Motley Fool Money - The Week's Growth Wasn’t Enough For Wall Street

Episode Date: February 13, 2026

We saw a rush of earnings reports this week and while results looked solid, stocks often cratered on fear of AI and disruption. We discuss our takeaways and where there may be value for investors. Then we discuss how a tiny company took a bite out of trucking and logistics stock this week, plus stocks on our radar. Travis Hoium, Lou Whiteman, and Jason Moser discuss: - The top earnings reports of the week. - Artificial intelligence coming for trucking stocks? - We debate: Value or falling knife? - Stocks on our radar Companies discussed: Shopify (SHOP), Workday (WDAY), Adobe (ADBE), Spotify (SPOT), Pinterest (PINS), Intuit (INTU) Cloudflare (NET), Airbnb (ABNB), Ferrari (RACE). Host: Travis Hoium Guests: Lou Whiteman, Jason Moser Engineer: Dan Boyd Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode. Learn more about your ad choices. Visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

We're in the heart of earning season. So what did we learn? Motley full money starts now. That's why they call it money. The best thing. Cool global headquarters. This is Motleyful Money. Welcome to Motley Full Money. I'm Travis Hoyum, joined today by Jason Moser and Lou Whiteman. And guys, this is really when earning season kicks into high gear for a lot of the companies that we follow. So we're going to do kind of a rapid fire look at some of the popular companies, you know, disruptive companies. and find out what we learned from the quarter.

Jason, what did we learn from Cloudflare? And maybe first, what in the world does Cloudflare do? That's a good question. It's kind of like, hey, what does Salesforce do, right? And I guess. Yeah, it's everywhere, but we don't necessarily see it. The proper answer, it does a little bit of a lot of stuff, but primarily it's seen as a content delivery platform focuses on application development

and most importantly, I think, in today's day and age, cybersecurity. There is a big cybersecurity dynamic to Cloudflare. And it's one we even talk a lot about in our Quantum Leap Service, thinking about beyond classical computing and into that post-quantum cryptography stage of life, that we will ultimately hit, Travis. Cloudflare is a company that is working to protect us on that front as well. But that's the answer in a nutshell. And I think this was another good quarter that showed that the language we had been talking,

we'd been using over the last couple of years with Cloudflare, and with a number of enterprise software-type companies, the elongated sales cycle, sort of the trepidation of their customers to commit to spending, those days seemed to be well past us. It was another very solid report. They grew revenue, 34% for the core, well-exceeding their own guidance, guiding for another tremendous year, 28% revenue growth. And again, they tend to under promise and over-deliver, which is certainly priced into the stock. But I think the story with Cloudflare really continues to be large customers. Those customers that pay over $100,000 per year, they really continue to drive results. Revenue contribution in that segment for the quarter was up 42% and now

contributes 73% of revenue in total. And that's up from 69% from a year ago. And then just, to top it all off, that dollar-based net expansion rate of 120%. That was up from 111% from a year ago. Very encouraging to see that not only do they sign on new customers, but they continue to really grow those relationships with customers, as we've seen from that large customer data. Cloudflare is one of these companies that, if you go back to 2021, This is the first one of those high flying stocks that I remember trading for 100 times sales. And then suddenly crashing in 2022. We're back to the point where they're trading for 30 times sales, which is still a very high number.

And, you know, five-year growth rate is 38%. Is valuation ever a concern for Cloudflare? Is this just one of those, hey, this is kind of a utility on the internet? And so they're not going anywhere. That's why the market pays a premium for them. I think it's a little bit of both, to be fair. I mean, I always look at something like a clad flare and think one of the primary risks to a business like this beyond some sort of security breach is the valuation itself. And it has always really traded for a premium valuation.

