More than 1,500 companies are reporting quarterly earnings this week. Of five in our watch list for Tuesday afternoon, three (Albemarle, MGM Resorts and Qualcomm) beat on both revenue and profits while one (Skillz) missed on both and the fifth (Fisker) had a smaller than expected loss but no reported revenue. Three companies we previewed that reported early Wednesday (Barrick Gold, Moderna and Nikola) posted mixed results.
Wednesday, we previewed seven companies set to report results after markets close Thursday. First, we looked at expectations for Airbnb, Peloton, Square and Uber. Then we previewed reports due from Cloudflare, Livent and Occidental Petroleum.
Here, we preview two companies set to report quarterly results Friday morning and one on tap before markets open on Monday. No earnings are scheduled for release Friday afternoon.
Canopy Growth
Marijuana grower and cannabis products maker Canopy Growth Corp. (NASDAQ: CGC) has seen its share price drop by about 33% over the past 12 months. Canopy Growth is the largest publicly traded cannabis company by market cap, but just barely, with a valuation of $5.28 billion. Number two Tilray’s market cap is $5.11 billion.
Canopy Growth’s one-year share price decline includes a spike that began in late December and added about 160% to the share price by mid-February. The stock has dropped 74% since that February peak. That’s also how far the stock is down over the past three years. Nothing will bolster marijuana stocks until U.S. regulators remove the dangerous drug label stuck on cannabis decades ago. The company reports results before markets open Friday.
It’s that hope for a change in U.S. law that keeps analysts from dumping these stocks. In Canopy Growth’s case, 14 of 19 analysts have a Hold rating on the stock, three have a Buy rating and two more rate the shares at Sell or Strong Sell. At the recent price of around $13.50, the upside potential to the median price target of $18.92 is almost 48%. At the high price target of $31.03, the upside potential is 130%.
Analysts estimate that Canopy Growth’s second-quarter fiscal 2022 revenue will come in at $117.55 million, which would be up 7% sequentially and 16.7% higher year over year. The consensus estimate calls for an adjusted loss per share of $0.15, down sharply from adjusted earnings per share (EPS) of $0.98 in the prior quarter and from EPS of $0.23 a year ago. For the full fiscal year, analysts expect a loss of $0.06 per share, significantly better than last year’s loss of $2.51 per share. Full-year revenue is forecast at $544.34 million, which would be nearly 13% higher.
Canopy Growth is not expected to post a profit in 2022, 2023 or 2024. The company’s enterprise value-to-sales multiple for 2022 is 9.1, and it is 6.8 for 2023 and 4.8 for 2024. The stock’s 52-week range is $12.45 to $56.50. Canopy Growth does not pay a dividend.
Coty
Beauty products maker Coty Inc. (NYSE: COTY) has seen its stock price rise by 188% over the past 12 months. The company reports quarterly results before markets open Monday.
Last month, the company agreed to sell 9% of its stake in Wella to KKR for $426.5 million, an amount representing a 50% increase in valuation since Coty sold 60% of Wella to KKR in December. As a condition of the sale, KKR will redeem about half of its remaining convertible preferred shares in Coty, reducing its stake in the company to just over 30%. Coty expects to realize approximately $26 million in annual dividend cash savings as a result of the transaction.
Of 14 analysts covering the stock, seven have a Hold rating and five more rate the shares at Buy or Strong Buy. At a price of around $9.20 per share, the implied gain based on a median price target of $10.50 is 14%. At the high price target of $15, the upside potential is 63%.
For Coty’s first quarter of fiscal 2022, analysts expect the company to report revenue of $1.67 billion, up 28.3% sequentially and 21.4% year over year. Adjusted EPS are expected to come in at $0.02, up from a loss per share of $0.09 in the year-ago quarter. For the full year, analysts currently anticipate EPS of $0.16, down 21%, on sales of $5.3 billion, up 14.5%.
Shares trade at 55.0 times expected 2022 EPS, 29.5 times estimated 2023 earnings and 23.2 times estimated 2024 earnings. The stock’s 52-week range is $3.05 to $10.49, and Coty does not pay a dividend.
DraftKings
Anyone who watched the recent World Series couldn’t help but notice the ads for online sports betting. Betting on sports is a huge opportunity, and there are lots of players seeking a bigger piece of the action.
Late last month, DraftKings Inc. (NASDAQ: DKNG) withdrew its $22.4 billion offer to acquire U.K.-based Entain after the offer had shaved almost 28% from DraftKings’ share price. Prior to that haircut, DraftKings stock was up by about 70% since this date last year. DraftKings’ 12-month share price gain stands at about 25% currently.
Competitor MGM Resorts reported a 140% year-over-year quarterly revenue gain Wednesday afternoon and beat estimates on both the top and bottom lines. DraftKings reports first thing on Friday.
DraftKings stock is included in three of Cathie Wood’s ARK Invest exchange-traded funds. They have raised their stake in the company by more than 2 million shares to around 16.1 million since the end of June.
Analysts are mostly bullish on the stock, with 18 of 29 giving the shares a Buy or Strong Buy rating. Another 10 have a Hold rating on the stock. At a price of around $46.60, the upside potential based on a median price target of $73 is 56.6%. At the high target of $105, the upside potential is 125%.
Third-quarter revenue is forecast at $237.9 million, down 20% sequentially but up about 79% year over year. Analysts are forecasting a loss per share of $0.91 in the quarter, larger than the loss of $0.76 per share in the prior quarter and down from a loss of $0.98 per share last year. For the full year, the current estimate calls for a loss of $2.40 per share, compared with the year-ago loss of $2.80. Revenue is forecast to rise by 110% to $1.29 billion.
DraftKings is not expected to post a profit in 2021, 2022 or 2023. The company’s enterprise value-to-sales multiple for 2021 is 13.9, and it is 10.0 for 2023 and 7.3 for 2024. The stock’s 52-week range is $38.44 to $74.38, and DraftKings does not pay a dividend.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
