Investing

Earnings Previews: Airbnb, Devon Energy, SolarEdge, ViacomCBS

Paul Ausick

Published: February 14, 2022 11:54 am

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%.

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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%.
Consensus estimates call for fourth-quarter revenue of $3.23 billion, down 6.7% sequentially and 152% higher year over year. Adjusted EPS are forecast at $1.24, up 14.6% sequentially and up from a break-even quarter last year. For the full 2021 fiscal year, Devon is forecast to post EPS of $3.39, sharply higher than the loss per share of $0.12 in 2020, on revenue of $10.17 billion, up 110.6%.

Devon’s stock trades at 15.2 times expected 2021 EPS, 9.3 times estimated 2022 earnings of $5.54 and 9.3 times estimated 2023 earnings of $5.57 per share. The stock’s 52-week range is $18.97 to $55.44. Devon pays an annual dividend of $1.24 (yield of 6.5%). Total shareholder return for the past year was 174.3%.

SolarEdge

Israel-based SolarEdge Technologies Inc. (NASDAQ: SEDG) has seen its share price decline by about 25% over the past 12 months. The company makes components, including inverters, for solar energy panels, and business is not exactly booming. When competitor Enphase reported results recently, both stocks got a bump, but both have since dipped again. Enphase traded down about 28.6% early Monday morning.

Of 24 brokerages covering the firm, six have a Hold rating on the stock while 17 have a Buy or Strong Buy rating. The stock trades at around $250.10, implying upside potential of 35.9% based on a median price target of $340. At the high target of $404, the upside potential is 61.5%.

Fourth-quarter revenue is forecast at $549.95 billion, up 4.5% sequentially and 53.6% year over year. Adjusted EPS are forecast at $1.32, down 15.6% sequentially but 34.7% higher year over year. For full fiscal 2021, analysts are looking for EPS of $5.01, a year-over-year increase of 22%, on sales of $1.96 billion, up 34.5% year over year.

SolarEdge shares trade at 49.8 times expected 2021 earnings, 36.3 times estimated 2022 earnings of $6.89 and 27.5 times estimated 2023 earnings of $9.06 per share. The stock trades in a 52-week range of $199.33 to $389.71. The company does not pay a dividend. Total shareholder return for the past year was negative 24.8%.

ViacomCBS

Media and entertainment company ViacomCBS Inc. (NASDAQ: VIAC) has posted a share price decline of around 37.5% over the past 12 months. Since reaching a peak in late March of last year, the stock is down 64%. At a market cap of around $23 billion, the company could be an acquisition target if a potential buyer could be sure of getting a deal through U.S. regulators. The likeliest candidate would have been Netflix, until about a month ago.

Analysts are mildly optimistic on the stock, with 10 giving the stock a Hold rating and 13 rating the shares a Buy or Strong Buy. At a share price of around $35.50, the upside potential to the median price target of $48 is about 35%. At the high price target of $67, the upside potential is 88.7%.

ViacomCBS is expected to post fourth-quarter revenue of $7.49 billion, up 13.3% sequentially and 9.0% year over year. Adjusted EPS are forecast at $0.45, down 41% sequentially and nearly 57% lower year over year. For full fiscal 2021, analysts are looking for EPS of $3.745, down nearly 11% year over year, on revenue of $28.07 billion, up 11%.

ViacomCBS stock trades at 9.5 times expected 2021 EPS, 9.3 times estimated 2022 earnings of $3.86 and 9.7 times estimated 2023 earnings of $4.94 per share. The stock’s 52-week range is $28.29 to $101.97. The company pays an annual dividend of $0.96 (yield of 2.70%). Total shareholder return for the past 12 months was negative 37.7%.