Lululemon Athletica (NASDAQ:LULU) shares hit an all-time high on earnings. Dave & Buster’s (NASDAQ:PLAY) delivers a surprise. Boston Beer (NYSE:SAM) falls on sluggish seltzer sales, and fintech company Affirm Holdings (NASDAQ:AFRM) soars on strong revenue growth and an Amazon (NASDAQ:AMZN) partnership. In this episode of Motley Fool Money, Motley Fool analysts Emily Flippen and Jason Moser discuss those stories and talk about the latest from RH (NYSE:RH), Coupa Software (NASDAQ:COUP), Paypal Holdings (NASDAQ:PYPL), and Casey’s General Stores (NASDAQ:CASY).
Plus, Villanova sports law professor Andrew Brandt talks about the business of football and the future of sports betting.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on September 10, 2021.
Ron Gross: It’s the Motley Fool Money radio show. I’m Ron Gross sitting in for Chris Hill. Joining me today are senior analysts Emily Flippen and Jason Moser. Fools, how are you doing?
Jason Moser: Hey.
Emily Flippen: Hey, Ron.
Gross: Good to see you, Fools. Earnings season isn’t over yet. Today we’re going to talk about fintech, home furnishings, and video games. But we begin with something you’ll never see me wearing, and that is yoga pants. On Thursday, Lululemon reported results that handily beat expectations and the shares were up more than 10%. Emily, results look strong. Should investors be concerned about the supply chain issue they talked about or is that just a temporary problem?
Flippen: Supply chain issues are completely overblown for Lululemon. Not just because they’re impacting all manufacturers across numerous industries, but because Lululemon is in the enviable position of being able to pass along most of these costs to customers, which means they’ve mitigated their supply delays with things like more air freight. They can afford to lose some points on their gross margins over the short-term in comparison to their competitors. Moreover, their clothing tends to be less seasonal than other retailers, which means they generally have less inventory risk and whose stable offerings throughout the year does also insulate them from the supply disruptions. But Ron, you should really never say never when it comes to yoga pants. Because if you look at this quarter for Lululemon, a bright spot was actually their men’s apparel. It grew faster than their women’s apparel on a two-year basis. Total revenue was up more than 60% year over year. I guess apparently, we’re not all done pretending like we’re working out. I imagine there are some people out there who are putting their sports bras on for Lululemon and jumping on their Peloton or jumping in front of their Mirror. But I think even more people are just putting on their comfy Lululemon clothing because they adopted this very comfortable lifestyle from the pandemic that they are pulling over into their daily lives even as they go back to the office.
Gross: I will keep an open mind. Companies like Lululemon, they’ve obviously benefited from work-from-home, from exercise at home. Let’s have some fun for both of you. What’s one current trend that you think stays or goes away post COVID, Emily?
Flippen: For me, I think it’s our consumption trend. I think what stood out to me over the past few years in comparison to how Americans shop is just how willing we are to still spend money even though we’re not going anywhere. That’s a trend that I don’t see changing. The average American bought over 68 pieces of clothing every year. I mean, 68 pieces of clothing, that’s incredible. That largely didn’t change as a result of 2020. I don’t expect that to change into 2021 either.
Gross: Jason?
Moser: I do think that the delivery phenomenon is here to stay. I mean, much as Amazon really gave us as consumers a new way to value our time. I think this is just the next step in that evolution. The pandemic really more or less hastened it, but I think folks are just realizing there are other ways to utilize their time and if something as simple as grocery delivery or food delivery can help free up a little bit more time, I think consumers just value time today more so than we ever have because we have so many more options. I think the delivery phenomenon is here to stay.
Gross: I get a big juicy burger delivered and then I’ll pretend to hop on my Peloton, that should work perfectly. Last week, shares of buy now, pay later company Affirm shot higher when the company announced a new trial with Amazon. On Friday, shares were up another 25% as investors seemed very pleased with the company’s fiscal 2022 guidance. Jason, guidance was strong, but how did the quarter look to you?
