The three major U.S. equity indexes closed mixed on Monday. The Dow Jones industrials added 0.09%, while the S&P 500 slipped by 0.12% and the Nasdaq fell by 0.1%. Seven of 11 sectors ended the day higher, led by real estate (0.7%), materials (0.6%) and communications services (0.6%). The tech sector dipped by 0.9%. Large-cap growth stocks traded down 0.4% on the day. Wednesday’s report on the consumer price index is likely to keep trader enthusiasm in check as well. In Tuesday’s premarket trading, all three major indexes traded lower.

After markets closed Monday, Upstart reported results that missed consensus estimates on both the top and bottom lines. The company also issued downside guidance for the current quarter. Shares traded down nearly 12% in Tuesday’s premarket.

Velodyne Lidar beat top-line and bottom-line estimates but lowered third-quarter guidance. The stock traded down about 1.6%.

Novavax missed estimates on both the top and bottom lines and lowered third-quarter guidance. The company reported revenue of $186 million, far below the consensus estimate of $1.02 billion. Its COVID-19 vaccine accounted for just $55 million in sales. The stock traded down more than 30% in Tuesday’s premarket session.

Before markets opened on Tuesday, GlobalFoundries beat estimates on both the top and bottom lines and raised third-quarter guidance for both earnings and revenues. The stock traded up about 5.6%.

Norwegian Cruise Lines missed both earnings and revenue estimates. Without giving specific guidance, the company said it expected to lose money in the third quarter. Shares traded down more than 8% Tuesday morning.

After markets close Tuesday afternoon, Coinbase, Roblox, Trade Desk and Unity Software are on deck to report quarterly earnings. The, before Wednesday’s opening bell, Array Technologies, Ballard Power and Plug Power are due to report their results.

Here are previews of three earnings reports due out after markets close Wednesday and one expected first thing Thursday morning.

AppLovin

AppLovin Corp. (NASDAQ: APP) develops and sells software platforms that help mobile app companies market and monetize their apps. Since its initial public offering in April of last year, the stock has dropped by about 31.6%. From its peak in mid-November, the stock is down 65%. The company is set to report results late on Wednesday.
This past April the company signed a deal with Trade Desk that gave advertisers access to AppLovin’s mobile in-app advertising exchange. AppLovin fired about 12% of its staff in late June in a cost-cutting move.

Of 16 brokerages covering AppLovin stock, 15 have a Buy or Strong Buy rating while the standout rates the shares at Sell. At a recent price of around $40.10 a share, the implied upside based on a median price target of $62.00 is 54.6%. At the high target of $118.00.00, the upside potential is 194%.

Second-quarter revenue is forecast at $835.75 million, which would be up 33.6% sequentially and by 25.0% year over year. The company is expected to post adjusted earnings per share (EPS) of $0.49, up 730.0% sequentially and by 6.5% year over year. For the 2022 fiscal year, the company is forecast to post EPS of $1.87, up 34.1% year over year, on revenue of $3.33 billion, up 19.1%.

The stock trades at 21.5 times expected 2022 EPS, 14.8 times estimated 2023 earnings of $2.71 and 11.9 times estimated 2024 earnings of $3.36 per share. The stock’s 52-week range is $27.04 to $116.09. AppLovin does not pay a dividend, and the total shareholder return for the past year was negative 31.6%.

Bakkt

Digital asset marketplace Bakkt Holdings Inc. (NYSE: BKKT) came public through a SPAC merger last October and shares zoomed nearly 400% in less than two weeks. By the end of the year, the stock was trading flat. Since then, shares are down about 62%. The company reports quarterly results early Thursday.

Over the past four quarters, the company’s cash flow from operations totals negative $166.5 million, and free cash flow totals $181.2 million. Plunging cryptocurrency prices made matters worse.

Only two analysts cover the stock, and both have a Hold rating. The closing share price was $3.25 on Monday, above the consensus price target of $3.00.

