Investing

Earnings Previews: GameStop, Adobe, General Mills, Winnebago

Monday afternoon’s and Tuesday morning’s noteworthy earnings reports were included in our Friday preview covering scheduled reports from robotics firm Raven Industries, cannabis industry software maker Akerna and China-based gaming platform Huya.

Here’s a look at four stocks scheduled to report quarterly results after markets close Tuesday or before they open on Wednesday.

GameStop

GameStop Corp. (NYSE: GME) is scheduled to report fiscal 2021 fourth-quarter and full-year results after markets close Tuesday. There’s not an analyst currently drawing breath who does not believe that the company’s share price is completely disconnected from the company’s business.

Even if GameStop reports record results (no one’s predicting that), the share price remains untethered from the company’s performance. In calendar year 2020, the stock rose about 210%. To date in 2021, shares are up another 930%, though that is down more than 50% from their January high of $483.

By now, GameStop’s story is well known: total short interest in the stock exceeding 100% of shares outstanding, a short squeeze applied by retail investors and massive options buying by those same retail investors. Analysts covering the stock are expecting earnings per share of $1.35 for the January quarter on revenue of $2.21 billion. For the full year, estimates call for a loss per share of $2.17 on sales of $5.2 billion. GameStop posted losses totaling $2.54 per share in the first three quarters of its 2021 fiscal year.

Among 12 analyst firms covering the stock, seven have Hold ratings and one has a Sell rating. Two each rate the stock a Buy or a Strong Buy, but not at the current price of around $193.90. The current consensus price target is $14.64 and the stock now trades at 1,500 times expected 2022 earnings and is not expected to post an annual profit until 2023.

The stock’s 52-week low is $2.57 and the average daily trade volume is nearly 45 million.

Adobe

Also set to report quarterly results after markets close on Tuesday is Adobe Systems Inc. (NASDAQ: ADBE). In the 2020 calendar year, Adobe posted a share price gain of nearly 52%, but the gain over the past 12 months is slightly lower at just over 50%. That’s pretty impressive for a company that is nearly 30 years old and has just gone through a long period of transforming itself into a cloud-based company.

For the company’s first fiscal 2021 quarter, analysts are expecting Adobe to post EPS of $2.78 on revenue of $3.76 billion, a year-over-year jump of 22% in EPS and nearly as much in revenue. Analysts’ current consensus estimate for full-year EPS is $11.26 on revenue of $15.2 billion, increases of more than 12% to profits and nearly 15% to revenue.

At the current market price of around $455.50, Adobe stock trades below the low end of its price target range of $510 to $605, indicating a potential upside of around 12% at the low end and 33% at the high target. Of 31 analysts following the firm, 25 rate the stock a Buy or Strong Buy and the rest have given Adobe a rating of Hold.

Adobe’s 52-week trading range is $287.78 to $536.88, and the consensus price target is $566.05. If Adobe paid a dividend, it would likely be classified as a value stock.