popped

Nuclear reactor builder Oklo (OKLO -0.13%) stock jumped 2.4% through 11:25 a.m. ET Thursday.

For that, you can thank the friendly analysts at Canaccord Genuity.

Image source: Getty Images.

Canaccord loves Oklo

Canaccord Genuity initiated coverage of nuclear company Oklo with a buy rating and a $175 price target on this $137 stock, as StreetInsider.com reports today. That may sound like a high price for a start-up with no revenue that isn’t expected to have revenue for another couple years, nor earn its first profit before 2030. But here’s the thing:

Canaccord isn’t thinking about 2030 here. It’s looking much farther out, with “our model stretching to 2050.”

Peering 25 years into the future, Canaccord sees “a new nuclear age emerging; one where nuclear assets grow not only in volume but as a percentage of the global energy mix.” Canaccord expects Oklo to play an outsize role in this future. “Vertically integrated,” boasting a “deftly constructed strategy” for rolling out small nuclear plants, and good “technology capabilities,” Canaccord is placing a bet on Oklo not just surviving until 2030, but going on to profit from the new nuclear renaissance.

Is Oklo stock a risky buy?

What makes Canaccord so confident about Oklo? With $530 million in the bank and a $53 million cash burn rate, it looks at first glance like Oklo has all the money it needs (and more) to last until profits arrive in 2030.

Problem is, most analysts think Oklo’s cash burn will accelerate dramatically as it approaches commercialization (and profit). Cash consumption over the next five years could actually reach $1.5 billion, which is more than Oklo has handy just right now.

Bright as its future looks, Oklo still needs to come up with even more cash, or else it will go bust.

USA Rare Earth (USAR 17.77%) stock, one of a handful of start-up companies attempting to jump-start rare earth oxide mining and rare earth magnet manufacturing in the United States, soared 15.6% through 10:45 a.m. ET Thursday. And why?

China just announced new curbs on rare earth exports.

Image source: Getty Images.

What’s China up to now?

The Chinese Commerce Ministry announced Thursday that government approval will be required for exporting products containing certain rare earth metals. China dominates global mining of rare earths (69% of global production), refining of rare earth oxides (85%), and manufacture of rare earth magnets (90%) — the end goal of all this work.

For more than a decade, China has used its near-monopolies in rare earths as a lever in trade negotiations, especially with the United States. In the context of President Trump’s hefty tariffs imposed on other Chinese exports, China’s once again limiting rare earth exports to punish the U.S.

Perversely, that’s good news for a company like USA Rare Earth, which aims to produce more of this stuff domestically to fill gaps in the supply line that the lack of Chinese exports creates.

Is USA Rare Earth stock a buy?

It’s good news long term, that is. In the short term, even a full-scale Chinese embargo on rare earth exports won’t change the fact that USA Rare Earth has no revenue and is losing about $100 million a year.

Analysts do believe the company will earn a profit eventually, but no sooner than 2028. By that time, however, the Trump administration will be heading for the exits, the trade war could be over, and rare earth exports from China could be flowing freely again.

Buying USA Rare Earth stock years before it turns profitable remains highly speculative. Caveat investor, and limit your risks.

Firefly Aerospace (FLY 6.69%) stock soared a lucky 7.7% through 11:20 a.m. ET Monday after the space stock announced, over the weekend, that it will purchase defense contractor SciTec for $855 million.

Firefly will pay $300 million in cash and hand over $555 million worth of stock at a $50-per-share valuation to acquire SciTec.

Image source: Getty Images.

Why buy Firefly?

It’s curious that SciTec would agree to value Firefly stock at $50 a share when the stock closed closer to $27 a share last week. Then again, it’s possible the parties negotiated the valuation weeks ago, when Firefly stock was worth a bit more.

Whatever SciTec’s reasoning, Firefly’s logic behind buying SciTec is clear: “The transaction aims to fuse Firefly’s launch, lunar, and on-orbit services with SciTec’s mission software, rapid data processing, and low-latency AI systems that support missile warning, tracking, and multi-domain operations.”

SciTec is a specialist in missile warning and defense. It’s also a company with $164 million in trailing-12-month revenue. Over that same period, Firefly itself collected less than $103 million in revenue.

In other words, by buying SciTec, Firefly will more than double its annual revenue stream and expand its own role in defense contracting.

Is Firefly Aerospace stock a buy?

