Motley Fool Money - Snap's Ripple Effect, Healthcare Stocks, and Streaming "Coopetition"

Episode Date: July 22, 2022

Shares of Snap fell nearly 40% on Friday, taking bigger companies down with it. (0:30) Matt Argersinger and Jason Moser discuss: - Snap's incredible fall over the past year - How worried shareholders of Alphabet and Meta Platforms should be - Intuitive Surgical's latest results - The latest from Twitter, Amazon, and Johnson & Johnson (20:15) Jason and Matt discuss the latest results from Netflix, as well as: - A wide-ranging discussion of the connected TV landscape - The "coopetition" that exists among major players like Disney, Apple, The Trade Desk and Roku - Domino's Pizza's streak of global growth ending - Whether Shopify is a buy - Two stocks on their radar: Etsy and Berkshire-Hathaway Got a question about investing? Our email address is [e-mail] Stocks discussed on the show: SNAP, PINS, META, GOOG, GOOGL, TWTR, ISRG, AMZN, JNJ, NFLX, MSFT, TTD, ROKU, AAPL, DPZ, SHOP, ETSY, BRK.A, BRK.B Host: Chris Hill Guests: Jason Moser, Matt Argersinger Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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Social media, streaming media, healthcare stocks, investors assemble. Motley Full Money starts now. That's why they call it money. Cool Global headquarters. This is Motley Fool Money Radio Show. I'm Chris Hill, joining me in studio. Motley Fool Senior Analyst, Jason Mozer, and Matt Argusinger. Good to see you, as always, gentlemen.

Hey, and it's great to be in. It's good to be in the studio. We've got the latest headlines from Wall Street. We will dip into the Fool Mailbag. And as always, we've got a couple of stocks on our research. radar. But we begin with a chaotic end to the week for social media stocks. Shares of Snap fell nearly 40 percent on Friday after second quarter results for the social media company came in lower than expected. Snap also said it plans to slow hiring. The reaction also sent

shares of Pinterest, meta platforms, and Google lower. Matt, we will get to the ripple effects in a minute. But first, how bad is this for Snap? Well, bad enough to send the stock down, I think it's around, well, to the market cap around $17 billion. And I think what's remarkable is less than a year ago, September 2021, SNAP's market cap was over $130 billion. I think that just shows you some of the insanity we were seeing in the market last year. But I can't argue with the market's reaction.

I mean, if you look at the earnings, user growth slowing, we know the ad market is softening. That tends to happen, but I think what I'm focusing on is that if you look at Snap's five-year history as a public company, it's never had positive earnings, not once. I mean, not in a single year. It's never really had any meaningful cash flow, especially if you adjust for the stock-based compensation, which is out of this world egregious. But it also worries me, I think in the second paragraph, you know, they kind of lay out the bad news, but the next thing they say is we're going to do a 500 million dollar share

purchase. I don't think that's a great use of capital. I have to say, I just think if you're losing hundreds of millions of dollars every quarter in earnings, and by the way, keep in mind, Jason actually pointed this out before the show. It's not like they have $5 billion in cash, as they've stated, and it's $500 million, they can cover it. They actually have over $4 billion in debt. And so laying out all that cash to buyback shares, when your business isn't even kind of on an even keel, especially after five years of being a public company, when your users are at the the highest they've ever been, and you still can't make a profit. It has me concerned. Yeah, and I think they explicitly stated, too, right?

I mean, those repurchases are to offset that dilution. It's not, I mean, they frame it as we're trying to protect shareholders. I mean, I guess I appreciate their honesty, but the bottom line is, you know, and we talked about this, I think last week, maybe, and just we were talking about metrics that maybe kind of fly under the radar. And I mentioned share repurchases looking one step further into share count outstanding, right? Because those repurchases are meant to bring that share count down. And in the case of SNAP, that obviously isn't going to be the case.

It's not like that's unique to them. I mean, this is part and parcel for the tech industry, but still, it's worth noting. I mean, I agree. It just doesn't feel like the most ideal use of that capital at this point when the company clearly has to play defense. Exactly. And that's your go-to, right? Your go-to is, can we stop the bleeding?

