Shortly after Friday’s opening bell, the Dow Jones industrials traded up 0.77%, the S&P 500 up 0.85% and the Nasdaq up 0.99%. Nonfarm payrolls jumped by 140,000 new jobs month over month in May to 349,000, far higher than expected. Offsetting that, the unemployment rate rose from 3.4% in April to 3.7%, more than expected. The mixed report has investors holding on to their hopes that the Federal Reserve will not raise rates at its FOMC meeting later this month.

After U.S. markets closed on Thursday, Lululemon beat the consensus earnings per share (EPS) estimate by 16% and reported a year-over-year revenue increase of 24%. Guidance for the second quarter is in line with consensus estimates, but full-year guidance for both EPS and revenue was higher than Wall Street estimates. Shares traded up 16% Friday morning.
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SentinelOne reported a narrower-than-expected loss per share but missed the consensus revenue estimate. The security software company also issued downside revenue guidance for the current quarter and the full 2024 fiscal year. Shares were hammered Friday morning, trading down 33.3%.

Dell beat estimates on both the top and bottom lines. For the 2024 fiscal year, Dell raised EPS guidance and maintained prior guidance for a decline in revenue of 12% to 18%. The stock traded up 0.6%.

Broadcom also topped both top-line and bottom-line estimates and issued upside revenue guidance for the current quarter. Shares traded up 2.8%.

ChargePoint posted a smaller per-share loss than analysts expected and beat the consensus revenue estimate. However, downside revenue guidance for the current quarter has cost the stock a drop of around 0.7% in early trading.

No notable earnings reports are due to be released Friday. Here is a preview of two companies reporting quarterly results on Monday.

GitLab

GitLab Inc. (NASDAQ: GTLB) provides a collaborative software development platform in the United States, Europe and Asia. In early March, the company’s stock sported a year-to-date price increase of more than 34%. As of Thursday’s close, shares were down 7.7% for the year to date. GitLab releases earnings results after markets close Monday.

Recall that early March was also the time that Microsoft and OpenAI announced the release of ChatGPT. GitLab’s stock was hit hard as investors departed for greener pastures. Over the past month, however, GitLab has announced a number of AI initiatives, including a new version of its DevOpsSec (development, operations, security) platform that includes “enterprise-grade, AI-powered” capabilities.

The company’s moves into AI have resulted in a bounce of 20% in its share price over the past month, and, on Thursday, BofA said that it believed the company is “making steady progress” in adding AI features to its platform. The analysts maintained their Buy rating and $50.00 price objective on the shares.

Of 16 brokerages covering GitLab, 12 have a Buy or Strong Buy rating. It is Hold ratings from the other four. At a recent price of around $36.00 a share, the upside potential based on a median price target of $44.50 is 23.6%. At the high price target of $65.00, the upside potential is 80.6%.
GitLab’s first-quarter revenue is forecast at $117.83 million, which would be down 4.1% sequentially but 34.8% higher year over year. Analysts have a consensus estimate for an adjusted per-share loss of $0.14, worse than the prior quarter’s loss of $0.0.3 per share but better than the year-ago loss of $0.18. For the full 2024 fiscal year that ends in January, GitLab is expected to post an adjusted loss of $0.26 per share, compared to last year’s loss per share of $0.46. Revenue is forecast to rise 25.6% to $532.79 million. Revenue rose by more than 60% last year, compared to the 2022 fiscal year.
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GitLab is not expected to post a profit in 2024 or 2025. The company’s enterprise value to sales multiple for 2024 is 8.7. For 2025, the multiple is 6.7 on estimated sales of $710.44 million, and for 2026 the multiple is 5.2 on sales of $950.12 million. The stock’s 52-week trading range is $26.24 to $70.96. The company does not pay a dividend. Total shareholder return for the past year is negative 6.24%.

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Science Applications (SAIC)

Science Applications International Corp. (NYSE: SAIC) provides a variety of IT services to a number of federal agencies, including the military, NASA, the State Department and the Department of Homeland Security. According to data compiled by FI-Aeroweb, SAIC was ranked 15th in prime contractor awards for the 2022 federal fiscal year that ended in September 2022. The company reports quarterly results before markets open Monday morning.

The company’s share price has increased by about 14.5% over the past 12 months, including a drop of nearly 11% so far in 2023. Two weeks ago, the company announced that Toni Townes-Whitley, formerly president of Microsoft’s U.S. Regulated Industries division, will take over as CEO for retiring CEO Nazzic Keene. Townes-Whitley will join SAIC on June 12 as CEO-elect.

There are 11 analyst ratings on SAIC’s stock. Four of those are Buy or Strong Buy ratings. Six brokerages have Hold ratings. At a share price of around $99.00, the upside potential based on a median price target of $115.00 is 16.2%. At the high target of $127.00, the upside potential is 28.3%.

For the first quarter of fiscal 2024, the consensus estimates call for revenue of $1.96 billion, down 0.6% sequentially and by 2.0% year over year. SAIC is expected to post adjusted EPS of $1.81, down 11.4% sequentially and 4.8% lower year over year. For the full fiscal year ending in January, the company is expected to report EPS of $6.98, down 7.9%, on sales of $7.15 billion, down 7.2%.

SAIC stock trades at 14.2 times expected 2024 EPS, 13.0 times estimated 2025 earnings of $7.60 and 11.7 times estimated 2026 earnings of $8.43 per share. Its 52-week range is $83.68 to $117.94. SAIC pays an annual dividend of $1.48 (yield of 1.5%). Total shareholder return for the past year was 16.20%.

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