Cathie Wood, founder of the investment management company Ark Invest, recently bought several shares that have underperformed the markets. And yet, its flagship ARK Innovation ETF (ARKK) gained 1.1% over the past week. Regarding this, Wood said in an interview: “With an investment horizon of five years, our forecasts for these platforms suggest that our strategies may today deliver an annual compound rate of return of 30-40% over the next five years. “
Wood is currently betting on Roblox Corporation (RBLX), UiPath Inc. (PATH), Robinhood Markets, Inc. (HOOD) and PagerDuty, Inc. (PD).
Wood believes these companies have immense growth potential and will fight current market headwinds and capitalize on industry tailwinds over the long term.
Roblox Corporation (RBLX)
RBLX develops and operates an online entertainment platform internationally. The San Mateo, Calif., Based company offers Roblox Client, an app that allows users to explore 3D digital worlds, Roblox Studio, a set of tools that allows developers and creators to create, publish, and operate 3D experiences and other content; and Roblox Cloud, a solution that provides services and infrastructure to power the human co-experience platform.
Invest in RBLX via ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) ETF, WOOD holds a combined holding of 700,242 shares, resulting in a 0.42% weighting in ETFs. RBLX is # 40 in ARKK’s major holdings.
On August 16, RBLX acquired Guilded, Inc., a privately held company focused on creating a platform for connecting gaming communities. The Guilded team has built a powerful platform for connecting gaming communities which includes tools and features like multilevel voice chat, video chat, built-in calendars, scheduling tools. It also launched its bot API to simplify bot development. For its fiscal third quarter, ended September 30, 2021, RBLX’s revenue increased 102.2% year-over-year to $ 509.34 million. However, the company’s operating loss amounted to $ 77.45 million, up 50.3% from the prior year period. And its net loss was $ 77.19 million for the quarter, an increase of 54.3% from the same period a year earlier. Its loss per share fell 50% year-on-year to $ 0.13. As of September 30, 2021, the company had $ 1.93 billion in Cash and cash equivalents.
A consensus revenue estimate of $ 2.74 billion for the current year represents an increase of 196.8% from the previous year period. RBLX’s EPS is expected to grow at a rate of 1.1% per year over the next five years. The stock lost 14.5% of its price over the past month and closed yesterday’s trading session at $ 102.77.
UiPath Inc. (PATH)
New York-based PATH provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions with a suite of capabilities that enable organizations to scale their digital business operations. at the International scale. The company maintains and supports its software and professional services. It serves the public sector, business process outsourcing (BPO), retail and consumer packaged goods (CPG) and business process automation (BPA), finance and banking industries, insurance, health, manufacturing and telecommunications.
Wood invested in PATH through ARKW, ARKK, ARK Fintech Innovation ETF (ARKF), ARK Genomic Revolution ETF (ARKG), ARK Autonomous technology and ETF robotics (ARKQ) and ARK Space Exploration & Innovation ETF (ARKX). She owns a combined holding of 14.03 million PATH shares, resulting in a 3.56% weighting in the funds. PATH is ranked # 11 in ARKK’s holdings.
On December 6, PATH and Accenture plc (ACN), an Ireland-based multinational professional services company, has expanded its business collaboration to help clients accelerate enterprise-wide automation adoption, accelerate technology transformation efforts and create new new growth opportunities. Businesses look forward to combining PATH’s robust automation solutions with ACN’s complementary services and industry expertise to help customers increase their productivity.
PATH’s total revenue for its fiscal third quarter, ended October 31, 2021, increased 49.9% year-over-year to $ 220.82 million. The Company’s non-GAAP gross profit was $ 188.25 million, an increase of 43.7% over the prior year period. Its non-GAAP operating profit was $ 9.10 million, compared to a loss of $ 13.58 million in the prior year period. PATH’s non-GAAP net income was $ 2.10 billion, down from a net loss of $ 21.63 million in the prior year period. Its non-GAAP EPS was zero, down from a loss of $ 0.04 per share during the period last year. And the company had $ 1.78 billion in cash and cash equivalents as of October 31, 2021.
