Motley Fool Money - The (Wall Street) Hits Keep On Coming

Episode Date: February 17, 2023

It was another big week of earnings results (and surprises). (0:21) Jason Moser and Ron Gross discuss: - Shopify's guidance outweighing its results - Airbnb nearly doubling profit expectations - Record revenue for The Trade Desk - Shares of Roku popping more than 25% - The latest from Marriott, Twilio, Cisco Systems, and Zillow Group (19:11) Jason and Ron keep the earnings coverage going and discuss: - Boston Beer surprising Wall Street - Outset Medical's latest results - The state of Microsoft's bid to buy Activision Blizzard - The latest from Coca-Cola, Roblox, Chipotle, and Alphabet - Two stocks on their radar: Etsy and Paramount Resources Looking for even more stock research and recommendations? Check out the details on our Epic Bundle membership at Epicstart.Fool.com Stocks discussed: SHOP, ABNB, TTD, MAR, TWLO, CSCO, ROKU, ZG, SAM, KO, OM, RBLX, ATVI, MSFT, CMG, SG, GOOG, ETSY, POU Host: Chris Hill Guests: Ron Gross, Jason Moser Engineers: Steve Broido, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, I'm Charlie Cox. Join us on Disney Plus as we talk with the cast and crew of Marvel Television's Daredevil Born Again. What haven't you gotten to do as Daredevil? Being the Avengers. Charlie and Vincent came to play. I get emotional when I think about it. One of the great finale of any episode we've ever done. We are going to play Truth or Daredevil.

What? Oh, boy. Fantastic. You guys go hard, man. Daredevil Born Again, official podcast Tuesdays, and stream Season 2 of Marvel Television's Daredevil Born Again on Disney Plus. There's a lot going on, so let's get to it. Motley Fool Money starts now.

That's why they call it money. Full Global Headquarters. This is Motley Fool Money Radio show. I'm Chris Hill joining me in studio. Motley Fool Senior analyst Jason Moser and Ron Gross. Good to see you, as always, gentlemen. What are you doing, Chris? We get 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 radar. But we begin with the latest reminder that the stock market is forward-looking. Shopify's fourth quarter profits and revenue came in higher than expected, but guidance was light, and shares of Shopify pulled back from what had been a pretty good start to the year, Jason. Yeah, you hit it. I mean, this was a reaction based more on what's to come as opposed to what they did. It was a good quarter, but the guidance for the current quarter is just it's okay. And for a company valued the way this one is, that's going to be just far more sensitive, to slowing growth, and we're seeing that play out. You look at just some of the numbers,

the same quarter a year ago, that top line grew 41%. Okay? I mean, revenue for 2021 was triple what they recorded in 2019. So they pulled, as many of these sort of pandemic names did. They pulled a lot of growth forward. It's not to say it's a business in trouble by any means, but that growth you should expect it to slow. Revenue for the quarter, up 28%. That's excluding currency effects. Gross merchandise volume was up 13%. Gross payments volume grew to $34.2 billion. That represents 56% of gross merchandise-processed to the quarter versus $27.7 billion, 51% from the fourth quarter of 2021. Gross margin for this quarter, 46%, that's versus 50.2% in the same quarter a year ago. So they're seeing some of those costs from the deliver acquisition and also the build-out

of Shopify payments. That's not a bad thing. Again, this is a business that's investing in growth. But again, you go back to those slowing growth rates. The valuation is just going to be more sensitive here. You can't really blame them for investing in that growth. They're pursuing a massive market opportunity. But I think you've got to really take the long view with this one.

You know, the pulling growth forward thing is very interesting to be, because there's nothing wrong with getting money today instead of next year. It's when you continue to project that that will continue, or you put infrastructure in place in terms of employees or other spending, that assumes that will continue. That's where the stocks can get ahead of themselves and you get into trouble. But money today, hey, burden the hand, I'm all for it. Absolutely. They're guiding for revenue growth in the high teens percentage for this current quarter, right? That's not bad. Let's not say that's bad. But, Relatively speaking, it's just a much different scenario than what we've seen over the last couple of years.

