More than 400 companies are scheduled to report quarterly results in the week of February 28. By coincidence or otherwise, five electric vehicle-related firms will be out with results before markets open on Monday: Blink, Canoo, Lucid, Luminar and Velodyne Lidar.
On Saturday, Warren Buffett is scheduled to release his letter to Berkshire Hathaway shareholders and we’ll take look on Monday at what he had to say about the year just past and the year to come.
Here are previews of four companies set to report results after markets close on Monday.
HP
Personal computer and printer maker HP Inc. (NYSE: HPQ) has added more than 25% to its share price over the past 12 months. The company generated more than $2.8 billion in operating cash flow in its fourth quarter of fiscal 2021. Free cash flow totaled nearly $2.7 billion, and the company reported $4.3 billion in cash and equivalents. Did the company handle logistics challenges in the first quarter of fiscal 2022, and did demand continue to be strong? We are about to find out.
Analysts have been cautious on the stock. Of 18 brokerages covering the company, eight have rated the stock at Hold while six have a Buy rating and four rate the stock at Strong Sell. At a recent price of around $34.40 a share, the upside potential based on a median price target of $36.00 is 4.6%. At the high price target of $50, the upside potential is more than 45%.
Revenue in the first quarter of fiscal 2022 is forecast to come in at $16.52 billion, which would be up less than 1% sequentially and 5.6% higher year over year. Adjusted earnings per share (EPS) are forecast at $1.02, up about 8.8% sequentially and 10.9% year over year. For the full 2022 fiscal year, analysts currently forecast EPS of $4.17, up 10.1%, on sales of $65.61 billion, up 3.3%.
HP stock trades at 8.2 times expected 2022 EPS, 7.8 times estimated 2023 earnings of $4.38 and 7.4 times estimated 2024 earnings of $4.61 per share. The stock’s 52-week range is $26.11 to $39.65. HP pays an annual dividend of $0.78 (yield of 2.91%). Total shareholder return for the past year is 25%.
Sea Limited
Singapore-based Sea Ltd. (NYSE: SE) operates Asia’s premier online gaming and entertainment site. Over the past 12 months, the stock has dropped by 45%. The stock posted an all-time high last October and has plunged by 63% since. Shares were up about 11% in Friday trading after the company asked India if its Free Fire game was mistakenly included in a number of games banned by the Indian government.
Of 27 analysts covering the stock, 25 give the company a Buy or Strong Buy rating. At a share price of around $136.60, the stock’s implied upside based on a median price target of $296 is about 117%. At the high price target of $455, the upside potential is nearly 233%.
Analysts expect Sea Limited to report fourth-quarter revenue of $2.97 billion, up by 10.6% sequentially and by 89% year over year. The expected quarterly loss per share of $0.91 is seven cents worse than the prior quarter loss and four cents worse than the year-ago loss. For the full fiscal year, the loss per share is forecast at $2.87, worse than the loss per share of $2.78 in 2020, on sales of $9.49 billion, up about 117% year over year.
Sea is not expected to post a profit in 2021, 2022 or 2023. The company’s enterprise value-to-sales multiple for the next three years is 7.3 for 2021, 5.0 this year and 3.7 in 2023. The stock’s 52-week range is $111.50 to $372.70. It does not pay a dividend, and total shareholder return for the past year is negative 42%.
Target
Target Corp. (NYSE: TGT) stock has added about 6.5% to its share price over the past 12 months. The shares hit a peak around $266 in mid-November and have dropped by about 26% since then. Rising costs for everything from logistics to wages to finished goods could dampen growth given consumer worries about inflation. Operating cash flow reached nearly $3.5 billion in the year-ago quarter and something more than that would go a long way to convincing investors that Target is on course for a good year.
Of 32 analysts covering the company, 22 have a Buy or Strong Buy rating and nine others rate the shares at Hold. At a share price of around $197.20, the upside potential based on a median price target of $275 is about 39.5%%. At the high price target of $312, the upside potential is 58.2%.
The consensus fourth-quarter revenue estimate is $31.40 billion, up 22.4% sequentially and 10.8% year over year. Adjusted EPS are forecast at $2.85, down 6% sequentially but up by 6.7% year over year. For the full year, analysts expect Target to report EPS of $13.23, up 40.4%, on sales of $106.36 billion, up 13.7%.
Target stock trades at 15.0 times expected 2022 EPS, 14.9 times estimated 2023 earnings of $13.27 and 13.7 times estimated 2024 earnings of $14.47 per share. The stock’s 52-week range is $166.82 to $268.98. HP pays an annual dividend of $2.94 (yield of 1.82%). Total shareholder return for the past year is 8.5%.
Zoom
Over the past 12 months, shares of Zoom Video Communications Inc. (NASDAQ: ZM) have dropped about 68% from their price. Since posting a 12-month high in early March of last year, the stock is down by nearly 75%. The company has failed to come up with a formula that would build on the terrific boom during the worst days of the COVID-19 pandemic.
There’s also stiff competition from Microsoft’s Teams software. To compete, spending on sales and R&D is likely to have to rise. Gross profit growth in the third quarter dropped from more than 280% to just over 50% even though the amount rose from $518.5 million to $779.8 million. And operating income for the third quarter was lower than in either of the two prior quarters.
Analysts are showing mixed sentiment on the stock, with 12 Hold ratings, 12 Buy ratings and four Strong Buy ratings out of a total of 29 brokerages covering Zoom. At a share price of around $123.30, the upside potential based on a median price target of $222.50 is about 80%. At the high price target of $400, the upside potential is 224%.
Fourth-quarter revenue is forecast at $1.05 billion, flat with the prior quarter but up 19% year over year. Adjusted EPS are pegged at $1.07, down 3.8% sequentially and 12.3% lower year over year. For full fiscal 2022, ended in January, current estimates call for EPS of $4.87, up 46%, on sales of $4.08 billion, up 53.9%.
Zoom’s share price to earnings multiple for the 2022 fiscal year is 25.1. For the 2023 fiscal year, the multiple to estimated EPS of $4.41 is 27.7, and for 2024, the multiple is 25.9 times estimated EPS of $4.72. The stock’s 52-week range is $114.26 to $440.00. Zoom does not pay a dividend. Total shareholder return for the past year is negative 66.5%.
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