PATH has beaten consensus EPS estimates for the past three quarters. Analysts expect PATH’s revenue to rise to $ 885.45 million for the current year, indicating a 45.7% year-over-year improvement. The company’s EPS is expected to grow at a rate of 35% per year over the next five years. The stock lost 9.7% of its price over the past month and closed yesterday’s trading session at $ 44.16.
Robinhood Markets, Inc. (HOOD)
HOOD operates a financial services platform that allows users to invest in stocks, ETFs, options, gold, and cryptocurrencies. Menlo Park, Calif., Also offers Snacks, Business News Digest; Learn, a collection of articles including a financial dictionary; News; and lists, which allow users to create personalized watch lists to monitor securities and treasury services.
Wood invested in PATH through the ARKW, ARKK and ARKF ETFs. She owns a combined 12.59 million PATH shares, resulting in a 1.39% weighting in the funds. PATH is ranked # 27 in ARKK’s holdings.
HOOD’s total net revenue for its fiscal third quarter, ended September 30, 2021, increased 35.4% year-on-year to $ 364.92 million. The company’s net loss amounted to $ 1.32 billion, up 12,250.6% from the prior year period. Its loss per share increased 4020% year-on-year to $ 2.06. And the company had $ 6.17 billion in cash and cash equivalents as of September 30, 2021.
Analysts expect the company’s revenue to improve 22% year-over-year to $ 2.24 billion for the current year. HOOD’s EPS is expected to grow at a rate of 79.5% per year over the next five years. The stock has gained 34% going year-to-date and closed yesterday’s trading session at $ 18.38.
PagerDuty, Inc. (PD)
San Francisco-based PD operates a global digital operations management platform. The company’s platform provides on-call management, event information, incident response, business visibility and advanced analytics solutions to meet digital operations management requirements. It serves a variety of industries, including software and technology, telecommunications, retail, travel and hospitality, media and entertainment, and financial services.
Investing in PD through the ARKW and ARKK ETFs, WOOD holds a combined holding of 7.02 million shares, resulting in a 1.5% weighting in the funds. PD is No. 24 in the main holdings of the ARKK.
On November 29, PD announced a multi-year marketing agreement with Amazon.com, Inc. (AMZN) A subsidiary of Amazon Web Services, Inc. (AWS) to help businesses accelerate cloud adoption and streamline hybrid cloud operations. As various industries digitize rapidly, offering intelligent AIOps and automation will help businesses cope with complexity and workloads without imposing on technical teams. Additionally, the companies announced the availability of PD’s fully managed Rundeck Cloud automation offering on AWS in early 2022.
PD’s revenue for its fiscal third quarter, ended October 31, 2021, increased 33.5% year-over-year to $ 71.76 million. The company’s gross profit was $ 59.72 million, up 29.6% from the same period a year earlier. Its operating loss amounted to $ 24.82 million, indicating an increase of 13.6% over the previous year. While its net loss increased 27.8% year-over-year to $ 26.34 million, its loss per share increased 19.3% to $ 0.31. The company had $ 359.74 million in cash and cash equivalents as of October 31, 2021.
Analysts expect PD revenue to grow 30.7% year-on-year to $ 279.10 million for the current year. It has beaten Street’s EPS estimates in each of the past four quarters. PD’s EPS is expected to grow at a rate of 30% per year over the next five years. The stock price fell slightly over the past month and ended yesterday’s trading session at $ 36.69.
RBLX shares rose $ 0.47 (+ 0.46%) in pre-market trading on Thursday. Year-to-date, RBLX has gained 48.91%, compared to a 27.05% increase in the benchmark S&P 500 over the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a particular interest in researching market inefficiencies. She is passionate about educating investors so that they can be successful on the stock market. Following…