Investing

Earnings Previews: Canoo, ExOne, Fisker, Tencent Music

Fisker

EV maker Fisker Inc. (NYSE: FSR) on Thursday signed an agreement with Taiwan’s Foxconn to build the company’s first vehicle in a U.S. factory for a projected production start in the fourth quarter of 2023. After spiking to a share price jump of 180% in late February, the company’s stock had dipped by nearly 2% its price at its October IPO. The announced deal with Foxconn sent the stock up by more than 6.5% Friday. Fisker’s extended timetable was the main reason Goldman Sachs last month lowered its rating on the stock to Sell.

Not all analysts agree with Goldman. Five of nine firms covering the stock rate the shares a Buy or Strong Buy. At around $10.50 a share, the stock’s upside potential at the average price target of $24.88 is 137%. At the high target of $40, the implied share price gain is a staggering 280%.

Fisker is not expected to post any revenue in 2021, and its expected loss per share is $0.83 per share for the year. If the company delivers its first EV in the fourth quarter of 2022, as planned, revenue for the year is forecast at $425.2 million.

Unsurprisingly, Fisker is not expected to post a profit in either 2021 or 2022. The stock trades at a multiple of 5.2 times expected 2022 EV/S. The stock’s 52-week range is $8.70 to $31.96, and the average daily trading volume is about 19.4 million shares.

Tencent Music

Tencent Music Entertainment Group Inc. (NYSE: TME) is China’s largest online music entertainment platform and a subsidiary of Tencent Holdings. In its nearly two-and-a-half years of existence, the company’s stock has gained about 8.6%, including a spike that saw the shares trading up by about 120% in late March.

Then the Chinese government began investigating Tencent, Alibaba and Meituan, three of the country’s largest online firms, for antitrust violations. Alibaba has been slapped with a $2.8 billion fine, and Tencent Holding is expected to get whacked with a fine of around $1.6 billion.

Regardless of Tencent Music’s current troubles, analysts are bullish on the stock, with 18 of 24 ratings the shares a Buy or Strong Buy. At a price of around $15.25, the stock shows potential upside of 84% to an average price target of $28.10. At the high target of $38.36, the implied upside is more than 150%.

Analysts expect the company to post earnings per share (EPS) of $0.71 on sales of $1.2 billion. For the full year, the consensus estimates call for revenue of $5.44 billion (up 21.3% year over year) and EPS of $3.16 (up 6.6%).

The stock trades at a multiple of 4.8 times expected 2021 EPS and 3.6 times estimated 2022 earnings. Tencent Music’s 52-week trading range is $11.59 to $32.35, and the average daily trading volume is 35.2 million shares. The company does not pay a dividend.