RJ Hamster
🦉 The Night Owl Newsletter for December 7th
Unsubscribe WARNING: “Ominous day” coming to stocks… (From Trend Labs)Rubrik’s Massive Rebound: Why the Next Leg Higher Could Be FastWritten by Thomas HughesRubrik’s (NYSE: RBRK) stock price rebounded robustly in December 2025 and will set a new all-time high by mid-year 2026 because it is vital to the AI ecosphere. The company’s fiscal Q3 results aligned with the newly revealed trend of accelerating AI and cloud adoption, as indicated by results from Salesforce (NYSE: CRM), Snowflake (NYSE: SNOW), Guidewire Software (NYSE: GWRE), and Okta (NASDAQ: OKTA). The critical details for investors include Rubrik’s position in the AI ecosystem: it is a cloud/data management company focused on backup and recovery, and is a fundamental element of comprehensive, enterprise-level cybersecurity, which it refers to as cyber resilience. Keeping data safe is only part of the problem; recovering it and helping businesses get back on track is the other half. Rubrik Posts Wow-Results: Guidance Stuns Market, Shares SurgeRubrik’s FQ3 results were stunning, with its $350.17 million in net revenue up nearly 50% year-over-year, outpacing MarketBeat’s reported consensus by almost 1000 basis points (bps), driven by the growth of large clients and clients in general. The company reports a 52% increase in subscriptions, its core business, with subscription ARR up by 34% and ARR from clients generating more than $100K in revenue up by 27%. Margin news is another stunning detail. The company achieved significant revenue leverage, improving margins across the board, to deliver not only bottom-line strength but also profits, reversing an expected loss. The 10 cents in adjusted earnings is more than a quarter better than expected, with cash flow up 200% and free cash flow up 400%. Guidance is yet another stunning detail, underpinning the stock price rebound and longer-term outlook. The company issued a strong Q4 guide, expecting the strengths and business momentum to continue, and lifted its full-year outlook to levels at the low ends of the revenue and earnings ranges above the prior highs. For full-year revenue, it is forecast to be at least $1.28 billion, or 400 bps better than expected. Analysts and Institutions Buy Into Rubriks’ Accelerating Growth OutlookAnalysts and institutional trends reveal that Rubrik’s stock is being accumulated in 2025. The analysts’ trends include a few price target reductions over the last year and quarter, but these are insufficient to offset the overall trend. Those include solid coverage with 21 analysts following the stock, a Moderate Buy rating, and an uptrend in the consensus price target. The post-release activity includes several price target revisions that align with the trend, pointing to an above-consensus level, suggesting a 25% upside from the critical resistance point is a minimum target. A move to the high-end range puts upside potential closer to $130, or about 35%.Institutions own about 50% of the stock as of December and provide solid support. They have been aggressively accumulating stock this year at a pace of approximately $3.70 per $1 sold, which has also provided a market tailwind. Assuming this dynamic remains in place, RBRK’s stock price has little choice but to move higher unless the short-sellers get involved. As it is, the short interest was elevated at nearly 10% in late November, fueling the price updraft in December. Rubrik’s Robust Rebound Reaches Three-Month High, More Highs to ComeRubrik’s report and guidance update catalyzed a robust rebound. The market gained more than 25% soon after the opening bell and continued higher in early trading. The move indicates robust support and short-covering, and will likely continue higher in the near term, at least. The critical resistance is near $100; a move above it will signal a market shift, but there is risk until that level is broken. Short-sellers may choose to reposition at the $100 level and cap gains until a more potent catalyst emerges.  READ THIS STORY ONLINE48-Hour Alert: This Signal Just Flashed on (TICKER) (Ad)Years before it became a household name, Shopify showed an early momentum pattern that experienced traders used to catch a 120% move — and that same repeatable signal has just appeared on a new small-cap ticker that hasn’t hit the mainstream yet. Our free Momentum Trading Report breaks down how to spot these stealth setups and reveals which names are flashing right now.GET EARLY ACCESS TO THE FREE MOMENTUM TRADING REPORT HEREFive Below and Dollar Tree Earnings Signal a Shopper ShiftWritten by Chris MarkochInvestors got solid earnings reports from Dollar Tree (NASDAQ: DLTR) and Five Below, Inc. (NASDAQ: FIVE) on Dec. 3. The reports were similar, with both companies beating on revenue and adjusted earnings per share (EPS) in the third quarter.Notably, both stocks are breaking out in a pattern that looks eerily similar to 2022, when inflation peaked, and consumers shifted sharply toward value chains.The common analysis has centered on a more “choiceful” customer—a fancy way to say consumers are bargain hunting. For investors, the renewed strength in discount retail stocks may reflect more than price sensitivity—it could signal a broader economic shift.As