Save those couple of years, just a few years back. One, we were talking about those elongating sales cycles and how committed their customers were. And we really saw the stock take a huge hit back then. But it has recovered, I think, based on these growth rates that we're seeing. And so as long as we see that top line continue to kind of grow at the pace that we're seeing today, I think the market, the premium is fairly well earned, but that is a big risk. If we see that tick down, I mean, we're going to absolutely see those shares pullback. Lou, what did we learn from Airbnb?

Yeah, so, you know, narrative busting week for Airbnb, because everything was down. Airbnb actually missed earnings, and the stock is up post. This week, that seemed really weird. A few things going on, though. For one, stock was already down 15% for the year, and we're still just in mid-February. So there weren't a lot of expectations baked in here. Also, they see double-digit revenue growth in 2026, which I think is better than some had feared, especially with all the macro concerns where things are going.

This was a good report from a good company. I think, you know, the funny thing is, though, is like, what expectations? What should we expect from here? I don't know about you guys, but increasingly, when I look at Airbnb, I see Marriott. I see a mature lodging business, asset light, that can outperform but is not going to be a high-growth stock. I've kind of given up on experiences as kind of a new rocket ship. Yeah, that was supposed to be their thing that they launched about a year ago. Yeah, yeah, they invented a concierge, right?

I mean, I think it's tough to figure out how this is anything more than a Marriott from here. The good news is that Marriott has been a pretty good, solid company. I think it's all about expectations from here, but a good company doing well, just they went public so late, so much of the growth was gone. And I think now we're just kind of waking up to this is more of a lodging company than it is a tech company, maybe. Well, correction, Lou. It was an AI-driven concierge. There was a revolutionary concept there. And I'm just, that's tongue-in-cheeked course. I'm kind of with you there. I mean, I love Airbnb is a consumer. I like it as a company. It is difficult to kind of see that tremendous

growth going forward, just given how big the company is. And yeah, experiences that's just been underwhelming, to save a least. The interesting thing for them is they did actually start to, like you said, accelerate in the quarter. And so it seems like some of those, this is going to kind of be a commodity. You're going to have booking.com come in. Maybe that isn't the huge fear, and I think they talked about that a little bit on the conference call. You've got this community of trust with Airbnb and in a world of AI and you don't know who you're going to be able to trust when you're doing something like planning a trip. Maybe that's an okay place to be.

We'll see. I'm always interested to hear Brian Cheske's digs at AI on the conference calls too, because he always seems to have an interesting take or two. All right, Jason, what do we learn from Shopify? Shopify. Well, this was another good one, right? This is not surprised to see the growth rates they lobbed up. The report looked very good.

Revenue up 30%. They saw quarterly gross merchandise volume surpassing $100 billion for the first time. Of course, we saw the stock sell off. That's not a terrible surprise because just like we're talking about Cloudflare, for as strong as Shopify is, I mean, it's still one of those businesses that trades like 150 plus times earnings. There is a lot of optimism baked in. Now, I get it, right? They're taking share.

Again, that grows merchandise volume number, very impressive, and that is poised to continue. I think one of the question marks I have with Shopify, it's not really specific to their business, but we just hear more and more talk about this agentic commerce, right, and exactly what that means. And so I think we're going to see how that opportunity in agentic commerce shapes. shapes up over the coming quarters and years. They certainly discussed their AI investments on the call. They're very excited with the opportunities, the efficiencies, helping their merchants run better businesses become more effective with their advertising and ultimately closing sales. Speaking of the valuation, listen, I think Shopify has at least earned that leap of fate

that the market is taking. It has grown revenue 32% annualized over the last five years, And I think the $2 billion share repurchase is an interesting announcement. Maybe it's a vote of confidence. That's a drop in the bucket, to be fair, $154 billion company today. It is a drop in the bucket. You're right. And ultimately, let's see that that authorization is actually having the desired effect. Yeah, you know, it's funny.

Timing matters. Maybe I'm oversimplifying, but it feels like they did. I mean, they grew by 31%, but margins were down because they were investing in AI. If that was the exact same headline last summer, the stock was probably up 15%. Yeah. So, you know, part of it is just kind of what you're doing. It feels like, you know, as a long-term holder, I didn't see any reason to go chicken little on this.

