A very light schedule of companies reporting earnings continues next week with only a relative handful of companies that attract significant investor interest scheduled to report.
There are no earnings reports scheduled for release after markets close today, and there is just one of note on Monday when China-based electric vehicle maker Xpeng reports.
Among the stocks that reported after markets closed Thursday and before they reopened Friday morning were Broadcom, Costco, Gap, Big Lots, and Smith & Wesson. The latter posted a big quarter but the outlook for the year ahead is murky at best.
After markets close Monday two young firms are scheduled to report earnings reports, while one venerable consumer discretionary company reports before Tuesday’s opening bell. We’ve also added some observations on the consumer discretionary sector following the previews.
Stitch Fix
Stitch Fix Inc. (NASDAQ: SFIX) is set to report fiscal second-quarter results after markets close Monday. The personal styling company posted a share price gain of 128% in 2020. A good showing, considering the stock traded at less than its November 2017 IPO price of $15 a share. The stock has tacked on another 8% in 2021.
Analyst sentiment on the stock is mixed. So far this year, two brokerages have maintained the equivalent of Buy ratings on the stock and lifted their price targets. Two others have dropped the ratings from the equivalent of Buy to Hold while raising their price targets. The stock trades at around $64 a share, currently around 13% higher than the consensus price target of $56.13. At the high target of $95, the potential upside is 48%.
The consensus third-quarter estimate calls for a net loss per share of $0.22, far worse than the $0.11 earnings per share posted in the same quarter last year. The revenue estimate for the quarter is $512.2 million, up 13% year over year. For the 2021 fiscal year, analysts are looking for a net loss per share of $0.26 on sales of $2.1 billion
Shares are richly priced at roughly 1.2 times expected sales for the next 12 months. The stock traded down about 11% at one point Friday morning, before paring its drop to around 6% to $65.50, in a 52-week range of $10.90 to $113.76. The company is not expected to post an annual profit until 2023.
GoHealth
GoHealth Inc. (NASDAQ: GOCO) also reports results after Monday’s closing bell. It operates a U.S. online marketplace for health insurance. Like property and casualty insurer Lemonade, GoHealth came public last summer, with the difference that by the end of the year, Lemonade had added 76% to its share price while GoHealth had lost nearly 40%. It may be some consolation that GoHealth’s share price decline of 14% so far in 2021 is about half that of Lemonade.
Analysts expect GoHealth to post earnings per share (EPS) of $0.45 in the quarter on revenue of $436.4 million. For the 2020 fiscal year, estimates call for a loss of $0.26 per share on sales of $868.2 million. For the record, Lemonade posted 2020 revenue of $94 million and a net loss per share of $0.60.
At a current price of around $11.75 a share, GoHealth stock trades at around 52 times expected 2020 EPS, 14 times expected 2021 earnings and less than 10 times expected 2022 EPS.
Dick’s Sporting Goods
Before markets open Tuesday, Dick’s Sporting Goods Inc. (NYSE: DKS) reports fourth-quarter results. The stock added nearly 18% to its price last year, after sinking by nearly 70% in late March. Shares have gained about 23% so far in 2021, but that’s about 16 points below its peak for the year.
Analysts have mostly weighed in with the equivalent of Buy ratings so far in 2021, although a couple of holdouts have kept Hold ratings. The consensus price target on the stock is $73.55, and shares traded at around $70 on Friday, implying a potential upside of 5%. At the high price target of $90, the potential upside is around 29%. Raymond James in December reiterated a Sell rating on the stock.
When the company reported third-quarter results last November, EPS came in at double the consensus estimate and revenues beat by estimates by around 10%. This time around, analysts are forecasting EPS of $2.26 for the quarter, a jump of 80% compared to the same period a year ago, on an increase of 18% in sales. For the full year, EPS is forecast to rise by 61% to $5.94 on a sales increase of nearly 9% to $9.52 billion.
At the current trading price, the shares trade at around 12 times expected earnings for the year and nearly 14 times expected EPS for 2022 and 13 times expected 2023 EPS.
24/7 Wall St.Consumer Discretionary
Now a word about consumer discretionary stocks. As more Americans are getting vaccinated against COVID-19 and states begin loosening guidelines for public gatherings, the outlook for these stocks is decidedly mixed. On the one hand, some of the largest of these stocks (Amazon, Alibaba and Home Depot, for example) performed well in 2020 but have seen share prices fall slightly this year as shopping from home is expected to give way to shopping in brick-and-mortar stores.
On the other hand, people’s shopping habits may have changed at least semi-permanently. Ordering goods and getting them delivered to your door in as little as a few hours has its attractions. Even big restaurant operators (McDonald’s, Starbucks, Chipotle Mexican Grill, for example) have seen share prices decline this year, primarily due to uncertainty about how quickly and if customers will return to the stores. Delivery services helped during the pandemic, but they also chew up profits.
Discretionary stocks are a large and varied group of industries encompassing everything from leisure and travel services to automakers. By the way, all three of those industries have performed well so far this year.
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