The earnings season has tapered off, but this week’s earnings have still been interesting. Take Fortesque Metals Group reporting yesterday annual (ending 30 June 2021) adjusted net income of $10.3bn, which is more than NVIDIA’s $7.1bn and on par with Visa’s $10.9bn. Keep in mind that this is for digging iron ore out of the ground, the lowest global value chain business activity. While iron ore prices are expected to ease somewhat, the Australian miner is still valued at a 2-year forward free cash flow yield of 10%. Whether it is the ESG trend that is causing this valuation, it is grossly out of line with the reality of the green transformation and urbanization in the developing world.
Zoom Video Communications that rose to fame during the pandemic reported FY21 Q2 revenue and earnings that were better than expected, but the guidance for the current quarter was in line with analyst estimates. However, investors were disappointed sending the stock down 16% in today’s session showing growth investors that there is a limit after all for growth stocks. The main question for investors is still whether Video can expand its business as Microsoft is going after its business.