But, yeah, it's just a different environment. And I think we're adjusting to all that. All right, Lou, we had Ferrari report. And I wanted to get your thoughts on Lewis Hamilton's season ahead. But we'll skip that for now. What did the numbers look like? You know, Travis, I'd rather talk about the big Brentford Arsenal game from yesterday if you want to go into European sports, but I'll spare you that and we won't get into Formula

1. Here's what I'd say. Ferrari, last time they reported back in October, shares fell 20%. This time, they beat sort of lowered estimates, and the stock responded well. It's still down about 20% since October, though, so I don't think we should read too much into just the headline jump. What's going on? What's run? They're only guiding for minimal revenue growth. in 2026, under 5%, no margin expansion. This, they say, is temporary. They're doing model changeovers. But look, I mean, the Ferrari model is you've got a huge waiting list. Just sell the cars, you know, just jack up prices. I don't get why it's working. I think I still like this company, but it's still trading it more than 30 times expected earnings. There's tariffs. There's

macro. I kind of get why the market sort of. Yeah. All right. I want to get to that two. quickly here. A sentence or two, Jason, what do you think of Spotify's results? Well, Spotify is another one. I love it as a consumer and was very impressed with these results. We saw monthly active users up 11%. Importantly, premium subscribers up 10%. And we know that is the lion's share of the revenue picture for Spotify. So consequently, we saw that premium membership revenue up 8%. But I thought what was really impressive was how they're starting to bring this all down to the bottom line, saw operating margin for the quarter 15 and a half percent. That's versus 11.2 percent a year ago. And so I think we had some questions really early on in the Spotify story as to

exactly how quickly they could get to profitability and how profitable the company could be, given the nature of the relationships with publishers and just the music business in general. I think we're hitting kind of a situation here where the company, they have so many users, it's starting to kind of become one of those Facebook-like or even Netflix-like stories where even a mass exodus at these levels probably wouldn't have that great of an impact. You know, Travis, I just realized they passed a $2 price increase on the family plan that we have here in the Moser household. I got it too, yeah. Happily, happily paying it.

Yeah, the kids app is very sticky for us. Lou, Pinterest is down 22% today. Post earnings. Yeah, so they matched expectations on earnings. They grew revenue by 14%. But that was a little shy of expectations. Interesting thing, the forecast is very, very underwhelming here. And they're blaming tariffs. They're basically saying that tariffs are depressing sales among their customers. And that's leading to fewer ad sales, which guys might be true. But here's my question. I don't feel like, I mean, retail has been very mixed. I don't think we have gotten the sky is falling from the actual retailers. Just throwing this out here, I hate to be too negative, but does this

sort of indicate that Pinterest is low on the priority level for ads? Like, if retailers are pulling back ad spending just a bit, it is affecting Pinterest more because those are the easiest ones to cut. And if so, is that a longer term issue? There's a lot of ifs there. I don't want to say it, but I both get the tariff excuse, and I'm a little skeptical just based on everything else going around. A lot going on with earnings, but there's also, Lou promises me there's something exciting going on in trucking. I'm only, I'm only promising fun, Tram. We'll get to that in a moment. You're listening to Motley Full Money. These days, I'm all about quality over quantity, especially in my closet. If it's not well-made

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and 365-day returns. Quince.com Molly. Welcome back to Molly Full Money. Okay, Lou, you are the old boring business guy. You like to talk about logistics and trucking, but you're promising that there's something exciting going on related to AI. So what's the news for this week? Okay, so first of all, it's not just logistics. All right? We saw this with SaaS stocks, just crushed because of AI tools. Charles Schwab and other financials were crushed earlier in the week because of some AI tax planning tool that is supposedly the first step towards replacing financial planning. That happened on Thursday with logistics companies.