Let's announce this what seemingly is a massive buyback. But even at the market cap today, again, around $17 billion, $500 million is not, and you just said it's not going to be accrued to shareholders anyway. So it's not even going to move the needle, really. In fairness to Snap, we have seen much larger, much more profitable companies like Microsoft come out and say, hey, we're slowing hiring. Let's put that aside for a second. I want to go back to something you said, Matt, about the ad market softening.

We're seeing so many companies pulling back on the marketing, lever because that's a lever they can control. Is it warranted that what we're seeing with shares of meta and alphabet? If I'm a shareholder of either of those companies, how concerned should I be about a pullback and ad spending? I don't think if you're a long-term shareholder of those, you should be concerned at all. To me, Google especially, and you made this point, Jason, earlier before the show, which is just the search-based advertising is such a, I don't know, a different, you know, a different model, I think. Meta, I could see, you know, they're going to have some ripple effects,

but even them, beyond Snap, they're so much more diversified. I think of meta as, you know, with all the things they have going. It's not just messaging like Snap. It's, you know, it's Facebook, it's Instagram, it's stories, reels. I mean, it's, it's a wider ecosystem around social media that they can kind of play into. So I tend to think Snap is a little unique. It's a very narrow niche among users. It's a very narrow experience, as far as I know, I'm not a Snap user, but that seems to be the case. I understand why it's having a little bit of an effect on the other players, but it shouldn't be meaningful in my view. Yeah, I mean, to me, you're right, Snap, fairly niche. I think Twitter falls in that same

category. I'd look at those two businesses. Let's just put the Musk Twitter drama side for a second. Twitter is just its own standalone business. I mean, you look at those as very niche plays that they're going to be the first to go, right? Advertisers are going to say, we just don't realize the same return on our investment that we do on something like a Google, for example. So when I see a Google, and I would put Google above meta in this case, just because I think search is so resilient, and meta is in a bit of transition. I see meta down, or I see Google down 5% today on this news. I mean, to me, that represents an opportunity, because while the ad market may be softening, Google's still going to get the lion's share of the dollars going

into that market. And when things do recover, they're going to continue to get the lion's share, and that price is going to recover. Later in the show, we're going to get the lion's share. Later in the show, we're going to into the latest from Netflix and really dig into the connected TV market. But do you think we are now entering a period of, let's just call it, the rest of 2022, where we as investors are going to see sort of the proverbial wheat separated from the chaff when it comes to advertising businesses? Because if companies across the board are cutting their marketing spends, then the competition becomes even fiercer across every platform, doesn't it?

Aren't we entering a period now where we're just going to see the fight becomes much harsher? I think so, and I think we talk about it often. When you enter these periods of tough times and headwinds or companies have to weigh investments they're making, it feels to me like the stronger companies usually, the strongest companies usually come out of these periods even stronger, right? And so you look to the market leaders in this case, again, going back to companies like Meta, Google, I mean, you could probably throw Microsoft in there to an extent at this point given the investments they're making in their advertising business.

It just looks, it really just feels like these are the times when the strongest businesses come out of these stretches even stronger. It's just difficult to see at the time because everything is taking a shalacking. Yeah, and I throw Amazon in there as well. Oh, yeah. And it's companies that obviously sustainable business models produce. just cash flow, all the companies you named, right? And it's not Snap at all. Before we go to break, Jason, you mentioned Twitter. I should point out Twitter's second

quarter results were lower than expected. The company blamed the drop in ad revenue on the uncertainty, and I'm using air quotes, because that's the word they use, surrounding the company's future regarding the takeover by Elon Musk. You think that's bigger news or the fact that in the first round of the legal fight, round one, one? went to Twitter. Because Elon Musk and his attorneys were looking to push the trial out to next year, and the judge came out and said, nope, we're doing an expedited trial starting in October, and it's going to last five days. Yeah, I mean, Twitter just seems like a completely uninvestable company at this point, regardless the outcome. I think it's pretty fascinating that they're really

