Investing

Earnings Previews: Airbnb, Devon Energy, SolarEdge, ViacomCBS

We are about halfway through this earnings season, and growth stocks have seen a couple of pretty consistent analyst moves. First, guidance trumps results. Specifically, lowered guidance outweighs results that beat expectations.

Second, analysts are lowering price targets on growth stocks while maintaining their ratings. Not too surprising given the hammering that these stocks have taken so far this year.

We already have previewed three stocks that report results before Tuesday’s opening bell: Continental Resources, Marriott International and Restaurant Brands.

Here is a look at four firms scheduled to report results after markets close Tuesday afternoon.

Airbnb

Over the past 12 months, shares of vacation rental provider Airbnb Inc. (NASDAQ: ABNB) have declined by about 21%. Between mid-July and mid-November, Airbnb shares jumped by 57%, but that gain mostly evaporated thanks to the emergence of the Omicron variant of COVID-19. Since late last month, the stock is up about 20% as Omicron has receded.

Most analysts appear to be treading water. Of 38 brokerages covering the stock, 20 have a Hold rating on the shares while 15 have either a Buy or Strong Buy rating on the stock. At a recent share price of around $167.20, the upside potential based on a median price target of $194 is 16%. At the high price target of $250, the upside potential is nearly 50%.

Fourth-quarter revenue is forecast at $1.46 billion, which would be down nearly 35% sequentially but up 73.4% year over year. Airbnb is expected to post a loss per share of $0.03, down from adjusted earnings per share of $1.23 in the prior quarter. For the full year, analysts are looking for a loss per share of $0.92, far less than the year-ago loss of $15.39, on revenue of $5.92 billion, up 75.2%.

Airbnb stock trades at a 2021 enterprise value to sales multiple of 16.7, and a multiple of 13.6 for 2022 and 11.1 for 2023. The stock’s 52-week range is $129.71 to $218.78, and the company does not pay a dividend. Total shareholder return for the past year is negative 21.4%.

Devon Energy

Devon Energy Inc. (NYSE: DVN) is one of the country’s largest independent producers of oil and natural gas. The company’s stock has added about 175% to its share price over the past 12 months, thanks largely to rising crude oil prices that began in late September. Free cash flow jumped to $1.15 billion in the third quarter, providing solid support for the company’s 6.5% dividend yield. Any threat to that yield will hurt the shares, while anything that improves it is a plus.

Analysts are solidly bullish on the stock, with 25 of 32 giving the shares a Buy or Strong Buy rating. Another six have Hold ratings on the stock. At a share price of around $51.70, the upside potential based on a median price target of $55 is 6.4%. At the high target of $65, the upside potential is 25.7%.

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