Highly shorted Powell Industries (POWL) has done well in the past few years, making it one of the best-performing companies in Wall Street. It has risen in the last two consecutive months, reaching a record high of $247, up by 1,282% from its lowest point in 2023. As a result, its market cap has soared from $260 million to over $3 billion.

Company in a complex industry

Powell Industries, a company with a 13% short interest, is a leading player in a niche industry. It manufactures products that distribute, control, and monitor the flow of electrical energy.

Its products are also used to protect motors, transformers, and other electrical products. Most of its products are ordered by companies in industries like those in the oil and gas industries, including in terminals, pipelines, and refineries.

Powell Industries has also expanded its business to include solutions for mining, transport, utilities, and data centers. 

To a large extent, the firm maintains most of its clients for a long time because of the challenges of switching to other companies.

Its stock has surged in the past few years because of ongoing investments in the United States’ oil and gas industries. Crude oil prices have remained elevated in the past few years, while the number of active rigs has jumped.

Most importantly, the US has become a big player in the natural gas industry, especially after Russia invaded Ukraine. In that period, its gas exports have almost doubled, with most of them going to European countries. 

Data by Statista shows that the industry’s capital expenditures rose to over $142 billion in 2023 from $104.4 billion a year earlier. It has done well after bottoming at $60 billion in 2020.

Powell Industry’s business is highly cyclical and usually depends on capital expenditure in the oil and gas sectors.

Earnings and backlogs are growing

Powell’s stock price has done well because of its strong revenue and backlog growth. Revenue jumped by 50% to $288 million, new orders rose by $356 million, and the total backlog jumped to over $1.3 billion.

These results were notable because they were close to the $470 million it made in the whole of 2021. Its net income of $46 million was higher than the $13.7 million it made in 2022, 

Analysts are optimistic that it will continue doing well in the near term as demand for its solutions rise. The average estimate is that its revenue will rise to $1.0 billion in the current financial year followed by $1.1 billion in the next one.

Key challenges remain

Powell Industries stock faces major challenges ahead. First, the stock has risen so fast that it is now priced to perfection. In most cases, such a rally is usually turned off by a simple event like a weak earnings report. Therefore, its next earnings report on December 3 will likely catalyse a reversal.

Second, there is a risk of the cyclical nature of the oil and gas industry. Some analysts believe that investments in the current cycle may have peaked. 

Additionally, Powell’s valuation has become relatively stretched. It has a forward P/E ratio of 20 and a trailing multiple of 22.

Powell Industries stock analysis

POWL chart by TradingView

The weekly chart shows that the POWL share price has been in a strong bull run for a long time. Most recently, it crossed the important resistance point at $208, invalidating a forming triple-top pattern.

The stock has also remained above the 50-week Exponential Moving Average (EMA), while the Relative Strength Index (RSI) and the MACD indicators have pointed upwards. 

Therefore, while the stock’s outlook is bullish based on trend-following principles, there is a risk of a severe pullback. 

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Netflix’s (NFLX) stock price has continued to do well this year, soaring to a record high of $720. It has jumped by over 348% from its lowest point in 2022, making it one of the best-performing media companies on Wall Street. In contrast, companies like Walt Disney, Warner Bros. Discovery, and Paramount Global have had negative returns.

Simple and predictable business

Netflix’s share price has done well because of its growing market share and simple business model compared to other media companies.

Warner Bros owns its MAX streaming service and many slow-growing legacy media brands like CNN and Cartoon Network, while Paramount owns Paramount+ and slowing companies like Smithsonian, Comedy Central, and Nickelodeon.

Netflix’s simple business model makes it highly profitable and simple to predict since it makes money through subscriptions and advertising. 

Over the years, the company has continued to grow its market share by adding millions of customers every quarter. And the competition that most analysts feared a few years ago has not materialized.

At the same time, Netflix has continued to evolve its business by adding new products like gaming and advertising. Its ad business brings in a new revenue stream and helps it lower customers’ subscription costs.

Netflix is still growing

The most recent second-quarter results show that its business is still growing by adding new solutions. Its revenue rose from $9.3 billion in last year’s second quarter to over $9.55 billion, a 19% increase. 

The company is also making more money for each paying customer in the United States and Canada, where the average revenue per member rose from $16 to $17.17. This figure dropped in its other regions like EMEA and LATAM.

To understand Netflix’s growth, you need to look at its annual revenue figures. Before Covid, its annual revenue was over $20.2 billion. Last year, it made $33.7 billion, while its trailing twelve-month figure was $36 billion. This growth happened even after large conglomerates. like Disney, Paramount, and Warner launched their competing products.