Moser: Guidance was strong. But when you look at the quarter, total revenue was up 71% from a year ago, which is clearly very strong. It turns out that when you saddle up with companies like Shopify and Amazon, the market likes that, Ron. Now kidding aside, these relationships really do matter a lot. I think they address one of the key risks in customer concentration with Affirm. They really were levered to Peloton in a big way for a long time. They are doing exactly what investors have been hoping for in diversifying their customer base. It’s not the magic bullet, so to speak but to my mind, it was paramount for this business to be able to have a shot at real growth and to just put these numbers in to context, for the nine months ended March 31, 2021, approximately 31% of Affirm’s total revenue was driven by Peloton. Now, that number was actually up from a year-ago as well. These relationships are going to be very valuable as they should help ultimately bring that number down, which is obviously very good.
Gross: On Wednesday, RH, the company formerly known as Restoration Hardware, beat expectations of both the top and bottom lines. Emily, RH shares are up a whopping 2,300% over the past five years and the strong operating results continue. This is just a home furnishing retailer, right?
Flippen: No. Anytime a business goes through a name change, you know, they’re trying to reinvent themselves. It’s like going through a bad breakup and getting a different haircut or dying your hair. This is what Restoration Hardware is doing. For so long they’ve been known as a home furnishing retailer, luxury retailer, but home furnishings nonetheless, and CEO Gary Friedman has made a really concerted effort over the past few years to completely reinvent this business. I and many investors have been skeptics, I suppose, of their ability to become more of a lifestyle brand as opposed to a home furnishing retailer but they are certainly proving it out. The opportunity is still very much ahead of this business despite its meteoric stock price rise. They’re building an entire ecosystem around what it means to be a luxury brand. In fact, they even announced over this recent quarter that they’re launching a platform called the world of RH, which really acts as a portal to brand and style advice, but more importantly, as a funnel into their media arm that they’re now partnering with lifestyle and luxury influencers to create content for brand leaders. Then they’re getting into things like the retail and real estate market. They are actually purchasing real estate, things like hotels, homes, apartments, condos, selling them to people. They’re fully furnished, already made, move-in ready. The idea is to serve consumers who have more money than they have time. I’m not quite sure what success looks like for this business, but it is certainly an understatement to call it simply a home furnishings retailer.
Gross: Has their loyalty program been a big part of this, or is that too old school for this innovative company?
Flippen: It’s a little old school, Ron, I have to admit. I think what’s more important for them moving forward is probably their galleries. This isn’t your Pier One import, where you walk in and you’re looking to make a purchase. It’s more like you’re walking into a Restoration Hardware gallery or an RH gallery, as I should say, and you’re conceptualizing your space. It has much less to do with loyalty and much more to do with lifestyle.
Gross: Earlier this week, Coupa Software posted second-quarter results that beat expectations and the stock jumped. But as the week wore on, shares gave back most of their gain. Jason, what gives? Good report or not so good report?
Moser: I think it was a good report, but it had its fair share of caution. I mean, the quarter itself was strong. I mean, it grew the top line 42% from a year ago on subscription revenue, which makes up the overwhelming majority of the business was up 40%. It’s been a challenging year from a stock perspective, shares were down around 25%, but I think a lot of this really is valuation-related. Right now the stock is actually valued around 53 times gross profit, around 30 times sales. But when you listen to the call, they mentioned something on the call that I think gave investors maybe a little pause. They noted that while they’re excited about the prospects for the back half of the year, they continue to incorporate what they call a heightened level of caution in their outlook. That’s something that investors just need to keep in the back of their minds. It really is all about the future but Coupa remains a strong business and a very attractive market opportunity, helping businesses manage their spending better. Roughly $2.8 trillion in cumulative spend under management that Coupa reported over this past quarter. I’d say a strong quarter, it’s probably a little bit more valuation-related, a little bit of a cautious outlook, it’s understandable.
Gross: Coupa, not afraid to make an acquisition. Management stated that their long-term compounding growth profile of 30% hasn’t changed. Do you think they need to continue to make acquisitions to get there or can they do that organically?
Moser: I think they can probably do it organically from this point, but it’s worth noting that competition is heating up in the space. We saw recently here, another company we talk about on the show, Bill.com. They recently made an acquisition of a company called DivvyPay, which pursues that same market opportunity in business spend management. We’ve seen Bill.com really performing very well also. This is not a market that Coupa can just own at its own leisure. They will have to keep those competitive fires burning, so to speak. But as I said, it’s a massive market opportunity and oftentimes with things like that, you’re going to have more than one winner. I suspect Coupa is in a pretty good place.
Gross: Coming up, we’ll grab a hard seltzer and play some video games. You’re listening to Motley Fool Money.
