Investing

Earnings Previews: Affirm, Disney, Progenity, SoFi

Paul Ausick

Published: November 9, 2021 12:40 pm

The number of companies reporting quarterly earnings this week has swelled to more than 1,000 as more companies confirm their plans. None of the four companies we previewed that reported results after markets closed on Monday beat both on both the top and bottom lines. Of three previews for Tuesday morning, only one (BioNTech) beat on both.

After markets close Tuesday or before they open Wednesday morning, Coinbase, Nio, Plug Power and 23andMe are set to report quarterly results. ArcelorMittal and Hut 8 take their turns in the earnings spotlight first thing on Thursday.
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Here are previews of four reports expected after markets close on Wednesday.

Affirm

Buy now, pay later (BNPL) payment processor Affirm Holdings Inc. (NASDAQ: AFRM) has posted a share price gain of 63% over the past 12 months, including a dip of around 50% in mid-May. A late August spike following an announced deal as the BNPL provider for Amazon has continued ever since. Adding to Affirm’s luster was a deal for BNPL services with American Airlines. Last week’s poor showing by Peloton, one of Affirm’s largest customers, threw a little shade on the company. Affirm is reporting first-quarter fiscal 2022 results on Wednesday.

Of 12 analysts covering the stock, seven have given the shares a Buy or Strong Buy rating, and another four rate the stock at Hold. At a recent price of around $161.20, the share price has surpassed the median price target of $145. Based on the high price target of $220, the upside potential for the stock is about 36.5%.

Analysts expect Affirm to report first-quarter revenue of $249.36 million, which would be down about 4.7% sequentially. They also expect the company to report an adjusted loss per share of $0.28, much better than the prior quarter loss of $0.48 per share. For the full fiscal year, Affirm is expected to post a loss per share of $0.65, sharply better than last year’s loss of $2.59 per share, on revenue of $1.21 billion, up 38.6%.

Affirm is not expected to post a profit in 2022, 2023 or 2024. The enterprise value-to-sales multiple is expected to be 38.2 in 2022. Based on estimated earnings for 2023 and 2024, multiples are 27.9 and 20.1, respectively. The stock’s 52-week range is $46.50 to $176.65. Affirm does not pay a dividend.

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Disney

Dow Jones industrial average component Walt Disney Co. (NYSE: DIS) traded nearly 60% higher than it did a year ago on this date. Since the early March high, shares have slipped by more than 12%. Disney will be sharing its fiscal fourth-quarter results.

Analysts and investors worry that growth at the company’s Disney+ streaming service is slowing and a delay in the production of the next film in the “Star Wars” franchise could mean a delay in the planned release date in December 2023. And then there was the Shanghai Disney resort lockdown. That didn’t boost confidence in a quick return to business as usual.

Analysts are strongly bullish on the stock. Of 29 brokerages covering the firm, 18 have a Buy rating on the stock and another five rate it a Strong Buy. There are no Sell or Strong Sell ratings. At a price of around $173.70, the upside potential based on a median price target of $210 is about 21%. At the high target of $263, the upside potential is 51.4%.
Fourth-quarter revenue is forecast at $18.77 billion, which is 10.3% higher sequentially and up almost 28% year over year. Adjusted earnings per share (EPS) are pegged at $0.51, down 37% sequentially but up from a loss per share of $0.20 a year ago. For fiscal 2021, analysts expect Disney to report EPS of $2.47, up 22%, on sales of $67.61, up 3.4%.

The stock trades at 71.2 times expected 2021 EPS. Based on current estimates, the 2022 multiple is 35.8 and for 2023 it is 28.1. The stock’s 52-week range is $134.10 to $203.02. Disney suspended its dividend payments last year.
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Progenity

Progenity Inc. (NASDAQ: PROG) is a biotech firm that currently makes and markets a noninvasive pregnancy testing kit, and it is working on developing several more proprietary products. Its market cap is less than $500 million, and that may be one reason the stock trades more than 61 million shares a day.

Another reason is that the stock is heavily shorted and meme stock investors continue to force the short sellers to run for cover. Over the past 12 months, the stock is up about 1,400%, while in late January shares were up 50% from their November 2020 price.

Just four analysts cover the stock, and they are evenly split between Hold and Buy/Strong Buy ratings. At a share price of around $3.40, the upside potential to a median price target of $4.00 is 17.6%. At the high target of $12, the upside potential is more than 250%.

Third-quarter revenue is forecast at $11.10 million, down 41% sequentially and 57% year over year. Progenity is expected to post an adjusted loss per share of $0.45, less than half the year-ago loss of $1.01. For the full year, the loss per share is pegged at $2.36, much better than last year’s loss of $7.01 per share, on sales of $39.69 million, down 46.6%.

There are no profit estimates for  2021, 2022 or 2023. The enterprise value-to-sales multiple is expected to be 10.2 in 2021. Based on estimated earnings for 2022 and 2023, the multiple for both years is 345.8. The stock’s 52-week range is $0.66 to $7.86, and Progenity does not pay a dividend.

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SoFi

Decentralized financial services firm SoFi Technologies Inc. (NASDAQ: SOFI) has posted a share price gain of around 110% since its December IPO. The stock trades about 13% below its post-IPO high. The stock was on an uptick until last week’s announcement that SoFi would redeem all its outstanding warrants at a price equal to $11.50 per share. A recent rumor that SoFi was in line to receive a bank charter lifted the shares by about 13% before the redemption.

The eight analysts covering the stock give the shares a Buy (five), Strong Buy (one) or Hold (two) rating. At a price of around $22.10, the upside potential based on a median price target of $25 is 13%. At the high target of $30, the upside potential is almost 36%.

Analysts expect the company to report fiscal fourth-quarter revenue of $282.13, up 10.5% sequentially, and a loss per share of $14, significantly better than the prior quarter’s loss of $0.48. For the fiscal year, analysts expect an adjusted loss of $1.14 per share on sales of $965.74 million. Comparison data is not available.

SoFi is not expected to post a profit in 2021, 2022 or 2023. The enterprise value-to-sales multiple is expected to be 8.7 in 2021. Based on estimated earnings for 2022 and 2023, the multiples are 5.8 and 4.0, respectively. The stock’s 52-week range is $11.80 to $28.56, and SoFi does not pay a dividend.