Charged Alpha Stock Encyclopedia

Colton Thomas
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⚡ Charged Alpha — The S&P 500 Stock Encyclopedia Data-driven deep dives into every stock in the S&P 500 after every earnings report. Each episode breaks down one company from open to close: what they do, how the numbers look, what Wall Street thinks, the bull case, the bear case. 🛠️ Check out our free beginner-friendly screening tools for stocks, ETFs, options, crypto, bonds, REITs & more at https://chargedalpha.com — no signup, no paywall. 📊 What you get in every episode: Company overview & competitive moat Full financial breakdown — valuation, revenue, margins, cash flow Analyst consensus & price targets Bull case vs. bear case Peer comparison, options flow & insider activity Key metrics to watch ⚠️ Not financial advice. For educational purposes only. Episodes are researched, written, and produced using AI-assisted tools. All data aggregated from publicly available sources. #stocks #investing #S&P500 #stockanalysis #chargedalpha #financialdata #earningsreport #earnings

  1. Aug 29

    Materialise (MTLS): One Segment Earns 118% Of The Profit

    Materialise (MTLS) Q2 2026 — Q2 2026 (three months to 30 June, filed in EUR): revenue EUR70.1M, +8.1% YoY; adjusted EBIT EUR3.9M, +26.9%; net profit EUR3.3M, EUR0.06 per ordinary share and per ADS. But the REPORTED operating result was EUR2.8M against EUR2.7M - essentially unchanged. Full-year adjusted EBIT guidance RAISED to EUR12-14M; revenue guidance reaffirmed at EUR273-283M. The 6-K landed pre-market on 27 Aug: +11.24% on 8.2x median volume, then 53% handed back the next session to close at $7.02. One of Materialise's three businesses earned more money last half than the entire company did. Materialise Medical produced EUR20.8M of segment adjusted EBITDA in the six months to 30 June; the whole company kept EUR17.6M - 118%, on 51% of group revenue. It is not a quarter: the same ratio was 133% across 2025 and 113% across 2024. Software, the highest-quality revenue in the group, is the only segment shrinking. Manufacturing is a third of revenue and lost EUR6.2M at the segment operating line. THE CALL: HOLD (3/5, ONE SEGMENT IS THE COMPANY, AND NOTHING FORCES ANYONE TO SEPARATE IT) — base-case value ~$7.21 vs ~$7.02 today. KEY METRICS: - CALL: HOLD 3/5, fair value $7.21 vs the $7.02 close of 28 August (+2.7%). Bear $6.01 (discounted cash flow), base $7.40 (group at 8.5x guided adjusted EBITDA), bull $8.44 (sum of the parts), weighted 40/25/35. One dated Street target: Cantor Fitzgerald, Overweight, $10.00, 20 February 2026, set with the ADS at $5.48. - THE SPINE - segment adjusted EBIT, June half: Medical +EUR17.4M, Software +EUR0.8M, Manufacturing -EUR6.2M, unallocated corporate -EUR5.6M. Those four sum to the EUR6.4M of consolidated adjusted EBIT Materialise reported. - THREE YEARS, NOT ONE QUARTER: Medical was 133% of group adjusted EBITDA across 2025 and 113% across 2024. Two-year segment revenue: Medical EUR116.4M to EUR134.2M, Manufacturing EUR106.5M to EUR92.5M, Software EUR43.9M to EUR40.9M. Group revenue barely moved. - BALANCE SHEET AND CAPEX: EUR74.2M of NET CASH, a fifth of the $407.1M market value. But depreciation was EUR11.3M in the half against EUR3.4M of capital spending - 0.31x. - VENDOR ERRORS NAMED ON-SLIDE: FMP's FY2025 revenue is 3.9% BELOW the filed figure; its earnings feed carries a PHANTOM 23 July 2026 print; its market cap is 1.0% high. ONE ADS IS ONE ORDINARY SHARE, proved from note 6.2. What to watch: UP: the medical share of group adjusted EBITDA falling below 100%; two consecutive periods of software revenue GROWTH; any announced separation or disposal of a segment. DOWN: capital spending staying below depreciation; manufacturing losses widening again; the full-year revenue guide being cut in November. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  2. Aug 29