The two analysts have forecast second-quarter revenue of $13.9 million, up 11.2% sequentially, and a loss per share of $0.16, worse than the prior quarter’s loss of $0.12 per share. For the full 2022 fiscal year, the analyst has forecast a loss per share of $0.59 on sales of $60.2 million. In 2021, Bakkt reported sales of $39.47 million and a loss per share of $0.81.

The company is not expected to post a profit in 2022, 2023 or 2024. Bakkt’s enterprise value to sales multiple for 2022 is 28.2. The multiple is 20.5 for 2023 and 15.5 for 2024. The stock’s 52-week range is $1.98 to $50.80. The stock’s 52-week range is $1.98 to $50.80. Bakkt does not pay a dividend, and the total shareholder return since October was negative 67.2%.

Disney

Over the past 12 months, Walt Disney Co. (NYSE: DIS) has seen its share price decline by more than 38%. The better news is that since mid-July, the stock has added nearly 19%. Look for the quarterly report after markets close on Wednesday.
Investors will be keeping a sharp eye on streaming subscriber growth because there is not a lot else to look for. The Dow component suspended its dividend two years ago and has not repurchased any stock since 2018. Disney’s goal is 230 million to 260 million total subscribers by September 2024, and strong subscriber additions pushed the total more than halfway to that goal at the end of the March quarter. Theme park revenue is likely to be hurt by inflation.

Analysts remain bullish on the stock. Of 29 brokerages covering the firm, 23 have a Buy or Strong Buy rating on the stock and the rest rate the shares at Hold. At a share price of around $109.10, the upside potential based on a median price target of $130.00 is about 19.2%. At the high target of $229.00, the upside potential is 110%.

Fiscal third-quarter revenue is forecast at $21.01 billion, up 9.1% sequentially and 23.4% higher year over year. Adjusted EPS are pegged at $0.99, down 8% sequentially but up 23.8% year over year. For the 2022 fiscal year ending in September, analysts expect Disney to report EPS of $3.93, up 68.7%, on sales of $84.12 billion, up 24.8%.

Disney stock trades at 27.8 times expected 2022 earnings, 20.2 times estimated 2023 earnings of $5.41 per share and 17.1 times estimated 2024 earnings of $6.39 per share. The stock’s 52-week range is $90.23 to $187.58. Total shareholder return for the past year was negative 38.4%.

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Paysafe

London-based Paysafe Ltd. (NYSE: PSFE) offers a variety of digital commerce products, including payment and transaction processing and digital wallets. The stock price has plunged by nearly 80% over the past 12 months. Since its IPO through a SPAC merger in March of 2021, the shares have dropped almost 85%. The company reports after markets close on Wednesday.

Cannae Holdings reported Tuesday morning that the book value of its 8% stake in Paysafe dropped from $450.7 million at the end of December to $195.4 million at the end of June. Cannae is the second-largest holder of Paysafe stock. Blackstone, with a stake of about 17.1%, is the largest.

Of seven brokerages covering the firm, three have a Buy or Strong Buy rating and three more rate the stock at Hold. At a share price of around $2.30, the upside potential based on a median price target of $3.25 is about 41.3%. At the high target of $6.00, the upside potential is about 161%.

Second fiscal quarter revenue is forecast at $375.48 million, up 2.1% sequentially but 2.3% lower year over year. Adjusted EPS are pegged at $0.05, up from a break-even prior quarter and up from EPS of $0.01 year over year. For the 2022 fiscal year, analysts currently expect Paysafe to report EPS of $0.23, up 92.1%, on sales of $1.53 billion, up 2.9%.

The stock trades at 10.0 times expected 2022 earnings, 12.7 times estimated 2023 earnings of $0.18 per share, and 6.2 times estimated 2024 earnings of $0.37 per share. The stock’s 52-week range is $1.72 to $11.13. Total shareholder return for the past year was negative 78.9%.

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