Can Codexis Repeat Its 2021 Feat In 2022?

You could say the story of Codexis, Inc. (Nasdaq: CDXS) is one from the pages of a fairy-tale, with a happily ever after. After facing tough and potentially business-terminating decisions in 2013, the company came up trumps and has become stronger. Since then, the only two times Codexis stock price ended a year below its starting point were in 2019 and 2020. The year 2021 was a blast, but can this stock repeat this trick?

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Source: RF._.studio

Codexis is a synthetic biotech that produces enzymes that help pharmaceutical companies reduce waste, thus increasing yield. The biotech company now has companies like Merck (Januvia) and Tate & Lyle (Stevia) in its customer books. Other companies in its books include most of the biggest pharmaceuticals. This is a testament to how useful the products that emerge from Codexis are.

Revenues are looking good for Codexis, as the company recorded a 100% year-on-year growth to $36.8 million in total revenue in the 3rd quarter of FY 2021. The company’s Performance Enzymes made up 88% of the total revenue while Novel Biotherapeutics made up the rest. And with $119 million in cash, the company has a lot of free cash to burn to sustain its growth.

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Source: Codexis

With these exciting growth narratives, it is safe to say that Codex ended the quarter on a strong note. It’s no wonder it has the confidence to increase its FY 2021 guidance to a $98 million to $103 million total revenue.

Technical Analysis

Contrary to the Wix stock which we most recently reviewed, 2021 was a great year for holders of Codexis shares. The stock soared by almost 90% before taking a breather in November. The breather came in the form of a correction that pulled the stock down by 35% from its all-time peak of $42.

After bouncing aggressively off the $28 – $30 support level, CDXS looks set to continue its bullish charge. It has risen by 8% from the support level as we speak. There may be more upside for this stock, as it currently sits in the bullish territory above the 25, 50, and 100 simple moving averages.

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The closest upside price target for CDXS is at the $40 – $41.6 resistance level. But if the stock fails with this attempt, it may consolidate for a while or fall back to the lower $18 – $19.5 support level.

Long term, we remain bullish on this stock.

Can Wix Achieve What It Failed To Achieve In 2021

Shareholders of Wix.com Limited (Nasdaq: WIX) can’t say they had a glorious year in 2021. The stock had a three-week surge that took the stock to an all-time high of $361 in February. But for the rest of the year, the narrative was bearish. It’s a new year (Happy New Year, by the way), and the question on many shareholders’ minds is this: Is 2022 the year for Wix to soar?

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Source: Monoar Rahman

While we can’t answer that question because we don’t know what will be, we can categorically tell you that the fundamentals of the Wix stock make a strong case.

Wix allows anyone to easily design professional-looking websites by simply dragging and dropping items using customizable templates. Customers can then keep access to their websites by paying monthly/annual subscriptions to Wix.

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While the company has other departments, such as eCommerce and online payments, the subscription (creative subscription, as Wix calls it) remains its biggest source of income, generating 66% of its total revenue in Q3 FY 21. The revenues for Creative Subscriptions also increased by 18% year on year.

Stiff competition is an understatement for what Wix faces from the likes of Shopify, WordPress, Squarespace, and Weebly. But with innovations that offer customized services to restaurants, events, bookings, fitness, hotels, and stores, Wix stands a reasonable chance of remaining robust in the space. And so far, revenues from these Business Solutions increased by 54% year on year in the recent quarter.

In addition, the website builder claims to have a potential and future collection of up $15.4 billion in the next 10 years, which is a healthy load of cash for expenditures.

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With everything the company has in its hands, Wix estimates its total addressable market to be $185 billion. And it hopes to ride on its 113% net revenue retention to reach that goal.

Technical Analysis

The WIX stock has been aggressively chased down by the bears, despite some fickle challenges by the bulls sometime last year. As we speak, the bears currently have it on the stock, having driven the stock down by 56% from its all-time high.

However, investors may be excited that the price of the stock now rests atop the $149 – $161 support level which looks to have temporarily stalled the dip. But only time will tell how long this excitement will last, as there still exists the $70 – $83 support level at the level and no bullish pattern is forming.

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Even if the stock bounces off the support level back up, the stock still has to break out of two descending trendlines before the bulls can have any real hope.

For new investors, however, this dip is good news. Wix has strong fundamentals and powerful growth potential.

Matterport Is Reinventing The Real Estate Sector

For the first time in a long time, technology is reinventing the way we do things in the real estate sector, and Matterport, Inc. (Nasdaq: MTTR) is right at the heart of it.