[…]
Welcome back to Motley Fool Money. Ron Gross sitting in for Chris Hill. Earlier in the week, PayPal announced that it would buy Japanese buy now, pay later start-up Paidy for about $2.7 billion. Jason, as we saw with the Affirm-Amazon deal and the Square-AfterPay acquisition, buy now, pay later is certainly hot. Does this even move the needle for PayPal though?
Moser: Perhaps. There absolutely is a potential in the long run, no question there. It’s a smaller acquisition though in the context of this market. But Japan is a $5 trillion economy with a population of around 125 million people, and it’s the third largest e-commerce market in the world. Online shopping volume has more than tripled over the last 10 years to around $200 billion. That’s the market really the Paidy is playing into, it’s got this two-sided network with more than 6 million registered users, more than 700,000 merchants, and it’s already accepted at the top 10 Japanese marketplaces. I think it’s an interesting point to note that while digital commerce and cashless transactions are still growing in Japan, around 70% of all purchases are paid for in cash, interestingly enough. As a culture, they tend to steer away from those heavy debt loads. We’ll want to see that number come down over time for this to really move the needle, I think. But all-in-all, I do understand the attraction there. It gives PayPal entry into a new market. It’s probably easier in this case for them to buy it as opposed to building it.
Gross: Casey’s General Stores reported fiscal first-quarter results that included a slight decline in earnings, but the company did increase its dividend for the 22nd year in a row. Emily, what stood out to you in this report? Was it strong or not so strong?
Flippen: Ron, this was an excellent quarter for Casey’s General Stores. Do you think it’s an overstatement if I were to say that Casey’s is the best publicly traded convenience store on the market today?
Moser: Probably not. But I can’t really seem to pull another competitive name out on top of my head.
Gross: Exactly. They’re private, the ones I would think of.
Flippen: There’s no other publicly traded convenience stores that can come across people’s mind because in general, convenient stores aren’t a particularly lucrative place to invest, and that’s because they are heavily impacted by things that are outside of their control, like gas and travel demand. While investors may look at this quarter and say, “Wow, revenue was up 50% year over year,” it’s a bit of a meaningless metric when it comes to Casey’s because it’s so heavily impacted by gas prices and travel demand, both of which were extremely low this time last year. That being said, earnings were a bright spot. They were a tad below their all-time high earnings per share, but still very high for Casey’s largely due to those costs, again, coming down as a result of the pandemic. What stood out to me though was their private-label sales rose to 4.4% in the quarter. Management has the lofty goal of getting that to 10% over the next few years to match the industry average. If they’re able to do that, that can meaningfully impact their gross margins which would be a really interesting thing to see evolve for Casey’s. But as great as this quarter was, I still can’t feel like buying Casey’s stock is just settling for second best. I know WaWa, Sheetz, Buc-ee’s, the Texas Buc-ee’s, they aren’t publicly traded, but if they were publicly traded, I can’t help but think they would just eat Casey’s lunch.
Gross: In this world of tech and innovation, it’s hard to get your money invested in a convenience store or a general store. Now they’ve had quite a success and it’s been a very strong business over the years, but it would seem to me that perhaps there’s better places for one’s money.
Flippen: Certainly.
Gross: Dave and Buster’s reported second-quarter results that easily beat expectations sending the shares higher. Jason, comps are tough here because of what COVID did to 2020 obviously. How do the results look if we compare them to 2019?
Moser: Yeah, that’s a good question. I’m glad you asked that because you’re right. Comps to 2020 are more or less meaningless. If we compare it to 2019, you get a better picture and revenue of around $378 million compared to $345 million in 2019. Comps were up 3.6% over that same period. It’s been a bit of a rollercoaster year so far, but what a difference a year does make. If you remember, just a year ago they were using the phrase “going concern” in their 10-Q. There were questions at the time as to whether they can actually survive the pandemic, and the market was really punishing the stock for it. But thankfully, I think for investors, they’re past that. That said, it is a business with some fundamental challenges management will need to take on. But the good news is that it does really seem they are meeting that challenge.
Gross: Quick question for both of you. If you’re the CEO of Dave and Buster’s, you’ve newly become the CEO of Dave and Buster’s, what’s one thing you do to improve the business? Emily?
Flippen: They need better advertisements, they need a facelift, they need to change their image and raise the public, because right now I think people are write-off Dave and Buster’s despite the investments they’ve made in technology over the years.
