Earnings Previews: Genius Sports, Home Depot, Sea Limited, Walmart
The three major U.S. equity indexes closed mixed on Thursday. The Dow Jones industrials added 0.08% while the S&P 500 slipped by 0.07% and the Nasdaq fell 0.58%. Just five of 11 sectors ended the day higher, led by energy (3.4%) and financials (1.2%). The producer price index fell by half a point month over month but remains up 9.8% year over year, perhaps indicating that wage and job growth have yet to run their course. All three indexes traded higher Friday morning.
After markets closed Thursday, Rivian Automotive beat the consensus loss-per-share estimate by a penny and surpassed the revenue estimate. The electric pickup and SUV maker reiterated production estimates for 2022 of 25,000 and said it had received 98,000 preorders for its R1 SUV. Shares were trading up about 1% late Friday morning.
Payoneer Global beat both top-line and bottom-line estimates and raised full-year revenue guidance. Shares traded about 23.5% higher on Friday.
Toast also beat estimates on both the top and bottom lines. The company raised third-quarter and full-year revenue guidance. Shares traded up about 13%.
ESS Tech hammered the consensus revenue estimate of $380,000, reporting quarterly revenue of $686,000 and a net loss per share of $0.10, much better than the forecast loss of $0.15. Shares traded up nearly 19% Friday.
Illumina missed both earnings and revenue estimates, topping off a poor report by lowering profit and revenue estimates for the full year. Shares traded down about 9.4%.
After U.S. markets close on Friday and before they open on Monday, Bitfarms, Li Auto and Sundial Growers will be reporting results. Later on Monday, Compass, IonQ and Tencent Music are expected to share their quarterly results.
Here is a look at four companies, including two components of the Dow Jones industrial average, scheduled to report quarterly results first thing Tuesday morning.
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London-based Genius Sports Ltd. ( NYSE: GENI ) develops and sells products and services to the sports, sports betting and sports media industries. More than just a stats provider, Genius Sports collects and distributes streaming video to help commercialize team footage and technology to flag suspicious betting active in global betting markets.
Over the past year, the stock's value has dropped by more than 76%, and from a high last September, the shares dropped 90% to a new low in mid-July. As has been the case with other growth stocks, the shares have jumped by more than 80% since their 52-week low.
While a decision is still to come regarding which tech giant (Apple, Alphabet/YouTube or Amazon) will get the honor of paying around $2.5 billion for rights to the NFL's Sunday Ticket package, Genius Sports already has pieces in place to be a partner with the winner.
Just seven analysts cover the stock, and all have a Buy or Strong Buy rating. The stock trades at around $4.20, implying an upside potential of nearly 43% based on a median price target of $6.00. At the high target of $11.00, the upside potential is about 162%.
Second-quarter revenue is forecast at $64.7 million, down 24.7% sequentially but up 15.8% year over year. The company is expected to post an adjusted loss per share of $0.05, compared to a loss per share of $0.30 in the prior quarter. For the full year, the net loss per share is forecast at $0.30 on revenue of $341.66 million, up more than 30% year over year.
Genius Sports is not expected to post a profit until 2024. The enterprise value to sales multiple is estimated at 2.0 times sales for 2022, 1.6 times estimated 2023 sales of $436.73 million and 1.2 times estimated 2024 sales of $548.07 million. The stock's 52-week range is $2.20 to $24.14, and the company does not pay a dividend. Total shareholder return for the past year was negative 77.5%.
Home Depot Inc. ( NYSE: HD ) has dropped about 5.5% from its share price over the past 12 months. Since posting a recent high in early December, the stock has dropped by about 24%. Between March 20, 2020, and early December 2021, Home Depot's stock added almost 185%, an incredibly strong pace for a Dow company. Even with the decline over the past several months, the shares are trading for more than double their mid-March 2020 price.
It is no coincidence that the huge runup mirrored the U.S. lockdowns due to the pandemic. Before the recent jump in inflation, homeowners already had begun shifting spending to services and travel, not fixing up their houses either for personal enjoyment or to make the property more salable. Expectations for Home Depot and chief rival Lowe's have been pulled in again.
