The three major U.S. equity indexes closed sharply higher on Wednesday. The Dow Jones industrials added 1.63%, while the S&P 500 rose 2.13% and the Nasdaq jumped by 2.89%. All 11 sectors ended the day higher, led by materials, consumer cyclicals and communications services (all up 2.8%). Wednesday’s report on the consumer price index (CPI) for July came in cooler than expected and loosened up investors’ wallets. Can it be that peak inflation is behind us? Stay tuned. As for Thursday’s outlook, all three major indexes were trading higher in premarket action.

After markets closed Wednesday, Disney reported solid beats on both the top and bottom lines. The House of Mouse met its forecast for Disney+ subscribers, but India’s Hotstar service fell short of the outlook by as much as 80 million. Shares traded up by about 9.3% Thursday morning.

AppLovin missed consensus estimates on both the top and bottom lines. Combined with the company’s $17.5 billion offer to acquire Unity Software, investors could not have been less inspired. The deal would require that Unity give up its $4.4 billion offer for ironSource, a deal the two companies agreed to last month. AppLovin stock traded down 7.3% Thursday morning.

Bakkt missed the consensus revenue and loss-per-share estimates but raised full-year revenue guidance. The stock traded up about 5.4% in Thursday’s premarket.

After markets close on Thursday, ESS Tech, Payoneer, Rivian and Toast are on deck to report quarterly earnings.

There is one company scheduled to report quarterly results after markets close Friday and two of note reporting before Monday’s opening bell.

Bitfarms

Toronto-based cryptomining firm Bitfarms Ltd. (NASDAQ: BITF) came public in late June last year, and the shares reached a 52-week high in early November. Since then, the stock has plunged by more than 78%. Bitfarms’ share price has tracked closely the fortunes of Bitcoin, which has dropped by about 62% over the past 12 months. Bitfarms reports quarterly results early Monday.

The company just added 18 megawatts to its Sherbrooke, Québec, Bunker mining operation, bringing its total operating capacity to 158 megawatts. Bitcoin production stands at 16.8 BTC per day following the Bunker upgrade.

Even though the stock trades about 4.3 million shares daily, only one analyst covers the company. That one has a Strong Buy rating on the stock and a price target of $7. At a recent price of $1.72 per share, the stock’s upside potential is more than 300%.

Second-quarter revenue is forecast at $48.3 million, up nearly 20% sequentially and over 31% year over year. Bitfarms is expected to post adjusted earnings per share (EPS) of $0.5, up from $0.01 sequentially and down from EPS of $0.06 in the year-ago quarter. For the full 2022 fiscal year, the company is expected to report EPS of $0.19, up 33%, on revenue of $212.6 million, up 25.4%.

The stock trades at a multiple of 32.87 to expected 2022 EPS. The stock’s 52-week range is $1.04 to $9.36. Bitfarms does not pay a dividend. The total shareholder return for the past year is negative 73.9%.

Beijing-based electric vehicle maker Li Auto Inc. (NASDAQ: LI) has seen its share price gain about 3.7% over the past 12 months. The stock price reached its peak in late June and has dived by nearly 23% since then. Li is scheduled to report results first thing Monday morning.

Reuters reported Thursday morning that a joint venture with Chinese ride-hailing company DiDi has filed for bankruptcy. The venture was formed in 2018 to produce a customized vehicle for ride-hailing services. DiDi was the majority partner with 51% of the joint venture and Li owned the rest. The company delivered 10,422 vehicles in July, up 21.3% year over year.

Of 25 brokerages covering the stock, 23 have a Buy or Strong Buy rating. At a share price of around $31.50, the upside potential based on a median price target of $46.60 is almost 48%. At the high price target of $62.00, the upside potential is nearly 97%.

Second-quarter revenue is forecast at $1.41 billion, down more than 6% sequentially but up nearly 168% year over year. Analysts have forecast a loss per share of $0.04, compared to EPS of $0.07 in the prior quarter, and a per-share loss of $0.01 in the same quarter last year. For the 2022 fiscal year, current estimates call for EPS of $0.01, down from EPS of 0.06% in 2021, on sales of $7.97 billion, up about 87.4%.

The stock trades at 90.2 times expected 2022 EPS, 46.6 times estimated 2023 earnings of $0.68 and 45.5 times estimated 2024 earnings of $0.69 per share. The stock’s 52-week range is $16.86 to $41.49, and the company does not pay a dividend. The total shareholder return in the past year is 3.7%.

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SNDL

Cannabis grower and product maker SNDL Inc. (NASDAQ: SNDL) shortened its name from Sundial Growers last month to match its ticker symbol. Maybe it helped. Since posting a 52-week low in late July, the shares have jumped 25%. A 1-for-10 reverse stock split probably helped more. At least it saved the company its Nasdaq listing. The company has approved a resolution allowing it to reduce its share count by as much as 1-for-25, so another reverse split may be coming. The company is scheduled to report results after markets close Friday.

Of four analysts covering the firm, three have a Hold rating and the other has rated the stock at Buy. At a share price of around $2.85, the upside potential based on a median price target of $5.01 is 75.8%. The high price target is $8.04, lifting the upside potential to 182%.

SNDL is expected to post second-quarter revenue of $162.42 million, up more than 1,000% sequentially and up from $7.38 million in the year-ago quarter. (The massive increases are the result of SNDL’s acquisition of liquor retailer Alcanna earlier this year). Analysts expect the company to post a loss per share of $0.02 for the quarter after posting a loss per share of $0.05 in the prior quarter. For the full year, the company is expected to post a loss per share of $0.12, up sharply from last year’s loss per share of $0.55. Revenue is pegged at $522.76 million, up gigantically from $44.39 million in 2021 sales. Thanks again Alcanna.

SNDL’s enterprise value to sales multiple is expected to be 1.0 in 2022, dipping to 0.8 in 2023 and 0.7 in 2024. The stock’s split-adjusted 52-week range is $2.12 to $9.60. Sundial does not pay a dividend, and the total shareholder return for the past year was negative 65%.

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