pushing hard for this acquisition to go through. That tells you they really see that as the best outcome, and I don't disagree. I mean, I think we've seen enough of a track record here in regard to Twitter over the last several years to understand it's kind of, it's hit its potential. As a matter of fact, I think its potential is way in the rearview mirror, right? Maybe if Musk ends up with this thing, perhaps there's the opportunity to realize some unfulfilled potential there. I mean, if I were a shareholder, which I'm not, I would be rooting for that because I think that status quo clearly isn't cutting it there. Yeah, it just, to me, this is just such a mess in every regard. Investors are getting screwed. Employees are getting it worse. I mean, wow. Hats off to the judge for kicking

in this expedited trial, because it really does feel like this is something that does not drag. It doesn't need to drag out any longer than already has. Well, I am a Twitter shareholder, unfortunately. I do view it as, unfortunately, the best outcome, because this is a, I think this is a business that its influence has always belied its valuation, And I always thought at some point that would connect a little bit. We all did. They'd find the model, right? And they would create the value that I think the platform actually creates for a lot of people for millions.

But it hasn't been the case. And I think, unfortunately, this $54.20, right? I guess that's what I'm rooting for, because that's probably the best outcome if that happens. It was a big week for the healthcare industry. We will break down the latest right after the break. So stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Matt Argusinger and Jason Moser.

Shares of intuitive surgical up for the overall week, but down a bit on Friday after second quarter profits came in lower than expected for the surgical robot company. Jason, what's going on here? Her hospital's just not buying the Da Vinci surgical system as much as they used to? Well, yes and no. They continue to invest in the Da Vinci, but they continue to invest in the latest iteration of the Da Vinci. and it feels like we've kind of hit a saturation point there in that regard. So that probably is contributing a little bit of these results. I mean, it's another business that had a tough start to the year. I think shares are down close to 40%. It is a much more competitive environment than ever before.

And so this is a company that continually needs to innovate. But, I mean, the numbers, they were okay, right? Second quarter revenue, $1.52 billion that was up 4% from a year ago. earnings per share fell 16 cents from a year ago. When you look at the Da Vinci setup there, they placed 279 surgical systems. That was down from 328 a year ago. Now, it's not because folks don't like them. It's just because they have, as they said in the call, they say, as our customers have standardized on Generation 4 DaVinci Systems, the installed base of third generation systems has declined. That's lowering the trade in population. Ultimately,

A lot of people have already sort of, you know, gone ahead and traded up to that new Generation 4 system, which is a good thing, right? And if you look at procedures, procedures grew 14% from a year ago. Now, if you compare that to a year ago, a year ago, that was 68%. But it could be argued there was a coiled spring effect there, given the headwinds in the healthcare space for obvious reasons. If you go back to 2019, that procedure growth was 17%. So a little bit more in line with what we just saw this most recent quarter. And they are slowly but surely installing more of the ion clinical bases there, and that is the bronchoscopy system that helps in regard to lung cancer diagnoses. So I think that'll be something that continues to offer a little incremental growth.

The installed base total, 7,135 systems that's up 13% from a year ago. And they actually did raise procedure guidance modestly for the year. So that's all pointing to signs that the business is doing well, but hospitals are absolutely facing headwinds on spending, and they're tightening up a little bit there. Shares of intuitive surgical down 40% year-to-date, is it? It's obviously cheaper. How cheap is it? I'm wondering if this is a buying opportunity. I feel like it is given the market position this company holds today. I mean, that installed base is really difficult to combat when you're a competitor.

We go back to share repurchases. We're talking about Snap. I will ding them on this. They repurchased $500 million in shares for the quarter. Yeah, all right. You know what? Share account's up since 2017. I don't like seeing that. Now, the flip side, they've got a very strong balance sheet, $8 billion in cash and equivalence with no debt. This is a well-run business in a very resilient market. I think if you're a long-term shareholder, you've got to feel like the future looks pretty bright for these guys. Amazon is getting deeper into the healthcare industry. This week, the tech giant bought. One-Life Healthcare, a primary care practice that operates under the name One Medical. The price tag is $3.9 billion. It is an all-cash deal, Maddie.