A lot of truckers and logistics stocks down 20% or more. Why? A company that six months ago sold karaoke machines announced an AI platform that it says will increase trucking efficiency by 300% and eliminate the need for truckers and brokerages, basically. Now, guys, I am willing to keep an open mind here. I believe technology can greatly add to efficiency into shipping business. Look, C.H. Robinson, RXO, some of these leaders, have been spending millions on tech. The issue is most of their customers still use rotary phones and paper. So now we're supposed to think that they are suddenly going to adopt AI. I'm a little skeptical. We'll see. Maybe this company does have the answer. We'll see. It's also possible that this is sort of the poster child for what we've seen,

the idea that maybe the market is overreacting. Sell first, ask questions later. One thing I know for sure here, and I'm kind of curious, because, look, this is, I think, a more extreme example than what's going on with the SaaS stocks and, you know, we'll see. But this company that made the announcement, their market cap is $6 million. Okay?

If this system is half, a quarter of what they say it is, yeah. Why don't we get together? Like someone should buy them for $200 million today, subject to due diligence. I would like them to do due diligence first. You know, you get to karaoke assets for free, I guess. But I think, and the reason I wanted to bring this up is, look, I don't know what's going on with logistics. Maybe they're all that. But we have seen just a bloodbath in sectors this week, just because companies we had never heard of have introduced AI tools that are going to disrupt.

I believe in AI. I believe that we are going to see disruptions all over the place. I do think as investors, is it's good to take a long-term perspective and not just sell off on these press releases. Let's wait and see how it develops. Does that make sense? One of the questions I have for you is it seems like a lot of these companies that are coming in and trying to disrupt established players, it's ultimately value destructive overall. And that's what's kind of confusing about what's going on with the market is. A company will introduce something. The bigger company will fall, 20% lose, let's say, you know, $50 billion in market cap, but there's no made up market cap by the company that's doing the disruption.

Obviously, they're just seeing this as potentially pure upside. But it does seem like the market overall is selling first and asking questions later. And yes, disruption may be coming. But also these companies have agency. And that's the thing that I think we don't think about. These trucking companies do have the ability to, if they can make an AI in six months that will improve efficiency, you would think that, at least someone inside C.H. Robinson and all these companies would be thinking about doing the same. They're spending millions. And this has been going on back from before we called it AI when it was machine learning. UPS famously in the 90s put in software to basically root out their drivers to make mostly right turns. Because right turns are safer and they're quicker. You know, like this sort of efficiency driving is pretty old. And again, you can do more. But, you know, yeah, I mean, C.H. Robinson is spending millions on tech. Their issue is getting customers to adopt it. And so, you know, yeah, there's a lot that can happen from here. And I do think that AI can be revolutionary.

I am not sure it's going. I mean, I actually think there's a world where on a lot of these, especially touching the physical world, that this is going to lead to actually better companies and more efficient companies. The trucker is selling off with the logistic companies, I don't get. The trucks are full already. I mean, the problem is that there's not enough distribution centers, and I don't know how AI solves that, but we'll say, I guess. Is it possible that in trucking in particular, we sort of skip this interim phase of being more efficient and just go straight to autonomy? Because it seems like that is an area where, you know, especially these long haul trucks, is it going to be safer and more efficient to just have an autonomous vehicle drive from point to point? You know, we saw this in an area like India. They just went straight to cell phones in 5G. They didn't go through kind of this development that we went through in the U.S.

Is that possible or am I overthinking it? If your timeline is long enough, maybe? I don't know. I mean, with cell phone, going straight to cell phones, you don't have to worry about it plowing into a bunch of other drivers. Yeah, we're heading all sorts of directions. How fast we get there, we'll see. Uncertainty seems to be the name of the game.

