particularly interesting. And John Pick picked three for us to discuss. Definitely a mixed bag of names, but each with some very interesting nuggets lurking deep in the report. So, John, kick us off with Wingstop, which I have to admit is not one that I've paid a ton of attention to. But it jumped out and struck you over the course of today's watching.
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Yes, exactly. I've seen some wing stops across the country and also should mention that the company catered in wings today for lunch, which was a huge mistake because no one wants to eat wings at their computer. But to Wingstop, the fast casual restaurant chain that focuses not on nuggets earnings
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but on wings, you've been dying to say that. You've been waiting. You've been lurking in the wings waiting to bust that one out.
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Exactly. Ticker wing on the NASDAQ market cap of $8 billion, the company has 3,000 global locations, the majority of them here in the United States, and revenue that they reported today for the fourth quarter of $176 million, that was up 8.6% year over year, but did miss expectations for the full year, 2025. Revenue of about $700 million was an increase of 11% versus 2024. And adjusted earnings per share of a dollar beat by 17 cents.
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So the overarching thing here, everything you just described, revenue up, John, in those two sort of the fourth quarter and for the full year. But domestic, same store sales. Same store sales. That's important metric when it comes to restaurants. For the United States, Those sales fell 5.8%, which is not, frankly, a great outcome. But Wall street had expected worse. So the story here was it was not as bad as it could have Been and there is some hope. The company did say it was expecting flat to low single digit domestic same store sales growth. Again not that great, but at least not a decline. That's their outlook for the full year 2026. And as a result shares popped up over 15% today. So this is a really strange world where, you know, good earnings but weaker guidance is being punished and not so crappy earnings is being rewarded with a 50 share price increase. So just a couple of things to account for those higher than expected outcomes. Cost did decrease slightly. It was helped by lower bone in chicken wing prices. And the company is continuing to grow. It's adding franchise locations. It's a pretty asset light way to grow your footprint because you're not spending a ton of money on the stores your franchisees do that opened 124last quarter bringing in royalties. So again, that's pretty good cash flow for this kind of business.
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That's right. And in terms of consumers, Wingstop is looking for a rebound in its lower income Hispanic and younger customers, which CEO Michael Skipworth pointed out is the most under pressure in this economy. And analysts see rollout of a loyalty program called Club Wingspot and the upcoming World cup as tailwinds to get that traffic into the stores.
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So people do not want to eat wings at their desk, but they do want to eat wings while they're watching some sport, which, which is actually completely intuitive. While shares down over the last six months, you can kind of see why in those numbers and the expectations that were there in terms of decline up 110 though over the past five years. So this is one that's actually done pretty well for the longer term investor.
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It's a growing business.
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It's a growing business. Well, let's now look at Fiverr which can't quite decide whether it's going to be a growing business or one that's maybe facing an existential threat. Now just to talk about what this business does, Fiverr operates a self service digital marketplace where freelancers can connect with either businesses or individuals looking it. So I've used Fiverr, John, and I use this because I was trying to put together a website and I could do it myself. I'd figured that out but I really didn't have the time and I just wanted to find a marketplace where I could go click around and see the portfolios of a couple of freelance designers and just sort of pick one and give them some guidance and let them get on with it. So graphic design, editing, programming, common threads for the kinds of services on offer on Fiverr. It was originally founded 15 years ago and initially freelancers would charge five bucks a gig. So that's where the name Flavor F I V E R R actually comes from.
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And it does show the evolving state of the platform. So years ago, I had a friend who would sell a song for $5. They'd compose and compose a song and. And then now, like you mentioned, it can be for more graphic design or bigger things. And now they're pivoting once again.
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Was that really a friend or was that you? Because I know you write jingles. I looked you up on your LinkedIn and you totally have a history of writing jingles. So here's your moment of truth. Was it actually you, John?
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I don't think I could get $5.
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Well, look, ticket Fiverr FVR listed on the New York Stock Exchange market cap, $450 million. Pretty small. Shares down 7% today, even though actually fourth quarter revenue is up.