Of 33 analysts covering the stock, 23 have a Buy or Strong Buy rating and 10 rate the shares at Hold. At a share price of around $312.10, the upside potential based on a median price target of $350.00 (down 7% since May) is 12.1%. At the high price target of $470.00, the upside potential is 50.6%.
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Analysts expect Home Depot to report second-quarter revenue of $43.33 billion, up 20.6% sequentially and by 5.4% year over year. The second quarter is historically the company's strongest. Adjusted earnings per share (EPS) are forecast at $4.93, up 14.8% sequentially and 8.8% higher year over year. For the full 2023 fiscal year ending in January, EPS is forecast at $16.48, up 6.1%, on sales of $156.22 billion, up about 3.4% year over year.
Home Depot stock trades at 18.9 times expected 2023 EPS, 17.9 times estimated 2024 earnings of $17.34 and 16.8 times estimated 2025 earnings of $18.55 per share. The stock's 52-week range is $264.51 to $420.61, and the low was posted Thursday. Home Depot pays an annual dividend of $7.60 (yield of 2.44%). Total shareholder return for the past year is negative 4.8%.
Singapore-based Sea Limited ( NYSE: SE ) operates Asia's leading online gaming and entertainment platform. Over the past 12 months, the stock has dropped by about 71%. The stock posted an all-time high last October and has plunged by around 83% since. Consumer spending on the company's Garena platform declined by 6.6% in the first half of this year. Bookings were down in the first quarter and profitably remains a distant objective. The second quarter could be a buying opportunity or a value trap.
Of 30 analysts covering the stock, 26 have a Buy or Strong Buy rating and 3 others have a rating of Hold. At a share price of around $87.00, the stock's implied upside based on a median price target of $120.00 is nearly 75%. At the high price target of $180.00, the upside potential is 107%.
Analysts expect Sea to report second-quarter revenue of $3.03 billion, 4.5% higher sequentially and up almost 33% year over year. The expected quarterly loss per share of $1.06, worse than the prior quarter's loss of $0.80 and $0.45 worse than the year-ago loss. For the full fiscal year, the loss per share is forecast at $3.98, worse than the loss per share of $2.96 in 2021, on sales of $13.13 billion, up about 31.9% year over year.
Sea is not expected to post a profit in 2022, 2023 or 2024. The enterprise value to sales multiple is estimated at 3.4 times sales for 2022, 2.7 times estimated 2023 sales of $16.93 billion and 2.1 times estimated 2024 sales of $21.06 billion. The stock's 52-week range is $54.06 to $372.70. Sea does not pay a dividend, and the total shareholder return for the past year is negative 71.5%.
The second Dow component reporting early Tuesday morning is Walmart Inc. ( NYSE: WMT ). Over the past 12 months, the company has seen its share price decrease by nearly 11.5%. Inflation, especially high fuel prices, has encouraged consumers to shop at discount markets closer to where they live and, Reuters reported Thursday, "there are no signs shoppers are returning to the nation's biggest retailer." July data indicated that foot traffic in Walmart's U.S. stores declined by 2.7%.
Analysts remain bullish on the stock, however, with 27 of 39 awarding the shares a Buy or Strong Buy rating and the rest rating the stock at Hold. At a share price of around $130.20, the upside potential at the median price target of $141.00 is about 7.5%. At the high target of $170.00, the implied upside is 30.6%.
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For its second quarter of fiscal 2023, Walmart is expected to report sales of $149.78 billion, up 6.8% sequentially and down about 7.1% year over year. Adjusted EPS are pegged at $1.60, up 23.1% sequentially and down 10.1% year over year. For the full fiscal year ending in January, analysts forecast EPS of $5.75, down 11%, on sales of $593.60 billion, up about 4.6%.
Walmart stock trades at 22.6 times expected 2023 EPS, 20.0 times estimated 2024 earnings of $6.51 and 18.4 times estimated 2025 earnings of $7.10 per share. The stock's 52-week range is $117.27 to $160.77. Walmart pays an annual dividend of $2.24 (yield of 1.47%). Total shareholder return for the past year was negative 11.1%.
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