Airbnb's fourth quarter profits were nearly double what Wall Street analysts were expecting. There were other numbers in the report, Ron. But I feel like the profits being nearly double, the expectation, are a big reason why shares of Airbnb rose more than 20% this week. Yes, a strong report, better than expected. Stocks had a six-month high. They recorded their first annual profit, which I'm sure is nice to get that under their belt. and the numbers do bear out that things are going pretty well. Fourth quarter revenue up 24 percent, strong travel demand, strong dollar abroad had a lot

of folks traveling, European travel picked up, stays in urban centers, interestingly picked up. And that's actually important because those are sometimes at lower price points, so they can have a price mix kind of effect, but those were strong. So there was a 20 percent increase in nights and experienced booked. which led to a 20% increase in gross booking value, and that really does drive the business. Average daily rates were down about 1%. Again, driven by the fact that Urban was on the higher side.

But they're doing really well. Interesting, the company makes money on the float. The float is the money they collect from people who stay at an apartment or a house and don't pay it out to the owner of that apartment until later. And in this quarter, they made $100 million in interest on the float. and that's up from $4 million a year ago. So that's almost 100% profit right there. It's a very interesting part of their business model. So you take that all together, net income was up almost 500% to over $300 million. And the company's doing well. Guidance was good,

but the comparisons are easy because last first quarter of 2022 was impacted by COVID. But they're on the right track. The Trade Desk posted record revenue in the fourth quarter and shares of the programmatic ad tech company rose 25% this week. Jason, at the start of the year, we did our preview for 2023. You called out the Trade Desk as a stock poise for Upside. I think this is what Upside looks like. Well, it is a very good start, right? I mean, this is a company I've owned for a number of years and hoped to own for many years to come.

But, yeah, absolutely a good start to the year. You remember that over-the-top spend when we were talking about that. I mean, it's poised to grow from $6.3 billion today, the advertising spend in over-the-top entertainment. It's going to grow from $6.3 billion today to projected $11 billion by the end of 2024. So this is a market that's growing very quickly, and a lot of that money is going to the Trade Desk platform. They saw $7.8 billion in total spend on their platform in 2022. That's versus $6.2 billion from a year ago. And that translated into some very encouraging numbers. Revenue was up 24% from a year ago to $491 million.

That's just at the top of their guide from a quarter ago. The adjusted EBITDA, that was better. They beat at $245 million. That was a little bit closer to their guidance. And they have a habit of really underpromising and over-delivering. So that was just one thing that kind of stood out here. But retention remained over 95% for the quarter as it has for the past nine consecutive years. years. They're guiding for 15% revenue growth in this current quarter. And ultimately,

this is a company that continues to gain share. They saw that estimates pegged total global ad spend grew 8% last year. Spend on their platform grew three times that. So that's what you like to see, picking up that market share. Strong performance in verticals, including travel and automotive. Political spend is starting to ramp up, and they did announce a $700 million repurchase authorization in the process. That's what I wanted to ask you about, because I saw that, and I'm wondering if you think that's a good use of $700 million. Well, okay, it's an authorization, right?

It's not like they're just blowing it all at once. I mean, you do like to see the confidence there. You know, listen, if we look back at this and it brings the share account down, Chris, I'll be happy. If it doesn't, then we'll revisit. I'll have some issues there. But again, it's an authorization, not a promise. Back to the business of room rentals, Marriott's fourth quarter profits in revenue came in higher than expected, and Marriott also with some nice guidance on bookings.