And when you look at shares of Amazon rising this week, that seems like a nice thumbs up from investors. I think, yeah, there's something to this. I mean, $3.9 billion, it's not a small acquisition, but for Amazon, it's a small bet. And I think what it gives them, it gives them something that they haven't had as they've sort of built out this approach to health care, which is, it's a very important. 188 medical offices, so it's got that brick and mortar element that comes with it. And I'll point out, they're buying the business for less than what one medical came public

at in early 2020 and about a 70% discount to its high. So I feel like it's Amazon being a little opportunistic here. They made the acquisition of pill pack several years ago, and I think a lot of us thought, wow, okay, Amazon's big step here. You know, that really hasn't, you know, I don't think that's reached the potential yet. It hasn't been the game changer, a lot of us thought. They launched Amazon Care. But I think this is a bigger step. And I think if you add all those three things together, you've got the pharmacy element,

you've got this Brick and More into Medical Office, personal health care service, you've got Amazon Care, the telehealth. You start to see the makings of, I think, what is an ecosystem here. And if they can test it out with their tens of thousands of employees, roll it out nationwide, small bet becomes a big bet. And this is kind of a part of Amazon strategy. And maybe we're not far off from a year or two from Amazon Prime offering some kind of basic medical insurance plan or healthcare service that you can subscribe to. I was just going to say, is that where this is going, whether it's part of Amazon Prime or it becomes its own standalone, it becomes a subscription service from the company?

I could see that. I mean, it would be interesting to see if it's all rolled into one Amazon Prime subscription, but I could see something like Amazon Prime Plus. Oh, gosh, that sounds terrible. Something beyond that, where it's greater and it includes health care, as well as maybe NFL ticket, too. I was just going to say, the waiting rooms only play Amazon Prime video. How far are we from the way?

I'm the biggest advocate of Amazon Prime. It's just the cost of living in our house. I cannot tell you everything you get with it. At this point, it just feels like they add something on, I just don't know everything that you get with it anymore. It feels like you kind of run that risk. I mean, you have this prime benefit, but you just feel you have this prime benefit, but you just you don't fully understand everything that you get for it. Maybe they could do a little bit of a better job of like,

you know, throwing that front. Well, yeah, if you've ordered for Amazon lately and you go to kind of like your orders, your account, the menu that you bring, drop-down menu is like 30 things long. It's enormous. It's like their earnings release. It takes an hour to read, just all their accomplishments. You're like, wow, that's great, but just give me the bottom line. Right. Business as usual for Johnson and Johnson. Third quarter profits were higher than expected. They raised guidance for the full fiscal year. Jason, nothing spectacular. Just J&J doing what they've been doing for a while now. Slow and steady wins the race, Chris. This is exactly the thesis, I think, with a company

like Johnson and Johnson. I've been a very good performer this year in the face of a difficult market back in April that marked their 60th consecutive year of a dividend increase. That makes them a dividend king. Plus 10. Just a dividend to rest. Yeah. So, yeah, this is one way I've said it before. Just the longer you own it, the more sense it makes and performance for the business, operational sales that excludes currency effects were up 8 percent, earnings per share, up 8.5 percent, and they maintain the midpoint of their guidance, which is encouraging.

Saw strong performance in pharmaceutical division. That was up 12.3 percent for the core, but they saw growth in all three segments, consumer health, pharmaceutical, and med tech. I think the big story with Johnson & Johnson really, and we won't know until this actually happens, is when this business actually splits out into two separate entities. They're going to split the consumer side of the business out and let the pharmaceutical and medtech do their own thing as the Johnson and Johnson brand. That is one of the main priorities here for a relatively new CEO, Joaquin Duotto. You look at this business on the whole, right?

You look at the Medtech side of the business. Eleven Medtech platforms, each delivered over $1 billion in revenue annually. look at the consumer side of the business, too. There are four segments of the business. They're delivering $1 billion better in revenue. So altogether, very strong business. I feel like it'll be a strong two businesses once they actually execute the separation. That won't happen until later on in 2023. What happens to the dividend next year? That's the big question, right? I feel like if you're the ongoing Johnson & Johnson

business that's the MedTech and the pharmaceutical side, I feel like you have to maintain that dividend increase. You've got to maintain. that reputation, who knows exactly what they'll do with the consumer health side of the business. But those are questions that we'll have to ask as this gets closer. I feel like both sides want to keep that street going. Yeah, absolutely. All right, coming up after the break, we've got the latest from Netflix and a much closer look at the connected TV landscape. So don't go anywhere.