Netflix has also emerged as a highly profitable company, with its annual profits rising from $1.86 billion in 2019 to over $5.4 billion last year. Its operating income also jumped to almost $7 billion. 

Earnings ahead

The next important catalyst for the Netflix stock price will be its earnings, which will come out on October 17. These results will provide more colour on its business growth and profitability. 

Analysts expect the numbers to show that its quarterly revenue rose by 14.4% YoY to $9.76 billion. Its forward guidance for the next quarter will be $10 billion, bringing the annual revenue figure to $38.7 billion. 

These numbers show that Netflix’s revenue growth is slowing since its 2025 revenue is expected to be $43 billion, a 12% growth from its 2024 figure. 

As a result, Netflix will likely soon reach single growth figures, transforming it into a value company, as we have seen with the likes of PayPal.

Valuation is stretched

Premium companies like Netflix, Mastercard, Netflix, and Visa always attract a premium valuation because of their big moat.

In Netflix’s case, its forward price-to-earnings ratio is 37, while its trailing figure is 45. These numbers are higher than the communication sector median of 18 and 20, respectively. 

However, they are higher than some other Magnificent 7 companies, such as Microsoft, Google, and Meta Platforms. Meta has a forward P/E ratio of 27, while Google and Apple have 22 and 33, respectively, meaning that Netflix is fairly overvalued.

The company must continue growing its revenues and profits to justify the valuation. 

Netflix stock price analysis

The weekly chart shows that the NFLX share price has been in a strong bull run for a long time. It recently crossed the important resistance point at $701, its highest point in November 2021.

The stock has remained above the 50-week and 200-week Exponential Moving Averages (EMA), meaning that bulls are in control.

On the other hand, it has formed a rising wedge pattern, a popular sign of a reversal. The Relative Strength Index (RSI) and the MACD have also formed a bearish divergence pattern.

Therefore, while the stock may have some more upside, there is still a risk for a big bearish reversal in the coming weeks. This reversal will likely happen after the company publishes its financial results on October 17. 

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McDonald’s is gearing up to introduce a brand-new addition to its US menu next week: the Chicken Big Mac.

With hopes of bringing in more customers and expanding its already impressive chicken offerings, the fast-food giant is betting that this latest twist on its iconic sandwich could help it reverse a challenging year.

The Chicken Big Mac is essentially a variation of the original Big Mac, but with two tempura-battered chicken patties in place of the usual beef.

This sandwich, which has already made waves in international markets, will be available to US customers starting on October 10 as part of a limited-time offer.

Over the past few years, McDonald’s has been doubling down on its chicken business, which has seen significant growth as consumers worldwide continue to show a preference for chicken items.

For example, last year the company rebranded its crispy chicken sandwich as the “McCrispy,” which has already garnered over $1 billion in annual sales.

The fast-food chain is keen to build on this success by rolling out more chicken products, including chicken tenders and wraps in the near future.

McDonald’s existing chicken portfolio — featuring crowd favorites like McNuggets and the McChicken sandwich — now brings in sales figures comparable to its beef offerings, amounting to around $25 billion annually.

The company’s recent earnings call highlighted this achievement, noting that the Chicken Big Mac could bolster McDonald’s position as a leading name in the chicken category.

Tough year for McDonald’s

2024 has been a tough year for McDonald’s. The fast-food giant has experienced a slump in sales, with consumers cutting back on dining out after grappling with years of rising inflation.

The broader fast-food industry has had to adjust to price increases that have outpaced those seen in casual dining restaurants and grocery stores, leading to some customer drop-off.

In an attempt to entice customers back into its stores, McDonald’s rolled out a value meal deal in June, which offered a combination of a McDouble or McChicken sandwich, small fries, four-piece chicken nuggets, and a small soft drink for $5 or $6, depending on the location.

The promotion was originally set to last for just one month but was extended through December due to positive customer response.

According to data from retail location analytics firm Placer.ai, McDonald’s has seen a modest improvement in foot traffic in recent months, thanks in part to the value meal promotion.

McDonald’s franchisees also voted to continue offering the $5 meal deal in most US markets, extending its availability into the holiday season.

Investors are paying attention

Despite the mixed sales performance, investors are still optimistic. Since hitting a recent low in July, McDonald’s stock has surged 23%, reaching an all-time high of $304.51 at the end of September.

Many on Wall Street view McDonald’s as a company that can weather economic turbulence, with its extensive scale and strong financial foundation giving it an edge over smaller competitors.

Some analysts have raised concerns about the potential downside of value deals like the $5 meal. While such promotions can successfully drive sales, they also have the potential to impact margins at franchised locations.