Yeah, stocks up 20% this year on a nice rebound to the business. Revenue per available room, Rev par, if you will. I know we like to talk about acronyms, up 29% worldwide, 24% in the U.S. in Canada, and 45% in international markets. So strong, but comparisons to the last. last year are easy because of COVID. And we have to understand that. When we look at them compared to 2019, to get a better comparison, worldwide REV PAR was

up about 5%. And that was driven by a 13% increase in average daily rates. So still fine, but not the astronomical numbers you see when you compare to COVID periods. With the exception of Greater China, Rev PAR in all regions, more than fully recovered, continues to show meaningful advances in occupancy. leisure demand is strong. Business demand was at nearly 90% recovery in the quarter, and those average early rates were about 3% above 2019. So pretty good. Operating income up 60%, adjusted earnings up 50%. Guidance was strong. Roughly halfway through the quarter now, global

booking trends are up. Rev PAR up 52% in January as an indication of how this quarter is tracking. Again, comparisons are somewhat easy compared to last year, so take that with a grain of salt, but the business is on track and doing well. What is a reasonable expectation for someone looking at shares of Marriott? Because you look at a five-year chart, and obviously there's the dip at the beginning of the pandemic in early 2020, but this is basically a flat stock. I know they pay a dividend, but what's a reasonable expectation if you're looking at buying what is, for all accounts and purposes, a strong brand.

Yeah, so 23 times forward earnings right now. That's in comparison to, let's say, Hyatt, who's at 47 times, but there's some things going on there. So Hilton at 27 times is probably a better comparison. But earnings are still kind of on the weaker side, as things kind of rebuild back. So that 23 times is probably artificially high, and you probably are actually going to buy Marriott for somewhere under 20 times, with an approximate 1 percent dividend. So I don't think you're going to knock the cover off the ball.

It's a stock I own and will continue to own, but I certainly think you can own it and make money. More earnings 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 Jason Moser and Ron Gross. Shares of Twilio up nearly 20 percent this week after fourth quarter revenue was just a little bit higher than expected. So, Jason, how strong was Twilio's guidance?

This was a razor-thin beat on the top line. True, but I think the guide for profitability to come is a little bit more encouraging, and that's what investors are excited about. Remember, late last year, I said that once they reached this next step of non-gap operating profit, the market would start to probably look at this thing a little bit differently. It feels like we're getting to that point. Management is holding true to their words, focusing on building a more efficient, resilient, and profitable business.

Revenue is up 22% for the quarter, virtually all. that was organic. But more importantly, now we're taking that step into the world of non-gap profits, right? And so non-gap operating income, $33 million, translated to earnings per share of 22 cents. All very encouraging. When you look at the metrics that matter for this business, they now have over 290,000 active customer accounts. That's compared to 256,000 from a year ago. I think the big news here, really, it is reorg, it is restructure, it is refocus. I mean, they are going to let go of 17 percent more of their workforce. That's on top of the 10 percent that they just cut, right? And so they're also going to reorganize this business into two

units. We'll have a communications unit, and then you have the data and applications unit. Communications being the bigger of the two, that ultimately is going to help them continue investing in that data and applications unit, which I think is a good idea. And another sign that management really is getting it, is just in regard to stock-based compensation. I think that's always been a point of weakness for a company like Tuolio here, representing anywhere from 22 to 25%, and even greater of revenue. Now, as they've cut the workforce, as that stock-based compensation starts to roll off, they're targeting stock-based compensation to be around 10 to 12% of total revenue by 2027.

So when you put all of that together, and then you've got management still guiding for around 14, 15% organic revenue growth for the year, and then also a range of $250 to $350 million in non-gap operating profit. No, we're not at the finish line yet, but we certainly are seeing steps in the right direction. And for a business like Twilio, a very sticky offering there, very necessary in the communications market. I think this is a good sign. Cisco Systems doesn't appear to be firing on all cylinders, but shares of the computer networking company up 10% this week after strong second quarter results. And Cisco's guidance was pretty strong, too, Ron.

Yeah, not your father, Cisco from back in the day. They're doing their best to really transition to a recurring revenue model instead of just selling big machines one at a time. And it seems to be working. This was a very solid report, better than expected on the top and bottom line. Revenue up 7%. Customers keeping investments steady in systems relating, not surprisingly, the cloud, artificial intelligence.