    JinkoSolar (JKS): The $212M Operating Loss That Was Reported As $103M

    JinkoSolar (JKS) Q2 2026 — Q2 2026 (three months to 30 June): revenue RMB12.36BN / $1,821.2M, -31.3% YoY on module shipments of 15,961MW, -34.4%; gross margin 4.2% from 8.3% in Q1; operating expenses $287.3M against $75.6M of gross profit, so a $211.7M loss from operations. Net loss attributable to ordinary shareholders $102.8M, or $1.94 per ADS - but the company's own ADJUSTED loss is $134.2M, 31% BIGGER. Full-year shipment guidance cut from 75-85GW to 60-70GW. The 6-K landed pre-market on 26 Aug: the ADSs closed -11.87% and made a fresh 12-month closing low the next session. Making and selling solar modules lost JinkoSolar $211.7M in the June quarter. The loss reported to the owners of the ADSs was $102.8M - less than half of it. Both figures are correct and both are printed on the same filed statement of operations. The $108.9M in between is five non-operating items: government grants of $29.7M, the gain on selling 75.1% of the US business ($34.9M), a fair-value mark on a portfolio of private investments ($54.6M), an income tax benefit ($24.1M), and $84.0M of the group loss carried by the MINORITY holders of the majority-owned operating subsidiary. Not one of them is a solar module, and on the same morning the company cut its full-year shipment guidance by 15GW and made its head of strategic investment the chief executive. THE CALL: SELL (3/5, A LEVERED CYCLICAL WHOSE REPORTED LOSS IS HALF THE OPERATING ONE) — base-case value ~$9.90 vs ~$13.54 today. KEY METRICS: - CALL: SELL 3/5, fair value $9.90 vs the $13.54 close of 28 August (-26.9%). Bear $4.94, base $8.89, bull $20.86, weighted 35/45/20. Below both live Street targets: Goldman Sachs cut to $11.00 and Roth Capital to $16.00, both on 27 August. Their average of $13.50 is 4 cents UNDER the last close. - THE BRIDGE: loss from operations $211.7M; net loss attributable to ordinary shareholders $102.8M; ratio 2.06x, against 1.27x in the March quarter. The five items in between total $227.3M of help against $118.4M of drags - net interest $40.3M, an exchange loss on foreign-currency debt of $48.0M, and smaller items. - THE UNIT ECONOMICS: 0.47 cents of gross profit per watt shipped against 1.80 cents of operating cost per watt - 3.8x. A quarter earlier the gross line was 1.10 cents. Gross margin must reach ~15.8% to cover the overhead; it is 4.2%, an 11.6-point gap that WIDENED from 7.7 points a year ago. - THE BALANCE SHEET: $6,617M of total interest-bearing debt less $2,497M of cash = $4,121M of net debt, 5.8x the $716M market value. Cash fell $865M in the quarter (from $3,362M at 31 March) while a $1.50/ADS dividend (~$79M) was declared. Equity attributable to JinkoSolar is $2,152M - 12.3% of $17.5BN of assets. Book value $40.72 an ADS; the tape pays 0.33x book. - TWO VENDOR ERRORS NAMED ON-SLIDE: (1) FMP's epsActual of -2.53 is the company's ADJUSTED loss per ADS, not the filed GAAP -1.94. (2) FMP's market cap of $177.3M is 75% TOO LOW - it carries 13.09M shares where the release prints 211,435,343 weighted ordinary shares, and ONE ADS REPRESENTS FOUR ORDINARY SHARES. The correction makes the stock DEARER, not cheaper. What to watch: DOWN (our case): gross profit per watt staying under 1.80 cents; a second cut to the 60-70GW guide in November; net debt holding above $4BN against a sub-$1BN equity. UP (what would change our mind): two consecutive quarters of gross profit per watt above 1.80 cents; the January 2027 efficiency standard lifting realised prices on 40GW of TOPCon 3.0 capacity; net debt falling toward the equity value. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  3. Aug 29

