Investing

Earnings Previews: Enphase, General Motors, Under Armour

Earnings season rolls along with some 500 U.S.-listed firms expected to report quarterly and, in many cases, annual results this week. We’ve highlighted some companies already in our weekly look at coming earnings results and will take a closer look at a few others as the week goes on.

Enphase Energy

It may not be as well known as some of the other big names in the solar energy sector, but Enphase Energy Inc. (NASDAQ: ENPH) provides critical components and systems for home photovoltaic systems. The company’s microinverter is used by practically every solar panel maker on the planet.

As of the end of September, Enphase had shipped more than 30 million microinverters and approximately 1.3 million Enphase residential and commercial systems have been deployed in more than 130 countries. The company reports earnings after markets close on Tuesday.

The consensus estimate for fourth-quarter earnings per share (EPS) is $0.40, essentially flat with the fourth quarter of 2019. Revenue is forecast to jump by 21% to $254.8 million. For the full year, EPS is forecast at $1.27 on sales of $764.5 million, an increase of a third on EPS and 64% on revenue.

At a current price of around $197, the stock trades above its consensus price target of $170.75 and at a multiple of 156 times expected 2020 EPS. As a multiple of 2021’s expected earnings, the current share price is 104 times forecasts. The high price target is $254 (at Truist), but four other brokerage firms have targets above $200, including JPMorgan and Goldman Sachs. At the high price target, the potential upside on Enphase shares is around 22%.

GM

General Motors Co. (NYSE: GM), which reports results Wednesday morning, had a pretty good year after the COVID-19 pandemic shock was controlled. Production suffered, but the relative scarcity of new vehicles pushed the average selling price up. However, buyers looking to purchase a used car were finding scarcity there as well, sending buyers back to dealers.

GM has committed to spending $27 billion on electric vehicles (EVs) and launching 30 new EVs by 2025. The stock added more than 15% last year and another 35% so far in 2021.

The consensus estimates call for EPS of $1.63 and revenue of $36.1 billion for the fourth quarter and $4.55 in EPS and $120.6 billion in revenue for the full year. Quarterly EPS is almost 32 times higher than in the year-ago quarter. Trading recently at around $56 per share, the stock is trading around 19 times expected 2020 earnings and 15 times expected 2021 EPS. Shares essentially trade at the consensus price target but have a potential upside of 45% to the high target of $80 per share.

Under Armour

Under Armour Inc. (NYSE: UAA) shares fell by just over 20% in 2020 as revenues in the March and June quarters dove due to the pandemic. The stock has recovered and now trades about flat with its share price in January of last year. Just last week, the company chose not to renew its on-field licensing deal with the NFL and already has turned its backs on new deals with major college sports programs and Major League Baseball. But that’s good news to investors, who have pushed the stock up 23% since the end of the year

When Under Armour reports earnings Wednesday morning, analysts expect a net loss of $0.07 for the quarter and a loss of $0.46 for the full year. Revenue is forecast down 12% in the quarter and nearly 18% for the year. Even at a recent price of around $21, though, shares are priced above the consensus price target of $16.32 and trade at a multiple of nearly 160 times expected 2021 EPS. At a high price target of $25, the potential upside on the shares is 19%.