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That's right. Fourth quarter revenue was $107 million, up 3.4% year over year. And the marketplace revenue, that's the cut they get from the services by freelancers was $71 million. But that, that's down 2.7 Euro year. So the marketplace is contracting. Annual active buyers of 3 million was down 13.6% year over year. So just contraction in their core business.
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And this is one that's really taking the hit in terms of the overall skittishness around certain tech names. Shares are down 48% over the past six months, down 95% over the past five years. It's one of those coming down off of its pandemic highs. And this is one where the company is desperately trying to get the message out that it's going to survive and thrive in a world of AI. We'll talk about how it's trying to get a narrative out of reinventing itself. But in September, it laid off 30% of its workforce using AI to automate systems. But the existential crisis I think that this business is facing, and this pegs a little bit to the experience I had with it. A lot of the service offerings that are on this platform are ones that are quickly being AI'd away. So now, if I wanted that website to be created, I would just go to Figma, right? And I would probably do it myself. So the problem here is twofold. It is the services being replaced by LLMs, meaning those freelancers, unfortunately aren't going to face as much demand. And that also means that, you know, on the user side, Yes, I may be helping to sort of cut get costs out of here, but maybe not fast enough to offset that decline.
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And I'm going to say exactly what the CEO Kaufman said on the earnings call today. We have begun executing a comprehensive multi year plan to transform Fiverr from a transaction oriented marketplace into a trusted work platform. One that enables businesses, AI models and agents to collaborate with talent on complex high value outcomes through intelligent matching, integrated workflows, end to end orchestration and fulfillment and durable trust. I know what he's saying, but at the end it just sounds like their hope, their ambition is to connect bots and agentic agents with artists.
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Yeah, and you know there's a lot of words, a lot of buzzwords there just passing through that quotation and the truth is it's really sort of very similar to what it does now. It's what Upwork does. You know there are elements of Adobe that do this. The idea that it's integrating into businesses systems, but that is exactly what these LLM models are also displacing. So I think the trying to get itself in the right place now one thing I will actually give them credit for though is they are at least trying. They looked ahead to the full year 2026 and said look, revenue is going to be down 3 to 12% from the prior year and the company has said it's positioning itself to take off in 2027. So I just want to read something from the press release that quote resetting expectations to invest for long term growth. As we execute this transformation, we are aligning expectations around a disciplined investment phase. While near term growth may be volatile due to market conditions, in the scope of our initiatives, we're committed to protecting structural profitability and generating healthy cash flow. We believe these investments position Fiverr to accelerate growth and drive value creation in 2027 and beyond. It's basically saying this year is a complete wash. We're trying to figure it out. But I got to tell you just again that CEO quote, I'm not hearing a definitive plan yet. So we'll keep watching this one. I do have a bit of a pit in my stomach talking about the stock too. They're not investment advice, but just intuitively I do worry that this one hasn't quite found its way quickly enough and I'm not sure it's going to. Well, just another one that we want to chat through is Moody's. Moody's analytics ticker MCO on the New York Stock exchange market cap $80 billion. And so Moody's has played A big part in my investing life. The company has been around for over 115 years, and it says that its mission is to be the source of insight for navigating risk. So providing data, expert analysis, robust tools for businesses and investors. And what they're really known for, of course, is their credit ratings. So that whenever corporations or governments or municipalities issue debt, they turn to Moody's as one of the rating agencies. And this is the way in which investors get a second pair of eyes, a check on an expert credit rating agency that is able to say, look, this is the debt profile, this is the risk profile, this is the cash profile. This is how we're going to ascertain the role it should play in your portfolio. So it's very important, and, you know, as I said, having grown up in the world of leverage to fund private equity deals, talking to Moody's about what your company and your portfolio is going to get as a credit rating was an important part of any deal process.