Gross: Jason?
Moser: After reading through the call, they’re doing what I was hoping they would do. Focusing a little bit more on things like sports and maybe they’ll be able to incorporate sporting events, some type of sport betting dynamic into the business there. They just inked a partnership with Pardon My Take, Barstool Sports. Pardon My Take, that podcast from Barstool Sports. You got Big Cat and those guys are going to be showing up at Dave and Buster’s for some livestreamed events. I think that will be a lot of fun, it will attract a new market demographic there that should help grow traffic over time.
Gross: When I was last in Dave and Buster’s, let’s call it 10 years ago, I had a barbecue, bourbon, chicken that was quite tasty. If I’m CEO, I’m doubling down on barbecue bourbon chicken, all the way. Good stuff.
On Wednesday, Boston Beer withdrew the guidance it gave in July saying it had overstated demand for its hard seltzer business. Emily, is the hard seltzer trend over? Please say yes.
Flippen: I hope it’s not. As a hard seltzer aficionado myself, I know that my consumption of Truly or White Claw, and all the numerous other hard seltzer brands has not necessarily decreased over the past year. But I will say there are a lot of people that are no longer buying their hard seltzers in stores. They’re going out with friends where the distribution for hard seltzers tends to be much smaller. For that reason, Boston Beer did withdraw that prior guidance. It’s not great to see a withdrawal of guidance so soon after they issued that guidance, which was already much lower than the guidance that they had issued even earlier this year. The trend is certainly downward. But I will say this, despite what happens with hard seltzer, despite how fragmented the industry is, I do think that Boston Beer has a lot of opportunities ahead of it. They have reinvented themselves as a business. They’re not afraid to move fast. They have great distribution, they’ve made smart partnerships, and I think they are well prepared for whatever the next best thing is.
Gross: Do you think there are just too many hard seltzer brands out there? If so, do some just go away or is there a chance to be consolidated here, or is there really no need for consolidation because they’re all basically the same thing?
Flippen: As a consumer, I think there’s never too many brands. But I do think your point as an investor, I don’t think that we’ll see the number of brands sustain themselves over the long term that we see today. But the big ones, the ones by ABM, Boston Beer, Constellation Brands, I expect those have long-term staying power.
Gross: Jason, you’re a golfer, you’re out on the golf course, you crack and open a nice cold Truly?
Moser: God no, Ron, never. I’ve never had a hard seltzer in my life. I would happily crack open a Samuel Adams Oktoberfest or maybe this new fest beer that they’ve got. But I’m good on the seltzer.
Gross: Nice. Fools, we’ll see you a little bit later in the show. Up next, a conversation with Andrew Brandt, Executive Director at the Moorad Center of Sports Law at Villanova University on why the NFL is the undisputed king of sports in America. Stay right here. You’re listening to Motley Fool Money.
[…]
Welcome back to Motley Fool Money, I’m Ron Gross. Earlier this week, Chris Hill interviewed Andrew Brandt, a Sports Illustrated columnist, host of the business of sports podcast, and the executive director at the Morehead Center of Sports at Villanova University. They discussed the rise of sports betting and whether it’s a zero-sum industry, the current group of rookie quarterbacks and why the NFL is the undisputed king of sports in America.
Chris Hill: The NFL is more popular than ever. When you think about the threat of COVID last year and what that had the potential to do to the season back earlier then those players kneeling, it’s going to turn off the fans. It seems like every year or two someone is eager to write the obituary of the NFL. Are you at all surprised that it is still, as you put it recently in one of your columns, the undisputed king of sports in the United States?
Andrew Brandt: Chris, I’m not surprised at all. I think as you mentioned, it seems every year there’s something that’s threatening the continued prosperity of the NFL as King of the Mountain when it comes to sports. Like you mentioned, one year it was the kneeling and protests and social causes and there was a faction that said that’s going to be the death of the NFL. Another year it was concussions and how brutal the sport is and that’s going to take people away from playing the game and thereby losing interest in the game and young people aren’t going to play contact football. Then in the past year and a half, of course, it’s been COVID. The fact that they are going through all these protocols and people are going to get turned away. It’s as strong as ever. In fact, valuations came out, they are through the roof for all the teams done by Forbes every year and that’s no surprise because the one thing that the NFL has that no other league comes close to is the product on television. It just continues to soar in ratings and even if ratings are off at dip, a little dip who cares? It’s the most powerful programming on television. It’s the only appointment television really for a lot of people including myself and they just did, they, the NFL owners, just completed $110 billion of television contracts. That’s right, with a “B.” $110 billion over the next 12 years. That hasn’t even kicked in, it won’t until 2023.
