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Disney Jumps, but This SaaS Stock Was Wednesday Night’s Real Winner

The stock market has been extremely volatile, but long-term investors once again reaped the rewards of their patience on Wednesday as major stock indexes continued to regain ground. Bond markets cooperated with lower rates, helping to establish the stock market’s supremacy as an engine for financial growth.

The Nasdaq Composite (NASDAQINDEX:^IXIC) once again performed best among major averages, but the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) didn’t get left behind.


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Data source: Yahoo! Finance.

After the close of the regular trading session, investors got a further treat when Walt Disney (NYSE:DIS) reported strong financial results that sent its stock soaring. Yet one key player in the software-as-a-service space managed to score even more impressive gains. Below, we’ll look more closely at Disney and then reveal the software-as-a-service (SaaS) stock that turned heads late Wednesday afternoon.

Two people in the front car of a roller coaster.

Image source: Getty Images.

Disney does well

Shares of Disney finished the regular session up more than 3%, but the best gains came after the company’s fiscal first-quarter financial report. The stock gained almost 8% more after hours on Wednesday afternoon.

Disney’s numbers showed a massive rebound from the challenges of the year-ago period. Revenue climbed 34% year over year to $21.8 billion, and adjusted earnings of $1.06 per share came in at more than triple what they were in the first quarter of fiscal 2021.

The key driver of Disney’s recovery was the parks, experiences, and products segment, which saw revenue more than double year over year. The best results came from domestic parks, which generated more than triple the revenue they did in the year-earlier period. Operating income for parks went from massive losses to even bigger profits, and only sluggish performance from the consumer-products division held back the segment.

Meanwhile, results from the media and entertainment distribution segment were more subdued, with sales growth of 15% and a decline in operating income of 44%. Challenges for cable and broadcasting continued, but 40% growth in international subscribers to its Disney+ streaming service helped boost total subscriber counts to nearly 130 million worldwide. Solid gains in average revenue per paid subscriber also pointed to health for the new business.

Disney came into the week with a lot of uncertainty. The results allayed fears, and the return of confidence was obvious from the stock’s jump.

Twilio turns upward

Disney’s gains were impressive but paled in comparison to SaaS stock Twilio (NYSE:TWLO). The provider of cloud communications platform services saw its stock soar 19% in aftermarket trading following its latest financial results.

Twilio’s financial performance largely silenced skeptics. Fourth-quarter revenue of $843 million was up 54% year over year, closing a year of 61% sales growth for the 12-month period. Adjusted losses for the quarter widened to $0.20 per share, but that was still better than most investors had anticipated from Twilio. The company brought in 35,000 new customer accounts over the past 12 months, bringing its customer count to 256,000. Although dollar-based net expansion rates fell to 126% for the quarter, that was largely due to the heavy political communications volume in the year-earlier period in 2020.

Moreover, investors were pleased with Twilio’s guidance. First-quarter revenue of $855 million to $865 million would be 45% to 47% higher than year-ago levels, with organic growth coming in at 32% to 34%.

Twilio has done a good job of combining strategic acquisitions with growth inside its core business. That’s been a recipe for smart expansion, and after a big pullback in the stock price, Twilio shareholders like what they’re seeing for 2022.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Read More: Disney Jumps, but This SaaS Stock Was Wednesday Night’s Real Winner

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