    Gaotu Techedu (GOTU): More Cash Than Market Cap - And Two Thirds Of It Is Prepaid Tuition

    Gaotu Techedu (GOTU) Q2 2026 — Q2 2026 (three months to 30 June): net revenues RMB1,670.1M / $246.1M, +20.2% YoY, accelerating from +13.2% in Q1; gross margin 66.5%; operating expenses $185.8M against $163.7M of gross profit, so a $22.1M operating loss, narrowed from $35.6M. Net loss $20.0M, RMB0.57 (-$0.09) per ADS. Operating cash inflow $126.9M, +46.3% - but the six-month figure is $4.8M, -70.6%. The 6-K landed pre-market on 27 Aug: the ADSs gapped +6.9%, faded to $1.74, closed +5.20%, and added +3.30% the next session. Gaotu holds $588.5M of cash, restricted cash and investments against a market value of $441.9M. On a screen that is a negative enterprise value. But $384.9M of that cash is deferred revenue - tuition already collected for lessons that have not been taught - and the filed shareholders' equity of $154.2M has already netted it off for you. Fund the cost of teaching every lesson already sold, at the filed 33.5% cost ratio, and $380.7M survives: $1.62 an ADS, 86% of the share price. That leaves the market paying about $61.2M for a business turning over $1.06BN at a 66.5% gross margin, still growing 20%. THE CALL: SPEC BUY (3/5, A CASH FLOOR UNDER A BUSINESS THAT STILL LOSES MONEY) — base-case value ~$2.35 vs ~$1.88 today. KEY METRICS: - CALL: SPEC BUY 3/5, fair value $2.35 vs the $1.88 close of 28 August (+25.1%). Bear $0.96, base $2.34, bull $4.04, weighted 30/45/25. Street: 10 ratings, consensus Hold, and NO live target - the newest dated note from a named firm is Citigroup's $5.81 of 5 August 2024, 754 days stale. - THE FLOOR: net cash $509.6M ($588.5M less $78.9M of borrowings) against a $441.9M market value. Deducting the whole $384.9M deferred revenue balance leaves $124.7M ($0.53 an ADS); deducting only the 33.5% cost of delivering it leaves $380.7M ($1.62 an ADS, 86% of the price). Filed shareholders' equity is $154.2M. - THE SPINE: operating cash inflow was $126.9M (+46.3%) while deferred revenue rose $120.6M over the same three months - 95% of it. The March quarter was a $122.1M OUTFLOW while deferred revenue fell $114.0M - 93% of it. Both quarters together: $4.8M against $16.4M, -70.6%. Six months of it moved the cash pile $3.0M. - THE ADS RATIO: three ADSs represent two ordinary shares. 156,703,879 ordinary shares outstanding is 235.1M ADSs, so the market value is $441.9M - not the $682.0M published, which uses 362.7M ADSs and is 54% too high. Corroborated independently by the FY2025 20-F depositary disclosure. - THE QUARTER: revenue $246.1M (+20.2%), gross margin 66.5%, operating loss $22.1M vs $35.6M. Operating costs fell to 75.5% of revenue from 83.4% - a 7.9 point move that halved the gap to operating break-even, from 17.4 points to 9.0. Selling costs alone were $134.6M, 82.2% of gross profit. - WHERE WE DISAGREE: guided Q3 revenue, this quarter's gross margin and costs grown at the +8.8% they actually grew give a FY2026 operating LOSS of $46.7M. The vendor consensus has a $5.3M operating PROFIT, on four revenue analysts and one earnings analyst. We agree on revenue to within 0.6%. Our model crosses into profit in 2028. What to watch: UP: March-quarter gross billings above last March's $146.8M; the operating cost ratio falling below 66.5% of revenue; deferred revenue continuing to grow year on year. DOWN: two consecutive quarters of deferred revenue falling year on year; refunds rising inside gross billings; the cost ratio back above 83%. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  4. Aug 29

