Investing

Earnings Previews: Bitfarms, Li Auto, Sundial Growers

The three major U.S. equity indexes closed sharply higher on Wednesday. The Dow Jones industrials added 1.63%, while the S&P 500 rose 2.13% and the Nasdaq jumped by 2.89%. All 11 sectors ended the day higher, led by materials, consumer cyclicals and communications services (all up 2.8%). Wednesday’s report on the consumer price index (CPI) for July came in cooler than expected and loosened up investors’ wallets. Can it be that peak inflation is behind us? Stay tuned. As for Thursday’s outlook, all three major indexes were trading higher in premarket action.

After markets closed Wednesday, Disney reported solid beats on both the top and bottom lines. The House of Mouse met its forecast for Disney+ subscribers, but India’s Hotstar service fell short of the outlook by as much as 80 million. Shares traded up by about 9.3% Thursday morning.

AppLovin missed consensus estimates on both the top and bottom lines. Combined with the company’s $17.5 billion offer to acquire Unity Software, investors could not have been less inspired. The deal would require that Unity give up its $4.4 billion offer for ironSource, a deal the two companies agreed to last month. AppLovin stock traded down 7.3% Thursday morning.

Bakkt missed the consensus revenue and loss-per-share estimates but raised full-year revenue guidance. The stock traded up about 5.4% in Thursday’s premarket.

After markets close on Thursday, ESS Tech, Payoneer, Rivian and Toast are on deck to report quarterly earnings.

There is one company scheduled to report quarterly results after markets close Friday and two of note reporting before Monday’s opening bell.

Bitfarms

Toronto-based cryptomining firm Bitfarms Ltd. (NASDAQ: BITF) came public in late June last year, and the shares reached a 52-week high in early November. Since then, the stock has plunged by more than 78%. Bitfarms’ share price has tracked closely the fortunes of Bitcoin, which has dropped by about 62% over the past 12 months. Bitfarms reports quarterly results early Monday.

The company just added 18 megawatts to its Sherbrooke, Québec, Bunker mining operation, bringing its total operating capacity to 158 megawatts. Bitcoin production stands at 16.8 BTC per day following the Bunker upgrade.

Even though the stock trades about 4.3 million shares daily, only one analyst covers the company. That one has a Strong Buy rating on the stock and a price target of $7. At a recent price of $1.72 per share, the stock’s upside potential is more than 300%.


Second-quarter revenue is forecast at $48.3 million, up nearly 20% sequentially and over 31% year over year. Bitfarms is expected to post adjusted earnings per share (EPS) of $0.5, up from $0.01 sequentially and down from EPS of $0.06 in the year-ago quarter. For the full 2022 fiscal year, the company is expected to report EPS of $0.19, up 33%, on revenue of $212.6 million, up 25.4%.

The stock trades at a multiple of 32.87 to expected 2022 EPS. The stock’s 52-week range is $1.04 to $9.36. Bitfarms does not pay a dividend. The total shareholder return for the past year is negative 73.9%.

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