Investing

Earnings Previews: Clover Health, eBay, Lordstown Motors, Nio, Opendoor

Paul Ausick

Published: August 10, 2021 11:25 am

Last Updated: August 10, 2021 2:28 pm

Of a dozen firms that reported earnings before markets opened on Tuesday, eight beat estimates and four missed. That’s a significantly higher percentage of misses than we have been seeing.

We already have posted our previews of four stocks reporting results after markets close Tuesday or before the opening bell on Wednesday: Coinbase, FuboTV, Unity Software and Berkeley Lights.

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Here is a preview of five more companies scheduled to release results after markets close on Wednesday.

Clover Health

Medicare Advantage provider Clover Health Investments Corp. (NASDAQ: CLOV), which came public in early January through a SPAC merger, has seen its stock drop in value by nearly 45%. That’s an improvement of 10 percentage points since the company reported first-quarter results in May. Late last month, the company reported that it would redeem all its outstanding public warrants. The announcement had little impact on the share price.

While the stock attracts a lot of attention from retail investors on Reddit, brokerages are much less enthusiastic. Of just three surveyed brokers covering the shares, there are no Buy ratings, one Hold rating and two Strong Sell ratings. At a recent price of around $9.10, the shares trade just above the median price target of $9.00. At the high target of $10, the upside potential is almost 10%.

Second-quarter revenue is forecast at $203.54 million, which is up 2.5% sequentially, and the quarterly loss per share is forecast to be $0.11, slightly better than the $0.13 per share loss in the first quarter. For the full year, Clover Health is expected to post a loss per share of $0.51, much better than the year-ago loss of $3.51. Revenue is expected to rise by more than 20% year over year to $811.49 million.

Clover Health is not expected to return a profit in 2021, 2022 or 2023. The stock currently trades at 3.6 times its enterprise value-to-sales (EV/S) ratio. That ratio is estimated at 2.8 in 2022 and 2.3 in 2023. The stock’s post IPO trading range is $6.31 to $28.85, and the company does not pay a dividend.

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eBay

Online auction house eBay Inc. (NASDAQ: EBAY) has seen a share price gain of nearly 22% over the past 12 months, about half its share price increase in 2020. So far in 2021, the stock has gained about 33%. To keep the party going, eBay’s outlook for the rest of the year will set the tone, and investors will expect more than already high expectations.

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Of 29 brokerages covering the stock, 10 have given eBay a Buy or Strong Buy rating, and 18 rate the stock a Hold. At the trading price of about $66.60, the upside potential to a median price target of $67.50 is just 1.4%. At the high target of $80, the potential upside is about 20%.

Analysts are expecting second-quarter revenue of $2.91 billion, down about 3.9% sequentially, and up by about 1.4% year over year. Adjusted earnings per share (EPS) for the quarter is forecast at $0.96, down around 12% both sequentially and year over year. For the full year, analysts currently estimate EPS of $3.93, up 15%, on revenue of $11.69 billion, up 13.8%.

Shares trade at 16.7 times expected 2021 EPS, 14.5 times estimated 2022 earnings and 13.2 times estimated 2023 earnings. The stock’s 52-week range is $45.36 to $74.13. eBay pays an annual dividend of $0.72 (yield of 1.10%).

Lordstown Motors

Electric pickup truck maker Lordstown Motors Corp. (NASDAQ: RIDE) came public through a SPAC merger in October of last year at a per-share price of $19.32. A month later, the stock posted its highest price to date. Since mid-February, however, the share price has fallen sharply, picking up speed in mid-March following a short seller report accusing Lordstown of overstating the number of orders for its Endurance pickup truck.

Coverage of the stock is light, with just seven brokerages following the company and only one issuing a Buy rating. Three analysts give the shares a Hold rating and the others rate the stock at Sell or Strong Sell. At a price of around $6.10, the upside potential based on a median price target of $7 is nearly 15%. At the high target of $20, the potential gain is about 228%.

Analysts do not expect Lordstown Motors to post any revenue in the second quarter. Production of the company’s EV is not expected to begin until September. The loss per share is estimated at $0.46. For the full year, the company is forecast to lose $2.27 per share on revenue of $50.4 million. The company had no revenue in 2020.

Lordstown Motors is not expected to return a profit in 2021, 2022 or 2023. The stock currently trades at 9.1 times its EV/S ratio. That ratio is estimated at 0.4 in 2022 and 0.3 in 2023. The stock’s post IPO trading range is $5.78 to $31.80, and the company does not pay a dividend.

Nio

In early February, shares of Shanghai-based EV maker Nio Inc. (NYSE: NIO) were trading up about 370% for the year to date. At Monday’s close, the stock was up about 237% for the year, a loss of more than a third. Weakish sales hurt the stock in the first quarter, but sales picked up again in the second quarter before stumbling in July.

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Of 22 analysts covering the stock, 17 rate the shares a Buy or Strong Buy and the other five have a Hold rating on the stock. At a price of around $44.80, the upside potential based on a median price target of $59.97 is nearly 34%. At the high price target of $91.83, the stock’s upside potential is 105%.

Analysts expect second-quarter revenue of $1.29 billion, up 6% sequentially and more than double year over year. The expected loss per share in the quarter is $0.09, five cents worse sequentially but six cents better year over year. For the full year, analysts expect a loss per share of $0.31, less than half of 2020’s loss, on a revenue increase of 120% to $5.5 billion.

Nio stock trades at 481 times estimated 2022 earnings and 122.7 times estimated 2023 earnings. The stock’s 52-week range is $12.54 to $66.99. The company does not pay a dividend.

Opendoor

Online real estate brokerage Opendoor Technologies Inc. (NASDAQ: OPEN) came public in late December 2020 in a SPAC merger led by Social Capital CEO Chamath Palihapitiya, who also brought Clover Health public a month later. Unfortunately, the stock has dropped more than 50% since its IPO and, again like Clover Health, the company has announced the redemption of all outstanding warrants with no appreciable positive impact on the share price.

Of seven analysts covering the stock, five rate the shares a Buy or Strong Buy, and two have Hold ratings on the stock. At a price of around $14.70, the upside potential based on a median price target of $33.50 is about 128%. At the high target of $42, the upside potential is 185%.

For the second quarter, analysts estimate revenue of $1.62 billion, more than 46% higher sequentially. The estimated loss per share is $0.15, up significantly for a loss per share of $0.04 in the first quarter. For the full year, the expected loss per share is $0.80, half last year’s loss, on sales of $5.36 billion, a year-over-year increase of 108%.

Opendoor is not expected to post a profit in 2021, 2022 or 2023. The stock currently trades at 1.4 times its EV/S ratio. That ratio is estimated at 0.8 in 2022 and 0.5 in 2023. The stock’s 52-week trading range is $10.55 to $39.24, and the company does not pay a dividend.