Investing

Earnings Previews: Abercrombie, Li Auto, Nordstrom, Zscaler

Only around 200 quarterly earnings reports are due out this week. With the Memorial Day holiday coming up (and after more than a year of restricted movement due to the COVID-19 pandemic), the flow of earnings reports will be slowing to a trickle until a couple of weeks after the June quarter closes.

No notable earnings reports were released Friday afternoon or Monday morning, but we have selected two reports due out Monday afternoon and one expected Tuesday morning that deserve some attention: AutoZone, Lordstown Motors and Zymergen.

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

Nordstrom

Department store operator Nordstrom Inc. (NYSE: JWN) will report first-quarter results after markets close Tuesday. Nordstrom managed to cut its 2020 share price loss from about 70% in late October to around 22% by the end of the year. For the year to date, the stock has added about 21%. Revenue tumbled by nearly a third in 2020, and it’s that revenue total that will get the most attention Tuesday afternoon. Macy’s set a high bar for revenue improvement with a year-over-year revenue jump of more than 50%.

Of 26 analysts covering the company, 17 rate the shares a Hold and just four rate the stock a Buy or Strong Buy. The stock already has outrun its consensus price target of $35.88, with a current trading price of around $37.60. At the high price target of $48, upside potential based on the current price is about 28%.

Analysts expect Nordstrom to post a per-share loss of $0.57 on sales of $2.9 billion. For the full 2022 fiscal year, consensus estimates call for earnings per share (EPS) of $1.12 on sales of $13.57 billion.

At the current price, Nordstrom’s stock trades at about 31.4 times expected 2022 EPS and 16.7 times estimated 2023 earnings. The stock’s 52-week trading range is $11.72 to $46.45, and the average daily trading volume is around 3.4 million shares. Nordstrom has suspended its $0.37 per share quarterly dividend.

Zscaler

Cloud security provider Zscaler Inc. (NASDAQ: ZS) also reports fiscal third-quarter results Tuesday. The stock added nearly 330% to its share price last year but has dipped about 12.6% so far in 2021 as tech stocks have sold off. Over the past 12 months, shares are up nearly 128%. The company was among the first to promote the “zero trust” platform that continuously verifies credentials and permissions for network users. Revenue rose 55% year over year in the prior quarter, and expectations for sequential revenue growth for the third quarter hover around 48%.

Analysts have been mostly bullish on the stock, with 14 of 26 firms rating the stock a Buy or Strong Buy. At price of around $175.20, the stock sports upside potential of 34% based on a consensus price target of $234.92. At the high target of $260, upside potential is just over 48%.

Consensus estimates call for quarterly EPS of $0.07 on sales of $163.7 million. For the 2021 fiscal year that ends in July, analysts are looking for EPS of $0.40 on sales of $638.21 million.