In terms of valuation as well, this deal sounds like a win for Firefly. For one thing, Firefly somehow convinced SciTec to value its stock nearly twice as high as everyone else on the stock market does!

For another, paying $855 million to capture a $164 million revenue stream means Firefly will pay a price-to-sales ratio of only 5.2 for SciTec. Compared to Firefly’s own sales valuation of 42, that’s a steal of a deal.

On reports that it has secured a new deal with a major company in the chip sector, Arm Holdings (ARM 6.28%) saw a leap in share price Wednesday. The U.K.-based semiconductor specialist’s equity increased to close the day over 6% higher, crushing the 0.3% gain of the S&P 500 (^GSPC 0.34%) that trading session.

Speculation about a new gig

Reuters published an article stating that leading mobile chip company Qualcomm has elected to use Arm’s current technology in its products. Citing unidentified “sources familiar with the matter,” the news agency said that Qualcomm’s recently introduced PC and smartphone chips will be packed with the ninth version of Arm’s tech.

Image source: Getty Images.

That report surely caught many Arm- and Qualcomm-watchers off guard, as just the day before, the two companies received the latest judgment in a long-running dispute over licensing brought by the former over Qualcomm’s Snapdragon X chipsets. Judge Maryellen Noreika quashed Arm’s request for a full retrial on the matter.

Arm has pledged to appeal the ruling; however, at the same time, it’s clearly eager to continue doing business with Qualcomm, a client of long standing despite the legal tussle.

Numbers wanted

The Reuters article did not provide any numbers for the apparent deal, so even if the reporting is accurate, it’s difficult to ascertain what it might mean for Arm’s financials.

Also, at this point it’s as-yet unconfirmed speculation, regardless investors are justifiably glad the specialty tech company might have earned this latest Qualcomm work. They’re also surely relieved that the lawsuit has been resolved — at least this stage of it.

AST SpaceMobile (ASTS 12.51%) stock was trading up by 12.1% as of 11:04 a.m. ET on Wednesday after British bank Barclays raised its price target on the direct-to-cell (DTC) satellite communications company by 62% to $60 per share.

Image source: Getty Images.

Why Barclays loves AST SpaceMobile stock

Barclays analyst Mathieu Robilliard points out that SpaceX and T-Mobile have already launched a text-only DTC service costing subscribers $10 per month. That gives them an advantage over AST, which has not yet begun offering its service commercially.

Still, AST’s competing service may be more attractive to many because it “will be richer with text, call, and broadband,” and so could command higher prices, he argues in a note that was covered on TheFly.com.

Is AST stock a buy?

Before AST can begin charging for DTC service, though, it must start offering service. It can’t yet, but with five satellites in orbit and more on the way, AST says it’s making progress.

In a tweet last night, the company confirmed it has completed assembly of its BigBird 6 DTC satellite and will ship BigBird 7 to its launch partner later this month. Nine more satellites “are in various stages of production, with launches planned every 1-2 months on average during 2025 and 2026,” the company said. It could have a total of 40 satellites in orbit early next year, and up to 60 by the end of 2026.

BlueBird 6 has completed final assembly and testing and is ready for flight! 🚀🚀🚀🚀🚀🚀 On October 12, it will head to India aboard an Antonov large cargo plane ✈️

We are officially kicking off our next-gen launch campaign:
• BlueBird 7 is expected to ship to the Cape… pic.twitter.com/wUPzoGyLup

— AST SpaceMobile (@AST_SpaceMobile) September 30, 2025

AST has laid out its roadmap. Now, it just needs to deliver on its promises, get service started, get revenue coming in — and make that revenue profitable. The consensus prediction among Wall Street analysts following the company, however, is that profits won’t arrive before 2027. Until then, it’ll be hard to say if AST SpaceMobile stock really deserves a buy rating.

Paccar (PCAR 4.84%) stock jumped 5% through 12:40 p.m. ET Friday, one day after President Donald Trump posted on Truth Social that “In order to protect our Great Heavy Truck Manufacturers from unfair outside competition, I will be imposing, as of October 1st, 2025, a 25% Tariff on all ‘Heavy (Big!) Trucks’ made in other parts of the World.”

President Trump’s truck tariffs

The president went on to explain his intention is to protect “manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks, and others” from “outside interruptions,” which seems to refer to competition from truck manufacturers based abroad.

Image source: Getty Images.