    Lantronix (LTRX): The $12.6M Drone Line That Replaced An $11M Customer

    Lantronix (LTRX) Q4 FY2026 — Fiscal Q4 FY2026 (three months to 30 June): revenue $31.2M, +8.0% YoY and +3.2% QoQ; gross margin 43.7% from 40.0%; operating loss $0.4M from $3.1M. GAAP EPS -$0.01; non-GAAP EPS $0.04 against a $0.03 bar. FULL YEAR: revenue $120.9M, DOWN 1.6% on $122.9M. A brand new unmanned systems line billed $12.6M in fiscal 2026, from what the release calls a minimal contribution the year before. In the same twelve months one customer went from just over $11M of revenue to zero - a sentence that appears only in the 10-K, never in the press release. The two very nearly cancel, which is why group revenue reads -1.6%. Take the new line out and $108.3M against $122.9M is -11.9%. THE CALL: AVOID (3/5, A REAL REPAIR, PAID FOR BY THE OWNERS) — base-case value ~$4.52 vs ~$5.37 today. KEY METRICS: - CALL: AVOID 3/5, fair value $4.52 vs the $5.37 close of 28 August (-15.9%). Bear $3.57, base $5.32, bull $8.35, weighted 35/30/35. Street: 6 analysts, 6 Buys, no Hold or Sell; four targets average $10.00, +86% above the tape and +121% above us - and not one published since the print. - THE SUBSTITUTION: $12.6M of unmanned systems revenue arrived (press release, three times) and just over $11M of one customer left (10-K Item 7, once). Excluding the new line, fiscal 2026 was $108.3M vs $122.9M = -11.9%, against a reported -1.6%. - THE SAME CAUSE TWICE: the 10-K attributes the 171bp gross margin gain primarily to the absence of that customer's lower-margin revenue, not to operating improvement. - THE MIX: Embedded IoT +15.6% to $53.6M, IoT Systems -15.2% to $58.3M, Software & Services +15.5% to $9.0M. Regionally Americas +20.2% while EMEA -30.2% and APJ -31.3% - $16.2M of annual revenue left the rest of the world. - THE BALANCE SHEET WAS BOUGHT: cash $20.1M to $60.5M and debt $11.8M to zero, funded by $44.9M of net share issuance. Shares 39.10M to 46.59M, +19.2%. Strip the raise and cash FALLS $4.5M. About $17M of the ATM remains open. - IN FAIRNESS: free cash flow was a genuine $9.3M (7.7% of revenue) - though $6.3M of it is a share-based pay add-back. Core opex held flat. 30+ unmanned engagements from ~10, NDAA-compliant, partners include Swarmer, DoD Solution and AVT Australia (CACI). - GUIDANCE: Q1 FY2027 revenue $31-33M = +7.4% at the midpoint against the year-ago quarter, NOT double digit. The full-year double-digit promise then needs +10.8% from the three quarters after it, and unmanned to reach $20-27M against $12.6M. - CONSENSUS DEFECT: the vendor's fiscal-2027 average net income of $9.0M over an average EPS of $0.234 solves to 38.4M shares. The company filed 46.7M on its 10-K cover. That $9.0M over the real count is $0.19, not $0.23. What to watch: UP: the September-quarter unmanned number tracking to management's 15-20% of fiscal 2027 revenue (about $5M in Q1); IoT Systems and the international regions stabilising. DOWN: the remaining $17M at-the-market programme being drawn near this price; the memory cost inflation the 10-K flags eating the margin gain; another concentrated customer leaving. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  5. Aug 29