Have you heard about artificial intelligence, Chris? A little bit, yeah, lately. Tools for hybrid work are actually strong. And Cisco is benefiting from the backlog of orders that were built up during the pandemic as supply chain constraints now ease, but things were backed up for a while. So that all translated to adjusted earnings up 5%. So that's not unbelievable, but for a company this size and what they do, not too bad, and that's why you can buy it for 14 times earnings, by the way, instead of having to pay over 20 times,

Increase the dividend yield, 3% yield right now. So that's attractive to. The guidance was strong. CEO, Chuck Robbins, is doing a nice job turning this business. Roku's loss in the fourth quarter was smaller than expected. Revenue was higher than expected. And shares of Roku rose nearly 30% this week. Jason, was it that good?

Well, I think it was coming off of a very low base in some difficult times. I do think we've seen beyond the shadow of it out. Roku is a force in the cord-cutting movement. It's clearly in a good position to hold and grow its position in streaming in the greater entertainment space. I think the real question now is, what's a reasonable expectation of profits here, right? What kind of bottom line are we looking at here longer term? Now, part of that answer lies in the shareholder letter where they talk about through

a combination of operating expense control and revenue growth. They're committed to a path that delivers positive adjusted EBITDA for the full year 2024. So still a little ways out. But the numbers were encouraging, right? In a difficult environment, basically flat at $867 million. Gross profit actually ticked down just a bit, but they've got now 70 million active accounts that's up 16%. Streaming hours even better, up 23%.

And average revenue per user ticked up a little bit at 2%. Although it's noteworthy, that was down a little bit sequentially. Again, I think with Roku, it goes back to the operating expenses. What kind of expectation is reasonable in regard to profitability? They are going to roll out this new series of television sets. A little bit curious here into their smart home investments. I'm not sure that's really the best use of investing dollars, given all of the competition that's already out there.

I mean, they're talking about things like doorbells and alarms and cameras. I mean, that stuff already exists. There are companies out there that do that very well. So I'm a little bit more glass half empty on that run. But they're guiding for 700 million in revenue. This current quarter, it's worth noting. down from the same quarter year ago at 735 million. But this goes back to something we talk about frequently, and it's capital allocation.

And to the point you made earlier, about the $700 million share buyback, it's just an authorization. They don't have to spend that. If you're making the investment to build entirely new devices, that just comes with higher risk. That's a little bit more of a promise. You're making a bit more of a commitment there. And in this case, I'm just not sold on it. A year from now, we'll see adjusted earnings to adjust for the investments made in those devices.

It's like, my adjusted body weight next year. If we adjust for the chicken wings and the pizza, I ate during the course of the year, I am perfectly fed. I think Ron's onto something here. Zillow, C.E.R. Rich Barton, sounds like a man who has gone through a storm and finally come out the other side. Zillow's fourth quarter results were better than expected, and Barton says he and his team are focused on the future. Ron, the eye-buying debacle.

Can I call it a debacle? You can. It looks like it is finally in Zillow's rear view mirror. Completely unwound that business. And yes, it was a mess. But that's behind him. We can look forward now. These results were significantly better than expected, but they're still very weak.

This business is not doing that well right now. Total revenue down 19% for the quarter. for the quarter, driven by their internet media and technology segment, IMT, they call it, and their mortgage business. But IMT was down 14%. It was just better than expected. Their premier agent business was down 20%, again, better than expected, but down. Rental advertising revenue was up 13%, so a bright spot there.

And mortgage segment revenue, although down 65%, to 18 million in the quarter, that would was near the midpoint of the range they had given, so it didn't disappoint investors too much. Net loss for the quarter is $72 million, so losing a little bit of money there. Their vision is to build the housing super app, which okay. That's fine. Let's get at it, guys. I think it'll be okay. Am I the only one who thinks that this is going to be a particularly interesting year

for the housing industry? You just think about everything that has gone over the past 12 months. You look at homebuilders, you look at businesses like Zillow Red. It just seems like we are setting up for a more interesting than average year. For sure, and it's all kind of driven by interest rates, right? I mean, and so you predict where interest rates are going to be, and I can predict for you where the housing market will be. My wife's a realtor, and this is around the dinner table almost every night talking about

