Hot Stocks: AFRM Jumps on Earnings; casino stocks rise; The figures dive; PAG hits high

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Rebounding from recent losses, Wall Street experienced a flurry of bargain hunting on Friday. The Nasdaq paced ahead, jumping nearly 4% amid strong gains in consumer and tech stocks.

Casino shares also contributed to the rally. Signs that COVID restrictions could be lifted in China’s biggest city have sparked a push in names like Las Vegas Sands (LVS), Wynn Resorts (WYNN) and Caesars Entertainment (CZR).

To affirm (NASDAQ: AFRM) was another standout winner of the session. Shares of the fintech rose in value by nearly a third on the back of a strong earnings report.

Penske Automotive (PAG) also showed strength. A higher dividend and an increased share buyback plan propelled shares to a new 52-week high.

Looking at some of the most notable declines of the day, FIGS (FIGS) dipped on a weak quarterly report. Meanwhile, earnings news dragged New Relic (NEWR) to a fresh 52-week low.

Focus on the sector

Casino stocks with heavy exposure to China’s gambling paradise, Macau, saw significant strength. The sector rallied on news that the COVID-related shutdowns in Shanghai may soon be lifted.

An Associated Press article reported that officials in China’s most populous city are considering a potential reopening amid signs that the latest outbreak has subsided. This would lead to increased demand for casinos in Macau, which faced another “tough quarter” in the first three months of the year, according to Citi.

Given the good news, Las Vegas Sands (LVS) jumped about 15% on the session, helping to lead the sector higher. Meanwhile, Wynn Resorts (WYNN) climbed around 13% and Caesars Entertainment (CZR) around 10%.

Outstanding Winner

Affirm (AFRM), the downed fintech leader, received a jolt after the release of its latest quarterly report. Investors rushed into the stock following strong advice and an extended partnership with Shopify (SHOP), sending it up 31% on the day.

Specialist Buy Now, Pay Later has predicted “a sustained rate of profitability based on adjusted operating income” by the middle of 2023. The forecast came as part of the company’s quarterly Street-beating report , which included a lower-than-expected loss and revenue that grew 54% year over year.

AFRM climbed $5.67 to close at $23.71. This helped the stock move away from a 52-week low of $13.64 set earlier in the day.

Shares have been under selling pressure since hitting a 52-week high of $176.65 in November. Even with Friday’s rebound, the AFRM is down 84% over the past six months.

Outstanding loser

FIGS (FIGS) suffered in the wake of its latest quarterly report. Disappointing earnings and revenue led to a decline of almost 25%.

The medical apparel maker reported first-quarter earnings that fell short of market analysts’ projections. Revenue also fell short, although revenue was up 26% from a year ago to $110 million.

FIGS also gave a conservative forecast for the year. The company predicted a total between $510 million and $530 million, below the nearly $557 million that analysts had targeted.

Pulled down by the quarterly update, FIGS ended the session at $9.64, down $3.21 on the day. The slide intensified a pullback that has been going on since early April. The stock has lost about half of its value over the past month.

Friday’s slide also took the stock to a new 52-week intraday low, with FIGS hitting a nadir of $9.23.

Notable new peak

News of an increased dividend and an expanded share buyback plan prompted further buying in Penske Automotive (PAG). The stock was able to capitalize on its recent gains, driving it to a new 52-week high.

The auto and truck dealership said it raised its quarterly dividend by 6% to $0.50 per share. At the same time, the company increased its share buyback authorization to $250 million.

PAG said it purchased about $184 million worth of stock from Jan. 1 to April 30, leaving about $46 million remaining under its previous authorization.

Supported by the increased return to shareholders, PAG climbed $6.92 on Friday to close at $115.94. The shares had risen in late April and early May, boosted by its latest quarterly report.

PAG has climbed 20% over the past month.

New notable low

The release of quarterly results and the announcement of a major management change put pressure on New Relic (NEWR). The stock slipped 3% to hit a new 52-week low.

The maker of software for tracking website performance reported a bigger loss than analysts had expected. This despite revenues that rose 19% more than expected from last year, with revenue reaching nearly $206 million.

The company also announced that its chief financial officer, Mark Sachleben, plans to retire after 14 years with the company. He will remain in place until a successor is found.

Spurred by earnings news and the C-Suite shift, NEWR initially plunged to a 52-week intraday low of $41.66. The stock recouped a good chunk of its losses from there. However, the stock still lost $1.20 to close at $46.60.

Looking further ahead, NEWR plunged in February after the release of a disappointing earnings report. Equities have recently added to those losses. Overall, the stock has lost 56% of its value so far in 2022.

For more of the day’s biggest winners, check out Seeking Alpha’s dynamic On The Move section.

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