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Chris Hill here in studio with Matt Argusinger and Jason Moser. Netflix had previously warned it would lose 2 million subscribers in the second quarter. But when Netflix reported after the closing bell on Tuesday, the streaming leader shared that it only lost 970,000 subscribers. Jason, I'm sort of poking fun of them. On a more serious side, shares of Netflix up 17% this week. Beating expectations, man. I mean, yes.

You know, less bad is the new good. It feels like we've hit a new chapter of the Netflix story here, right? I mean, I don't think that's necessarily a bad thing. I mean, we knew it was coming at some point. Subscribers just don't grow to the moon, and they're dealing with a much more competitive landscape than ever before. It is interesting to see the slowdown. I mean, you exclude currency effects. They grew revenue 13% for the quarter.

I think more noteworthy, they're forecasting just 4.7% growth for the current quarter, and ultimately, target. getting subscribers back to where they were at the end of the first quarter this year. So, you know, it remains to be seen exactly what kind of investment this is going forward. It is something to remember now nearly 60% of their revenue comes from outside of the U.S. So they are going to be more subject to those exchange-related impacts as time goes on. But really, I think the big story is clearly the advertising tier. I mean, that is something that they're going to be focused on here in the coming quarters, and they hope to roll that out in 2023.

I'm torn here. I mean, it is for a long time. So the key for them, and they mentioned this in the letter, in the near term, a key priority to reaccelerate revenue, it's to evolve and improve their monetization. And they see doing that three different ways. One of them is the ad-supported tier. Fully agree with that.

Another one, they're going to continue to work on figuring out how to crack down on password sharing. I'm fully agree with that too. The one that I'm kind of like, hmm, they better keep an eye on this. They want to keep an eye. They're looking to figure out a way to keep the service simple. And I agree, but I think the problem is that Netflix, as time goes on, is becoming less and less simple. That was a big selling point in the early days, right? It was just one pricing tier. Then it became three. Now it's going to become, who knows, three plus an ad-supported tier. And exactly how they roll that ad tier out remains to be seen. I think they're doing the right thing in actually rolling that tier out, but it is just worth

remembering. Hastings, for the longest time, we viewed him as the smartest guy in the room when it comes to streaming. I think that's spot on. I think he is the smartest guy in the room when it comes to streaming. But that was a much different business than what we're seeing going forward. I don't know that that necessarily applies when we're talking about an ad-supported streaming service. I mean, he's got a lot to learn, I think, in that regard.

So hopefully that's what they're doing, is taking some notes and figuring this out, because I think that is going to be, that's going to be a point of uncertainty. We're going to see a lot come of this in the next couple of years as to whether they can really execute. I think Netflix was really the only kid on the block, if you think about it, going back seven or eight years ago. And the competition, well, I always felt, same with you, I kind of liked Netflix's simplicity, and something Reed Hastings talked about all the time.

We're simple, you pay us once a month. We deliver great content. Not many multiple tiers, not advertising, not live sports. We're going to just focus on made content. But the competition, I think, has pushed them. I think they've seen competition be successful with ad tiers. They've seen success with other platforms that roll out content slower. Episodes come out not all at once, but over weeks or over months.