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Very important. And just to look at the range of things that they cover, in 1997, we may remember this, David Bowie securitized royalties on his back catalog. They called them Bowie Bonds. And initially the 10 year bond was rated by Mooney's as Triple A. Yeah. And then later in 2004, with music piracy, the bond were downgraded to Ba3, just above junk bond status. But the bonds were paid off in full in 2007. So that was a fun one that I remember following that in the news. And Moody's was a big part of that story.
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Well, revenue did beat estimates for the latest quarter hitting $1.9 billion, up 13% year over year. Sort of reflection of the amount of deal activity that we saw last year. And so credit plays a big part of that. Adjusted earnings per share beat estimates by 20 cents, up 39% year over year to hit $3.64. And quarterly profit of 610 million, 8% higher than estimated. All good news and all rewarded with the shares up over 6% today. But one of the things we want to talk about again, I mean, it sort of relates to what we talked about with fiverr, which is AI and people and what are businesses in the service industry going to do? And Moody's is a financial services business that currently employs over 15,000 people. And the concern here, of course, John, is that the research and analysis this could be done by AI. I absolutely, by the way, believe that based on my own personal experience, I have no doubt seeing the plugins that, you know, exist to Things like Excel, that a lot of the analysis, a lot of the stress testing, a lot of the scenario analysis that Moody's does as part of its underwriting process can absolutely be sped up and done in large part by AI.
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And I think that was addressed today by CEO Rob Faber, who was saying that, you know, this work could be done by AI. But he kept saying that there is decision grade contextual intelligence at play at Mooney's and that they have high stakes decision making. I kept seeing this over and over again in quotes that these are high stakes. You don't want to leave it up to a bot, you want to leave it to a professional human. And then also talking about the. The other moat that they see is the data that they have. Over 100 years of being in business, our data can't be synthesized from public sources. The CEO said that data is both AI enabling and AI resilient.
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So I'm just going to sort of bust through it. There was a lot, it was very dense, right? What he had to say in those quotations, I was going to bust through it a little bit and actually talk about how this process works. So again, when you go to Moody's, let's say you, John, want to issue John Crateau bonds, right? Here's what happens. You go and you make an appointment. You see a Moody's officer and an analyst and you sit down, they're under a non disclosure agreement, they've signed an NDA and you present to them your own private financials that nobody's seen yet, right? And you say, okay, this is what my financial profile looks like, my cash flow outlook. What do you say? Moody's about these John Ko set of financial projections and they will give you feedback. And that process does tend to be done privately. So there is something to be said that Moody's does indeed play a special role because if AI is mainly sourcing its information from public disclosures and you haven't disclosed anything public yet, then that makes complete sense. So I do think there is a role, I do think there is a moat around that. But I do think again whether it can continue to charge what it's been charging and enjoying the margins that it's been enjoying. When people, people like me, know how much AI is now automating away a lot of the grunt work. That is where I think it's going to get a little bit tricky for companies like Moody's. But I'm fascinated by this one. I love this stuff. So going to keep on watching. Well, let's take a break. And when we come back, we're going to spin through the headlines that move the market today, including a glimpse at some of Warren Buffett's final investment moves. We saw a lot of 13F disclosures today, of course, showing what people were doing at the end of last year. John, what do you prefer? Mystery meat or meat from an organic farm that you know has high standards?
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Obviously the less well.
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Do you hold your supplements to the same standards?
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I've never thought about it, but I guess not.
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Well, you should. It's why Iherb buys direct from manufacturers and trusted distributors to ensure authenticity. No third party resellers allowed. You can finally 2000 brands and tens of thousands of products to choose from on ihub.com what you won't find hidden membership fees. They make wellness accessible globally, shipping to over 180 countries while accepting 80 plus currencies and more than 40 payment methods.
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Plus their eye tested products are continuously tested for purity and quality standards. Stock up on supplements from a trustworthy source. Go to iherb@iherb.com that's iherb.com There it
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is, the closing bell. 4:00pm on the east coast and the markets wrapping up after a tumultuous day. Actually, well, we don't have a ticker tape. We'll throw it over to our human ticker, our producer. John.
