Investing

Earnings Previews: AutoZone, Lordstown Motors, Zymergen

As if to underscore the shrinking number of earnings reports now trickling rather than pouring out of U.S.-traded companies, we could find no notable reports due out either Friday afternoon (no surprise there) or Monday morning.

On Wednesday, we previewed four companies releasing earnings reports Thursday afternoon or Friday morning: Applied Materials, Deere, Palo Alto Networks and Ross Stores. We also have done a wrap-up of these Friday morning reports.

This preview looks at two companies reporting quarterly results Monday afternoon and one more scheduled to release results Tuesday morning.

Lordstown Motors

Electric vehicle (EV) maker Lordstown Motors Corp. (NASDAQ: RIDE) was supposed to report results on May 17 but delayed its report in order to restate its December 2020 results in light of the SEC’s recent ruling on how companies must account for warrants issued in mergers with blank-check companies. Lordstown came public in October of last year in a SPAC merger that showered Lordstown with some $675 million in cash to help it deliver its first Endurance pickup trucks by the fall. The stock is down about 47% since the IPO.

Surprisingly, perhaps, only one of five brokerage firms rates the Stock at Underperform while two give the stock a Hold rating and three have set their rating at Buy or better. The average price target is $22.00, and with shares trading currently at around $10, that’s potential upside of nearly 118%. The stock last traded at near that price target in late February.

Analysts expect the company to post a loss per share of $0.28 for the quarter on essentially no revenue. For the full year, the loss per share is expected to reach $1.59 on revenue of $110.1 million.

Lordstown is not expected to post a profit in either 2021 or 2022. The stock trades at a multiple of 15.7 times expected 2021 enterprise value/sales and 1.0 times estimated 2022 EV/S. The stock’s 52-week trading range is $6.69 to $31.80, and the average daily trading volume is about 9.8 million shares.

Zymergen

Zymergen Inc. (NASDAQ: ZY) calls itself a biofacturing company; that is, one that uses natural components rather than petroleum-based chemicals to manufacture commercial products. Its first product, a flexible polymer film called Hyaline, is aimed at the foldable smartphone market. The company raised $500 million in an upsized IPO last month. The company priced the IPO at $31 a share and sold 16.13 million shares, about 2.5 million more than it had originally marketed. The report is due after Monday’s closing bell.

Of five firms covering the company, all rate the shares a Buy or Strong Buy. The average price target is $48.50, which implies an upside potential of 34% at the current trading price of around $36.20. At the high target of $56, the implied gain is almost 55%.

No analysts have yet estimated earnings or revenue for the company nor are than any estimates for trends going forward. Cathie Wood’s Genomic Revolution ETF added about 1,000 shares to its holdings in Zymergen on Thursday, bringing the fund’s total investment in the company to nearly $38 million with ownership of 1.05 million shares. The average daily trading volume on the stock is around 800,000 shares.

AutoZone

Auto parts retailer AutoZone Inc. (NYSE: AZO) reports first-quarter results before markets open Tuesday. The company’s stock plunged more than 35% in late March last year and shares closed out 2020 essentially the same as where the stock began the year. So far in 2021, shares are up about 23.5%.

Analysts are about evenly split between those who rate the stock a Hold (14) and those who rate the shares a Buy or Strong Buy (12). The share price is around $1,462.75, implying upside potential of about 10% to a consensus price target of $1,612.65. At the high target of $1,700, upside potential is more than 16%.

For the quarter, analysts are looking for earnings per share (EPS) of $19.75 on revenue of $3.22 billion. For the full year, the consensus forecast calls for EPS of $80.42 and sales of $13.53 billion.

The stock trades at a multiple of 18.2 times expected 2021 EPS, 16.7 times estimated 2022 earnings and 14.9 times estimated 2023 earnings. The stock’s 52-week range is $1,074.45 to $1,542.30, and the average daily trading volume is just 220,000 shares. AutoZone does not pay a dividend.