    Canadian Solar (CSIQ): The 27 Cents That Sits On No Line Of The Income Statement

    Canadian Solar (CSIQ) Q2 2026 — Q2 2026 (three months to 30 June): net revenues $1,207.7M, -28.7% YoY and +12.0% QoQ, at the high end of the $1.0-1.2BN guide; gross margin 13.9%, inside the 13-15% guide; operating expenses $239.5M against $168.5M of gross profit, so a $71.1M operating loss. Loss attributable $76.9M, -$1.40 a share. Storage shipments 3.7 GWh, +73% YoY, ahead of a 2.8-3.2 GWh guide. On the print (27 Aug) the stock gapped -3.3%, traded to $12.92 and closed +0.79% at $13.98; the NEXT session closed -6.01% at $13.14, a settled two-day reaction of -5.26%. The filed loss per share is -$1.40. The filed loss over the filed share count is -$1.13. The $18.2M in between is a paid-in-kind dividend on Recurrent Energy's redeemable preferred, and it appears on no line of the income statement, no line of the segment table and no line of the cash flow. It reconciles exactly to the filed half-year figure, it grew 45% in a year, and because it is paid in kind it compounds - $73M a year accruing ahead of the common, on an $892M equity. THE CALL: HOLD (2/5, A CHEAP ASSET BASE THAT EARNS NOTHING) — base-case value ~$12.55 vs ~$13.14 today. KEY METRICS: - CALL: HOLD 2/5, fair value $12.55 vs the $13.14 close of 28 August (-4.5%). Bear $5.24, base $13.36, bull $21.48, weighted 30/50/20. Street: 33 analysts, consensus Buy, but ONE live target - Mizuho $18.00 on 15 June, +37% above the tape and +43% above us. - THE LINE ON NO LINE: -$76.9M over 67,907,507 shares is -$1.13. The company filed -$1.40. The $18.2M residual is a paid-in-kind preferred dividend at Recurrent Energy ($12.6M a year ago, $16.1M last quarter). Q1+Q2 residuals reconcile to the filed half-year figure within $0.05M. - THE SPINE: storage shipped 3.7 GWh (+73% YoY) and billed $425.9M against $432.4M a year ago - about $115/kWh from about $202/kWh, -43% per unit. Modules did the opposite: 3.1 GW (-60%) at about $0.19/W from $0.13, +44% per unit. - THE STACK: $892M of equity against $7.1BN of debt - 11.2% of the enterprise. Book value $40.57 a share, so the tape pays 0.32x. Interest took 38% of gross profit against 9% a year ago. Q3 guide $1.3-1.5BN at 13.5-15.5% implies an operating loss at EVERY point; break-even needs a 20.2% gross margin. What to watch: UP: storage revenue per GWh printing back above ~$130/kWh; the deferred Recurrent project sales closing in H2; gross margin recovering toward the 25.1% of one quarter ago. DOWN: another quarter at ~14% gross margin; the preferred accrual growing again off a larger base; total debt drawn past $7.1BN. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  6. Aug 1

    Madison Air (MAIR): It RAISED Guidance — the Stock Fell 8% — Is MAIR Stock a Buy?