You can just talk about whatever you want to talk about with the NFL, it’s there and my last comment is on ratings. Ratings don’t really matter. Let’s say we were in week five and something happens and the ratings are really down for the NFL, who cares? They just inked $110 billion for the next 12 years. If ratings are terrible, ratings are great. It’s all locked in right now.
Hill: One of the things you and I have talked about over the years is the issue around health and safety. Obviously COVID and the role of COVID and which players are vaccinated or unvaccinated. That’s a big topic this preseason but somewhat overlooked in the conversation about player health and safety, is the fact that the schedule has been expanded to 17 games. For more than 40 years, it was a 16-game schedule. Now it’s 17 games, I don’t think it’s going to be another 40 years before they look to expand to 18 games and I get that more games means more money, but do you think it’s good business in the long run?
Brandt: I think it’s always good business for the NFL to have more inventory and more product. From the player’s side, of course not. They’re giving up more inventory, more of their bodies, more of their career, extra game if you can lay it on that means that potentially loss of a year of their lifetime in football. I was very critical a year ago, Chris, of the collective bargaining agreement when the NFL players gave away that precious asset of the 17th game. Now they were getting some massive increase in overall revenues, they are getting some big, I don’t know, deal that they were going to live off of for the next 12 year of their CBA, great, but they didn’t get enough in the return to give up this massive give of the 17th game. It’s happened. As you indicated, 40 years of 16 games, I think it’s an obvious statement, but it needs to be said, we’re not going back. We will never, ever see a 16-game schedule in the NFL again. We may see an 18-game schedule in 10 years, but now we’re at 17 and no one knows, it’s new uncharted territory, how it’s going to look this year, what’s going to happen. The attrition we can expect will be further. We have, pick a number, 25% of the league gets injured over 16-game season. Maybe it’s 29% or 31%, or 33% of the league gets hurt over 17-game season. By hurt, I mean something that will keep a player out of a game or maybe even three games. Yeah, at one point, Chris, we heard well, we’re going to do 17, but players can only play 16. Well, that went by the way so pretty quick. Players will play if they’re able, all 17, and again, the toll will increase year-over-year so we’re in uncharted territory here we go, 17 games for the first time ever.
Hill: Another big story line during the pre-season is something that goes against what fans have heard for decades about rookie quarterbacks. They need time to adjust to the speed of the game, they should take a year or two to be on the sidelines, hold a clipboard back up a veteran and yet we’ve got three teams that are going to be starting rookie quarterbacks week one. I get the sense that you like this move.
Brandt: I do, but let me give my full disclosure because I know everyone will come back at me. Yes, there were the Packers for 10 years. Yes, I went through this. But they’re different. Let’s not put the Packers in this discussion because in each case, 15 years ago and now, the backup first-round quarterback is playing behind a bonafide first ballot Hall of Fame quarterback. Let’s put that aside. Now take the other five teams this year that have the first-round quarterback. As you mentioned, Jacksonville, Trevor Lawrence, right away, Jets, Zach Wilson right away, and just found out last week Patriots’ Mac Jones over Cam Newton right away. The two holdouts are the Bears who drafted Justin Fields are now going to go with Andy Dalton. The 49ers who drafted Trey Lance and gave up a ton to get him still going with Jimmy Garoppolo. I think that’s not optimal because I think of a couple of things. No. 1, Garoppolo and Dalton are not your future. These other players are. In my words, get on with it. Just get on with it. No. 2, these guys are going to replace them, whether it’s going to be game three, game four, game five, game seven, game nine, it’s going to happen. What are we doing? If I’m talking to the 49ers, or the Beyers, what do we do? This idea of sitting and learning, what are they learning by sitting?
My point is, you’re going to have drawing pains with first-round quarterbacks or with any rookie quarterback. Why not get it over in week one through five instead of weeks five through 10, that’s my feeling. My prediction, Chris, is I’m going to stake a claim not only by Halloween, but by the end of September, all five will be starting. That’s my claim.