And like we've seen with the example I keep thinking about is electric, vehicles. You know, five years ago, we thought that everyone was going to be buying an electric vehicle today. But that is not where we ended up. Sometimes these disruptions take a lot longer than you think. And if you go back to the dot-com bubble, you know, it really took until the early to mid-2010s for a lot of those things to materialize. When we come back, we're going to see what stocks are a falling knife and which ones aren't. You're listening to Motley Fool Money. What does leadership really look like on the power of advice, a new podcast series for from Capital Group. You'll hear from athletes, entrepreneurs, and executives who've led on the field

in the boardroom and in their communities. It's not about titles. It's about impact. Discover what drives them and the advice they carry forward. Subscribe and start listening today. Published by Capital Client Group, Inc. Welcome back to Motley Full Money. This segment would like to have a little fun and just kind of get a feel of what's going on in the market. So I want to ask Jason and Lou whether these stocks are falling knives. So a cautionary tale, you don't want to be buying before it hits the bottom, or are these stocks worth a fresh look? So we talked a little bit earlier about Shopify. Shares of Shopify are down 38% from their peak. Jason, is this a falling knife or worth a fresh look? I would say worth a fresh look now, kind of going back to what we were talking about earlier in the show.

I mean, I do also believe that valuation is going to be just a risk that investors have to consider with this stock. That said, it has always maintained a premium valuation. And I think that's for a lot of the reasons we discussed, right? The growth rates of the company continues to lob up there. I think just that overall opportunity in commerce, the nature of the business. There's some big question marks as to entirely what agentic commerce means. and what that ultimately is going to define that. Yeah, it's like, it's, it's, it's funny to see that the AI company's explaining what agentic commerce means. And I'm just as a, as a normie user of this stuff, I'm going,

really? Like, I'm just going to let it go plan a trip for me without, you know, no, you're not. You're not. It's not. It's not, it's not a mind reader. And I think that's kind of where we had to figure, okay, where's sort of that happy middle there. I mean, are we talking about just auto-filling? delivery addresses and payment information because, you know what? That's been happening for a while now. So, yeah, I've read a lot of thoughtful pieces about Agentic Commerce, and a lot of them kind of talk about why that may be a little bit overblown. And perhaps what we see with agentic commerce ultimately is it serves more on the back end for these companies and is less consumer-facing. I think that's a little bit of an easier lead to make there. When we see these investments the businesses make in helping their merchants run more efficiently,

and making their actual businesses more efficient. But overall, I mean, I think we still look at Shopify, and I'm a longtime shareholder, very happy shareholder, and I'm happy to hang on to those shares. I think when we see the company pull back like this, historically, these have represented interesting times. I don't think that Shopify is the type of business that is going to be disrupted by AI, as many of these companies were discussing, right?

I mean, that's kind of the big question mark. They seem to be sort of necessary, because they're serving the long-tale. of companies. And if you're going to build a business, an online business that's going to plug into these AIs, you would think that Shopify would be the place you would do it. It's going to be building, I think, on top of that layer of AI technology, ultimately helping reshape the commerce industry. I think, obviously, a very tech forward company and Toby Lukie, I think, just as clearly very dedicated to the business. And I don't

imagine that changing any time soon. So, Lou, my question here is, when does this company company get really interesting. I'll give you some valuation metrics. Enterprise value to sales is about 13 still. Even on a four, price to earnings ratio is 126 on a trailing basis and on a forward basis, still 65. Not really a good value argument here, but, you know, where do you get to the point where you go, man, this is just too cheap to pass up? Yeah, I mean, I would echo almost everything you I said about, you know, I'm not worried. I'm a shareholder. I'm not worried here, but valuation does keep me from buying. I think they're a long-term winner. And look, at the end of day, valuation is your ability to grow over what time frame, right? So I do think there's an argument to me that if

you're a long-term holder, you can do okay here. But I would like, I would probably not add to it unless it falls from here, just because I do think nobody knows what's going on. We just talked about it. It's shoot first, ask questions later. I don't think, like, you know, I don't think you can say buy in now and it goes straight up from here. So I don't know if I necessarily want to catch this right now, but I also, I don't. I lose sleep about a lot of things, guys. I'm not losing sleep over my shop on my shares. All right, let's go to another company that's really taking it on the chin. This has been on my watch list for a long time, but I've never been a shareholder. That is workday. Shares are down 53% for,