Paccar itself manufactures half the truck brands named — Peterbilt and Kenworth, and DAF as well. Freightliner, however, is actually owned by Germany’s Daimler, while the Mack Trucks brand is owned by Sweden’s Volvo. Complicating matters further, Freightliners are built both domestically, in North Carolina, and abroad, in Mexico. Mack Trucks meanwhile are built in Maryland, Pennsylvania, and Virginia, with a headquarters in North Carolina… and also in Mexico.

Even Paccar’s Peterbilt has both domestic and foreign manufacturing operations, in Canada and Mexico; Kenworth is built in Ohio and Washington — and also Canada; and DAF is built all around the world — but not the U.S.

Is Paccar stock a buy?

As a result, it’s possible President Trump’s truck tariffs will affect many of the brands he’s trying to protect.

What this means for Paccar stock is hard to say. Still, at a valuation of only 16.2x trailing earnings, paying a strong 4.5% dividend, and with earnings expected to nearly double over the next four years, Paccar looks to me like a solid stock to invest in — which or without protection from tariffs.

Quantum computing is a hot area of the tech field these days, and thanks to that, International Business Machines (IBM 5.31%) stock was popular on Thursday.

A convincing demonstration of its prowess in this technology wowed investors, who collectively pushed the company’s share price up by over 5% that day. Speaking of convincing, that performance crushed the S&P 500 (^GSPC -0.50%); this slid by 0.5%.

Quantum leap

The demonstrator was global bank HSBC. Before market open, the company announced it successfully ran a trial of algorithmic bond trading analysis, using a combination of traditional and quantum computing resources. IBM team members handled the technical aspects of the test.

Image source: Getty Images.

HSBC said that the trial indicated that this combination delivered as much as a 34% improvement over classical prediction techniques in predicting key information about a bond trade — specifically, how high the possibility was that it would be filled at a quoted price.

In HSBC’s press release on the trial, the bank quoted vice president of IBM’s quantum unit Jay Gambetta as saying that it “shows what becomes possible when deep domain expertise is integrated with cutting-edge algorithm research, and the strengths of classical approaches are combined with the rich computational space offered by quantum computers.”

Clients with deep pockets

It was clever of IBM to get involved in HSBC’s effort to ramp up the technological foundation of an important securities trading activity. The tech company has clearly demonstrated that it can be a go-to partner for such well-capitalized clients, in a hotly competitive field where the stakes are high.

IBM isn’t necessarily a top choice for investors seeking to capitalize on quantum computing, but perhaps this piece of news will help move that needle.

Chinese autonomous driving tech company Pony AI (PONY 3.84%) motored well higher on the stock exchange Tuesday. On the back of a fresh analyst update, investors crowded into the stock to leave it with a gain of nearly 4% the trading session. That contrasted with the trajectory of the benchmark S&P 500 index, which moved in reverse with a 0.6% decline on the day.

Ramping up service hours and road testing

Well before market open, Goldman Sachs prognosticator Allen Chang boosted his Pony AI price target by 13%. In his opinion the stock is now worth $27.70 per share, up from his previous level of $24.50. Chang maintained his buy recommendation, which is sensible given that the new fair value assessment is nearly 30% above the company’s latest closing price.

Image source: Getty Images.

The latest developments announced by Pony AI are the key factors in the analyst’s move, according to reports. The Goldman Sachs pundit pointed out that the company has started road testing its Gen-7 robotaxi in the major Chinese cities of Beijing, Guangzhou, and Shenzhen. Additionally, in certain markets where its service is live, Pony AI has expanded operating hours from 15 per day to a full 24.

Chang also mentioned that the company began full commercial service in Pudong, a busy district in the country’s most high-profile city, Shanghai.

Self-driving success

Given these advancements in commercialization, Chang feels that Pony AI has more than a chance to increase its gross merchandise value (GMV) per robotaxi. That, combined with its ambition to grow its fleet to 1,000 vehicles by the end of this year, bodes well for growth in the fundamentals.

Kratos Defense & Security Solutions (KTOS 5.26%), a leading manufacturer of drones for the U.S. military, gained 4.6% through 12:20 p.m. ET after announcing a new five-year strategic manufacturing agreement with Elroy Air.

Image source: Getty Images.

Elroy who?

Elroy Air is hardly a household name, so it may not be immediately apparent why this is good news. Based out of San Francisco, Elroy Air is a 10-year-old start-up building “autonomous aerial cargo systems for middle-mile logistics and military resupply.”

In other words, it builds remotely operated aircraft that deliver supplies to military units in the field.