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Source: Patryk Kamenczak

Matterport allows potential property buyers to take virtual tours of the properties they intend to buy. And because no other company is currently doing what Matterport is, the company enjoys first mover’s advantages in a space with a $240 billion market opportunity!

Having just only gone public early this year, one thing Matterport completely nailed is its business model. It allows the Matterport app to be available for free on mobile and PC platforms to attract as many people as possible. However, homeowners or managers who intend to publish and share their properties may pay based on a subscription model that starts from as low as $10 monthly.

Thanks to this generous business model, the company boasts of a 116% growth in the number of subscribers with a 36% year-on-year increase in subscription revenue in Q3 FY 21. And this subscription model accounted for 57% of the total revenue gained at the same time. Other ways through which the company gathered revenue include products, services, and licenses.

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Source: Matterport

Apart from the real estate, Matterport can also be used in other industries, including construction, travel, corporate, hospitality and retail.

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Source: Matterport

By the way, another stock that went public within the past year and is currently doing well is Airbnb. If you had bought the stock when we recommended, you would be profitable by close to 40% by now.

Technical Analysis

It is safe to say we already missed most of the opportunity to “buy the dip” on MTTR. But who knows? Another opportunity may be presenting itself as we speak. The stock is 38% from its ATH of $38, having dipped by as much as 61% in May. The stock currently hangs under the $24.8 – $26.3 resistance level, and whatever happens here will determine what value investors should do.

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If the stock falls to the lower $17.2 – $18.5 support level, it may become a more attractive buy. But if a breakout of the resistance level occurs, we may have another bullish run on our hands.

However, the strong fundamentals that back this stock up make us believe that even though we’re not buying cheap, we would still be getting in early on a potential 10X stock in the next decade.

Can Elastic Stock Stretch To 10 Times Its Current Price?

The tech space is so vast and fast-growing that there are growth stocks hiding in every nook and cranny of the demography. Today, we set our aim on Elastic NV (NYSE: ESTC).

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Source: RODNAE Productions

Elastic is a search, data logging, and data analytics company. Its three major products are Elastic Search, Elastic Observe, and Elastic Security.

It is because of companies like Elastic that you can easily locate the closest Uber to you. Elastic’s technology is also behind the user-matching algorithm on Tinder. Apart from Tinder and Uber (NYSE: UBER), Elastic also boasts of other big customers, such as Adobe (Nasdaq: ADBE), Shopify (NYSE: SHOP), Walmart (NYSE: WMT), and Pfizer (NYSE: PFE).

These big companies aren’t the only ones who subscribed to Elastic’s services. More companies are registering themselves in the company’s books, helping the company reach a massive 17,000 new customers In Q2 FY 2022 alone.

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Source: Elastic

Apparently, attracting new clients isn’t their problem at Elastic. And this growth clearly reflects on the company’s revenue, with the total revenue increasing by 42% y/y to $206 million in its most recent quarter, and subscription revenue making up a whopping 92% of the total revenue.

The next place to check to see if Elastic is a worthy growth stock is how it sizes up against its competitors. And even here, ESTC isn’t doing badly. Its enterprise search product is the flag bearer product for the company, and it remains one of the popular in the market by far. Forrester Wave recognizes Elastic as the leader in cognitive search, with Amazon Web Services, Google and Microsoft trailing it.

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Source: Elastic

We see Elastic becoming a crucial part of the platforms of a larger customer-base as more companies set up and expand their digital infrastructure.

Technical Analysis

When we first had ESTC stock on our radar some weeks ago, it was at a crucial point where it would either break out of the $170 – $179.5 resistance level above it or bounce off the level and fall to the lower support levels below it.

The latter played out.

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The price recently fell to the $94.5  – $103.5 support level and bounced off it. This lower support level would be a good place to buy the stock for value investors if the price falls back to it. But if the price breaks out of the $131.5 – $140 resistance level, the retest of the level would be the next technically logical place to buy.

Growth investors, on the other hand, can buy this stock and hold long-term now, regardless of whether it breaks the resistance level. This is because we believe the ESTC stock could be at least 2 times its current value within the next decade.

Your Investment Could Piggyback On This Steadily Growing Company

You may not be familiar with the company, but chances are that you’ve used its services at least once. If you’ve ever tried to chat up a business’ customer support or sent a message to a Lyft driver, then you’ve most likely been part of the business of Twilio Inc (NYSE: TWLO).