from their all-time high. That actually goes back to 2024. But the valuation getting a little bit more compelling than we get at Shopify. Enterprise value to sales is 3.8. Forward priced earnings multiple is just 13. One of the reasons this caught my eye this week was one of the big AI labs said that they were adopting workday. So even the big AI labs aren't building a workday to replace workday. Lou, is that saying something to you? It certainly is interesting, isn't it? It's certainly worth noting. I mean, look, even before the AI drama, there was a lot of competition in this sector. So it was already sort of an uphill battle. To their credit, they have done very well beating back the competition and establishing themselves.

I don't really worry about this one, but I think I'm less confident than I am with Shopify. I do think that, look, you have all this competition plus AI at least on the back end, automating some of the things that go on here. I think I see maybe a bit of a crack in the foundation, but I don't see rubble. If you make me say one or the other, I would say worth a fresh look, but I'm sort of content to watch this play out and see how it develops here. Yeah, you know, I think it's interesting to see the language that we're hearing from a lot of folks in the tech space these days, right?

I mean, I feel like they've got a pretty good in there and maybe know a little bit more than some of us do about kind of what's going on. We saw Amazon Web Services Chief Matt Garman talking about this recently saying that much of the fear is overblown. I went back to a tweet that Aaron Levy at Box had sent out a little while back talking about, you know, this is going to be transformative technology, but what it's going to result in, it's going to result in more software than ever before, more productivity. more options, more companies, more ideas that we just aren't even thinking of today. And so I don't think it's going to be destructive as much as it's going to be constructive. And when I look at something like a workday, yeah, it's one thing if you can go in there and vibe code some of the stuff that they do. But don't discount the difficulty in building

an actual company. This is a $38 billion market cap company right now. And by the way, what they're doing is really, like, you can't make mistakes. It's not easy. It's not easy. It takes a lot of thought. It takes a lot of work. It takes a lot of redundancy. It takes a lot of bug squashing.

And then after all of that is said and done, it takes a ton of maintenance. And it takes a lot of work to build that customer base and build that trust. I don't think that's something that just disappears overnight. And when you look at the economics of the company itself, I mean, it's a strong business. I get why shares have pulled back. I mean, we've seen the software and services sector. Essentially, earnings valuation for this sector has just been cut in half. And that's more or less overnight.

Now, I'm not saying it's not warranted because I think we're seeing a lot of these companies. We're kind of re-rating the growth prospects going forward in trying to understand exactly how they might be disrupted. But let's also remember to think about what we don't know here, kind of know what you don't know. We're still asking a lot of these questions as to how they're. this is ultimately going to shake out.

We just really don't know yet. We're kind of watching it play out real time. One of the companies that I'm intrigued by and may not be, it may actually fall in the value stock category at this price is Adobe. Shares are down 62% from their high. Then the valuation numbers are just getting kind of crazy. Enterprise Vitis sales is four, but they're actually a really high margin business.

Price earnings multiple on a trailing basis is 15. That's cheaper. than the market overall, but on a forward basis, that PE multiple is just 11. Jason, is this a falling knife? And this is, hey, this is a disruption happening. And we're going to watch this stock grind lower for the next decade as the business deteriorates. Or are we getting this all wrong? And professionals are going to continue using Adobe a decade or two from now. Well, it is a not loved business today. Travis, that's for sure. We've seen investors kind of vote with their feet there. And I've owned a handful of shares of Adobe for a while. It's been a recommendation