To further this effort, Elroy picked Kratos to serve as its “exclusive U.S. manufacturing partner for the Chaparral,” described as a hybrid-electric autonomous vertical takeoff and landing (VTOL) cargo drone that can carry 300-lb. payloads up to 300 miles.

Is Kratos stock a buy?

Kratos notes that manufacturing of the Chaparral will begin in 2026, and says Elroy plans to build the aircraft at high volume. This suggests that revenue from the contract could be substantial. However, Kratos did not provide any specific figures for estimated revenue from the contract — nor even define precisely how many units “high volume” might entail.

What we do know is this: Kratos is a $13.6 billion company that earned less than $15 million last year. (That’s right, its price-to-earnings ratio is verging on quadruple digits, getting awfully close to a P/E of 1,000.) Kratos is also burning cash (negative $61 million in annual free cash flow).

Although Kratos does have nearly $500 million in the bank, and can afford to burn some cash for a while, longer-term these are not great numbers. Unless profits grow spectacularly over the next few years, Kratos stock will be a sell for me.

Micron (MU 6.38%) stock jumped this morning on some positive comments from Wall Street analysts. Wolfe Research and Susquehanna raised price targets on Micron stock yesterday. Today, Wedbush made it three in a row with a hike to $200.

Micron stock is up 5.4% through 11 a.m. ET.

Image source: Getty Images.

What Wall Street likes about Micron stock

Micron makes semiconductors for computer memory — DRAM and NAND flash memory — and has become popular with the AI crowd for its high-bandwidth memory, or HBM. Yesterday, Wolfe cited “resilient” pricing for DRAM, and noted NAND flash memory demand is growing due to insufficient hard disk drive supply — supporting its thesis that Micron stock could hit $180 a share within a year.

Susquehanna added positive words about HBM prices holding up through 2026 — and posited a $200 price target.

Today, it’s Wedbush’s turn. In addition to agreeing with Susquehanna’s price target, Wedbush agrees that HBM will help profits in 2026. Wedbush explains its price target values Micron at 10x “peak” earnings next year, and argues this estimate could be conservative and based on Micron earning lower gross profit margins that it earned at the last cyclical peak in 2018, according to a note on The Fly. 

Translation: Gross margins this time could be better — and Micron’s profits could be, too.

Is Micron stock a buy?

Analysts polled by S&P Global Market Intelligence generally agree that Micron’s earnings this year will be 10x what the company earned in 2024, and could double by their peak in 2027, to $13.70 per share.

If “10x forward earnings” is the right price for Micron though, then at today’s price of $168 and change, the stock is arguably already overpriced. With Micron stock up 79% over the last year, it may be time to sell.

Social media company Snap (SNAP 3.16%) proved to be a popular stock on Wednesday, as news about a peer made its equity look attractive. Snap closed the day more than 3% higher in price, comparing very favorably to the slight decline of the benchmark S&P 500 index.

Yet another TikTok delay

Towards the end of Tuesday’s trading session, President Trump issued the latest in a series of executive orders concerning TikTok, the controversial short-form video app from Chinese developer ByteDance.

Image source: Getty Images.

The new order extended the delay — for the fourth time — in enforcing a law that effectively bans TikTok in this country; the extension expires on Dec. 16. That move followed Treasury Secretary Scott Bessent’s announcement that U.S. and Chinese officials had agreed to a “framework” of a deal that might put TikTok’s U.S. operations in the hands of domestic companies.

The same day, Reuters reported that these would be handed over to a consortium that included tech sector mainstay Oracle, private equity firm Silver Lake Technology Management, and venture capital firm Andreessen Horowitz.

Citing unnamed “people familiar with the matter,” the news agency added that the entity’s ownership would be approximately 80% U.S. investors, with the remainder being Chinese.

Snap judgement

The delay benefits Snap because it implies that the Chinese/American deal — the specifics of which have yet to be provided — will take some time to implement. In the hands of well-capitalized American investors, TikTok on our shores could be developed into a giant social media company that might eat share from sector players like Snap.

Novo Nordisk (NVO 2.83%) — the original Ozempic stock — got a boost from private German bank Berenberg this morning, which upgraded the stock to buy. In fact, Berenberg says Novo is its “preferred obesity play,” as The Fly reports.

Novo stock is up 2.9% through 10:30 a.m. ET.

Image source: Getty Images.

