After markets closed on Tuesday, Gitlab beat estimates for both earnings per share (EPS) and revenue. The company raised EPS and revenue guidance for its fiscal third quarter and for the full 2024 fiscal year that ends in January. Shares traded up 7% shortly after Wednesday’s opening bell.

Zscaler also posted better-than-expected EPS and revenue. Earnings more than doubled and revenue increased by 43% year over year. Shares traded down about 0.2% early Wednesday, largely due to general weakness in the outlook for cloud security stocks.

American Eagle Outfitters, ChargePoint, C3.ai, GameStop and UiPath are set to report quarterly results after U.S. markets close on Wednesday.

Here is a preview of what analysts are looking for when the following three companies report results late Thursday or early Friday.

DocuSign

Shares of cloud-based signature and contract management software vendor DocuSign Inc. (NASDAQ: DOCU) have dropped by 4% over the past 12 months. Over the past two years, the stock is down more than 62%. So far in 2023, the stock is down about 5.7%; from a peak in early February, shares have dropped almost 23%. At the same time, cash flow from operations is at new highs, pushing up free cash flow as well. The company reports quarterly results after Thursday’s closing bell.

The company is getting some stiff competition from the likes of Google, which recently rolled out an e-signature capability in its Workspace products, Box and DropBox, both of which have had similar capabilities for a while. Perhaps a dividend payment would tilt the playing field back in DocuSign’s favor? Or a share buyback even?

Of 25 brokerages covering the stock, six have a Buy or Strong Buy rating and 16 have Hold ratings. At a recent share price of around $52.00, the implied gain based on a median price target of $67.00 is 28.8%. At the high price target of $84.00, the upside potential is 61.5%.

Second-quarter revenue is forecast at $677.42 million, which would be up 2.4% sequentially and by 8.8% year over year. Adjusted EPS are forecast at $0.66, down 8.8% sequentially but by 50.0% year over year. For the full 2024 fiscal year that ends in January, DocuSign is expected to post EPS of $2.56, up 26%, on sales of $2.72 billion, up 8.2%.

DocuSign trades at 20.4 times expected 2024 EPS, 19.5 times estimated 2025 earnings of $2.68 and 17.2 times estimated 2026 earnings of $3.05 per share. The 52-week trading range is $39.57 to $69.45. The company does not pay a dividend, and the total shareholder return for the past year is negative 4.0%.

Kroger

Kroger Co. (NYSE: KR) has dropped more than 7% from its share price over the past 12 months. The grocery store operator is expected to report quarterly results early Friday morning.
Kroger’s announced $24.6 billion merger with Albertsons is still in the hands of regulators. Bloomberg reported Tuesday that privately held C&S Wholesale Grocers has received financial backing from Softbank Group (the same outfit that is looking to take Arm Ltd. public next week) to acquire an estimated 250 to 300 stores from both Kroger and Albertsons, hoping to earn regulatory approval for the bigger deal.

Of 23 analysts covering the stock, 11 have a Hold rating. Ten have a Buy or Strong Buy rating, while two have a Sell rating. At a share price of around $45.00, the upside potential based on a median price target of $51.70 is 14.9%. At the high price target of $65.00, the upside potential is 44.4%.

Fiscal second-quarter revenue is forecast at $34.12 billion, down 25.5% sequentially and 1.5% lower year over year. Adjusted EPS are tabbed at $0.91, down 39.6% sequentially and by a penny year over year. For the full 2024 fiscal year ending in January, Kroger is expected to post EPS of $4.51, up 6.7%, on sales of $151.22 billion, up 2%.

The stock trades at 10.0 times expected 2024 EPS, 10.0 times estimated 2025 earnings of $4.50 and 9.6 times estimated 2026 earnings of $4.69 per share. Its 52-week range is $41.81 to $52.00. Kroger pays an annual dividend of $1.16 (yield of 2.58%). Total shareholder return for the past year was negative 4.92%.

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Smith & Wesson

Shares of gun maker Smith & Wesson Brands Inc. (NASDAQ: SWBI) have slipped by nearly 16% over the past year, including a gain of almost 30% so far in 2023. Look for its results after markets close on Thursday.

The company is the largest (by revenue) gunmaker in the world and has a market cap of around $520 million. It has beaten sales and EPS estimates in both of the past two quarters and is expected to do so again for its April quarter. Gun sales have increased internationally, and S&W exported nearly 37,000 guns (half were handguns) in 2021.

Barclays has raised its stake in S&W twice this year and now owns 0.10% of the company’s outstanding stock. Institutional investors as a group hold about 56% of the company’s floated stock.

Only three analysts cover Smith & Wesson. Two rate the stock a Buy, and the other has a Hold rating. At a price of around $11.30 per share, the implied upside based on a median estimate of $13.50 is 19.5%. At the high target price of $20.00, the upside potential is 77%.

For the first quarter of fiscal 2024, revenue is forecast at $100.93 million, down 30.3% sequentially but more than 16% higher year over year. Adjusted EPS are forecast at $0.11, down 65.6% sequentially and flat year over year. For the full fiscal year that ends in April, Smith & Wesson is expected to post EPS of $0.92, down 2.7%, on sales of $501.2 million, up by 4.6%.

The stock trades at 12.3 times expected 2024 EPS and 11.2 times estimated 2025 earnings of $1.00 per share. The 52-week trading range is $8.21 to $13.69. The company pays an annual dividend of $0.48 (yield of 4.09%). Total shareholder return for the past year was negative 13.05%.

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