However, McDonald’s business model, which derives revenue from franchise royalties based on total sales, should shield the company itself from major negative effects.

McDonald’s has the scale to win

With the upcoming release of the Chicken Big Mac, McDonald’s is likely increasing its marketing and advertising spend, which could also have a short-term impact on its earnings.

However, given its global reach and financial stability, the company is well-positioned to handle these costs.

Industry experts suggest that McDonald’s could emerge as a winner in the ongoing “value wars” among fast-food chains.

In a recent note, Goldman Sachs analyst Christine Cho highlighted the company’s scale as a key factor in its ability to outperform peers.

She raised her 12-month price target for McDonald’s stock from $284 to $325, signaling strong confidence in the company’s future growth potential.

Earnings in focus

McDonald’s is scheduled to report its third-quarter results on October 29.

Wall Street analysts surveyed by FactSet expect the company to report earnings of $3.19 per share, in line with last year’s results. Revenue is forecast to increase slightly by 1.5% to $6.69 billion.

All eyes are now on the Chicken Big Mac launch, as McDonald’s continues to innovate within its menu offerings in a bid to drive growth in an increasingly competitive fast-food industry.

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CAVA Group (CAVA) stock price is firing on all cylinders, making it one of the best-performing companies in the US. It has jumped by over 194% this year, beating Nvidia and MicroStrategy, which have risen by 152% and 180% this year. 

CAVA Group is a restaurant disruptor

CAVA Group was largely unknown a few years ago. It is now a fast-growing restaurant chain aiming to replicate Chipotle Mexican Grill’s success. 

CAVA hopes to do that by focusing on the Mediterranean food industry, which is increasingly popular in the United States. 

Its revenue has done well in the past few years, growing from $500 million in 2021 to over $845 million in the trailing twelve months.

This growth happened as the company boosted its investments in store openings in the country. For example, it increased the number of stores by 18 in the second quarter. Compared to other companies, it is growing its store counts without incurring substantial losses.

The most recent quarterly results showed that CAVA’s business was doing well. Revenue rose by 35.2% to $231.4 million, which was also higher than the $171 million it made in the first quarter. This means that its growth is accelerating.

The results also revealed that its same-restaurant sales growth was 14.4%, higher than other similar companies.

Most importantly, like Chipotle, CAVA Group is also seeing more online sales as more Americans embrace platforms like Uber Eats, Grubhub, and DoorDash. Its digital revenue mix was 35.8%.

CAVA Group is also making profits during its growth phase. Its net income in the last quarter was $19.7 million, a figure that was higher than the $13.3 million it made in the whole of 2023.

Read more: Cava Group stock price analysis: is this the next Chipotle?

Growth to continue

Analysts believe that CAVA Group has more room to grow in the coming years. Besides, the company has just 341 stores in the United States. In contrast, Chipotle has over 3,495 stores in the country. McDonald’s has over 14,000 people in the country, while Chick-fil-A has over 3,000. Starbucks has 6,500 stores in the US.

These numbers mean that CAVA has yet to scratch the surface in its growth path in the US alone. 

Some analysts believe that one approach would be for CAVA to franchise its business, a move that will help it grow faster. 

Focusing on this model has enabled most restaurants to become giants. Some notable ones are McDonald’s, Starbucks, Chick-fil-A, and Taco Bell.

The franchising model benefits franchisees by allowing them to grow their businesses and receive regular fees. Still, it is unclear whether CAVA Group will embrace this model in the future. Instead, it may decide to follow Chipotle’s business model of building self-operated stores.

Read more: Here’s why CAVA Group stock price is going vertical

Valuation concerns remain

A key challenge for CAVA Group is that it has become one of the most expensive companies in the industry, a premium that has come because of the comparison with Chipotle, a company that also has substantial valuation metrics. 

CAVA Group has a market cap of over $14 billion, which is substantial for a company that is expected to make $935 million this year and $1.13 billion next year. The figure means that CAVA has a price-to-sales ratio of 16, higher than other companies like Domino’s, Wingstop, and Chipotle.

CAVA’s valuation means that Wall Street values its restaurants at over $41 million each. On the other hand, each of Chipotle’s store is valued at about $20 million while McDonald’s stores are valued at over $5.6 million. 

Therefore, these numbers mean that the management will need to continue executing well to justify the valuation. 

The next key catalyst will happen on November 22, when it publishes its financial results. Analysts expect the numbers to reveal that its revenue rose to $231 million while its annual revenue jumped by 32% to $231 million in the last quarter. 

CAVA Group stock analysis

The daily chart shows that the CAVA share price has done well in the past few months. It has soared from last year’s low of $28.85 to the current $126. It has remained above all moving averages while oscillators have continued pointing upwards. 