What Berenberg said about Novo Nordisk

Novo Nordisk created the GLP-1 weight loss market — then fumbled it, allowing first Hims & Hers to horn in on the business when Novo was unable to produce enough semaglutide, then giving Eli Lilly time to develop competing products (that by some measures work better) in the form of Mounjaro and Zepbound.

Still, Berenberg argues, since Novo’s fumbles, market expectations for Novo have reset, and the stock price has gotten considerably cheaper. With Novo Nordisk shares now selling for less than 15 times earnings, paying a 3% dividend yield, and expected to grow only 8% annually over the next five years, investor expectations are a whole lot more realistic today than they were a year ago.

Is Novo Nordisk stock a buy?

Now, there’s still some debate about whether Novo Nordisk stock is a buy, based on its growth outlook, potential catalysts, and valuation, admits the analyst. A P/E of 15 with a 3% dividend and an 8% growth rate still values Novo Nordisk at a total return ratio of about 1.3 — which is more expensive than the value investor’s target of a 1.

In other words, there’s still room for Novo Nordisk to fall.

On the other hand, if the company can find its footing, perhaps by marketing Ozempic and Wegovy in upsized dosages and at attractive prices, Novo might grow faster than expected. And with fast enough growth, Novo Nordisk could quickly turn from a sell into a buy.

Shares of USA Rare Earth (USAR 7.86%) spiked higher by as much as 15.6% in early trading today. The move comes after commentary on a JPMorgan podcast created optimism that the company could be the next in line for government investment following the landmark deal with MP Materials announced recently.

What JPMorgan said

In the internal podcast, JPMorgan’s co-head of mid-cap mergers and acquisitions, Andrew Castaldo, discussed the recent MP Materials deal and said JPMorgan believes that “there’s a whole slew of different critical minerals” that “the administration is also focused on, that could potentially be ripe for this type of collaboration.” He also noted that “we’ve had no less than 100 calls with clients to talk about the MP transaction as well as what this means for other industries.”

What it could mean for USA Rare Earth

It’s natural for investors to hear this kind of commentary and conclude that USA Rare Earth could be next. After all, the company is on track to begin producing rare-earth magnets at its Stillwater, Oklahoma, facility in 2026.

That will help reduce America’s dependence on foreign-sourced rare-earth magnets. The company plans to use the near-term revenue and earnings from magnet production to ultimately develop the Round Top Mountain in Texas, which it controls the mining rights to, to provide its own supply of rare-earth materials for magnet production.

Image source: Getty Images.

Clearly, it will take time and likely a lot of capital to fulfill the plan. Given the strategic importance of securing a domestic supply of rare-earth materials and magnets, it’s perfectly feasible that the current administration could also consider providing some form of support to USA Rare Earth.

Shares of Opendoor Technologies (OPEN 5.24%) were moving higher today, even as there was no news out on the volatile online home flipper.

Instead, investors seemed to be looking forward to Wednesday’s rate decision from the Federal Reserve, which will include commentary and a forecast on future rate cuts. Investors widely expect the central bank to cut the federal funds rate by 25 basis points on Wednesday. CEO Kaz Nejatian also began his first day on the job.

As of 10:33 a.m. ET, Opendoor stock was up 11.5%.

Image source: Getty Images.

What the Fed rate decision means for Opendoor

Since its business is so closely tied to the housing market, few stocks seem to have more to gain from falling rates than Opendoor does, as housing is likely to bounce back as rates come down.

In addition to the expected rate cut of 25 basis points, we’ll also get some insight into the direction of future rate cuts, as the Fed will also release its quarterly “dot plot” projections, in addition to Fed chair Jerome Powell’s commentary at the press conference.

Back in June, the Fed had forecast 50 basis points of cuts this year, but that forecast could change as the labor market has softened substantially in the last couple of months.

New Opendoor CEO Kaz Nejatian is also starting in the job today, and co-founder Keith Rabois is back as  chairman, which is likely to accelerate changes in the business.

What’s next for Opendoor?

Opendoor’s volatility will almost certainly continue through the coming weeks and months, as it’s turned into a meme stock, but one with a legitimate chance at a turnaround now with new leadership in place and interest rates expected to fall.

Expect the stock to swing on Wednesday as well. While the rate cut is likely priced in at this point, the stock will move based on commentary and the forecast from the Fed.

