February 7, 2025: Jobs Miss Stirs Markets, Tech Earnings Mixed

Market Overview

Markets mixed after the jobs report showed slower hiring than expected, with 143,000 jobs added versus 170,000 forecast. The Nasdaq gains 0.51%, the S&P 500 up 0.36%, while the Dow slips 0.28%. Weather impacts and strikes affected January employment data. The unemployment rate improves to 4%.

Key Stock Moves 📈📉

Winners

• Pinterest (PINS): +22% on first billion-dollar revenue quarter, strong user growth
• Affirm (AFRM): +17% after surprise profit and strong GMV
• Cloudflare (NET): +10% on strong Q4 results
• Expedia: +9.5% as bookings rise across core brands
• Fortinet: +7.9% on earnings beat and strong guidance
• Take-Two: +6.2% after narrower loss and maintained outlook

Losers

• Bill Holdings: -29% on weak revenue guidance
• e.l.f. Beauty (ELF): -27% after reducing the full-year forecast
• Amazon (AMZN): -2.9% on light Q1 guidance and FX headwinds
• Neurocrine Bio: -14% as Ingrezza sales outlook disappoints

Trade Call Update 

Amazon made a short buy move yesterday before the closing bell, the earnings and AWS results missed expectations and the price took a beating post-market.

We were still able to gain 1.36% from our call before market close, overall this week has been a good one. Congratulations to our members who take our calls seriously.

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Market Catalysts Today 🎯

• January payrolls: 143,000 vs 170,000 expected
• Unemployment rate drops to 4%
• Weather conditions and strikes impact numbers
• Wage growth data suggests cooling inflation
• Jobs report reaction
• Fed speakers’ commentary
• Global trade tensions
• Earnings season continues

Trading Wisdom 💭

“To anticipate the market is to gamble. To be patient and act only when the market gives the signal is to speculate.”- Jesse Livermore.

The Big News ⚡

Fortinet (FTNT) jumps +5% premarket after a “solid” Q4 earnings beat, fueled by optimism around a faster firewall refresh cycle. But analyst reactions are split—bulls see growth, and bears warn of risks.

Show Me The Numbers 💰 

• Q4 Beat: Revenue & EPS topped estimates | Billings Growth: +7% (vs. 5% consensus)  
• 2025 Guidance:  
• Product Revenue Growth: +10% YoY  
• Organic Billings Growth: ~10% (midpoint) vs. prior 12%+ CAGR framework  
• Margin Win: Operating margin beat by 560 bps   
• Stock Move: +5% premarket | Price Target Updates:  
• Evercore: $90 → $105 (In-Line)  
• Morgan Stanley: $113 (Overweight)  
• Jefferies: $105 → $115 (Hold)  
• Mizuho: $78 → $87 (Underperform)  

What’s Cooking? 🔥 

Bull Case (Upgrade Cycle):  

Firewall refresh accelerating, especially in large enterprises.  

Initiatives to target SMBs and verticals with tailored bundles.  

Morgan Stanley sees double-digit FCF upside 💸.  

Bear Case (Guidance Caution):

Q1 2025 weakness is expected due to tariff disruptions in LatAm/Canada (15% of billings).  

U.S. Fed market uncertainty: “No one left in the office to buy.”  

Mizuho doubts firewall refresh’s impact and flags SASE/SecOps competition (vs. CrowdStrike, Cloudflare).  

Why It Matters 🛡️ 

• Fortinet’s split narrative reflects the cybersecurity sector’s crossroads:  
• Refresh Tailwinds: Aging firewalls need upgrades, but will budgets hold?  
• Execution Risk: Can new sales strategies offset tariff/geo headwinds?  
• Valuation Check: Stock up 5% premarket, but bears warn of limited multiple expansion.  
• Sector Ripple: Cloudflare (+10%), and CrowdStrike (+1%) also rally—signaling broader cybersecurity strength.  

The Bigger Picture 🌐  

With 2025 guidance in line but billings growth below prior targets, Fortinet’s story hinges on H2 2025 momentum. A firewall refresh boom could lift the sector, but macro risks linger.