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Earnings Previews: Activision, Lyft, Occidental, Skillz
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This week will bring June-quarter results from several oil and gas exploration and production companies, along with some big health care firms, media companies and utilities. We already have previewed three stocks that will report results after markets close Monday: NXP Semiconductors, Take-Two Interactive and Transocean.
Alibaba, Nikola and Under Armour will post quarterly earnings before Tuesday’s opening bell.
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Here are previews of four companies set to report quarterly results after markets close on Tuesday.
Activision-Blizzard
Video game maker Activision-Blizzard Inc. (NASDAQ: ATVI) has managed to post a share price gain of just 1.4% over the course of the past 12 months. For the year to date, the stock is down nearly 10%, including a dive of more than 9% since a lawsuit was filed against the company alleging sexual harassment, unequal pay and retaliation against female employees. That acrimonious overhang just adds to the company’s weak performance over the past year.
Analysts either have ignored the recent charges against the company or are waiting to see what Tuesday afternoon’s results will be. Of 31 surveyed analysts covering the company, 28 rate the stock a Buy or Strong Buy and the other three have a Hold rating. At a recent price of around $83.50, the stock’s implied upside to a median price target of $119.50 is 43%. At the high price target of $126, the upside potential is 51%.
Second-quarter revenue is forecast to slip by nearly 9% sequentially to $1.89 billion. That’s an increase of more than 22% year over year. Earnings per share (EPS) are expected to come in at $0.74, down 10% sequential and down about 23% year over year. For the full fiscal year, current forecasts call for EPS of $3.75, up 7.1%, and revenue of $8.76 billion, up 4%.
Activision stock trades at 22.3 times expected 2021 EPS, 19.1 times estimated 2022 earnings and 17.7 times estimated 2023 earnings. The stock’s 52-week range is $71.19 to $104.53. The company pays an annual dividend of $0.47 (yield of 0.56%).
Lyft
Ride-hailing provider Lyft Inc. (NASDAQ: LYFT) has posted a share price gain of about 96% over the past 12 months. So far in 2021, the stock is up nearly 17%. The company, and main rival Uber, are seeing rising demand from riders, but are having difficulty filling the demand for drivers.
Surging coronavirus infections may have sliced into second-quarter results, but it will be what the company sees going forward that could determine how well quarterly results are received. Lyft has said that it will be profitable by the third quarter. Guidance must endorse that promise. And lack of guidance will be interpreted as backing away from that promised profitability.
Sentiment on the company tends to be bullish, with 23 of 38 analysts putting Buy or Strong Buy ratings on the stock. Another 13 rate the shares at Hold. At a price of around $57.70, the stock’s implied upside based on a median price target of $72 is about 25%. At the high target of $86, upside potential on the stock is 49%.
Second-quarter revenue is expected to reach $699.3 million, which would be up nearly 15% sequentially and 106% year over year. Lyft is expected to post a per-share loss of $0.25 in the quarter, 10 cents better than the first-quarter loss and $0.61 better than the year-ago loss. For the full year, analysts are forecasting a per-share loss of $0.66 (including a fourth-quarter profit of four cents) and revenue of $3.14 billion, or a third higher year over year.
Lyft stock trades at 100.4 times estimated 2022 earnings and 34.2 times estimated 2023 earnings. The stock’s 52-week range is $21.34 to $68.28. The company does not pay a dividend.
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Occidental Petroleum
Occidental Petroleum Corp. (NYSE: OXY) has posted a 12-month share price gain of about 69%. In 2021, the stock has added about 53% to its value. Since late October, rising crude prices have boosted Oxy’s share price by nearly 200%. Sounds great, but in this case, it means that Oxy has recovered just about half the value it lost after beating out Chevron with a $38 billion bid for Anadarko in May of 2019.
Analysts are mixed on the stock, with half of the 26 covering the stock rating the shares at Hold. Another nine rate the stock a Buy or Strong Buy. At a price of around $26.30, the implied upside based on a median price target of $33.50, is about 27%. At the high target of $44, the upside potential is about 67%.
Second-quarter revenue is forecast to rise sequentially by nearly 7% to $5.85 billion. Year over year, revenue is expected to increase by 96%. EPS are forecast at $0.03 compared to a loss per share of $0.15 in the first quarter and $1.76 in the year-ago second quarter. For the full fiscal year, analysts expect Oxy to report EPS of $0.04, compared to a loss of $3.91 per share last year. Revenue is currently forecast to rise by nearly 43% to $23.24 billion.
Oxy is not expected to post a profit in either 2022 or 2023. The stock’s 52-week range is $8.52 to $33.50. The company pays an annual dividend of $0.04 (yield of 0.15%).
24/7 Wall St.Skillz
Mobile games platform Skillz Inc. (NYSE: SKLZ) has seen its share price drop about 38% since its mid-December initial public offering. Shares nearly doubled by early February, but investor enthusiasm did not hold. The stock has not traded above the IPO price for nearly two months, and the recently announced redemption of warrants held by certain investors did not help. The warrants have an exercise price of $11.50 and any unexercised warrants still held after August 16 will be redeemed by Skillz at $0.01 per warrant.
Analyst coverage of the company is fairly light, with just seven ratings, of which three are Hold and four are Buy. At a share price of around $14.10, the implied gain based on a median price target of $23 is 63%. At the high target of $34, the upside potential on the shares is around 140%.
Revenue is forecast to rise sequentially by 6.1% in the second quarter to $97.7 million. That would be an increase of about 62% year over year. Analysts expect a loss per share of $0.11, compared to a loss of $0.15 in the first quarter and a loss of $3.08 per share in the same quarter last year. For the full year, Skillz is expected to post a per-share loss of $0.47, slightly worse than the $0.42 per-share loss in 2020. Revenue is expected to rise about 65% for the year to $379.33 million.
The company is not expected to post any earnings in 2021, 2022 or 2023. The stock’s 52-week range is $10.26 to $46.30. Skillz does not pay a dividend.
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