Air taxi company Joby Aviation (JOBY 2.27%) announced Friday that it will participate in the White House eVTOL (electric vertical takeoff and landing) Integration Pilot Program (eIPP) announced back in June, aiming to “demonstrate eVTOL use cases, such as passenger transportation, cargo delivery, and emergency response, ahead of achieving type certification.”

Joby stock soared 5.7% through 10:10 a.m. ET Friday in response to the news.

Image source: Getty Images.

President Trump loves to fly

The eIPP in question was itself announced by executive order in June, with the White House promising to “create a pilot program testing flying cars, also known as electric vertical take-off and landing (eVTOL) aircraft.” Joby notes that this program “directs the Department of Transportation (DOT) and Federal Aviation Administration (FAA) to ensure that mature eVTOL (electric vertical take off and landing) aircraft can begin operations in select markets ahead of full FAA certification,” which could potentially give the company a revenue boost, and sooner than if full certification were required before operations begin.

Joby argues it has a leading position in this race because it “has the most mature eVTOL aircraft in the sector,” which has flown 600 times in 2025 alone, and it has amassed a total of more than 40,000 miles of flight across its fleet. Moreover, the company is already in stage four (out of five) in the FAA Type Certification process and expects to begin test flights with FAA pilots aboard next year.

Is Joby stock a buy?

Now, don’t get too excited. Even if Joby is in the lead here, this race is a marathon, not a sprint, and profits remain a long way off. Analysts who follow Joby don’t expect it to report its first profit until 2031.

Until Joby turns profitable, the stock remains speculative.

It’s two weeks until Micron (MU 10.66%) stock reports its earnings for fiscal Q4 2025, but Citigroup isn’t waiting around for the numbers to upgrade this stock. This morning, Citi analyst Christopher Danely raised his price target on the memory maker to $175 a share, and reiterated his “buy” rating.

Micron stock jumped 8.9% through 11:20 a.m. ET in response.

Image source: Getty Images.

What Citi says about Micron stock

Most analysts predict Micron will report $2.85 per share when its news comes out Sept. 23, and Citi’s Danely agrees the company will be “in line” with that estimate. What has Danely feeling really optimistic about Micron, though, is the potential for management to give strong guidance on top of its Q4 earnings.

DRAM and NAND sales and prices could both be very good heading into fiscal 2026, argues the analyst, as “the continued memory upturn is being driven by limited production and better-than-expected demand, particularly from the data center end market.” (Translation: Demand for artificial intelligence capacity is driving Micron’s business.)

Danely predicts that by 2029, fully 34% of all NAND memory chips will be used for AI applications, adding $29 billion worth of NAND sales globally.

Is Micron stock a buy?

Danely may be right. Most analysts following Micron stock predict the company could earn $10 a share in 2029. What worries me, though, is that even if they’re right, it means Micron stock already costs more than 15x earnings that it might (or might not) earn four years from now.

Investors are giving Micron credit for earnings it hasn’t actually earned yet. Meanwhile, Micron’s free cash flow is less than one-third of reported income, and the stock costs 82x FCF already today. That’s more than I want to pay, and Micron remains a sell for me.

Shares of Shopify (SHOP -0.38%) were climbing the charts last month after the e-commerce software superstar turned in strong results in its second-quarter earnings report. It also benefited from an improving outlook for interest rate cuts, which should help Shopify as a growth stock and one that relies on small businesses that benefit from cheap capital.

Additionally, several Wall Street analysts weighed in on the stock with price target hikes. By the end of the month, Shopify had gained 16%, according to data from S&P Global Market Intelligence.

As you can see from the chart below, Shopify stock actually pulled back following the post-earnings surge, due in part to its concerns about its valuation.

Image source: Getty Images.

Shopify shines again

Shopify struggled in the aftermath of the pandemic and with a botched expansion into logistics through the Deliverr acquisition. But it delivered another quarter of strong growth on the top and bottom lines, showing those days are long behind it.

Revenue in the quarter jumped 31% to $2.68 billion, ahead of the consensus at $2.55 billion, while gross merchandise volume was up by the same percentage to $87.8 billion.

Margins were also solid, with a free-cash-flow margin of 16% and adjusted earnings per share of $0.35, which topped estimates at $0.29.

Shopify jumped 22% on the day of the report, showing investors were clearly impressed with the results, but shares pulled back over much of the rest of the month on valuation concerns. Shopify now trades for a price-to-sales ratio of 19 and a price-to-earnings ratio of 81, valuations that typically apply to smaller companies, though Shopify is still growing rapidly.