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Source: Miguel Á Padriñán

Twilio provides cloud-based tools businesses can integrate into their systems to enable easy communications with their customers. The company also uses Segment, one of acquisitions, to analyze customer data to optimize interaction. Some companies in the customer books of Twilio include Dell, CocaCola, AirBnB, Glassdoor, Yelp, Twitter, and many more.

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Source: Twilio

Twilio has maintained its status as a steadily growing company with a sustained year-on-year quarterly revenue increase of at least 46% FY2019. In the latest Q3 FY’21 report, it was a 65% year-on-year growth to $740 million. And with a consistently above 130% dollar-based net expansion since FY ’19, it’s obvious that clients are sticking and are willing to pay more after their first contact with the company.

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Source: Twilio

The company is also looking to increase its reach beyond the U.S., as it now has 33% of its customers outside of the country. And the international market is still there for the taking, as the company has a market share of 38% among communications platform as a service (CPaaS) providers in the world. The company closest to it only has 11%.

Technical Analysis

The TWLO stock is trading below the peak price it hit earlier this year by 41%. And right now, it looks to have retraced to the $271 – $286 resistance level it recently broke as a support.

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This is usually a bearish signal, and the price may further dip to the $208 – $220 support.

About when to buy the Twilio stock, we recommend patience. The price to sales ratio of the stock is close to the lowest it has been (17.84) since the beginning of this year, which is a positive signal for potential investors. But we believe you could wait till the stock falls even lower to the $208 – $220 support, as it is still quite expensive at the current price of $264.

Why You Should Pay More Attention To Walker & Dunlop in 2022

Many times, acquisitions are good for the acquiring companies, especially when they already have solid foundations in their industry. Will such be the story of Walker & Dunlop (NYSE: WD).

What Has Happened:

On the 16th of December, 2021, Walker & Dunlop announced the acquisition of Alliant Capital. This acquisition is set to help Walker & Dunlop better penetrate its market, and the company estimates the impact to be immediate.

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Source: The Lazy Artist Gallery

Why This Matters:

Walker & Dunlop is a leading real estate lender in the United states — the biggest multifamily capital lender and the fifth largest lender on commercial real estate, such as offices, hospitality in the country. Alliant is the sixth largest low-income house tax credit (LIHTC) syndicator in the United States.

The absorption of Alliant into itself places Walker & Dunlop in a better position to influence housing on the U.S. “Combining the largest provider of capital,” Willy Walker, Chairman and CEO of Walker & Dunlop, said, “to the multifamily industry with the sixth largest low-income housing tax credit syndicator in the nation creates a focused affordable housing financing platform with few peers. Walker & Dunlop is now a big part of the solution to build and maintain affordable and workforce housing across America.”

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Source: Walker & Dunlop

Walker & Dunlop estimates the acquisition would raise the total revenues by $100 million, while also driving the estimated adjusted EBITDA by $60 million.

What Now?

The Alliant acquisition is only going to boost the consistently outstanding performances Walker & Dunlop has already built. In the company’s latest quarter, Q3 FY 2021, total transaction volume rose by 120% to $18.5 billion, total revenues increased by 40% to $346 million, and earnings by 60% to $72 million year-on-year.

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Source: Walker & Dunlop

The growth opportunity is also there for the real estate lender. According to Freddie Marc Forecast, the total multifamily loan originations are expected to grow to $476 billion by 2022. MBA estimated it to be about $421 billion this year.

With such impressive results, the next thing on your mind may be to get in on the stock. For that, we’ll do a little technical analysis on the stock.

Technical Analysis

The $152 – $157 resistance level proved to be a too strong resistance level for WD, as it was immediately repelled at contact, effectively preventing any new all-time highs.

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WD has a support at the $113 – $117 price range to which the price may make further correction before continuing on its bullish journey. If this support level fails to hold, the next support level is at the $80 – $84 price range. But we expect the price to hit the dynamic support level in the form of the bullish trendline that originated in April 2020 before it hits this lower support level.

Although price targets are higher than the current price, only a further correction to lower prices could provide a palatable entry level for the stock.

The Stock To Keep Going Into 2022

The year is all but over. If you’re like many other investors, you’re preparing for the new year by making investment plans for the year. Now more than ever, you are looking for beaten-down stocks with substantial upside potentials in the coming years. If we just described you, Amyris, Inc. (Nasdaq: AMRS) might be worth your attention.

