Investing

Earnings Preview: Ciena, Express, NetApp, Splunk

After a pause to observe the Memorial Day holiday, quarterly earnings reports began rolling out Tuesday morning with results from cannabis producer and consumer products maker Canopy Growth and cloud software firm Cloudera.

There were no reports either Friday or Monday, but here’s a look at results reported for four companies that announced late Thursday: Box, Costco, Dell, Gap and Salesforce.

This preview looks at two firms reporting earnings after markets close Wednesday after and two more companies reporting before Thursday’s opening bell.

NetApp

NetApp Inc. (NASDAQ: NTAP) reports fiscal fourth-quarter results after markets close Wednesday. Shares plummeted more than 40% in late March of last year, but the stock recovered to post a gain of almost 11% for the full calendar year. To date in 2021, shares have added another 17%.

Brokers have mixed ratings on the stock, with 14 of 29 assigning Buy or Strong Buy ratings and 13 rating the shares at Hold. At a recent price of around $76.55, the stock shows upside potential of 4.4% to a consensus price target of $77.90. At a high target of $100, the upside potential is about 23.5%.

Analysts expect earnings per share (EPS) of $1.12 on sales of $1.5 billion for the quarter. For the fiscal year ended in April, estimates call for EPS of $4.01 on sales of $5.69 billion.

NetApp stock trades at a multiple of 19.1 times expected 2021 EPS, 16.9 times estimated 2022 earnings and 15.1 times estimated 2023 EPS. The stock’s 52-week range is $39.96 to $80.66, and NetApp pays an annual dividend of $1.92 (yield of 2.48%). The average daily trading volume is about 1.6 million shares.

Splunk

Splunk Inc. (NASDAQ: SPLK) also reports late Wednesday. The security and solutions software company posted a share-price gain of about 13.4% last year, but year to date, the shares have lost nearly 30% following a disappointing January quarter report.

Shares currently trade around $119.70, below the lowest price target of $125 and well below the consensus target of $180.47. Most analysts (33 of 43) view this as a buying opportunity, with upside potential of 50% based on the consensus target and 121% to the high target of $265.