Investing

Earnings Previews: Chipotle, Enphase, Global Foundries, Lyft, Peloton

Paul Ausick

Published: February 7, 2022 11:44 am

Merger Monday was living up to its name, as Frontier Airlines has announced a merger with Spirit Airlines aimed at creating the lowest-cost U.S. carrier. The even bigger news was a bidding war for Peloton. As for earnings, both ON Semiconductor and Tyson Foods beat estimates and traded up more than 6% early Monday.

Three notable earnings reports are due out after markets close Monday: Amgen, Simon Property and Tenet Healthcare. Three more, BP, Pfizer and Sysco, are due before markets open on Tuesday.

Here is a look at five firms scheduled to report results after Tuesday’s closing bell.

Chipotle Mexican Grill

Shares of fast-food chain Chipotle Mexican Grill Inc. (NYSE: CMG) have traded down by about 1% over the past 12 months. Since reaching a high in late September, the shares have dropped by almost 24%. The company has nearly 3,000 stores worldwide and believes that North America alone can support a total of 6,000 stores on its own. That is an awful lot of potential growth. At the same time, Chipotle wants customers to use its digital ordering. Can it achieve both simultaneously?

Of 32 analysts following the stock, 23 have given the shares a Buy or Strong Buy rating and the other nine have rated the stock at Hold. At a recent share price of around $1,483.40, the stock’s upside potential based on a median price target of $1,925 is nearly 30%. At the high price target of $2,600, the implied upside is almost 75%.

Analysts expect the restaurant chain to post fourth-quarter revenue of $1.96 billion, which would be up 0.3% sequentially and 21.7% higher year over year. Adjusted earnings per share (EPS) are expected to come in at $5.29, down by 24.6% sequentially but up 52% year over year. For the full 2021 fiscal year, analysts are looking from EPS of $25.13, up 134% year over year, with revenue 26.1% higher to $7.55 billion.

Chipotle’s stock trades at around 59 times expected 2021 EPS, 45.2 times estimated 2022 earnings of $32.82 and 35.3 times estimated 2023 earnings of $42.02. The 52-week range is $1,256.27 to $1,958.55. The company does not pay a dividend. Total shareholder return for the past 12 months was negative 1.56%.

Enphase

Solar energy component maker Enphase Energy Inc. (NASDAQ: ENPH) has seen its share price fall by 28% over the past year. The U.S. Energy Information Administration (EIA) currently estimates demand for new solar capacity to rise by more than 38% year over year to 21.5 gigawatts. Rooftop solar capacity could represent nearly 40% of that total. Enphase’s microinverters and battery storage products should see improved demand. If federal funds are committed to solar projects, shares are likely to soar.

Brokerages are bullish on the stock, with 18 of 27 analysts giving the stock a Buy or Strong Buy rating and the rest rating it at Hold. At a share price of around $141.20, the implied gain based on a median price target of $221.50 is about 57%. At the high target of $313, the upside potential is 121.7%.

For the fourth quarter, analysts have forecast revenue of $399.62 million, up 13.7% sequentially and about 51.0% year over year. Adjusted EPS are forecast at $0.59, down a penny sequentially and up 15.7% year over year. For fiscal 2021, analysts estimate EPS at $2.26, up 64.9%, on revenue of 1.37 billion, up almost 77%.

Enphase’s shares trade at 64.0 times expected 2021 EPS, 47.5 times estimated 2022 earnings of $3.04 and 36.5 times estimated 2023 earnings of $3.95 per share. The stock’s 52-week range is $108.88 to $282.46. Enphase does not pay a dividend. Total shareholder return for the past year was negative 26.9%.

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Globalfoundries

Chipmaker Globalfoundries Inc. (NASDAQ: GFS) came public in late October and shares soared more than 50%, before dropping by more than 35% and then bouncing back to a post-IPO share price gain of about 17%. Over the same period, the SOX index added just 1%. The company has a deal with Ford to continue making the older, feature-rich node chips that the automaker has been sourcing from Taiwan Semiconductor.