Hill: Well, and if you’re the television networks, you have to be pretty happy about the youth movement for NFL quarterbacks. It’s a glamorous position, Drew Brees just retired, Tom Brady, I don’t know at some point in the far future he will retire and this crop of rookie quarterbacks increases the likelihood that new stars come into the league.
Brandt: On that point, this is another problem for the 49ers and Bears, Chris, because, you know as well as I do, everyone listening knows, the Bears starter, the 49ers starter throw a bad interception, had a bad game. The drumbeat is going to be loud. Get the rookie in because they are the most popular players on that team right now from a fan standpoint. These five quarterbacks, like you mentioned, are bringing a tremendous amount of buzz to the league. They were the most-watched players in preseason, I think that’s safe to say. Yes, that’s great because again, Brady will move on, Brees moved on.
Brandt: Roethlisberger will move on, we just had Philip Rivers move on, and a side note to all this, I think Deshaun Watson and Aaron Rodgers will be playing for different teams in 2022. We’ll have new young quarterbacks playing for those existing teams.
Hill: Anyone who is consuming any type of information about the NFL is almost certainly running into advertising from some business in the sports betting industry. It’s something you and I have talked about before, and speaking of drum beats, it only gets louder and louder. It’s amazing to me the incentives that are being thrown out in commercials on television just to get people into their system. Two-part question, one, does the money surprise you at all? Then two, do you look at sports betting as more of a zero-sum game than other industries because it does seem like something where once you’ve got your betting app that you’re familiar with, you’re probably just sticking with the one.
Brandt: I don’t know where to start here, Chris, because there is no area of sports law, which I teach, or sports business, which I teach, that has undergone as big a sea change as this — none. Because you and I were talking years ago. It was the complete taboo, it was pick a story, it was Tony Romo not allowed to go to a fantasy football convention in Vegas simply because it was attached to a casino The Sands in Las Vegas. The suspensions and kicked out of Pete Rose, of Alex Karras, of Paul Hornung, just name it. What changed? Well, one thing changed in 2015 was the market share embrace of fantasy. Where two start-ups, which essentially were, FanDuel and DraftKings, bombarded the NFL with advertising which again was accepted and embraced because it was fantasy, it was soft gambling. It’s like pick your mashup team and having fun with it. Well, then the courts became involved because the NFL, NBA, NCAA, NHL, NBA, they were all fighting against this because of integrity, we know that word, and they lost. Seven years in court fighting New Jersey who wanted to implement sports betting, they lost, the leagues lost. I’ll never forget the day, May 14, 2018, and the floodgates opened. Now we’re in 23 states plus the District of Columbia, not only legalized sports betting, but having, like you said, mobile, and we’re going to have more in-stadium sports facilities, sportsbooks. We have it in Washington in the arena, we have it at MetLife although it’s at Meadowlands next door to the stadium, it’s happening.
Arizona and Glendale have it in the stadium. It’s de rigueur now for teams to have an embrace of sports betting. The zero-sum is a great question because now there’s a gold rush, a land rush, get in, and everybody is doing partnerships, Barstool with Penn Gaming and FOX sports with PointsBet, ESPN is looking for their partner. Once that matches up, then there’s going to be no one left. You’re right. We’re in this golden age of sports betting, where in a couple of years, there’s no more land to be mined and everybody’s matching up. I think the biggest point is on that day I referenced when the Supreme Court legalized sports betting. There was a statement from Mark Cuban who’s always prescient in these matters, the owner of the Dallas Mavericks, who said this will double, he used the word double, the value of sports franchises. We’re not there yet. But if we look at sports value of franchises in 2018 and maybe in five more years, it may have doubled, and sports betting may have been a big part of that. Everyone’s looking for new revenue sources. This is a big one.
Hill: Last thing and then I’ll let you go. This is local to where I am and where you grew up. The Washington football team has reportedly narrowed down its list of new names. Armada, Brigade Commanders, Defenders, Presidents, Red Hogs, Red Wolves, and then just sticking with the Washington Football Team. Is there some business upside to changing it because as you and I were talking during the break, it seems like they backed into the Washington Football Team, and people like it a lot more than I think they probably thought.