the old saying goes: history doesn’t repeat, but it often rhymes. Are these earnings results just a reflection of consumer resilience? Or are they a prelude to another round of inflationary pressure?Five Below: A Clean Beat and a Full-Blown Momentum StoryFive Below delivered exactly what momentum traders wanted via its Q3 earnings. Double-digit revenue growth, a 14.3% jump in comparable sales, and an EPS beat were all supported by increased store traffic and higher sales tickets.The company also added 49 net new stores in the quarter and raised full-year guidance, signaling confidence heading into the holiday spending season.In contrast to big-box retail stocks that are struggling with slowing discretionary spending, Five Below continues to prove that small luxuries at low price points are sticky in almost every market.Its formula of providing trend-right goods at “why not?” prices helps capture the consumer who won’t splurge at mall prices but also hasn’t abandoned fun.That positioning matters. In 2022’s inflation surge, Five Below thrived because consumers didn’t just trade down—they traded down with intent to keep spending. The current setup suggests a similar behavioral trend: inflation concerns aren’t destroying demand; they’re reshaping where it goes. Dollar Tree: Another Beat, but a Different TrajectoryDollar Tree also delivered a strong earnings report with solid beats on the top and bottom lines—but its story is more nuanced. After divesting Family Dollar, consolidated revenue declined year-over-year (YOY), and operating margins compressed.At the same time, comparable sales rose 4.2% on stronger average tickets, while traffic dipped slightly.Diving into the report, consumables and discretionary sales grew by 3.5% and 4.8% respectively. However, the mix continues to lean structurally towards essentials over multiple years.That’s a classic signal—when budgets tighten, households don’t shop less, they shop cheaper, shifting spending into necessities at fixed-price stores.In short, while Five Below reveals a consumer still embracing small joys, Dollar Tree illustrates one guarding their grocery budgets. That is precisely the bifurcation that marked late-2021 and 2022: resilient spending, but reshaped toward value, clearance racks and $1-to-$5 baskets. What the Financials Say About the ConsumerFive Below’s results suggest that consumers are still making discretionary purchases while trading down from traditional retailers. This is consistent with consumers who are managing inflation by seeking value rather than cutting out non-essentials entirely.Dollar Tree’s report paints a more defensive picture. Its growth is being driven by traffic and small basket inflation. However, the company is experiencing margin pressure, higher selling, general, and administrative (SG&A) expenses, and lower consolidated revenue from the absence of Family Dollar, reflecting inflation and suggesting a low-end consumer that is under stress.What the Charts May Say About InflationOver the past five years, both FIVE stock and DLTR stock have traced a similar pattern: post‑pandemic rallies, sharp resets as stimulus faded, and now renewed breakouts on the back of better‑than‑expected earnings. This isn’t coincidence—discount retail stocks often lead when inflation expectations rise.These breakouts suggest that markets are anticipating:Slower progress on disinflationA sticky floor under consumer pricingRenewed pressure on household budgetsImportantly, the 2022 narrative wasn’t just based on Consumer Price Index (CPI) data. It was behavioral: consumers re-priced the meaning of value. The breakouts we’re seeing today suggest a similar narrative will affect consumer sentiment going forward.The Market Isn’t Waiting for DataInvestors will gain more clarity on Dec. 5 when the belated September Personal Consumption Expenditures Price Index (PCE) reading is released. Consensus expectations for the release sit near 2.8%. A print at or below expectations would confirm muted but persistent inflation. And if the number resets higher toward 3% or above, 2022’s pattern would look less like a coincidence and more like foreshadowing.But here’s the more important point: discount chains are rallying before that data hits. Markets trade on anticipation, not confirmation.Five Below reflects a consumer choosing value without sacrificing discretionary identity. Dollar Tree reflects the consumer tightening at the pantry level. Together, they sketch the same macro portrait that preceded last cycle’s inflation peak: a consumer who is still spending—but is shopping smarter. READ THIS STORY ONLINEWARNING: “Ominous day” coming to stocks… (Ad)JC Parets has spent more than 20 years tracking the market’s most important technical signals, and he’s now warning that a key date on the calendar could mark the next major turning point for stocks. After calling the 2008 crash, the 2020 collapse, and the exact bottom in 2022, he’s sounding the alarm again — and he’s sharing the specific day he believes investors need to prepare for. SEE JC’S LATEST MARKET FORECAST HEREUlta’s Stock May Be Set for a Glow-Up—20% Upside Ahead?Written by Thomas HughesUlta’s (NASDAQ: ULTA) fiscal Q3 earnings report proves that its appeal is more than skin deep. The rally, which began in April 2025, is no short-term phenomenon. It is on track to reach new highs in 2025 due to its growth and operational quality, and is likely to continue rallying in 2026.Among the critical takeaways from the release is the analysts’ bullish response to the news. They view the results as not only strong but also the guidance as potentially cautious, setting up a catalyst for early in 2026. Between then and now, the price-target revision trend has been supporting the action and pushing this market to new highs. While the consensus aligned with the market ahead of the release, trends, including post-release activity, suggest a price range of $650, which is sufficient for a nearly 20% upside expected to be reached within the next few quarters.  