3 Early Stage Stocks (and 1 Startup) I'm Watching This Earnings Season

What to watch with IonQ, Pubmatic, RadAI, and Solo Brands.

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3 Early Stage Stocks (and 1 Startup) I’m Watching This Earnings Season

I know we officially started earnings season last month — but now that we’re enjoying a veritable onslaught of quarterly reports from companies I’m actually interested in, it’s time to batten the hatches and narrow my focus a bit.

Here are three early stage stocks (and one startup) I’ll be watching closely in the coming days and weeks.

IonQ has a lot to prove this month

Shares of IonQ (NYSE: IONQ) have more than tripled since the start of last year, fueled by excitement surrounding faster-than-expected technical milestones and new partnerships as it works to commercialize the capabilities afforded by its immensely powerful quantum computers.

But we’re still in the earliest stages of the so-called quantum revolution, and IonQ only recognized $6.1 million of revenue in its latest quarter (more than doubling from a minuscule base last year).

Bookings are arguably IonQ’s most exciting metric. Last quarter IonQ reached its previously stated goal of $100 million of cumulative bookings within its first three years of commercialization efforts (starting in 2021), and its latest guidance calls for full-year 2023 bookings to arrive between $60 million and $63 million.

IonQ’s 2024 revenue and bookings expectations will be key to determining its near-term price action when it releases fourth-quarter results later this month (on Feb. 28, 2024). But with a total addressable market estimated to reach $65 billion within the next six years, I still think there’s plenty of time for patient, long-term investors to open or add to a position in this budding business.

2 Days left on RadAI’s Reg CF Round

On the startups side of this newsletter, I’ve previously singled out marketing technology leader RAD AI (short for “Remove All Doubt”) as one of my top 5 startups for 2024. So I was more than pleased when RadAI reached out and offered to help support my newsletter with a sponsorship. RadAI has already struck partnerships with the likes of Hasbro, Google, Accenture, Fidelity and Sweetgreen — and its revenue last year more than tripled (albeit from a small $446K base) from 2022.

Its current round on Dealmaker is nearly fully subscribed already, however, and the company has moved up its deadline to invest by several weeks to Feb. 15, 2024.

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Can PubMatic run up the score?

Getting back to the publicly traded stock side, we have PubMatic (NASDAQ: PUBM). Shares of the supply-side advertising technology specialist are trading roughly flat from this point a year ago — similar to its year-over-year revenue growth in recent quarters — but the stock is also up more than 34% on the heels of its better-than-expected Q3 2023 results in early November.

PubMatic’s revenue growth has stagnated (down 1% year over year last quarter), particularly as connected TV (CTV) advertisers tightened their purse strings. But its active publishers on the platform grew 11% year over year, to over 1the company is still generating healthy 29% adjusted EBITDA margins and remains comfortably cash-flow positive as it leans on its leadership in the Supply Path Optimization (SPO) category — which now represents 45% of total activity on its platform.

As soon as the market gets even the slightest whiff of a broader rebound in digital advertising spending, PubMatic stock could promptly roar higher in response.

Is the worst baked in for Solo Brands?

Finally, best known its “smokeless” wood-burning fire pits, Solo Brands (NYSE: DTC) has had a disastrous 2024 so far, falling more than 50% last month after simultaneously appointing a new CEO and lowering its full-year sales and EBITDA guidance.

Management blamed the guidance reduction on a weaker-than-expected response to its “unique” marketing campaigns (one of which featured rapper Snoop Dogg “giving up smoke”), which apparently raised awareness for the brand but simply didn’t convert well into actual sales.

Still, I can’t help but wonder whether the market’s punishment didn’t exactly fit Solo Brands’ crime. And I might just take the opportunity to open a small position in this otherwise well-liked business ahead of its upcoming quarterly release early next month.