Investing

Earnings Preview: Ambarella, Canopy Growth, HP Enterprise, Zoom

The Memorial Day holiday effectively shuts down the remaining trickle of earnings reports until next Tuesday morning. Next week we’ll be getting reports from more retailers and a few tech firms, among others.

Here’s a look at the results of reports from Box, Costco, Dell, Gap and Salesforce, all posted after markets closed Thursday. After markets closed Wednesday and before they opened Thursday morning we also had earnings reports from Best Buy, Medtronic, Nvidia and Pure Storage.

This preview looks at one firm reporting earnings before markets open Tuesday morning and three more companies reporting after Tuesday’s closing bell.

Canopy Growth

Canada-based marijuana producer Canopy Growth Corp. (NASDAQ: CGC) reports fourth-quarter fiscal 2021 results before markets open on Tuesday. Its share price rose by nearly 17% last year, after plunging by more than 50% in late March. From a high of around $57 in the fall of 2018, shares dropped to around $26 recently. Cannabis companies have faced some tough times over the past two-and-a-half years, but recent legalization of cannabis in New York and New Jersey offers large, new markets for the industry.

Analysts are mostly cautious on the stock, with 11 of 18 brokerage firms rating the shares a Hold. At a median price target of $31.93, the upside potential based on a current price of around $25.50 is more than 25%. At the high target of $41.82, upside potential is 64%.

Canopy Growth is expected to post a loss per share of $0.20 in the fourth fiscal quarter and a fiscal year loss of $1.56. Quarterly revenue is tabbed at $126 million, a 51% year-over-year increase. Full-year revenue is forecast to rise by 64% to $465.2 million.

The company is not expected to post a profit in 2021, 2022 or 2023. The stock’s 52-week trading range is $13.83 to $56.50, and the average daily trading volume is about 3.5 million shares.

Ambarella

Semiconductor maker Ambarella Inc. (NASDAQ: AMBA) had a share price boost of nearly 52% last year and has added about 10% so far in 2021. Over the past 12 months, shares have added around 78%. The company reports first-quarter 2022 earnings after markets close Tuesday.

Earlier this week the company announced collaborations with Lumentum and ON Semiconductor on next-generation artificial intelligence-Internet of Things (AIoT) AI-based 3D sensing devices. Technology from Lumentum and ON will be combined using Ambarella’s AI system-on-a-chip to deliver more accuracy and better decision-making on AIoT devices.

Of 18 brokerages covering the stock, 17 rate the shares a Buy or Strong Buy. At the median price target of $137, the potential upside on the shares at a price of around $101.25 is 35.3%. At the high target of $160, upside potential is 58%.

Consensus estimates call for Ambarella to report quarterly earnings per share (EPS) of $0.17 on sales of $68.64 million. That represents year-over-year revenue growth of 26% and profit growth of 325%. Full-year EPS is forecast to rise by 155%, with sales rising by 26% to nearly $291 million.

Ambarella stock trades at 14.5 times expected 2022 EPS and 9.4 times estimated 2023 earnings. The stock’s 52-week range is $43.69 to $137.21. The average daily trading volume is around 540,000 shares.