Investing

Earnings Previews: Lemonade, Nio, Zoom

After a rocky premarket session on Friday, the three major indexes managed to trade at least flat at the opening bell. The Nasdaq Composite was up about 1%, the S&P 500 was up fractionally and the Dow was just a few ticks below unchanged, but the blue chips later sank. The tech sector opened up about 1.3%, probably due to a fall in interest rates on the 10-year Treasury to below 1.5%.

In our earnings preview from Thursday, we looked at Berkshire Hathaway, Workhorse Group and Stratasys. Berkshire Hathaway releases Warren Buffett’s annual letter on Saturday, while Workhorse and Stratasys report quarterly results before the bell Monday. A separate preview covers expectations for Kohl’s, Sea and Target, which report early Tuesday.

This edition of our earnings previews includes three companies expected to report results Monday after the closing bell.

Lemonade

Lemonade Inc. (NYSE: LMND) is scheduled to report results after markets close Monday. The online insurance company came public in July and its share price had posted a gain of more than 160% by early January. Since then, shares have fallen back by about half, cutting the share price appreciation to around 84% since the IPO.

Analysts expect Lemonade to post a quarterly loss per share of $0.64 and a full-year loss of $3.81. Revenue for the quarter is forecast at $19.1 million and for the year at $93 million. Analysts don’t expect the company to post a profit until after 2023.

The stock’s post-IPO range is $44.11 to $188.30, and the consensus price target is $86.17. Shares traded at around $126.60 on Friday, well above the consensus target but about 28% below the high price target of $163.

Nio

Nio Ltd. (NYSE: NIO) shares gained more than 1,100% in 2020 along with shares of virtually every other electric vehicle (EV) maker, whether located in China or not. Nio stock even outperformed Tesla, which rose by more than 740% last year. Nio took advantage of its soaring share price to issue more shares and more debt in 2020 and in January of this year. As of the end of January, Nio reported that it had shipped nearly 83,000 vehicles, including 7,225 in the month of January alone.

The consensus estimates for the fourth-quarter call for a loss per share of $0.07 on sales of $1 billion, while the full-year estimates see a loss of $0.06 per share on sales of $2.5 billion. Nio has been publicly traded since 2018, but it didn’t manage to cement a solid gain beyond its IPO price until July of last year.

Shares traded on Friday near $45.30, in a 52-week range of $2.11 to $66.99 and with a consensus price target of $55.05. At the recent price, the stock has a potential upside of around 22%. At the high price target of $99.83, the potential upside is a whopping 120%.

Nio is expected to post a loss per share of around $2.04 in the 2021 fiscal year and post its first profit ($0.06 per share) in 2022. At its current share price, the 2022 multiple is around 760.

Zoom Video Communications

Zoom Video Communications Inc. (NASDAQ: ZM) came public in April 2019 and the stock took off following last year’s lockdowns due to the COVID-19 pandemic. Between April 8 and October 19, Zoom’s stock added more than 380%. Since then, the shares have given about a third back and trade up by about 206% as of Friday.

Analysts expect the company to report fourth quarter of fiscal 2021 (ended in January) results Monday, including earnings per share (EPS) of $0.79 and revenue of $811.8 million, reflecting an increase of 420% in EPS and 331% in revenue. For the full year, EPS is tabbed at $2.91, up from $0.35 in fiscal 2020, and revenue of $2.6 billion, up from $622.7 million.

The stock traded at around $361 on Friday in a 52-week range of $97.37 to $588.84. The consensus price target is $466.10, implying a potential upside of nearly 23%. The high target of $610 implies a potential gain of nearly 70%.

At recent prices, Zoom’s stock trades at around 126 times expected 2021 EPS, 114 times expected 2022 EPS and 91 times expected 2023 earnings.