    Madison Air Solutions Corporation (MAIR) Q2 2026 — Reported the MORNING of July 30 (quarter ended June 30, 2026). Net sales $991.3M (+21.0% GAAP, +14% pro forma, +14.1% organic), adjusted EBITDA $265.8M at a 26.8% margin (DOWN from 27.5%), GAAP EPS $0.15 vs $0.31 adjusted, backlog $2,868.4M (+133.0%). FY26 sales guidance RAISED $75M to $3,825-3,925M while adjusted EBITDA guidance was REAFFIRMED unchanged at $1,020-1,065M. The stock closed down 7.9% at $29.14 (low $28.69 intraday, the widely-quoted -9.3%), then $29.06 on July 31 — the lowest close of its public life. Four numbers in circulation are wrong. The $0.31 EPS is ADJUSTED, not GAAP ($0.15), and the '$0.00 prior year' is a carve-out artifact (it was $0.07). 'Resilient residential' is false: Residential ORGANIC sales FELL 4.8%. And tariffs were a Q2 TAILWIND, not a headwind — the Supreme Court voided them in February and MAIR booked refunds as a reduction to cost of goods sold. THE CALL: HOLD (3/5, A FAIR PRICE FOR A REAL BUSINESS WITH A MARGIN QUESTION) — base-case value ~$31.0 vs ~$29.06 today. KEY METRICS: - CALL: HOLD 3/5 — fair value $31 vs $29.06 (+6.7%). STREET: Buy, 5 buy / 0 hold / 0 sell, but only ~5 firms cover it. Average target $44.63, median $45. Stifel CUT to $41 from $49 on 7/31 (the only post-print revision), RBC $47 (cut from $50), Wells Fargo $46 (cut from $47). We DIFFER: their $44.63 implies 24.2x EV/EBITDA — a Trane multiple. - THE REAL STORY: sales guidance RAISED $75M at the midpoint to $3,825-3,925M, adjusted EBITDA guidance REAFFIRMED unchanged at $1,020-1,065M. That is an implied FY margin cut from 27.43% to 26.90%, 53bps. More revenue at zero incremental profit. The market read it correctly. - COMMERCIAL INCREMENTAL MARGIN 13.5%: Commercial sales +$126.5M (+23.8%, 22.3% organic) but Commercial adjusted EBITDA only +$17.3M. Segment margin fell from 29.3% to 26.3%, down 303bps. Management: the comparison 'primarily reflects rapid growth in large data center programs, project mix, capacity addition investments and program ramp costs'. The record backlog and the lost margin are the SAME event. - RESIDENTIAL IS NOT RESILIENT: reported +16.2% but ORGANIC sales FELL 4.8% (-3.4% for the half). AprilAire contributed $56.4M against a $46.5M total increase. Residential backlog FELL from $71.5M to $66.0M. Its margin rose 423bps to 29.5% — but $21.8M of the $25.9M EBITDA gain was AprilAire, plus 'favorable net tariff impacts'. - TARIFFS WERE A TAILWIND: the Supreme Court invalidated certain emergency-authority tariffs in Feb 2026; MAIR began receiving REFUNDS in Q2 and booked them as a reduction to cost of goods sold. Adjusted gross margin STILL fell 120bps to 39.0%. Underlying margin is worse than printed, and the help does not repeat. - THE Q4 BET: guidance implies H2 margin of 27.72% vs 26.07% delivered in H1. Management guided Q3 'roughly flat'. Hold Q3 at Q2's 26.8% and Q4 must print ~28.6% — the highest margin ever disclosed, 180bps above the quarter just reported. - SHARE COUNT + STRUCTURE: 10-Q cover 7/28/26 — Class A 177,342,753 + Class B 324,379,859 = 501,722,612 shares, both fully economic (Class B is 10 votes, not a stub). Market cap $14.58B, net debt $2,791.9M ($3,053.7M debt less $261.8M cash), EV $17.37B = 16.7x FY26E EBITDA. Holdings (founder Larry Gies) has 64.7% of economics and 95.2% of votes. - UNUSUALLY CLEAN FOR A SPONSOR IPO: NO Tax Receivable Agreement at all. And the control block is NOT a 180-day cliff — the prospectus discloses TWO-YEAR lock-ups with Holdings and Kedge running to ~April 2028. Backlog $2,868.4M (+133.0%), book-to-bill 1.34x (1.51x Commercial), net leverage 2.8x after repaying $2,625.7M with IPO proceeds. - VALUATION: 2027E sales ~$4.19B at 27.0% = $1.13B EBITDA, less $50M recurring equity comp (the 10-Q shows $93.0M unrecognised over 2.65 yrs), $55M real depreciation, $175M cash interest, tax 25% = owner earnings ~$637M, or $1.27/share. DCF at 9.0% = $28 (bear $19, bull $40). Peer cross-check 16-18x = $28-32. Fair value $31. The REVERSE DCF at $29.06 demands ~$656M of 2027 owner earnings vs our $637M — almost exactly fair. What to watch: Bullish: Q4 adjusted EBITDA margin above 28%, Commercial incremental margins back above 20%, Residential organic sales returning to growth. Bearish: Q3 margin below 26%, any cut to the FY adjusted EBITDA range, or Commercial backlog converting at falling margins into 2027. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  7. Jul 29