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Source: Tima Miroshnichenko

What Happened?

November and December have not been good for holders of AMRS stock in their portfolios so far. Amyris is a synthetic biology establishment that produces bio-based sustainable products. After the company released an underwhelming 30% year-on-year dip in ingredient production revenues, the bears pounced. A 65% dip has since ravaged the stock.

Amyris’ CEO, John Melo, had supply chain disruptions to blame for the unexciting report, and he expects the company to suffer into the fourth quarter. It also cited the late quarter launches of new brands as another reason for the challenging conditions the company found itself in.

What Now?

The ingredient production revenue was only one of the few things that didn’t go well for Amyris in the third quarter. Apart from those, the consumer product sales revenue gained by 87%, underlying products increased by 17%, and the company’s R&D and other services soared by 264% over what they were the previous FY year. In addition, the company reduced debt by 43% while increasing cash by over 300%.

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Source: Amyris

Already, Amyris is working hard to fight the supply chain headwinds it faced this year. It plans to begin operations at a new ingredients plant with four production lines in Brazil early in 2022. It also plans to start up a 150,000 ft sq. consumer production facility in Nevada in 2022. The CEO believes these two are going to directly ease the supply chain headwinds.

Going into the new year, Amyris will hope to turn the tide and end the year stronger than where it’s ending this one. And this is what investors are hopeful about.

Technical Analysis

If the $5 – $6 support level is not enough to hold the plunging price, we may see a continued bearish charge to the lower $1 – $2 support level. So at the moment, our short-term sentiment towards AMRS is bearish.

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However, if the price bounces back up from the support level, our sentiment may change. But that all depends on what happens between that support level and the $9 – $10 resistance level. A breakout from the resistance level would be a powerful statement of intent from the bulls.

Based on the fundamentals and the other things the company has in the works, though, we hold a bullish sentiment for the stock long-term.

Can Sea’s Potential Upsides Be Limited By Its Substantial Risks?

Sea Limited (NYSE: SE) is a Southeast Asian company that offers gaming, e-commerce, and financial services to its customers. Garena, its game-publishing department, owns one Free Fire, one of the highest-grossing mobile games in the region.

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Source: Sam Lion

Sea, As it Stands

Sea Limited enjoyed a triple-digit GAAP revenue increase by 122% year-on-year according to its latest Q3 FY 21 report. The company has its three departments to thank for that.

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Source: Sea Limited

Garena saw a 43% year-on-year rise in quarterly paying users. The company’s eCommerce department, Shopee, increased its gross orders by  123% to 1.7 billion. And its financial service, SeaMoney, had its total payment volume increase by 111% from what it was in Q3 2020.

Historic and Future Growth

Growth seems to be no problem for Sea Limited if history is anything to go by. The company started its business in Singapore, but it has since then expanded to the rest of Southeast Asia. It also has a presence surrounding countries, such as India and Taiwan, and some of Latin America.

Going forward, the future looks even brighter. The internet economy of Southeast Asia would be three times in 2025 of what it was in 2019, according to the e-Conomy SEA report. And with Sea Limited being one of the leaders in the internet game in the region, it stands to reap from this growth.

The Risks

The first potential red flag an investor might encounter when looking into this SE stock is that the company isn’t profitable, accruing even more loss in the last quarter year-on-year. According to Sea, all the gains from the company are being re-invested back into building the company.Can Sea’s Potential Upsides Be Limited By Its Substantial Risks 03

Source: Sea Limited

The company’s over-reliance on Garena could also be a problem in the future. And it is the proceeds from this game that bankrolls about a substantial part of the company’s other expenditures. Recently, the earnings from the game have started to stagnate, and if the company is unable to come up with another high-performing game, it may suffer.

The only upside here is that Sea keeps modest cash and cash equivalents of $11.8 billion. So, even if the Garena falls out of favor, the company still has some cash to run its business for a while. There is just no telling how long this would last.

Technical Analysis

SE has been on a free fall since November without as much as a temporary bullish correction on the weekly chart. As we speak, it is down by 43% from its year-to-date and all-time high peak of over $370 to the $195 – $205 support level.

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So, is this the best time to buy SE?

For investors who have the guts to hold a non-profitable company long-term, buying SE may not be a bad idea. However, if you’re in for the short-term, we believe a better/lower price is worth waiting for. Or at least until we have enough reason to believe the stock has bottomed out and is about turn bullish.