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That's right. The S&P 500 finished up half a percent, the NASDAQ finished up a quarter of a percent and The Dow was up 8.10of a percent to finish the day. A few market headlines, according to regulatory filing, Berkshire Hathaway cut its holding in Amazon by more than 75% in the fourth quarter of 2025 while also building a stake in the New York Times Company accounting for one of Warren Buffett's last new investments as chief executive officer of the conglomerate. Berkshire acquired 5.1 million shares of the Times in three months through December, a stake worth $351.7 million.
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I'm very curious to know why that was. So I'm going to be looking out to see what the disclosures are there. As to the rat, shares in the New York Times ticked up 1 1/2% today on that news, seen as a vote of confidence from one of the greatest investors of all time. They are up actually 25% over the last six months. New York Times been doing pretty well showing that subscription content models can still work. A good reminder also, by the way, that the Times it is a publicly traded company which is often easy to forget, but one that has been controlled through boating control by the Ox Salzburger family since 1896, and many generations have actually worked in the business too. It's fascinating.
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Shares of Moderna were up over 5% today after the Food and Drug Administration, that's the FDA, changed course from a decision last week and agreed to review Moderna's application to sell a new MRNA flu shot. The reversal comes after Moderna proposed a revised regulatory approach that addresses agency criticisms and tailors the new proposal to an older population. The days long public dispute between the FDA and Moderna prompted market concerns about a shift in U.S. vaccine policy under the Trump administration and potential impact on
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pharma stocks, and a final decision just to wrap that up is due on that flu vaccine in August, and that would enable Moderna to make that vaccine available for the next flu season. Well, finally Palo Alto Networks. That's Ticker Panw. We flagged this one right at the end of the show as a name that we were going to be eyes on. With their Post Bell earnings released, the cybersecurity firm did exceed revenue and profit estimates for Q2, but its full year earnings outlook fell short of fair lofty expectations. And the reason why is pretty interesting. It's because this company is going to be so busy, some would say distracted, but really focused on doing the heavy, heavy execution lift which is integrating multiple recent large acquisitions. Just as a reminder, this company bought Cyber Arc, purchased it a $25 billion deal. It's a large one. Last year also bought the observability platform Chronosphere that signed in November and only last month Palo Alto decided to do even more and add more its plate by agreeing to buy the startup Koi. So that is a lot of operational focus to take away potentially from the core existing business and redirect it towards making sure that teams are integrated and operations are integrated. It's just a lot of work.
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And the deal aims to expand Palo Alto's capabilities in AI following its launch of a suite of new agentic tools in the fourth quarter.
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Nevertheless, shares did trade down today and the CEO Nikesh Arora went out of his way, interestingly, to address the software selloff that has hit Palo Alto as well as others in recent weeks. He said in an interview on CNBC today it was good one to watch. Quote I'm still confused why the market is treating AI as a threat to at least cyber security. One thing we're definitely seeing is that customers have figured out that they need to drive more consistency in their security stack to be able to respond faster using AI. So couple of analysts, including well known wedbush analyst Dan Ives, came out and said we didn't get it either. So we've seen actually some of the analysts coming out in support of this particular name. Well, there are more earnings coming out this week, some big ones. We've got Walmart on the docket tomorrow after the bell right now I think we've got Door Dash, we've got a couple of others, including Open Door. I think that's also coming on the docket. So lots for us to catch up on. We're brewing some more tea and coffee, but it is that's it today for today's Brew Markets Daily.
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Brew Markets Daily is hosted by Anne Barry and produced by John Coteau, Tarkov Delatif and Emily Miller. And our Technical director is Uchenwa Ogu. Jim Orzo is our audio engineer and the President of Morning Brew Inc. Is Devin Emery. If you have any feedback or company you'd like us to cover COVID leave a comment or send an email to brewmarketshow@morningbrew.com.
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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.