Brandt: As we talked about, people didn’t like it at the beginning and then it caught on, it was almost this European soccer lingo, cool football team. But no, it seems like they’re going to change it, and I think the buzz that the Washington Football Team got, albeit delayed, will happen again. People will be resistant to the new name, people will hate it. There’ll be some memes and bad negative tweets, but they will embrace it at some point. It’s this drumbeat, we keep using that word toward the new name. Now they’ve released the finalists and people are going to talk about that. It’s a good marketing scheme. Listen, I was a diehard fan growing up and I thought nothing galvanized Washington D.C. like that team. It’s gone through some tough times. But it just seems like they got the right thing going there. Jason Wright comes from a finance background and he’s running the team now, Ron Rivera brings credibility right away and integrity to the team. They are on the upside and they are in a bad division, they are favored to win by many, that division, and they have the ultimate survivor of the NFL, Ryan Fitzpatrick as their quarterback, he’s the ultimate survivor. I say that with fondness because every time he is left for dead in one situation he emerges as starting for another team. There we are, they are trying to capitalize on a lot of newness around the team and we’ll see how long it lasts.
Hill: I appreciate your time, Andrew. Thanks.
Brandt: Always enjoying it, Chris.
Gross: Coming up, we’ll share some stocks on our radar. You’re listening to Motley Fool Money.
[…]
Welcome back to Motley Fool Money, Ron Gross here with Emily Flippen and Jason Moser. Fools, it’s time for some stocks on our radar and I’ll bring in our man, Dan Boyd, for a quick question. Jason Moser, you’re up first. What do you got?
Moser: Well, a stock I just recently bought myself, the company is called C3.ai (NYSE:AI). The ticker is AI, and this is an enterprise AI artificial intelligence, application software company that enables the rapid deployment of enterprise scale AI applications. It’s a unique business and they take a model-based approach. Developers can rapidly build these AI applications as opposed to having to write the complex and lengthy structured code. They have developed some very strong partnerships along the way, they just announced an alliance with Google Cloud [Alphabet]. You look at additional relationships with Amazon Web Services, Baker Hughes, Microsoft, Raytheon, just an interesting business in the technology. Then founder and CEO Thomas Siebel, also founded Siebel Systems, which was ultimately acquired by Oracle. He owns about 11% of the company today. Still a young company, it’s still a new business to the market, but I’m encouraged by what they are doing, so I felt compelled to take a position.
Gross: Dan, I know you’ve got a question about C3.ai, come on.
Dan Boyd: Yes, I don’t really know a whole lot about AI stocks, big surprise. But Jason, would you say that C3 is like a leader in the industry?
Moser: I think I need to develop an artificial intelligence application so that they can just answer that for you. But in all honesty, yes, I do. I think their novel approach in this model-based system is something that gives them a little bit of an edge.
Gross: Emily, you are up. What are you looking at?
Flippen: This is mine to lose because I have a fun one for you, Dan. I’m looking at Allbirds, and they aren’t public yet. But once they go public, their plan is to list on the Nasdaq under the ticker BIRD, which is a great ticker to grab. But they are an environmentally sustainable, direct-to-consumer shoe and apparel business. They have a broad mission to help reverse climate change without us having to sacrifice our sense of fashion, they actually got started in 2014 from a kick-starter campaign, but they have scaled rapidly. By 2018, they had sold more than 1 million pairs of shoes and 50% of revenue comes from repeat customers. They have some pretty impressive lifetime value.
Gross: Dan?
Boyd: As many people know, I am an avid bird watcher, so when I heard that we were talking about Allbirds today, I was very excited. Then you tell me it’s a shoe company, oh boy.
Gross: Is there a question in there?
Flippen: Here’s what I’ll say, Dan. This is an environmentally sustainable company. Their mission is priority, they’re a Certified B Corp, a public benefit corporation. They want to help the birds, they want to help the environment. By buying Allbirds, you are helping the birds just one step removed.
Gross: Then do I dare ask if you’ve got a favorite for your watch list?
Boyd: You know what, Emily convinced me, Ron, I think I’m going to go with Allbirds this time. I love birds, I love the environment, so let’s do it. Let’s go.
Gross: Emily for the win. Jason Moser, Emily Flippen, thanks for being here, Fools.
Moser: Thank you.
Flippen: Thanks, Ron.
Gross: That’s going to do it for this week’s Motley Fool Money. Our engineer is Dan Boyd, our producer is Mac Greer, I’m Ron Gross. Thanks for listening. We’ll see you next week.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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