The Stock You Oughta Have In Your Portfolio

As more companies move their services online, there is the need to also move their worker profiles online, manage authentication and authorization services for these workers, and provide identity security. This relatively sparsely populated niche is where Okta, Inc. (Nasdaq: OKTA) reigns.

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Source: fauxels

Okta offers an identity management platform through which businesses migrate their process and people to the digital space while also providing the necessary security to prevent identity theft.

Q3 FY 2022 was not a great quarter for Okta. The company reported a total revenue of $351 million, a 61% increase from what it was in Q3 FY21. In this same quarter, the company reported a TTM- dollar-based net retention rate of 122%. This metric is used to determine how well the company is doing with gaining new customers and retaining them. And with a value of 122%, it means Okta is not only retaining customers, but it is also getting them to spend more.

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Source: Okta

Thanks to these impressive Q3 figures, Okta raised its revenue guidance and estimated the company would end the year with total revenue of $1.26 billion, over 50% year on year.

The growth opportunity is also there for Okta. The company, in its Q3 FY 22 report, estimated its Total Addressable Market (TAM) at $80 billion. To achieve this, the company intends to strike more partnerships going forward, expand internationally, and develop its recent pretty penny acquisition, Auth0.

Technical Analysis

If you were asked to point at a stock that has not had a good 2021, you wouldn’t be wrong if your pick was Okta. The stock rode on a momentum that drove it for years into the first couple of months in 2021. Since then, the price has only gone sideways.

Despite this sideways formation, one chart pattern that immediately becomes obvious is the pennant chart pattern. Two bullish trends sandwich a triangular-looking sideways price movement.

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When you bring the good ol’ support and resistance level into perspective, you notice that the price recently touched the $190 – $199 support level and is likely headed in a temporary bullish direction. But there’s no way to know for sure where the price goes from here.

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While investors may not mind this short-term uncertainty, some traders will enter a long position on the stock and close at the next support level. The more conservative traders, on the other hand, would love to see the price drop some more before they even begin to consider a trade entry.

PayPal: To Buy The Dip Or To Hold?

When the slumping technicals of a stock are aggressively and continuously defying its strong fundamentals, it is worth observing. Such is the paradoxical story of PayPal Holdings (Nasdaq: PYPL), and we’ll be looking at it today.

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Source: Anna Shvets

What Happened

The online payment company reached its highest peak in July when it topped out at $309. But since then, the stock has unforgivingly dipped by as much as 40%, despite strong earnings and revenues report in the quarters within its peak and now.

This same company with the dipping stock price gained 13.3 million new active accounts in Q3 FY 21, bringing its total number of active accounts to 416 million. Unsurprisingly, revenues grew by 13% year on year to $6.18 billion. Finally, the free cash flow of the stock rose by 20% year on year to $1.3 billion.

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Source: PayPal

What Next?

PayPal has done a lot to maintain its strong fundamentals and also ensure that it remains relevant in the future amidst competition from companies, such as Square. The company recently announced that users of its subsidiary platform, Venmo, in the US, can use their accounts to purchase items on Amazon.

Maybe one of the most glaring efforts to remain relevant is in PayPal’s attempts to incorporate the potential future of money, cryptocurrency, into its platform. The company announced that its 400 million-plus users can now purchase cryptocurrencies via its platform. It also has an online trading platform for stock investors in the works, which the company hopes to launch in 2022.

With all these future investments and strong fundamentals, you may then ask yourself if this dip is merely the market sentiment for the short term. If so, where is the best place to buy the dip?

Technical Analysis

The PYPL stock has plunged since it reached its all-time high in mid-July after having risen by almost 260% since the beginning of the pandemic last year.

It has remorselessly shredded the $216 – $224 support level and now has the $166 – $174 support level behind its crosshairs. Having proven to be a key support level on three different occasions in the past, it’ll be interesting to see what the price has in mind for this level.

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Most traders would, however, would like to see this stock dip even further before they prepare their investments for a buy. Already, the price-to-earnings ratio is higher than the industry and market values, making other stocks more attractive than PayPal. So, only a further dip in price, maybe to the $122 – $131 support level, could convince traders to buy PayPal.

But as for investors, a 40% dip on a fundamentally robust stock might not sound like an en entirely bad entry position. Nor does it look enticing, anyway. And just like traders, investors may await a potential further dip to get better entry points.

But from where we stand, there isn’t enough evidence to buy the PYPL dip at 40% as of the time of this writing.