the health of these industries. Hope you're thirsty because we've got all kinds of beverages right after the break. Stay right here. You're listening to Motley Foolman. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser and Ron Gross. We're going through some of the big stories of the week. And if you're the kind of investor who's looking for more stock research and recommendations,

check out Epic Bundle. Epic Bundle combines the Motley Fool's four foundational stock investing services into one membership. With Epic Bundle, you get immediate access to all of the research and recommendations within Stock Advisor, Roll Breakers, Real Estate winners, and Everlasting Stocks. and for a lot less money than if you paid for each one of those four services individually. For more details, just go to Epicstart.fool.com. That's Epicstart.fool.com. Boston Beer Company surprised investors this week, and it was not the good kind of surprise. The parent company of Sam Adams beer posted a loss in the fourth quarter. Guidance for the

current quarter was also for a loss, and shares of Boston beer falling more than 15 percent as a result, Jason. Yeah, this really is all about what's coming down the pike. And it all looks fairly challenging, at least in the near term. There's plenty of data out there that says Americans are drinking less beer. I'm not sure what that's all about. And we've seen the trouble that this company's had with its core Samuel Adams brand over the years, right?

I mean, that's not news. They are witnessing some real challenges there with the Samuel Adams core brand. And so it's become more about other things for a while. It was cider. They did great until that kind of ran its course. And then it was Truly Seltzer, and that's done great. Problem is now Truly Seltzer is running into some headwinds as well. They've had a pretty good run here in the last few years. They ended 2022 with revenue of $2.1 billion, which is essentially almost double what they recorded in 2019 at $1.2 billion. Again, though, this is really all about truly Seltzer at this point, because that's where they've been

hang in their hat over the last couple of years. And now they're seeing those headwinds start to build, and that's reflecting in the guidance, right? They see volumes declining in 20203. They do see growth in Twisted Tea, but that's such a small part of the business. You do have to ask yourself some questions, what is next for this company? Because they are playing in a very competitive space. I like the strategy of being more things, right? Introducing new beverages into that portfolio. It looks like they may need to find another rabbit to pull out of that hat. Shares of Coca-Cola flat this week, despite fourth-quarter revenue coming in higher than expected. Rob, we were talking about this earlier today.

The soda sales, they're not great, but they're doing better than the non-soda parts of Coke's portfolio. Except for coffee. Coffee was actually strong. Well, it's coffee. Sales of juices, dairy and tea were down. Coke zero sugar was actually probably the strongest in the sparkling segment, up nine, But overall, sparkling soft drinks were flat, coffee up 11%. So different pockets carrying the weight there.

Overall, organic revenue was up 15%. That was driven by 12% growth in price and some mix assortment and 2% growth in concentrate sales, but unit case volume declined 1%. So price increases here are the main story as to how they're actually putting up numbers that look somewhat good. Adjusted operating margins were up a bit. Operating income up 24%. Net income was down 16%. But if we adjust for some things, as we are want to do, they were actually flat. Increased their dividend for the last 60 years. 2.9% yield right now, not too bad. They did increase their guidance. They're going to continue to increase prices. That's interesting to me because Pepsi

said they were going to hold prices steady. So that'll be interesting to see how that shakes out. Well, report was fine, just not great. I'm glad you made the comparison to Pepsi, because that really is going to be interesting to see, not just with these two businesses, with a lot of consumer-facing businesses that, for perfectly good reasons, have raised prices pretty significantly over the past 12 to 18 months. It can be interesting to see how they deal with it in 2023. Yeah, you know, the old Warren Buffett loves companies with pricing power, and that's

why he owns companies like Coke. And it is great. There is a limit. You can't continue to just price your way into growth. But when you need to pass along some higher cost to the customer, companies like Coke and Pepsi are able to do so. There's no way to make this transition smooth. So let's go from beverages to dialis technology. Mixed end to the fiscal year for outset medical. The Medtech company reported a loss in the fourth quarter, but revenue was higher than expected. Jason, what's your diagnosis for outset medical?