Ulta Has Beautiful Quarter, Issues Robust Guidance With Cautious ToneUlta had a strong quarter, given the macroeconomic headwinds and analysts’ forecasts. The company’s $2.9 billion in net revenue grew by 12.9% year-over-year (YOY), outpacing MarketBeat’s reported consensus by nearly 750 basis points. Strength was driven by comp-store sales, an increase in store count, and acquisitions, all of which are expected to drive growth in the current and subsequent quarters.Comps increased by an impressive 6.3%, driven by a 3.8% traffic increase and a 2.4% improvement in transaction size. The data indicate that Ulta’s customers not only visit the store more frequently but also spend a greater portion of their beauty and skin-care dollars there as the company gains market share. The margin news is also impressive. The company widened its gross margin and controlled operating costs, resulting in solid bottom-line outperformance. Gross margin increased by 70 basis points due to lower costs, while operating margin decreased because of higher selling, general, and administrative expenses related to wages, incentives, and store-level expenses that are driving the revenue in.Salaries and incentives are here to stay, but store remodeling won’t be, creating an opportunity to improve margins in the upcoming fiscal periods. The bottom line for Q3 is that earnings of $5.14 are flat compared to the prior year but more than 1170 basis points better than expected. Ulta’s Debt Increase Not a Worry for Investors, Capital Return Is SafeThe worst news coming out of Ulta’s Q3 report is an unexpected increase in short-term debt. The company leaned on its revolving credit facility for working capital, significantly increasing its debt, but ultimately did no damage to itself or its outlook.The net result is that cash remains healthy at roughly 0.5x debt, while increases in receivables, inventory, and prepaid expenses offset the debt. Regarding leverage and equity, the company’s total liabilities are approximately 2.2x its equity; there is virtually no long-term debt beyond lease liabilities, and equity is increasing, up 9% YOY.Ulta’s capital return is attractive, underpinning the long-term stock price outlook. The company doesn’t pay dividends; instead, it aggressively buys back shares. The FQ3 and YTD activity resulted in a 4.66% average quarterly and a 5.36% year-to-date decline in share count, and the pace is likely to continue over the next year. The company has $2 billion left under the current authorization, sufficient for more than two years at the FQ3 pace. Ulta’s New High Is Imminent: 20% Gains Could Be Seen by Year’s EndThe post-release action put ULTA stock in line with record-high levels, positioning it on track to set new highs in the opening session.Assuming the market follows through on the signal, those highs are likely to be followed by a rally that could take this market up by 18% to 20% from the critical resistance point within a few weeks.The risk is that gains will be capped at the existing high, keeping Ulta range-bound, but that seems unlikely, given the results, outlook, and institutional activity.The institutions own more than 90% of this stock and are accumulating in Q4 2025. READ THIS STORY ONLINEThe last gold bull market of our lifetime… (Ad)A major shift is coming to the gold market — the world’s largest gold buyer is preparing to launch a new way for everyday Americans to invest in gold with a click, and when it goes live in 2026 it could unleash a wave of demand unlike anything we’ve seen. Garrett Goggin believes one $1.60 gold stock is positioned to be a prime beneficiary of this surge — a move where even a small price jump could mean a meaningful gain — along with several other miners set to ride the same trend.CLICK HERE TO SEE THE $1.60 GOLD STOCK AND GARRETT’S FULL LIST OF RECOMMENDATIONSThe Night Owl is a financial newsletter that provides in-depth market analysis on stocks of interest to individual investors. Published by MarketBeat and Early Bird Publishing, The Night Owl is delivered around 9:00 PM Eastern Sunday through Thursday. If you give a hoot about the market, The Night Owl is the newsletter for you. View as a Web PageIf you have questions or concerns about your subscription, feel free to email our South Dakota based support team at contact@marketbeat.com.Unsubscribe Copyright 2006-2025 MarketBeat Media, LLC. All rights reserved. 345 N Reid Pl. #620, Sioux Falls, South Dakota 57103. 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