Of the three companies we previewed earlier this week that reported quarterly results after markets closed Thursday, Applied Materials missed estimates on both revenue and profits while Workday and Ross Stores beat on both. Shoe retailer Foot Locker beat both estimates as well Friday morning.
There are no earnings reports due out after markets close Friday and just one of note, Meten, on tap for Monday morning. While not a well-known stock, Meten has offered educational and tutoring services in China for more than a decade. The company was slammed twice this year by government policy changes and has pivoted to a blockchain/crypto-mining effort. More than 94 million shares of Meten stock are traded every day.
The Thanksgiving holiday essentially means next week has just three days. However, there are several earnings of note in those days. Here’s a preview of three companies reporting late Monday or before markets open on Tuesday.
Medtronic
Medical device maker Medtronic PLC (NYSE: MDT) has posted a share price gain of around 9% over the past 12 months. That total reflects a drop of 12.4% since early September. Demand for surgeries picked up in the prior quarter but dipped again in the third following a surge of coronavirus infections caused by the Delta variant. Fortunately, Medtronic’s other businesses are expected to pick up the slack.
Analysts are bullish on the stock, with 21 of 26 ratings of Buy or Strong Buy and the other five ratings are all Hold. At a recent price of around $117.10, the upside potential based on a median price target of $146 is nearly 25%. At the high price target of $155, the upside potential is 32%.
When Medtronic reports second-quarter fiscal 2022 results before markets open Tuesday, analysts expect the company to report revenue of $7.98 billion, which would be essentially flat sequentially but up 4.3% year over year. Adjusted earnings per share (EPS) are forecast at $1.29, down 8.6% sequentially and up about 21% year over year. Current estimates for fiscal 2022 call for EPS of $5.71, up 28.5%, on sales of $32.97 billion, or 9.5% higher.
Medtronic’s share price to earnings multiple for fiscal 2022 is 20.5. For fiscal 2023, the multiple to estimated EPS of $6.29 is 18.6, and for 2024, it is 17.1 times estimated EPS of $6.84. The stock’s 52-week range is $109.57 to $135.89. Medtronic pays an annual dividend of $2.52 (yield of 2.14%). Total shareholder return for the past year is 7.5%.
Xpeng
Since its initial public offering in late August of last year, electric vehicle maker Xpeng Inc. (NYSE: XPEV) has outperformed China’s other two major U.S.-traded EV makers. Xpeng’s stock is up by nearly 11% since its IPO, while both Li Auto and Nio trade about 15% lower in the same period. Shanghai-based Nio gets more attention from retail investors and, as a result, about four times more shares than Xpeng’s 9 million. Xpeng is due to reveal its new electric SUV Friday at an auto show in its home city of Guangzhou.
All 14 analysts covering the stock have a Buy (eight) or Strong Buy (six) rating on the stock. At a share price of around $46.80, the upside potential based on a median price target of $56.55 is almost 21%. At the high price target of $87.12, the upside potential is 86%.
The automaker reports third-quarter results before U.S. markets open on Tuesday. Third-quarter revenue is forecast at $820.86 million, up 41% sequentially and down from $1.99 billion a year ago. The company’s adjusted loss per share is forecast at $0.33, much improved over the prior quarter’s loss of $1.38. A year ago, Xpeng reported a loss per share of $2.16 in the third quarter. For full fiscal 2021, the company is expected to post a loss per share of $0.86, compared with 2020’s loss of $1.11 per share, on sales of $3.00 billion, up 235%.
Xpeng is not expected to report a profit in 2021, 2022 or 2023. The stock’s price-to-enterprise value multiple this year is expected to be 12.1. For 2022, the multiple is estimated at 6.8 and, for 2023, the estimate is 4.5. The stock’s 52-week range is $22.73 to $74.49. Xpeng does not pay a dividend and total shareholder return for the past year is negative 2.4%.
Zoom Video
Since the beginning of last year, shares of Zoom Video Communications Inc. (NASDAQ: ZM) have added about 275% to their price. The not-so-good news is that as of mid-October of 2020, the shares were up about 735%. Just as was the case with Peloton, Zoom’s stock began to decline as the economy began returning to normal late last year.
Zoom is not expected to take the same hammering Peloton did when it reported results a couple of weeks ago, but analysts and investors are going to be on the lookout for better margins and customers for Zoom’s latest products. Zoom will report third-quarter results after markets close Monday.
Analysts are showing mixed sentiment on the stock, with 11 Hold ratings, 11 Buy ratings and four Strong Buy ratings out of a total of 27 brokerages covering the shares. At a share price of around $259.30, the upside potential based on a median price target of $350 is about 35%. At the high price target of $469, the upside potential is almost 81%.
Third-quarter revenue is forecast at $1.02 billion, flat with the prior quarter and up 31% year over year. Adjusted EPS are pegged at $1.10, down 19.5% sequentially and 10% higher year over year. For the full fiscal year, current estimates call for EPS of $4.83, up 44.5%, on sales of $4.01 billion, up 51.4%.
Zoom’s share price to earnings multiple for fiscal 2021 is 17.9. For fiscal 2022, the multiple to estimated EPS of $4.72 is 15.2, and for 2024, it is 12.9 times estimated EPS of $5.57. The stock’s 52-week range is $245.16 to $486.83. Zoom does not pay a dividend. Total shareholder return for the past year is negative 37.6%.
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