Investing

Earnings Previews: Chico's FAS, NetEase, StoneCo, Zoom Video

Earnings announcements that we had previewed for Thursday evening and Friday morning posted mixed results. Bill.com hammered the revenue estimate but reported a larger loss than forecast, and the stock traded up about 28% late Friday morning. Peloton also beat on revenues but missed badly on profits, and the stock traded down about 8.5%. Big Lots missed on both and traded down about 3%. Workday beat on both and shares was up about 11% Friday morning.

We already have previewed Cloudera and Li Auto earnings, due out before markets open on Monday.

Here is a look at four companies reporting results late Monday or first thing on Tuesday.

StoneCo

StoneCo Ltd. (NASDAQ: STNE) provides fintech services to merchants and their partners in Brazil. The company is headquartered in the Cayman Islands and is a subsidiary of HR Holdings. Over the past 12 months, the shares have added about 4.7%, including a spike to a gain of more than 90% in mid-February. For the year to date, including that spike, the stock is down about 39%.

At the end of June, Cathie Wood’s ARK Fintech Innovation ETF owned 585,570 shares of StoneCo stock. As of Thursday’s close, the fund holds more than 1.35 million shares valued at $68.25 million.

Of 17 analysts covering the company, 10 rate the shares as a Buy or Strong Buy, and the rest rate the stock a Hold. At a recent price of around $51.00, the stock’s upside potential based on a median price target of $80.83 is about 58.5%. At the high target of $105.59, the upside potential is 107%.

StoneCo is expected to report second-quarter 2021 revenue of $210.6 million, which would be up 36.6% sequentially and nearly 72% year over year. Adjusted earnings per share (EPS) are tabbed at $0.19, or up 77% sequentially and 90% year over year. The current consensus estimates for the full fiscal year call for EPS of $0.91, up 42%, on sales of $976.39 million, nearly 53% higher.

The stock trades at 58.2 times expected 2021 EPS, 34.5 times estimated 2022 earnings and 27.3 times estimated 2023 earnings. The stock’s 52-week trading range is $46.60 to $95.12. StoneCo does not pay a dividend.

Zoom Video

After a blistering rise of nearly 400% in 2020, Zoom Video Communications Inc. (NASDAQ: ZM) stock has risen by less than 1% so far in 2021. While enforced work-from-home rules drove the share price last year, investors appear to believe that once offices reopen, Zoom’s video calling service won’t be in such high demand. The ARK Innovation and ARK Next Generation Internet ETFs combined held 3,394,864 shares of Zoom stock as of Thursday’s close, a decrease of about 7.5%. Zoom Video reports quarterly results after markets close on Monday.

Analysts remain bullish on the stock, with 14 of 25 rating the shares a Buy or Strong Buy and nine more putting a Hold rating on the stock. At a price of around $339.80, the stock’s upside potential based on a median price target of $428 is about 26%. At the high price target of $525, the upside potential is 54.5%.