    UMC (UMC): Net Income Up 161% - But Two-Thirds Wasn’t From Chips

    United Microelectronics Corporation (UMC) Q2 2026 — United Microelectronics (UMC), Taiwan's mature-node specialty foundry, reported Q2 2026 revenue of NT$68.73B (US$2.18B, +12.6% QoQ, +17.0% YoY) at the top end of guidance, gross margin up to 32.5% from 29.2%, operating income up 32.6% to NT$14.95B on utilization of 85% and wafer shipments up 10.6%. Net income attributable of NT$42.26B was up 161% QoQ - EPS NT$3.39, or US$0.537 per ADS against a consensus of about US$0.158. But NT$30.24B of that pre-tax profit was NET NON-OPERATING INCOME, up 463% QoQ and 67% of pre-tax profit, and the earnings deck never says what it was. Core operating EPS taxed at a normal 17% is about US$0.157 per ADS - almost exactly the consensus. The entire beat was the line the company did not explain. Management also raised 2026 capex from $1.5B to $2.0B, approved roughly $5B of phased expansion across 2026-27 (Singapore P4 cleanroom plus a new Tainan fab shell), and guided depreciation to grow low-teens percent for at least two years. Our call: AVOID, 3/5, fair value $11.50 per ADS versus $17.11 - and no cell in our mid-cycle grid reaches today's price. UMC just reported net income up 161% in a single quarter and beat the analyst estimate by thirty-eight cents a share - and the stock did essentially nothing. That was not a market failure. Q2 2026 revenue was NT$68.73 billion (about US$2.18 billion), up 12.6% sequentially and 17% year over year, at the top end of guidance. Gross margin expanded from 29.2% to 32.5%. Operating income rose 32.6% to NT$14.95 billion. All of that is real. But net income attributable was NT$42.26 billion, and pre-tax profit was NT$45.19 billion - which means NT$30.24 billion, sixty-seven percent of pre-tax profit, was NET NON-OPERATING INCOME, up 463% from NT$5.4 billion in Q1. The earnings materials do not tell you what it was. Tax the operating line at a normal 17% and core earnings come to about 15.7 US cents per ADS. The consensus estimate was 15.8 cents. On the business of making chips, UMC delivered exactly what was expected. Meanwhile management raised 2026 capex from $1.5 billion to $2.0 billion, approved roughly $5 billion of phased expansion, and guided depreciation to grow low-teens percent for at least two years - into a quarter already running 85% utilization. Our mid-cycle model says $11.50 per ADS against $17.11 today. THE CALL: AVOID (3/5, A REAL OPERATING QUARTER WRAPPED IN A HEADLINE THAT IS NOT REPEATABLE) — base-case value ~$11.50 vs ~$17.11 today. What to watch: Silicon photonics revenue disclosed as its own line and large enough to matter once the 12-inch platform opens to general customers in 2027, plus the Intel 12nm collaboration hitting its milestones on schedule - PDK complete late 2026, tape-outs in 2027, meaningful production 2028. Either would convert optionality into an actual earnings estimate and we would raise the multiple, not just the numbers. The near-term risk to respect is the non-operating line: whatever produced NT$30.24 billion this quarter almost certainly does not recur, so Q3 net income can fall sharply while the foundry itself gets better - utilization above 90% and gross margin in the mid-30s alongside a net income number that looks like a collapse. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

