Investing

Earnings Previews: Activision Blizzard, Devon Energy, Invitae, Lyft, Skillz

Paul Ausick

Published: May 3, 2021 11:31 am

More than 1,500 publicly traded companies are scheduled to report March quarter earnings this week, with heavy representation from energy exploration and production companies. Other top brands like Google, Ferrari, Pfizer, and T-Mobile are on deck as well.

Looking at companies reporting earnings following Monday’s closing bell and before markets open again Tuesday morning, we have previewed Ballard Power, CVS, Pfizer, SolarEdge and Under Armour.

The five companies previewed in this story are scheduled to report earnings after Tuesday’s closing bell.

Activision Blizzard

Game developer Activision Blizzard Inc. (NASDAQ: ATVI) posted a share price increase of 57.3% last year, but the price has dipped by less than 1% so far in 2021. Analysts at Jefferies recently maintained their Buy rating on the stock and a price target of $120. The medium-term future may be even brighter, according to Jefferies: “For the first time in a decade, we expect to see several consecutive years of top line growth and an even faster bottom line rate.”

Analysts, in general, are upbeat on the stock, with 20 of 27 rating the shares a Buy or Strong Buy. At a recent trading price of around $91.70, the stock’s upside potential is 23.6% at a consensus price target of $113.29 and 37.4% at a high target of $126.

Analysts expect Activision to post March quarter earnings per share (EPS) of $0.70, which is up more than 20% year over year, on a sales hike of 16.9% to $1.78 billion. For the full 2021 fiscal year, the consensus forecast calls for EPS of $3.65 (up 5.2%) on sales of $8.55 billion, or 1.5% higher.

At the current trading price, Activision trades at 24.9 times expected 2021 EPS, 21.3 times estimated 2022 earnings and 20.0 times estimated 2023 earnings. The stock’s 52-week trading range is $65.23 to $104.53, and the company pays an annual dividend of $0.47 (yield of 0.52%). Average daily trading volume is 5.8 million shares.

Devon Energy

One of the country’s 10 largest independent oil and gas producers, Devon Energy Inc. (NYSE: DVN) updated its first-quarter guidance in late March, noting that it expected to take a hit to production of about 8% due to the impact of the freezing weather in Texas. Devon also will not include the effect of an asset sale nor the effects of an acquisition that occurred prior to the January 7 closing. Expenses were forecast to rise by 5% as well.

Analysts had mostly priced all this in, along with higher oil and gas prices, of course. Of 32 brokerages covering the firm, 23 rated the stock a Buy or Strong Buy. The stock trades at around $23.35, about 32% below the consensus price target of $30.77 and 88% below the high target of $44.

Consensus estimates call for EPS of $0.33 and revenue of $2.21 billion, up about 61% and 5.8%, respectively, compared to the first quarter of last year. For the full year, Devon is forecast to post EPS of $1.94, sharply higher than the loss per share of $0.09 in 2020.

Devon’s stock trades at 12.2 times expected 2021 EPS, 9.0 times estimated 2022 earnings and 8.4 times estimated 2023 earnings. The stock’s 52-week range is $7.73 to $26.13. Devon pays an annual dividend of $0.63 (yield of 2.62%). Average daily trading volume is 11.6 million shares.

Invitae Corp. (NYSE: NVTA) is a medical genetics company that integrates genetic information into clinical testing. Two ARK Invest exchange-traded funds hold a total of some 20 million shares in the company, which saw its share price rise by 159% last year. Shares have dropped about 19% so far in 2021.

Analysts have been lukewarm on the shares, with three of eight firms rating the stock a Buy or Strong Buy. At around $34.00 a share, the stock’s upside potential is 57% at a consensus price target of $53.50 and 91% at a high target of $65.

For the March quarter, analysts expect Invitae to post a loss per share of $0.59, somewhat better than the per-share loss of $0.80 in the same quarter last year. Revenue is expected to jump nearly 71% to $101.46 million. For the full year, the loss per share is forecast at $2.20, down from a loss of $2.78 a year ago. Revenue is forecast to rise by 65.7% to $463.21 million.

Invitae is not expected to post a profit this year or in either of the next two years. As a multiple of sales, however, the stock trades at 14.7 times expected 2021 sales, 10.2 times estimated 2022 sales and 7.4 times estimated 2023 sales. The stock’s 52-week range is $14.84 to $61.59. Invitae does not pay a dividend, and average daily trading volume is 4.3 million shares.

Lyft

Ride-sharing firm Lyft Inc. (NASDAQ: LYFT) eked out a 14% share price gain last year after falling more than 60% in late March. The defeat of a California proposition that would have had Lyft and other gig employers treat workers like regular employees rather than contractors lifted a major overhang on the share price. Unlike rival Uber, Lyft did not enter the delivery business last year.

Analysts are mostly upbeat on the company, with 24 of 39 firms rating the shares a Buy or Strong Buy. At around $57.00, the stock’s upside potential is about 18.6% based on the consensus price target of $67.60 and 54% based on the high target of $88.

For the March quarter, analysts expect a loss per share of $0.53, worse than the per-share loss of $0.32 last year. Revenue is also forecast to decrease by 41.6% year over year. For the full year, Lyft is expected to post a per-share loss of $1.10, considerably better than the loss of $2.66 per share a year ago. Revenue is forecast to rise 28.6% to $3.04 billion.

Lyft stock trades at 276.5 times estimated 2022 earnings and 56.8 times estimated 2023 earnings. The stock’s 52-week range is $21.34 to $68.28. Lyft does not pay a dividend, and averaged daily trading volume is 7.2 million shares.

Skillz

Skillz Inc. (NYSE: SKLZ) develops and operates an e-sports platform to host and connect mobile games and mobile e-sports tournaments both in the United States and internationally. Since its IPO in mid-December, shares reached a high of nearly double the IPO price but have since slipped back to trade at around 23% below the IPO price.

When Jefferies initiated coverage on the stock last week, Skillz was rated a Hold with a price target of $17. That’s well below the consensus price target of $28.71. At a price of around $16.90, upside potential to the consensus target is nearly 70%. At the high target of $34, upside potential is 101%. Out of eight brokerages covering the company, five have assigned a Buy rating.

For the company’s first fiscal quarter, analysts expect a loss per share of $0.10 on sales of $78.58 million, below the company’s March 25 outlook for $80 million. Skillz also forecasts an adjusted EBITDA loss $37 million, somewhat worse than the analysts’ expectation of $32 million

Skillz is not expected to post a profit this year or in either of the next two years. The stock’s post-IPO trading range is $9.83 to 46.30. The company does not pay a dividend. Average daily trading volume is 18.7 million shares.