And that's pushed them to do some things. But I want to go back to the very first thing you said, which is I think Netflix is kind of the first notable earnings announcement, guidance, etc. for this earnings season. And it really is about, just don't disappoint me too much. Last quarter, you said it, Chris, before the shows, last quarter was like any hint of like, you could have had a blowout earnings, it didn't matter. Your stock was getting crushed. Now for every company, it's like, well, just we understand things are bad. Investors know that. Just don't disappoint us anymore, and we'll reward the stock. And I think that might be the way going

forward. And I think a good thing, too, for this business, just to note this. I mean, they expect to be free cash flow positive from here on out. And I think that's a big deal. Because we've been targeting this for a while. And when you look at the obligations this company has, I mean, they've got content obligations now of just under $23 billion, and they've got just under $18 billion worth of the balance sheets. So that's just fuel for this engine, right? That's going to be in perpetuity, I think, for a business like this, to a degree. But that free cash flow should help them, I think, going forward not only improve

their financial position, but also keep that content coming out. They should announce a buyback. I mean, come on. Here's the answer. We got a question from Bill in Seattle who wrote, is there any concern about an ad-based system causing more Netflix subscribers to leave? And if that happens, what will be the revenue impact, if any? Well, I think that's a great question.

It is. My assumption is, you know, that is front and center in their thinking is, we got to do this in a way that brings in more revenue and brings more people onto the platform, not less. Yeah, it's going to be interesting to see how that you have. that nets out because, I mean, in theory, it really does feel like it should bring more people into the fold than ever before. Now, the counter to that is, there are likely going to be some subscribers that say, you know what, we just don't use Netflix as much as we used to, or we have other services that we use now, so we downgrade our subscription from like the mid-tier

down to the ad-supported tier. I think the good thing for Netflix, at least there, is they don't see those subscribers leaving in full, right? You're keeping the subscriber in your universe. And we know those acquisition costs are just really expensive over long periods of time. So if it can ultimately enable them to just keep subscribers in their universe, even if they're just downgrading to a cheaper subscription, I think that's a net win for Netflix. Our email address is Podcasts at Fool.com. Related to all this, we got an email from Psi who writes, I'm interested in the connected TV and over-the-top advertising market, especially around the trade desk and Roku. My question is, how are they differentiated?

against the competition? How does Roku stack up against Amazon Fire and Apple TV? And how does Trade Desk stack up against Google, Amazon, and Facebook? Great questions. And a reminder among other things of just how intertwined this entire industry is. When we talk about streaming entertainment, you have all of these businesses that are simultaneously competing with one another. And in a lot of of cases having to work with one another. Yeah. Yeah, I mean, there are a lot of dots to connect in the space. And the word that always comes to mind here's co-opetition. I mean, there are companies that are partnering up and yet competing with each other to a certain degree. I mean, you look at

something like the Trade Desk, which is the industry leader in programmatic advertising, and ultimately just sort of an independent provider of that demand-side platform. And that's great, right? A very disruptive force. you know, in ad tech, you look at something like Roku, far more consumer facing, right, a streaming platform, and they've done a great job pivoting from being that hardware company that we knew so long ago to ultimately being more or less a software company, right? It's about the operating system. So you buy a TV, say, it doesn't matter whether it's a Samsung or an LG or whatever, but it's got that Roku operating system where you can then

subscribe to all of your channels in that operating system. So Roku's getting a slice of the subscription revenue. but mostly, mostly, it's the ad-supported revenue that Roku is benefiting from. So, two different businesses, but they play in the same sandbox. And it feels like there's plenty of room to own both of those. Now, they're higher-risk ideas when you put them in the context of your businesses like Microsoft, Amazon, and whatnot. Yeah, I struggle with this too, because it's a great question of my side. I think there's a lot to unpack.

I have a question, though. Am I a dinosaur? Let me, we recently had it. I live out on a farm now, and we recently got Xfinity finally. They dug the hole, and so I have internet. And it came with an Xfinity Flex device, which is basically giving us all the connections to Netflix and Amazon and HBO that I had before, either via smart TV or some other device. And so I feel like there's another player there.

And so, you're right. They all have to work together. And I just feel like it comes down to what is the customer experience and what makes it easiest for someone to connect to all their different apps. I can't tell you, they all seem really great and easy to me. Well, and yeah, I mean, Comcast was not part of the question, but they're absolutely a leader when it comes to cable. They own Xfinity. They have a lot of content.