  8. Jul 24

    NextEra Energy Stock: It Beat Earnings and Is Buying Dominion — So Why We Say HOLD (NEE Q2 2026)

    NextEra Energy (NEE) Q2 2026 — NextEra Energy (NEE), the largest U.S. electric utility and the world's biggest generator of wind and solar, reported a solid Q2 2026 on July 24: adjusted EPS of $1.15 beat the ~$1.10 estimate (+9.5% YoY), though revenue of $7.53B missed the ~$8.0B consensus. Florida Power & Light earned $1.41B ($0.67/sh) as its regulated rate base grew 9.3%; NextEra Energy Resources earned $1.29B adjusted ($0.62/sh) and signed another 3.6 GW of renewables/storage (incl. 2 GW batteries), lifting its backlog to ~35 GW. Management reaffirmed FY2026 adjusted EPS of $3.92-$4.02 (targeting the top end) and >8%/yr long-range EPS growth through 2032 — but slowed dividend growth to ~6% (from ~10%) to help fund the pending, transformational Dominion Energy merger. The stock (~$89, roughly flat on the print) trades at ~22x forward earnings, a premium to peers. Our blended P/E + dividend-discount fair value lands near $90 — essentially the price. Our call: HOLD, 3/5 — a notch below the Street's ~$99 Buy. NextEra Energy is the bluest of blue-chip utilities — the largest electric utility in America and the world's number-one generator of wind and solar, built on two engines: Florida Power & Light, the gold-standard regulated utility serving ~12M Floridians, and NextEra Energy Resources, the world's leading clean-power developer. Q2 2026 (reported July 24) was a solid quarter: adjusted EPS of $1.15 beat the ~$1.10 estimate (+9.5% YoY) and GAAP EPS was $1.50, though revenue of $7.53B came in light versus the ~$8.0B consensus. FPL earned $1.41B ($0.67/sh) on 9.3% rate-base growth; Resources earned $1.29B adjusted ($0.62/sh) and added 3.6 GW to its renewables/storage backlog (incl. 2 GW of batteries), pushing the pipeline to ~35 GW. Management reaffirmed FY2026 adjusted EPS guidance of $3.92-$4.02 — and said it expects the top end — plus a long-range plan of >8%/yr adjusted-EPS growth through 2032. The catch: it's underwriting the biggest merger in utility history, the pending acquisition of Dominion Energy (announced May 2026, ~12-18 months to close), which also slows dividend growth from ~10% to ~6% a year. At ~$89 the stock trades near 22x forward earnings — a clear premium to the 17-18x utility average — with net debt near 6x EBITDA and a ~2.8% yield. Because a capex-heavy regulated + clean-energy utility runs free cash flow negative by design, we value NEE on a utility frame: a fair P/E (20-22x on 2026-27 EPS) plus a two-stage dividend-discount model. Both cluster near $90 — essentially today's price, i.e., no margin of safety. Our call: HOLD, 3/5. A best-in-class utility, fully priced, taking on enormous change — and we're a notch more cautious than the Street's Buy (~$99 avg, 24 of 36 analysts). We'd add on real weakness in the mid-$80s and watch the Dominion regulatory calendar closely. Do your own research; this is not financial advice. THE CALL: HOLD (3/5, A BEST-IN-CLASS UTILITY, FULLY PRICED — A BEAT WITH NO MARGIN OF SAFETY, NOW UNDERWRITING A MEGA-MERGER) — base-case value ~$90 vs ~$89 today. What to watch: clean progress on the Dominion merger — key state and federal regulatory approvals landing without painful concessions — which would lift the single biggest overhang and could prompt an upgrade; the risks to respect are the merger bogging down in the states or the balance sheet straining and pressuring the dividend, and at ~22x forward earnings with no margin of safety even a modest stumble could re-rate the premium multiple lower Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

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