Analysts are mostly bullish on the stock, with 12 of 15 giving the shares a rating of Buy or Strong Buy and another two with Hold ratings. At a share price of around $54.20, the upside potential based on a median price target of $80 is 47.6%. At the high price target of $100, the upside potential is 84.5%.

For the company’s first quarter of fiscal 2022, analysts are forecasting revenue of $1.87 billion, up 6.8% sequentially. Adjusted EPS are forecast at $0.23, up 59.5%sequentially. For the full fiscal year, Globalfoundries is expected to post adjusted EPS of $1.75, up from a loss of $0.14 in the prior year, on sales of $7.66 billion, up 17%.

Globalfoundries stock trades at 31.1 times expected 2022 EPS and 19.4 times estimated 2022 earnings of $2.80 per share. The stock’s 52-week range is $43.59 to $73.25. Globalfoundries does not pay a dividend.

Lyft

Ride-hailing operator Lyft Inc. (NASDAQ: LYFT) has seen its share price sink by about 26% over the past 12 months. It last traded in the green on November 10 and has lost 28% since then. Lyft’s third quarter was its first profitable one as a public company. Rival Uber’s share price drop over the same period is about 35%. The two firms appear to have survived the pandemic; now the issue is whether they can win back passengers (and revenues).

The 41 analysts covering the stock come down on Lyft’s side with 26 Buy or Strong Buy ratings and 13 Hold ratings. At a share price of around $39.10, the upside potential based on a median price target of $65 is 66.2%. At the high target of $95, the upside potential is almost 143%.

Fourth-quarter revenue is forecast at $940.47 million, up 8.8% sequentially and 65.0% year over year. Adjusted EPS are forecast at $0.08 for the quarter, up 48.8% sequentially and up from a loss per share of $0.58 in the year-ago quarter. For full fiscal 2021, the loss per share is forecast at $0.24, much better than last year’s loss of $2.66, on sales of $3.18 billion, up 34.4%.

Lyft stock trades at 46.3 times expected 2022 EPS of $0.85 and 21.7 times estimated 2022 earnings of $1.81 per share. The stock’s 52-week range is $33.94 to $68.28. Lyft does not pay a dividend. Total shareholder return for the past 12 months was negative 25.8%.

Peloton

Shares of fitness product maker Peloton Interactive Inc. (NASDAQ: PTON) have been declining for nearly the entire past year and now trade nearly 80% lower, despite a big gain Monday morning on reports that companies like Amazon, Apple and Nike may be considering acquiring Peloton.

CNBC reported last week that the company had slashed 2022 revenue projections for its apparel business. The company has cut its projections by a quarter, from $200 million to $150 million. That is still almost 30% higher than fiscal 2021 apparel revenue of $107 million. For a potential buyer with deep pockets, $12 billion to $15 billion may be a reasonable price for Peloton.

Analysts continue to back the stock. Of 29 brokerages covering the shares, 15 have a Buy or Strong Buy rating on the shares, while another 13 rate the stock at Hold. At a share price of around $29.75, the upside potential based on a median price target of $40 is 35.5%. At the high target of $90, the upside potential is more than 200%.

For the company’s second quarter of fiscal 2022 that ended in December, analysts expect revenue to total $1.15 billion. That would be up 43% sequentially and 8.4% higher year over year. Analysts are also expecting a loss per share of $0.92, better than the $1.10 loss per share in the prior quarter and far from the per-share profit of $0.21 in the same quarter last year. For the full fiscal year, analysts currently estimate a loss per share of $2.62, compared to a loss of $0.05 per share last year, on revenue of $4.23 billion, up by about 5.2%.

Peloton is not expected to post a profit in 2022, 2023 or 2024. Based on the current share price, the stock’s estimated 2022 sales to enterprise value multiple is about 2.5 times. That multiple drops to 2.1 times in 2023 and 1.8 times in 2024. The stock’s 52-week range is $22.81 to $155.52, and Peloton does not pay a dividend. Total shareholder return over the past year is negative 79.7%.