Investing

Earnings Previews: Coinbase, Nio, Plug Power, 23andMe

Paul Ausick

Published: November 8, 2021 12:47 pm

Nearly 500 companies are reporting quarterly earnings this week. The one in our watch list for Monday morning, Coty, beat estimates on both the top and bottom lines.

We already have previewed four reports due out after markets close Monday (PayPal, Roblox, SmileDirectClub and Virgin Galactic) and three more set to report earnings first thing on Tuesday (BioNTech, Palantir and Workhorse).

Here are previews of four reports due out after Tuesday’s closing bell or before trading begins Wednesday morning.

Coinbase

Since its IPO in mid-April, Coinbase Global Inc. (NASDAQ: COIN) have added about 6% to its share price. The company came public in a direct listing that went out at $381 per share, soared to $429.54, and closed the day at $328.28. Coinbase reports third-quarter results after markets close Tuesday.

The largest institutional holder of Coinbase stock is Cathie Wood’s ARK Invest, which has amassed slightly more than 6 million shares, valued at $1.88 billion, in three of its exchange-traded funds (ETFs). The company recently branched out into non-fungible token (NFTs) but remains concerned about expected regulatory measures.

Of 22 analysts covering the stock, 15 have the shares rated at Buy or Strong Buy, and another five rate the stock at Hold. At a recent price of around $350, the stock has outrun its median price target of $348.50. At the high target of $500, the upside potential at the current price is about 43%.

For the third quarter, the current consensus calls for revenue of $1.58 billion, which would be down 29% sequentially. Adjusted earnings per share (EPS) are forecast at $1.72, down 75% sequentially. Data for last year is unavailable. For the full year, analysts expect EPS of $7.74 on sales of $6.58 billion.

The stock trades at 26.2 times expected 2021 EPS. Based on estimated earnings for 2022 and 2023, multiples are 45.5 and 40.5 times estimated earnings, respectively. The stock trades in a post-IPO range of $208 to $429.54. Coinbase does not pay a dividend.

Nio

China-based EV maker Nio Inc. (NYSE: NIO) has added about 5% to its share price over the past 12 months. At one point in early February, the stock was up 50% but later dropped to 25% below the year-ago share price. It bounced higher in late June and fell again in early October.

Rising competition for EVs, especially recently from Lucid, has cooled enthusiasm for Nio, as did a weak report on October deliveries. What the company has to say about that when it reports earnings Tuesday afternoon could have a big impact on the share price.

There are 22 analyst ratings on Nio’s stock, and 18 of those are Buy or Strong Buy. At a price of around $43.80, the upside potential based on a median price target of $59.38 is about 35.6%. At the high target of $92.01, the upside potential is 110%.

For the third quarter, the consensus estimates call for revenue of $1.47 billion, up 12.4% sequentially and 120% year over year. Nio is expected to post an adjusted loss per share of $0.05, worse than the $0.03 per-share loss in the prior quarter and better than the year-ago loss of $0.12 per share. For the full year, the company is expected to report a per-share loss of $0.42, better than the $0.66 loss last year, on sales of $5.67 billion, up about 128%.

Analysts estimate that Nio will trade at 116.5 times earnings in 2023. Until then, it will not post a profit. The enterprise value-to-sales multiple is expected to be 12.0 in 2021 and 7.2 in 2022. The stock’s 52-week range is $30.71 to $66.99. The company does not pay a dividend.

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After rising to a 12-month high in late January during the meme-stock rocket ride that took the stock up more than 280%, hydrogen fuel cell maker Plug Power Inc. (NASDAQ: PLUG) is trading about 120% higher since November of last year. Since early October, the shares have added about 70%, largely on the since-realized hope of a U.S. infrastructure bill that includes funds for building out the country’s hydrogen availability. Combined with raised guidance, the company (and its investors) have high hopes.

Of 25 analysts covering the stock, 18 rate the shares a Buy or Strong Buy and another six have a Hold rating. At a price of around $41.30, the implied gain based on a median price target of $42 is 1.7%. At the high target of $78, the implied gain is 89%.

Third-quarter revenue is forecast at $144.18 million, up nearly 16% sequentially and about 35% year over year. Analysts are forecasting an adjusted loss per share of $0.08, better than the $0.18 loss per share in the prior quarter but worse than the year-ago loss of $0.04. For the full year, Plug Power is expected to post a loss per share of $0.43, compared to a loss last year of $0.26, on sales of $494.14 million, up from a negative $100.47 million in the prior year. The negative sales were due to accelerated vesting of certain warrants owned by Amazon.com NV Investment Holdings.

Plug Power is not expected to post a profit in 2021, 2022 or 2023. The enterprise value-to-sales multiple for 2021 is forecast at 36.9. For 2022 and 2023, the multiples are expected to be 22.5 and 14.8, respectively. The stock’s 52-week range is $18.47 to $75.49 and Plug Power does not pay a dividend.

23andMe

Home DNA test kit maker 23andMe Holding Co. (NASDAQ: ME) came public in late November of last year. Shares jumped 20% on the first day of trading and had soared to a gain of around 80% by early February. As of Monday morning, the stock was up more than 39% since the IPO. The company reports results Wednesday morning.

The company is planning to use the genetic data it has collected (and will be collecting) to create medicines based on that data by linking diseases with particular genes. As Bloomberg pointed out in a story last week, the company is following a proven business plan:”collect all the data, derive whatever insights you can, and find an adjacent line of business with the potential to yield much bigger profits.” That has been Google’s path to a $2 trillion valuation.

Only two analysts cover the stock. One has a Buy rating while the other has a Strong Buy rating. At a price of $13.60 (up 5.7% in Monday trading), the stock has outrun its median price target of $12.50 and its high target of $13.

For the company’s second-quarter of fiscal 2022, analysts expect sales of $54.3 million, down about 2.6% sequentially, and a loss per share of $0.15. For the full year, the adjusted loss per share is expected to be $0.58 on sales of $257.29 million. Prior data is unavailable.

23andMe is not expected to post a profit in 2022, 2023 or 2024. The enterprise value-to-sales multiple is expected to be 19.9 in 2022. Based on estimated earnings for 2023 and 2024, multiples are 16.2 and 14.1, respectively. The stock trades in a post-IPO range of $208 to $429.54. The stock’s post-IPO range is $7.01 to $18.16, and the company does not pay a dividend.