They're the parent company of Peacock. This is one of those things. We were talking about this before the show that so often as investors, it's almost like our brains are wired to think in terms of binary outcomes. like, who's the leader here? Who do I think is going to win? And as much as any industry, this seems like one where I just want to say to anyone who's asking these types of questions, please don't try and pick one winner, which is one of the great things about being a stock investor. You can take a diversified portfolio approach, not just to your portfolio, but to individual

industries. And this seems like one where, like, I don't know, I'm a trade desk shareholder. Are they going to be the big winner in this? Maybe. But I would hate to have 100% of my exposure in this industry just riding on one single company. I mean, I think you can really just adjust one word in what you just said there and say it's going to be a big winner instead of the big winner, right? And so I would encourage I just encourage you to look at it from that perspective, because we mentioned a lot of companies in there that interestingly enough are also playing in this sandbox. As I said before, I mean, NBC Universal, for example, they have their own ad tech, right?

I mean, NBC Universal was actually in the running as a potential partner for Netflix. Now, Netflix obviously chose Microsoft, and most people, if not everybody, never saw that coming because most people don't even realize the investments that Microsoft has been making in their advertising business until now, when we've been able to dig into it a little bit more. So now you bring Microsoft into the fold. You see NBC Universal, which is owned by Comcast. They've got an ad tech business. You see Disney, obviously, securing what a record.

It means $9 billion in advertising commitments here recently. 40% of those are devoted to streaming. Now, obviously, that is a big win for the trade desk, because the trade desk is going to be handling Disney's advertising. But it just goes to show you, as you said, there's so many different companies out there are serving so many different roles. It's kind of like the payments industry.

It can be difficult to connect to all of the dots. And, Chris, you know, we're famous for talking about the war on cash here, because it just doesn't seem prudent to pick a winner when there are going to be so many. Last thing before we go to break, lost in all of this is early in the week. Disney comes out and says, we're raising the price of ESPN Plus, and they really jacked it up. This was not, oh, we're bumping it up by a dollar a month. They went from $7 a month to $10 a month, but they kept the price of the Disney bundle exactly the same. So you get Disney Plus, ESPN Plus, and Hulu for, I think it's $14 a month, which signals to me that they are completely focused on getting people into that, basically saying, hey, we're jacking up ESPN Plus, but for just a couple bucks more, Matt, you can get an enormous amount of content.

And it'll be interesting to see how compelling that is, because just on the surface, it's a strategy that seems like it should work. It should absolutely work. My only question about all this, though, is there are only a certain number of hours in the day that someone has to consume content. I know that, especially when I have a three-year-old son at home. So, they're going to be, like I said, the basket approach is the right approach. There's going to be so many winners in this space. And it's an exciting industry to watch. I mean, Amazon's got their own demand-side platform that basically competes with the trade desk. So Jason just keeps confusing me. And yes, the trade desk. New companies, he keeps throwing out new companies that are in this space. And yet the Trade Desk has a partnership to some degree with Amazon. So, again, back to that co-optition. I mean, it's a really difficult one to parse, and that's why you've got to be willing to take a look at a lot of different names.

This is why stock investing is not forever. It's also why it's a lot of fun. Absolutely. Up next, an impressive streak comes to an end for one of the best-performing stocks of the past decade. Plus, we've got a couple of stocks on our radar. Stay right here. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about,

and the Motley Fool may have formal. recommendations for or against. So, don't buy or sell stocks based solely on what you hear. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser and Matt Argusinger. Second quarter revenue for Domino's Pizza came in higher than expected, but international same store sales fell 2%, which is noteworthy, Jason, because it's the first time international same store sales have fallen since 1993. Yes, yes, that is a shame. I mean, they are in good company because you have a same store Fails fell as well, 2.9%. But just a difficult quarter all the way around for Domino's, but not

terribly surprising. Revenue up 3.2%, but earnings per share down 7.8% as they continue to witness inflationary costs, right? They saw an average of 6% price increases for the quarter, but labor remains a very difficult issue for the business. The carryout business actually performed very well. Com for up 14.6%. Delivery fell 11.7%. They're just having to trouble, having some trouble locking down drivers. Management set goals of hitting 25,000 stores and $25 billion in global retail sales by 2025. They're just over 19,000 stores today, and the trailing four quarters of store growth is just over 1,200. So I'm not sure they'll be hitting those targets. But it is a very resilient business, nonetheless. They've done a lot building

out the technology side of the business as well. So I suspect they'll be okay. So there's DiMaggio Street and then Domino Street. Man, there you go. Once again, our email address is podcast at fool.com. Question from Sean Williams. Is it time to buy Shopify or wait? I would love to hear where the thesis stands on this one. What do you think, Maddie?