One analyst, Phillip Securities, downgraded the stock to neutral but raised its price target to $150 in regards to a valuation that appears “stretched.”

What’s next for Shopify

Shopify’s guidance was strong as well, calling for a revenue growth in the mid- to high-20% range for the third quarter, and a similar free-cash-flow margin to Q2, showing it expects its momentum to continue.

Overall, the business is in great shape. Its merchant base continues to grow. It’s finding new ways to monetize it, and it’s delivering solid profit growth.

Still, the valuation concerns are valid. At this point, investors shouldn’t expect much multiple expansion from the stock. For the stock to move higher, it will have to do so by growing its revenue and earnings, though it’s plenty capable of doing that.

Well, that was fast.

Just one week after revealing a new logo that was nearly universally panned, Cracker Barrel Old Country Store (CBRL 8.01%) announced on Tuesday that it was scrapping its plans to change the logo. On Wednesday, the company’s shares — which had tumbled more than 10% after the new logo was revealed — had rebounded by 8.0% by the time the closing bell rang.

For investors who bought the dip, it’s a pretty good outcome. But is it too late for everyone else to buy in?

Why shares were down

On Aug. 19, Cracker Barrel launched a fall campaign it dubbed “All the More.” It was mostly a pretty standard seasonal restaurant campaign. It announced a partnership with country music star Jordan Davis and introduced some seasonal fall menu items like a cinnamon roll skillet and Uncle Herschel’s Favorite (“back by popular demand”).

However, the campaign also featured “updated creative,” including a change to the restaurant’s logo that removed the eponymous barrel and the iconic “old timer” figure — referred to by many as “Uncle Herschel” — leaving only an orange background and the words “Cracker Barrel.”

The backlash was immediate and intense, with many criticizing the stripped-down logo as generic or too reminiscent of other restaurant logos, such as Denny’s or Golden Corral. On Tuesday, even President Donald Trump weighed in on Truth Social, “Cracker Barrel should go back to the old logo, admit a mistake based on customer response (the ultimate Poll), and manage the company better than ever before.”

Despite the negative reactions, Cracker Barrel initially doubled down on its logo decision, with a spokesperson saying the feedback had been “overwhelmingly positive and enthusiastic about the refreshed dining and shopping experience” (a statement which, you’ll notice, pointedly does not say anything about feedback regarding the logo specifically), and attributing the backlash to a “vocal minority.”

However, by Tuesday, shortly after President Trump’s post, the company changed its tune. “We thank our guests for sharing your voices and love for Cracker Barrel. We said we would listen, and we have,” the company said. “Our new logo is going away and our ‘Old Timer’ will remain.” The new logo has been removed from the company’s website.

Does it matter for the stock?

If you believe that any publicity is good publicity, this ruckus might result in some short-term positives for the company. Cracker Barrel’s name has been in the news (and, more importantly, in the zeitgeist) for a week now, and it’s even making me hungry for hash brown casserole. Many people are praising management for its ultimate decision. This could be a golden opportunity for the company, as Trump suggested in his Truth Social post, writing: “They got a Billion Dollars worth of free publicity if they play their cards right. Very tricky to do, but a great opportunity.”

Image source: Getty Images.

That publicity might increase foot traffic to Cracker Barrel’s stores in the short term, which would be a welcome boost for the company. In its most recent quarter, same-store restaurant sales increased by just 1%, while same-store retail sales declined 3.8%. Overall, revenue has been stagnant since the pandemic lockdown reopenings, only up 5.7% since 2022. Net income has slipped by more than 50% and profit margins have declined to just 1.7%.

Those metrics aren’t just bad, they’re worse than most of its peer companies, including Brinker International (EAT -3.52%), which owns Chili’s and Maggiano’s; and Darden Restaurants (DRI 0.14%), which owns Olive Garden and Cheddar’s, among many others. Perhaps the problem is the breakfast: Dine Brands (DIN 1.15%), which owns IHOP and Applebee’s, has struggled with a similar drop in profits, but even Dine’s profit margin is above 5%.

In short, it will take more than the publicity surrounding this logo controversy to fuel a long-term turnaround at Cracker Barrel. According to CEO Julie Felss Masino, the company is “in the middle of a three-year transformation” that’s expected to cost $700 million and include changes to the company’s advertising, menus, and store layouts. If this is how well things are going, investors will face a long and rocky road, no matter what Cracker Barrel’s logo ends up looking like.