in a number of our services. Generally speaking, it's because of just the historical success it's had. And I think a lot of that being brought into question now with the capabilities of these large language models. I mean, you see some of the things that notebook L.M is capable of, for example. I mean, you can build some pretty fascinating graphics with just not very much expertise at all. So then the question for me becomes really like, what does Adobe do to utilize AI? to make their business better. It's not like they can't respond to this and say, well, we can offer these same types of tools

and we can do it better. We are actual businesses here that can support your needs and grow the relationship. I'm kind of hanging. It's not a high conviction name right now. I would not say. I don't think it is a falling knife. I think that the company has the wherewithal

to respond competitively and utilize AI to make. their business better and respond to the competitive threats. But it is a bigger question mark out there right now than probably some others, I would say. Their operating margins have not really felt a pinch since 2018. The operating margin is up from 31.5% to 36.6%. So if there's pricing pressure, which is just one of the areas you would feel at first, they're not feeling it yet. You would figure. And if you look at what they've done to their share account outstanding, they're buying shares back, hand, over fist. So I applaud them for their conviction there. Yeah, this is what I'm watching close.

I get the concerns. I just think professional users, it's going to be a long time before they go to free tools or lesser tools, especially with Adobe investing and making, like, incorporating AI. I'll admit it's not a slam dunk, but Travis, look, it's down, I think. It's lost a quarter of its value this year. And again, we're in early February. And it was arguably a value stock at the beginning of the year. Yeah, I don't think this is a slam dunk by any means. I think the threat is real. But yeah, this is one that I'm getting closer and closer to leaning into. All right. Let's talk about another one that is potentially under threat that is into it. So this is a company that's making tax preparation,

TurboTax, that's kind of the thing that they're known for the most. But the drawdown with their stock is 60%, and that's in just a matter of months. So is this one of these cases where disruption is coming for them, and we're not going to see it until maybe tax season 2027? Or are we getting to value territory with Sherrod's trading for 16 times forward earnings estimates, Lou. I'm not a big fan of this company. I feel like that there should be better ways. You don't like paying for into it once a year? You don't like doing your taxes? Come on. Well, look, look, the IRS gets all the

information. I do feel like that, like in most civilized countries, they should be able to just kind of... I've never understood that. Why is it that once a year, it seems like I get like a $50 bill from the IRS for something that I forgot to put into TurboTax? Why didn't you just tell me that in the first place? I mean, lobbying, baby. I don't know. I don't want to be a conspiracy. Look, I do think the lesson, if anything, we've gone the other way with the consumer product that, you know, like, I do think the lesson is, is that they do have a powerful market position, however they got there. And I think it'll probably be okay. I mean, look, as much we talk about the TurboTax side, a lot of what's driving this business is on the, you know,

the non-consumer side. And that's a whole lot more complicated. I'd be surprised if this business goes away. I've heard multiple, multiple reasons, predictions about why it was doomed over the years. So far, none of them have come true. Yeah, it feels like it's a bit more of a, I don't want to say protected, but just the barriers to entry and kind of like finance and all the regulatory sort of red tape that comes with it, whether it's helping someone run their business or someone do their taxes or manage their payroll. I mean, that's difficult to replicate. replicate reliably and then, you know, actually push out to a large consumer base. It seems like, golly, it seems like the easier disruptor for this company would have been if our

politicians could have simplified the tax code, made it easier just to file taxes. But as I think we all probably know, as we get older, that process just becomes inherently more difficult because we've accumulated more wealth and yada, yada, it goes on and on and on. We use turbotax every year. And frankly, I find it to be sort of a breath of fresh air knowing that I can log in, speak with a tax representative, have them do this stuff for me. I know that it's being done correctly to the extent that they're doing it. I just think most people hate the idea of having to deal with doing their taxes. And furthermore, it's, it's un-understandable in many cases. I mean, unless you're just filing the simplest of returns. I've felt the same way as I've gotten older,

where you know what paying a hundred bucks even 200 bucks to get your taxes done is just it's way more efficient than spending a whole bunch of time i mean my grandpa used to do do these by hand yeah and that was like his hobby as he got older but they also seem like a company that could potentially leverage tools like artificial intelligence correct to be much more efficient as a company you know hey Travis here's your folder of documents just dump them in we'll put put them in the right place and we'll figure it out for you. And so now instead of having to go through 50 pages of yes, no, answering questions, you can kind of answer all that stuff for you.