Yeah, if you look at Shopify, I mean, it's down 75-odd percent from its high, so you're thinking, yeah, maybe there's an opportunity here. But, you know, if you look at the, I'm just looking at consensus earnings estimates, not just this year, let's forget this year, let's look at next year, 25 cents a share. So even after the downturn, the split in the stock, I'm adjusting for all that, it still trades for about 150 times earnings. You can look at cash flow, and that's great. They do about 500 million operating cash flow, maybe normalized, but that's still 90 times that

based on their market cap. So, again, shop-wise is an exciting business, growing like gangbusters. I'm actually a shareholder as well. You've got to be fearful of the valuation even after this big downturn they've had this year. All right, let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is actually behind the glass this week. He's going to hit you with a question. Jason Moser, you're up first. What are you looking at? Well, earning season is underway. So next week, Etsy reports on July 27th. The ticker is ETSY. You know, a business that benefited clearly from the stay-at-home stock mania that has since come back to Earth. But Etsy's still doing okay. Last quarter, they acquired over 7 million new buyers that was almost 60% up from Q1, 2020.

They also continue to see reactivation of laps buyers. They saw 5 million reactivations in the first quarter of year ago as well. So I think the big question for Etsy, right, the headline over the past couple of quarters here has just been the fee change. They're raising fees for their merchant customers. And we saw a vocal minority make a lot of noise about that. In reality, though, based on management's comments from a quarter ago, they say they saw less than 1% of sellers actually go into temporary vacation mode and kind of take a little bit of time off from the actual business.

They saw active listings just drop a little bit less than 1% during that week as well, and that has returned back to previous levels. So, again, it seems like a vocal minority in regard to those increases, and it does sound like they're using those increases to reinvest in the business. business and provide more for their merchant customers in the way of ads and payments and whatnot. But I'll be paying attention to that language here in this call. Dan, question about Etsy? Etsy is a terrifying business, Chris, because I'll look at it and I'll be like, oh, I'll

spend $15 on hobby supplies or painting supplies or something. And then my wife looks at it and says, man, this $900 handmade wooden cabinet sure would be nice to have. It's a terrifying business, Chris, which probably means it's a good. business. As a shareholder, I appreciate both of you contributing. Didn't sound like there was actually a question in there, Jason. No, I'll just wholeheartedly agree and move on to Maddie. Maddie, what are you looking at? I'm actually looking at Berkshire Hathaway, ticker BRKB, unless you're Jason that can afford the A share. Fake news. But this is astounding

to me. In less than three months, Berkshire stock price went from an all-time high of around $360 to a 52-week low. in less than three months. For that size of a company, and for Bursher itself, that seemed remarkable to me. Now, it's up a bit over the past few weeks, but you can still buy the stock today at roughly one and a quarter-times book value, which is right at the threshold where Warren Buffett has said in the past, he'd be buying back the stock. So other than Chevron, I think that's where Buffett is probably buying these days.

And so it's one of those few companies, I think, in the market right now, that you can say, you know what, there's probably limited downside to it. Dan, question about Berkshire-Hathaway? Yeah, does anybody have any A shares they want to gift me? That would be my birthday's in September, but we could do a little early. It's cool. You can do a GoFundMe, right? Let's all let's all consider it to a GoFund.

We can buy one. You're going to buy one? Just one. Dan, two very different businesses. You've got one you want to add to your watch list? Well, interestingly enough, Chris, I am a Berkshire B shareholder already. So I'm going to be adding Etsy to the watch list because I think it's a very interesting stock. Terrifying.

Terrifying in a good way, though. That's right. That's right. Jason Moser, Matt Argusinger, great having you in studio. Thanks. Thank you, Chris. That's going to do it for this week's Motley Full Money Radio show. The show is Mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you next time.