In the late-morning trading on Tuesday, the Dow Jones industrials were up 1.49%, the S&P 500 up 2.03% and the Nasdaq up 2.33%. February’s consumer price index came in as expected, up 6% in 12 months, and core inflation was up 5.5% year over year.
[in-text-ad]
After U.S. markets closed on Monday, GitLab reported fourth-quarter revenue that beat expectations and a net loss per share that was also better than expected. What was dragging the shares down Tuesday was lukewarm revenue guidance for both the current year and the full 2024 fiscal year. Shares traded down 28% Tuesday.

Lennar, SentinelOne and StoneCo are on deck to report quarterly results after markets close on Tuesday. Look for Adobe and UiPath to post their results late Wednesday.

First thing Thursday morning, the following four companies are scheduled to report earnings.

Academy Sports

Sporting gear retailer Academy Sports and Outdoors Inc. (NASDAQ: ASO) has seen its share price soar by nearly 90% over the past 12 months. After posting a new all-time high early in February, the stock has slipped in by about 2.8%. Rival Dick’s Sporting Goods reported better-than-expected revenue and earnings. Then the company doubled its dividend. Prior to reporting results for its third quarter, Academy’s one-year return was nearly three times better than Dick’s. Did Academy bring that game to the fourth quarter?

Of 13 brokerages covering the firm, 12 have a Buy or Strong Buy rating and the other rates it at Hold. At a recent share price of around $60.00, the upside potential based on a median price target of $70.00 is 16.7%. At the high price target of $80.00, the upside potential is about 33.3%.

Analysts expect Academy Sports to report fourth-quarter revenue of $1.8 billion, which would be up 20.2% sequentially but down 0.6% year over year. Adjusted earnings per share (EPS) are forecast at $1.81, up 7.3% sequentially and by 12.4% year over year. For the full 2023 fiscal year that ended in January, estimates call for EPS of $7.43, down 2.2%, and revenue of $6.45 billion, down 4.7%.

The stock trades at about 8.1 times expected 2023 EPS, 7.6 times estimated 2024 earnings of $7.86 and 7.0 times estimated 2025 earnings of $8.58 per share. The stock’s 52-week trading range is $25.10 to $63.89. Academy Sports pays a forward annual dividend of $0.36 (yield of 0.59%). Total shareholder return for the past year was 90.78%.

Shares of Dollar General Corp. (NYSE: DG) have risen by about 5% over the past 12 months, including a drop of 12.5% for the year to date. The off-price retailer lowered its same-store sales and EPS forecasts late last month. Some locations in Virginia and North Carolina have had to close temporarily in recent weeks to rearrange merchandise that local fire departments said clogged store aisles and needed to be cleared for safety reasons. Not a good look.
[in-text-ad]
Analysts remain mostly bullish on the stock. Of 29 brokerages covering the off-price retailer, 19 have a Buy or Strong Buy rating and nine more rate the shares a Hold. At a price of around $215.50 a share, the upside potential based on a median price target of $249.00 is 15.5%. At the high price target of $288.00, the upside potential is 33.6%.

Fourth-quarter revenue is forecast at $10.24 billion, up 8.2 sequentially and by 18.4% year over year. Adjusted earnings per share (EPS) are forecast at $2.96, up 26.9% sequentially and 15.2% higher year over year. For the full 2023 fiscal year that ended in January, Dollar General is expected to report EPS of $10.71, up 5.3%, on sales of $37.89 billion, up 10.7%.

The company’s shares traded at 20.1 times expected 2023 EPS, 18.9 times estimated 2024 earnings of $11.41 and 16.8 times estimated 2025 earnings of $12.84 per share. The stock’s 52-week range is $183.25 to $262.20. Dollar General pays an annual dividend of $2.20 (yield of 1.01%). Total shareholder return for the past year is 4.22%.

KE Holdings

KE Holdings Inc. (NYSE: BEKE) is a Beijing-based online real estate brokerage. Its share price is up about 74% over the past 12 months. Much of that growth has come in 2023. Lifting the strict COVID-19 lockdowns boosted the fortunes of KE among hedge fund managers. The stock posted the second-largest gain in hedge fund activity (behind only Tesla) in the first two months of this year.

Of 18 analysts covering the stock, 17 have a Buy or Strong Buy rating and the other has a Hold rating. At a share price of around $17.50, the stock’s implied upside based on a median price target of $23.09 is about 32%. At the high price target of $30.94, the upside potential is 77%.
Analysts expect KE Holdings to report fourth-quarter 2022 revenue of $2.39 billion, down about 3.3% sequentially and by about 14.6% year over year. EPS are pegged to come in at $0.08, down 62% sequentially but up from EPS of $0.01 in the year-ago quarter. For the full fiscal year, EPS are forecast at $0.25, down 18.8%, on sales of $8.65 billion, down 31.9% year over year.
[in-text-ad]
KE Holdings stock trades at 71.2 times expected 2022 EPS, 27.0 times estimated 2023 earnings of $0.65 and 23.5 times estimated 2024 earnings of $0.75 per share. The stock’s 52-week range is $7.31 to $21.08, and the company does not pay a dividend. Total shareholder return over the past year is 94.44%.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Lithium Americas

Lithium miner Lithium Americas Corp. (NYSE: LAC) has posted a share price decline of around 21% over the past 12 months, including a 12% increase for the year to date. A month ago, GM agreed to invest $650 million in the company’s Thacker Pass property in northeastern Nevada. Supplies of lithium are critical for electric vehicle makers and, for its investment, GM got exclusive access to first-phase production (40,000 metric tons per year) at Thacker Pass and the right of first offer on second-phase production (another 40,000 metric tons) at the site. Vancouver-based Lithium Americas commenced construction of the project earlier this month.

Analysts are bullish on lithium in general and Lithium Americas in particular. All 15 brokerages covering the stock have a Buy or Strong Buy rating. At a share price of around $21.00, the upside potential based on an average price target of $38.59 is nearly 84%. At the high price target of $53.89, the upside potential is about 157%.

Analysts do not expect the company to post any revenue in the fourth quarter. The adjusted loss per share is forecast at $0.25, worse than the prior quarter’s loss of $0.16 and the year-ago loss of $0.11 per share. For the full 2022 fiscal year that ended in December, the loss per share is expected to be $0.94, exactly double the year-ago loss. Full-year revenue is estimated to be $4.25 million.

Lithium Americas is expected to post revenue of $337.32 million in fiscal 2023 and $467.76 million in fiscal 2024. The enterprise value to sales multiple for 2023 is estimated at 9.1 and, for 2024, it is 6.6. The company’s 52-week range is $17.57 to $40.39, and Lithium Americas does not pay a dividend. Total shareholder return for the past year was negative 12.15%.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.