Well, Chris, I'm not a doctor, and I don't play one on TV. But as a shareholder and one who's recommended the stock, I will say the big picture here for Outside Medical is good, right? This company is in a good place. An investor should be very encouraged with this progress. They did pre-announce these results earlier in January, so there weren't any real surprises. But to recap, revenue of $32 million in the quarter was up 15.3%. They are growing margins, non-gap gross margin grew 5.1 percentage points to 17. To put this in context, management sees a long-term target there of 50%. So there's a long way to go there if they can reach it.

Ultimately, the business is, of course, still recording a bottom line loss, but profits are a matter of when and not if. It really boils down to how are they doing with this Tableau dialysis system? The news there is encouraging. Year-end installed base grew 54% to approximately 4,000 systems. And even more encouraging, that includes a more than doubling of units with home-profile providers to almost 800. And that matters because they essentially see home as the largest long-term market opportunity. That's the differentiator is in the home. The Mexico production

facility is up and running for the usable cartridges, for the consumables in this razor blade model. That will help on the margin side. Management's calling for revenue growth of around 26 percent at the midpoint 4, 2023. They'll continue to get these machines placed. They'll continue to pump those gross margins up. They'll continue to bring those. operating expenses down. So slow and steady wins the race here, I think. This is still a small company. It's a $1 billion market cap. How confident are you that three years from now outside medical is still a standalone business and hasn't been snapped up by a bigger player?

I hope it is. I kind of would be surprised if it's not, because what we're seeing is clear signs here that their tablo system is a really good one. And it's gaining share quickly. When that happens at this size, yeah, you usually see a lot of. of big interest from a lot of bigger companies. Shares of Roblox up nearly 20% this week after fourth quarter results were much better than expected. Roblox also reported nearly 60 million daily active users. Ron, is this business on the right path? Because it's been a rough couple of years for shareholders. It is on the right path, but you can see the roller coaster ride. Just take a look at the

stock chart, up 60% this year, but still off 25% from a 52-week high, and off 60%. 66% from its all-time high. So, you know, one would argue that that all-time high was probably a bit frothy, if you will, and things have come back down to earth. But this report is good. It's good in the sense that they reported a smaller than expected loss. So if that gets you excited, then it's a good report. So revenue up 2 percent, but bookings were up 17 percent. As you said, average daily active users were about 59 million. That's up 19% year over year. So that's pretty good. Hours engaged were up 18% year over year. An interesting metric was that growth was strong across

all geographies and age groups, but particular strength among those 17 years old or older. When I think of Roblox, I think of it as really an application for younger kids. So that's probably very interesting to the company to watch those demographic shifts. January metrics are encouraging. So the growth is continuing. Estimated revenue up about 22 percent they believe in January. Estimated bookings also up about 20 percent in January. So if those numbers follow through, it bodes well. I think we'll have another good quarter. Well, and to go back to the daily active users, I mean, close to 60 million, that's, you know, you mentioned it's up 19 percent year over year. That's not insignificant.

significant because this is a year where we basically came out of the pandemic. So 20% growth, if we're talking 2020 to 2021, that sort of thing. I don't know. I feel like that was one of the more encouraging parts of this report. For sure, it does have to continue, and they have to make sure their operating expenses are reasonable to both grow, but also to some point earned a profit. Because as I said, we're still not profitable yet. So we want to keep an eye on the bottom line as well.

