Earnings Previews: Palantir Technologies, Vornado

Shortly after Friday’s opening bell, the Dow Jones industrials traded 0.05% higher, while the S&P 500 was down 0.06% and the Nasdaq down 0.37%.

After markets closed Thursday, Cloudflare beat earnings per share (EPS) and revenue estimates. The cybersecurity company also issued first-quarter and full-year guidance in line with expectations. Shares traded up 3.6% Friday morning.

Lyft posted a net loss of $0.76 per share, while analysts had projected EPS of $0.13. Even worse, the company said it expects EBITDA of between $5 million and $15 million in the current quarter. Analysts had forecast $83.6 million. The stock was down about 35%.

PayPal beat the consensus EPS estimate but missed on revenue by about $10 million, or about 0.013%. The payment provider also raised fiscal year EPS guidance and expects current-quarter revenue to close above the average analyst estimate. Shares traded up 3.6%.
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Before markets opened on Friday, Enbridge missed the consensus EPS estimate. The Canada-based firm also raised its annual dividend to CAD$3.55 and reaffirmed previous 2023 guidance. Shares traded up 0.7%.

Here is a look at what to expect from two firms reporting earnings Monday afternoon.

Palantir Technologies

Over the past 12 months, shares of Palantir Technologies Inc. (NYSE: PLTR | PLTR Price Prediction) have declined by nearly 43%. Like many other tech stocks, the shares have risen this year, up by nearly a quarter. Palantir’s unique analytics software for the government and commercial markets gives it a wide moat, but its price is steep. The company has to keep its costs under control, reduce its stock-based compensation expenses, and, most importantly, drum up new business.

Of 15 analysts covering the stock, just two rate the shares as a Buy, while eight have Hold ratings. At a recent share price of around $8.00, the stock trades right at its median price target. At the high price target of $15.00, the potential upside is 87.5%.

The consensus fourth-quarter revenue estimate is $504.84 million, which would be up 5.6% sequentially and 16.6% higher year over year. Adjusted EPS are forecast at $0.03, up by two cents compared to the prior quarter and by one cent year over year. For the full 2022 fiscal year, estimates call for EPS of $0.05, down 65.1%, on sales of $1.9 billion, up 23.4%.

The stock trades at about 175.1 times expected 2022 EPS, 49.2 times estimated 2023 earnings of $0.16 and 36.6 times estimated 2024 earnings of $0.22 per share. Its 52-week trading range is $5.84 to $14.86, and the company does not pay a dividend. The total shareholder return for the past year is negative 42.68%.
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Vornado

Almost 95% of Vornado Realty Trust (NYSE: VNO) shares are held by institutions, where it likely sits in funds of one kind or another. The stock trades nearly 5 million shares a day. Over the past 12 months, shares are down 45%, although they have added 10% since the beginning of the year.

A real estate investment trust (REIT), Vornado’s key market is New York City, but it owns key properties in Chicago and San Francisco as well. Last week, the company revealed that it will take a $600 million writedown in the fourth quarter, and earlier this year, the company was removed from the S&P 500 index. The company does pay a rich dividend, however.

Of 14 analysts covering the stock, just three have a Buy or Strong Buy rating, and seven rate the shares at Hold. At a price of around $23.00 a share, the stock trades right at its median price target. At the high price target of $50.50, the potential upside is 120%.
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Analysts are forecasting fourth-quarter revenue of $452.88 million, down 1.0% sequentially but up 7.6% year over year. Adjusted EPS are forecast to break even, which would be down sequentially from EPS of $0.19 and from $0.23 in the year-ago quarter. EPS estimates for the full 2022 fiscal year are not available, while sales are forecast at $1.81 billion, up 13.7%.

The stock trades at 50.3 times expected 2022 earnings before interest and taxes (EBIT), 46.3 times estimated 2023 EBIT and 43.4 times estimated 2024 EBIT. The stock’s 52-week range is $20.03 to $47.26, and the company pays an annual dividend of $1.50 (yield of 6.4%). The total shareholder return for the past year is negative 40.8%.