Hot or Not, Stock Market Edition: 02/21/2025

What’s up? What’s down? We’ve got the story on four of the hottest movers in the market:

• HOT: The future looks bright for Tapestry (NYSE: TPR); real estate company Compass (NYSE: COMP) smashes revenue expectations. 
• NOT: Despite a modest gain, we have reservations about Southwest Airlines (NYSE: LUV); a substantial drop for Etsy (NASDAQ: ETSY)

📈 Want more? Check out the biggest winners and biggest losers on WSZ. 

🔥 HOT: Residential real estate brokerage Compass (NYSE: COMP) gained 28.2% on Wednesday after reporting fourth-quarter earnings. The company’s loss-per-share was in line with analysts’ expectations at $0.08, but its revenue came in $35.5 million higher than anticipated. Compass has returned almost 180% since this time last year, has solid balance sheets, and issued stronger-than-expected guidance for 2025. All of those factors lead us to give the company a B Zen Rating and a Buy recommendation.

🥶 NOT: Southwest Airlines (NYSE: LUV) gained 0.7% on Wednesday amidst some internal shuffling. Southwest’s primary shareholder, hedge fund Elliot Management, negotiated a larger maximum allowable stake in the company, increasing its limit to a 19.9% stake from its previous value of 14.9%. This development comes hot on the heels of the company’s plan to cut 1,750 corporate positions, a move designed to cut costs without affecting the airline’s pilots or crews. LUV is down 16% since early December and 10% since the start of 2025. We give LUV a C Zen Rating and a Hold recommendation.

🔥 HOT: Tapestry (NYSE: TPR) was mostly flat on Wednesday (+0.2%) but announced that it was planning to sell its Stuart Weitzman brand for $105 million in cash. The decision will allow the company to focus on its other brands, Coach and Kate Spade, which the company hopes will help it refocus after its bid to acquire Michael Kors’ parent company, Capri Holdings, was blocked by the FTC. The company’s financials are solid, and it has returned 95% over the last year. We give TPR a solid B Zen Rating and a Buy recommendation.

🥶 NOT: Shares of Etsy (NASDAQ: ETSY) fell by 9.9% on Wednesday after its fourth-quarter earnings report had some investors worried about the company’s future. Etsy’s profit came in higher than expected — $1.03 per share versus the consensus estimate of $0.93 — but the company’s revenue was lower than expected by nearly $10 million. Even though Etsy looks strong financially, we’re a bit concerned about its growth potential going forward. As such, we give ETSY a C Zen Rating and a Hold recommendation.

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