Well, you ask the question, are you interested in a loss that's smaller than expected? It's like, well, yeah, that's on the pathway to actually turning a profit, I assume. Chipotle is getting ready to do something it has not done for six years. Details after the break, so 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 ourselves based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill, here in studio

with Jason Moser and Ron Gross. Our email address is Podcasts at Fool.com. That's Podcasts at Fool.com. Got a great question from Kevin Skinner who writes, what are your thoughts on the state of Activision Blizzard's deal with Microsoft? It doesn't seem likely that this deal with Microsoft will go through. So what is your outlook on holding or selling Activision Blizzard stock before things get any farther along. It's a great question, Ron. I mean, it was over a year ago, I believe, that this deal was announced. It's expected to close late spring, early summer of this year, assuming it doesn't get formally blocked. And I think Warren Buffett, among others, has played the arbitrage here with shares of Activision Blizzard trading below the buyout

price that Microsoft is willing to pay. Correct. But Berkshire did recently cut their stake, so they seem to be a little bit. little way. A little hedge. Yeah. It's looking more and more like this might not happen. I think several months ago, I predicted on the show that it would happen. As long as Microsoft and Activision would make some concessions about business units and business

lines, this is getting dicey, both in the UK and the US. So it's time to start to look at Microsoft, but specifically to this question, Activision as a standalone business. Before the announcement, Activision was at $65 a share. was going to be acquired for 95. Now we're at 77. So we're at about 20 times forward earnings for Activision. That's not too bad for a company that is still putting up pretty good numbers and still have some of the hottest games out there. I'm an owner, and if this doesn't go through, I would most likely be happy to continue to hold it as a standalone company, as

I would Microsoft, too. That's actually one of my favorite companies. So I think you're fine. Either way, Either if it goes through, you'll get taken out at $95, or you can continue to own at a company that is relatively reasonably priced. Chipotle is getting ready to open a new brand called Farmeza Fresh Eatery. The new concept will feature bowls with grains or salads, along with proteins. Longtime investors may recall Chipotle tried alternative restaurant brands before with burgers and Asian cuisine before ultimately shutting them both down in 2017. Jason, what do you think? Third times a charm?

Well, I remember you asking not all that long ago if I thought they would try building a new brand again anytime soon. And I said I'd be surprised they did, if they did, and at least with the gumption that we've seen in the past. Now, I guess this, it's interesting from a few angles. I mean, first and foremost, this really does seem like a very small bet, as they say. I mean, they're using a ghost kitchen. They're not affiliating it with the Chipotle brand. I mean, this is just kind of a one-off experiment. And so from that perspective, I get it. It makes sense. Seems like a competitor to a sweet green or a kava.

Chopped. Chopped, exactly. So maybe there's something there. I mean, for me personally, I really do feel like, even though the investment in this is likely just a rounding error, it feels to me like, if you're looking to really move the needle and do something different, I mean, for the love of God, just introduce a simple breakfast menu, right? Right? You're fantastically successful namesake stores. Rollout breakfast in those things, I guarantee you that would be worth more of the investment in their time. But I'm not the CEO, Chris. I was also surprised that this was the version they tried to go with, in part because you see a business like Sweet Green, which as a public company, you know, in a phrase Ron used earlier in the show, not really knocking the cover off the ball.

Well, and no offense to California, but I don't know that California is the place where I would be going to do something. like this because I think they live in kind of their own little world. I'm not sure that it's representative of what might work nationwide, right? What works there might not work here, likely won't work in Middle America. Probably some better places to try things like this and get some better feedback, but we'll see. This week, YouTube CEO, Susan Wigiski, said she is stepping down after nearly 25 years with parent company Alphabet. Senior Vice President Neil Mohan will take over as the new head of YouTube. Wajiski started working at Google in 1999, and in 2006, made the case that the company should acquire YouTube.

Ron, a nice reminder that Google Video was an in-house competitor to YouTube before Wajiski and others said, you know what? Let's just write those people at YouTube a big old check and acquire them. Yes, a great legacy. YouTube's CEO for nine years and did a lot of good there. YouTube's current Chief Product Officer will take over that job now. Now, it's not an easy job. It's interesting. The advertising model is a stressful one for me. There's a lot of competition there, whether you're at something similar to YouTube or you're