Is that a reasonable way to think about it, Jason? I personally think so. I think it's the more likely scenario is essentially that application, right? That service being built on top of the AI foundation to make that business ultimately better and more intuitive. See what I did there, guys. In all honesty, that does feel like it's going to be the more likely scenario. I mean, I could be wrong.

But again, you talk about well-established businesses that are very difficult to replicate at that scale. This is one of those. All right. When we come back, we're going to get to the stocks on our radar. You're listening to Motley Fullman. I feel so good. Come pay day. I think of all the things.

I'm going to buy when I pick up my page. Don't you know? But then they have me... The old adage goes, It isn't what you say, it's how you say it, because to truly make an impact, you need to set an example and take the lead. You have to adapt to whatever comes your way.

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While personal finance content follows the Motley Fool's editorial standards, it is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. We'd like to end the show with the stocks on our radar. Jason, you're up first. What are you looking at this week? Yes. Well, Travis, as you know, companies need to communicate with their customers, and that's what Twilio does. Tickr is T-W-L-O.

They just reported another strong quarter on Thursday. Flew passed their own internal guidance with revenue up 14%. And another quarter of gap operating profitability was up better than 300% from a year ago. So with active customers up $402,000 now, that's versus $325,000 from a year ago. dollar base net expansion rate up 109% for the quarter. That was versus 106% from a quarter to go. This is a business that really kind of turn the tides a little bit. I think a lot of that boils down to what CEO, Kazim and Ship Chandler, has done. And we talk about that often. How do you assess leadership? It's a squishy topic. Oftentimes, I'm just looking to see that they do what they say they're

going to do. And Ship Chandler really has done just that. And I'll just conclude with this. If you guys saw over the week here, JPMorgan put out a list of their AI resilience software companies, very interesting sort of list there with tech and enterprise software, cybersecurity data and industry software. But Twilio was one of those companies. And just kind of going back to those discussions about AI, I think Twilio is doing a good job of building on top of that AI layer to ultimately make their business better and their customers' lives easier. So, one, I'm keeping an eye on. Dan, does Twilio have a good AI argument because its name sounds like an AI? I don't know, Travis, but I have a question for Jason.

So Twilio, they talk about it's making, receiving phone calls, text messages, and blah, blah, blah, cloud communications. Is this the spam text company? I was told there would be no questions. No, that's a good point. Some of that service is very well received, but not all. That's a good point. What's on your radar this week? So, Dan, I got to talk about logistics earlier, and now I'm going to double down, press

my luck, and talk about building supplies. Company is QXO, ticker QXO, easy to remember, formed by serial entrepreneur Brad Jacobs to roll up the building products industry. So this week, they did their second deal. They bought something called Kodiak for $2.25 billion. And I really like this deal. Kodiak diversifies the product line, adds more than 100 locations, mostly in high growth the States. QXO is getting the business at less than one-time sales, just 10 times EBTA,

factor in expected cost cuts, and it's closer to seven times EBTA. This is textbook Jacobs. He built United Waste, United Rentals and XBO, some of the best performing, all top 10 performing Fortune 500 companies over the past decade. QXO stock was up 15% plus on the announcement, which you'd never see for an acquirer. I expect more deals to come. This is a formula that's worked really well for Jacobson shareholders. The machine is up and running. I'm really excited to watch. Dan, what do you need to know about QXO? I just don't like the name because it's too much like XPO. Get a new name, Brad. That's his kryptonite. He can't name companies, unfortunately. All right, what's going on your watch list, Dean? Let's go with Twilio.

Oh, all right. That's all our time for today. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.