Therefore, the stock will likely continue rising, a move that will be confirmed if it rises above the all-time high of $131.58. If that happens, the next point to watch will be at $150.

What is clear, however, is that CAVA’s stock growth will not be linear, meaning that it may see some short-term volatility. For example, Chipotle’s stock retreated by over 40% between September 2021 and June 2022. Before that, it fell by 67% from its August 2025 to its lowest level in 2018 amid the e-coli crisis. Therefore, a pullback cannot be ruled out in the coming months or years.

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Etsy (ETSY) stock has moved from a beloved Wall Street darling into an embattled fallen angel as its business has slowed significantly. It has dropped to $52.80, its lowest point since April 2020, and 82% below its highest level during the pandemic. $10,000 invested in the company at its peak of $307 in 2021 would now be worth just $1,690. 

How Etsy became a fallen angel

Etsy was one of the most popular companies during the Covid-19 pandemic. It attracted more sellers amid the lockdowns, which increased its seller fees. At the same time, the low interest rate environment, coupled with government stimulus and high savings, led to more spending. 

As a result, its annual revenue rose from $818 million in 2019 to over $1.7 billion in 2020 and $2.74 billion in 2023. 

The past few years have been difficult for Etsy as the number of creators in the network has dropped. Also, higher interest rates have made many people to reduce their discretionary spending, which has led to a slow revenue and profitability growth.

At the same time, Etsy’s relationship with its sellers is challenging because of the increase in its fees. In 2022, some of its biggest sellers went on strike after the company increased its transaction fees to 6.5%. Many sellers have quit because of the meager revenue they make.

Etsy’s active sellers rose by 5.9% to 8.8 million in the second quarter, while buyers rose by just 0.4% to 96 million. That is a sign that demand for crafts made in its platform has slowed.

Etsy’s growth metrics have slowed

The most recent quarterly results showed that Etsy’s business continued slowing down this year. Its gross merchandise sold dropped by 2.1% to $2.9 billion in the second quarter and by 2.9% in the year’s first half.

Etsy’s quarterly revenue also dropped from $628 million in 2023 to over $647 million. Its marketplace revenue, which takes a cut for all transactions, rose to $470 million while the service figure jumped to $177 million. 

Most importantly, Etsy’s profitability has dived even after the management slashed 11% of its workforce. Its net income dropped by 14.4% to $53 million. 

These numbers mean that only a handful of Etsy sellers are making good money. The average revenue per seller in the last quarter was about $75. 

Etsy’s forward guidance was also weaker than expected, with its GMV falling by a low single digit. 

Read more: Etsy stock lacks a meaningful upside: Citigroup

Etsy earnings ahead

The next important catalyst for Etsy’s share price will be its earnings, which will be released on October 30th. These results will provide more information about Etsy’s business and whether management’s turnaround efforts are working.

According to Yahoo Finance, analysts expect Etsy’s revenue to reach $653 million, an increase from last year’s $640 million. 

Its third-quarter revenue guidance will be $867 million, while its annual figure will be 2.40 billion. 

However, these estimates should be taken with a grain of salt since the company has missed its earnings forecasts in the last three consecutive quarters, meaning that the trend may continue in the near term.

More metrics show that the company is not doing well. For example, SimilarWeb data shows that its website traffic rose slightly to over 423 million in August. 

Etsy’s valuation metrics

The ongoing Etsy stock plunge has led to a valuation reset, with its price-to-earnings ratio at 12.48. The sector’s P/E multiple is 15.13, while its five-year average is 38.

Etsy’s forward P/E ratio of 11.68 is also lower than its sector median of 17 and its five-year average of 40. This valuation reset is because Etsy is not the company it was a few years ago when it used to have double-digit growth rates. 

Etsy’s net profit in 2023 was over $307 million, while its market cap is over $6 billion. This means that its valuation is significantly stretched, considering that it also has a big debt load of over $2.28 billion. 

Also, I believe that Etsy’s business will not benefit from low interest rates, as some analysts expect. 

Etsy stock price analysis

ETSY chart by TradingView

The weekly chart shows that the Etsy share price peaked at $307 in 2021 and has been in a strong bearish trend since then. It has remained below the 50-week and 25-week Exponential Moving Averages (EMA). 

Also, the MACD indicator has moved below the zero line, while the Relative Strength Index (RSI) has moved below the neutral point.

On the positive side, the stock has formed a falling wedge pattern, which is nearing a confluence level. Therefore, while the outlook is bearish, the stock will likely have a bullish breakout soon. That breakout may happen on October 10 when it publishes its third-quarter financial results.

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