Investing

Earnings Previews: Canoo, ExOne, Fisker, Tencent Music

Paul Ausick

Published: May 14, 2021 12:05 pm

Last Updated: June 11, 2021 8:27 am

The number of March quarter earnings reports we expect to see this week is right around 300. Traditional retailers will be out in force with the first-quarter results, along with an assortment including electric vehicles, online gaming and a sprinkling of tech companies.

There were no reports of note on Friday, so our most recent preview covered Coinbase (which reported Thursday afternoon) and Clover Health and Lordstown Motors, both of which report results before markets open Monday morning.
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In this preview, we cover four companies reporting results after markets close on Monday.

Canoo

Electric vehicle (EV) maker Canoo Inc. (NASDAQ: GOEV) will be reporting quarterly results Monday afternoon. After coming public in late December, the stock now trades down about 60%. The big dip came in late March after the company cut its ties with Hyundai to build Canoo’s EV. Hyundai and Kia were supposed to use Canoo’s EV platform to build vehicles under their own brands, but that deal is also dead now. This wouldn’t have had such a damaging effect on the share price if Canoo had had a Plan B in place. Alas, such a plan has yet to surface.

Canoo has not attracted much analyst coverage, with three firms split three ways among Buy, Hold and Sell. The average price target is $12, and with the stock trading at around $7.50, the upside potential is 60%. At the high target of $18, the upside potential is 153%.

Analysts expect a loss per share of $0.23 in the first quarter on sales of $3 million. For the fiscal year, the loss per share is forecast at $1.04 on sales of $85 million.

Canoo’s enterprise value-to-sales (EV/S) multiple is about 470 for 2021. The stock’s post-IPO range is $6.51 to $24.90, and the average daily trading volume is 5.3 million shares.

ExOne

3D printing company ExOne Co. (NASDAQ: XONE) added about 27% to its share price last year, including a spike taking the stock up nearly 120% in early September. At the end of December, the stock’s top holder with 2.37 million shares (nearly 11% of shares outstanding) was Cathie Wood’s ARK Invest. The investment management firm has since pared that back to a total holding of around 2.22 million, even though the stock has doubled since January. Shares spiked again in early February to show a gain of almost 580% in just over a month.

Analysts are slightly bullish on the stock, with three of five rating ExOne as a Buy. At a current price of around $19.40, the average price target of $44.25 implies upside potential of 128%. At the high target of $50, the implied upside is 158%.

The consensus first-quarter estimates call for a loss per share of $0.21 on sales of $14.31 million. For the fiscal year, sales are forecast to rise by 22% to $71.93 million, while the loss is forecast to narrow from $0.81 last year to $0.70 in 2021.

ExOne is not expected to post a profit in either 2021 or 2022. The stock trades at a multiple of 5.8 times expected 2021 EV/S and 4.7 times estimated 2022 EV/S. The 52-week range is $7.20 to $66.48. ExOne’s average daily trading volume is about 1.1 million shares.

EV maker Fisker Inc. (NYSE: FSR) on Thursday signed an agreement with Taiwan’s Foxconn to build the company’s first vehicle in a U.S. factory for a projected production start in the fourth quarter of 2023. After spiking to a share price jump of 180% in late February, the company’s stock had dipped by nearly 2% its price at its October IPO. The announced deal with Foxconn sent the stock up by more than 6.5% Friday. Fisker’s extended timetable was the main reason Goldman Sachs last month lowered its rating on the stock to Sell.
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Not all analysts agree with Goldman. Five of nine firms covering the stock rate the shares a Buy or Strong Buy. At around $10.50 a share, the stock’s upside potential at the average price target of $24.88 is 137%. At the high target of $40, the implied share price gain is a staggering 280%.

Fisker is not expected to post any revenue in 2021, and its expected loss per share is $0.83 per share for the year. If the company delivers its first EV in the fourth quarter of 2022, as planned, revenue for the year is forecast at $425.2 million.

Unsurprisingly, Fisker is not expected to post a profit in either 2021 or 2022. The stock trades at a multiple of 5.2 times expected 2022 EV/S. The stock’s 52-week range is $8.70 to $31.96, and the average daily trading volume is about 19.4 million shares.

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Tencent Music

Tencent Music Entertainment Group Inc. (NYSE: TME) is China’s largest online music entertainment platform and a subsidiary of Tencent Holdings. In its nearly two-and-a-half years of existence, the company’s stock has gained about 8.6%, including a spike that saw the shares trading up by about 120% in late March.

Then the Chinese government began investigating Tencent, Alibaba and Meituan, three of the country’s largest online firms, for antitrust violations. Alibaba has been slapped with a $2.8 billion fine, and Tencent Holding is expected to get whacked with a fine of around $1.6 billion.

Regardless of Tencent Music’s current troubles, analysts are bullish on the stock, with 18 of 24 ratings the shares a Buy or Strong Buy. At a price of around $15.25, the stock shows potential upside of 84% to an average price target of $28.10. At the high target of $38.36, the implied upside is more than 150%.

Analysts expect the company to post earnings per share (EPS) of $0.71 on sales of $1.2 billion. For the full year, the consensus estimates call for revenue of $5.44 billion (up 21.3% year over year) and EPS of $3.16 (up 6.6%).

The stock trades at a multiple of 4.8 times expected 2021 EPS and 3.6 times estimated 2022 earnings. Tencent Music’s 52-week trading range is $11.59 to $32.35, and the average daily trading volume is 35.2 million shares. The company does not pay a dividend.