even in the search business. Their premium subscription business is interesting to me, but then you're in the content game, and that's a little stressful to me as well. So good luck to Mr. Mohan, who will be taking the reins. It'll be interesting to watch. Yeah, it is one of those things. We talk about this more often with CEO, roles where it's like, you know, someone announces they're stepping down and one of the questions we ask each other, it's like, how attractive is this job? Is this a job that people are going to seek out? They're choosing to promote from within, which seems like the right move. Oh, I'd agree. I think it's also a far more difficult job today than would have been five

years ago. I mean, just managing the content, I mean, figuring out ways to incorporate technology to help you filter out the bad stuff to, you know, create a place where your audience is going to feel safe enough. I mean, we've seen what. what's happened just in the social media world. And I think YouTube really does fall into that category in this regard. I mean, it's just a massive, massive engine. But with that, it's just a massive, massive job, too. Let's get to the stocks on our radar. Our man behind the glass, Steve Broido is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week? I'm going with a company I'd never heard of before until I saw that it was

recommended by our colleague John Rotante, and it's Paramount Resources, P-O-U, which trades on the Toronto exchange, it's a $4 billion Alberta-based independent oil and gas producer. Now, this is kind of a blind spot for me. It's actually one of the reasons I'm digging in because I need to really learn more about this sector and have it be a potentially bigger allocation to my own portfolio. It's been around for 40 years. It's had its ups and downs, but they're doing a pretty good job right now of both managing costs and debt and expanding their low-cost production. The current yields are on 4.8%. That's attractive to me. But I need to dig in and understand how this company fits in. Steve, question about paramount resources?

Sure. As an investor, do I want to be investing, actively choosing to invest in a different country? Isn't it just a bunch of red tape? I mean, wouldn't it be easier for me just to stay in the U.S.? It can be red tape. It's hard to sometimes trade on a proper exchange or sometimes tax implications. So you're right. It is not for everyone. Jason Moser, what are you looking at this week? Yeah, taking a look at Etsy ticker is ETSY. They've got earnings coming out on Wednesday after the market closes. This is a stock I've recommended.

It's one I also personally own. Given just everything we've seen with retail and holiday results, I think this will be an interesting report. You remember last quarter, they took an impairment charge of $1 billion in total on the Goodwill write down from the acquisitions of D-POP and E-L-O-7. So let's hope that that is fully in the rearview mirror. But they were entering the holiday season on a note of caution, just guiding for around 3% growth and revenue.

I've got a sneaky suspicion they can beat that. We'll see. And as we've seen throughout this show, it really is more about the guidance that they lay out going forward. But the strategy to build this House of Brands continues to seem to be paying off here. And I like where the business is headed. I will just add, for a company of Etsy's size in terms of what they're doing for quarterly, revenue, a $1 billion impairment charge is significant.

It's a doozy. Steve, question about Etsy? Sure. Does Etsy have to move beyond their current model, or can they just stick with selling things that people have either collected or made it home? I think they can stick with what they're doing now. I think it's really just about expanding the different types of offerings that they have, which really that kind of speaks to the acquisitions they've made of companies like Deepop

and Elo 7 and the ultimate strategy of just building that house of brands that pretty much scratches every itch out there. Maybe they could open like a salad place. Now, that's a novel concept. You get to pick a protein and a green. That's a novel concept. Two very different businesses, Steve. Do you have one you want to add to your watch list? I think I might go with Etsy. Yeah. Steve, if you had to open your own Etsy shop, what types of things do you think you'd be offering in that store? That's a great question. I think I would probably try to find something that no one else in the world was making, and I would make it and sell it.

I would have, I don't know what that is. I don't know. I would have guessed used audio video equipment. It could be it too. One never knows. Yeah, it could be. All right. Jason Moser, Ron Gross, guys. Thanks for being here.

Thanks, Chris. Keep the emails coming. Podcasts at Fool.com. It's plural, everybody. Podcasts with an S at the end. Podcasts at Fool.com. That's going to do it for this week's Motleyful Money Radio Show. Our thanks to Steve Broider.

The show is mixed by Rick Engdahl. I'm Chris Hill. Thanks for listening. We'll see you next time.