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Earnings Previews: DocuSign, Ideanomics, Kroger

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The three major U.S. equity indexes closed lower Tuesday. The Dow Jones industrials ended the day down 0.55%, the S&P 500 dropped by 0.41% and the Nasdaq fell by 0.74%. Seven of 11 sectors ended the day with losses, ranging from 1.2% (communications services) to 0.2% (consumer cyclicals). Real estate (up 1.0%) and utilities (up 0.3%) were the top gainers. Later in the morning, Apple will launch its new iPhone 14, along with other new and improved products. All three major indexes traded slightly lower ahead of Wednesday’s opening bell.

After markets closed Tuesday, Coupa Software beat estimates on both the top and bottom lines and issued earnings per share (EPS) guidance for the current quarter and the full year that was above analyst estimates. Revenue was guided lower than estimates, however. The stock traded up about 11.4% in Wednesday’s premarket session.

UiPath also beat top-line and bottom-line estimates but issued downside revenue guidance for the quarter and the full year. Shares traded down by more than 21% Wednesday morning.

GitLab beat EPS and revenue estimates as well and issued upside guidance for the quarter and the full year. The stock traded up by less than 1%.

Before markets opened Wednesday, Chinese electric vehicle maker Nio reported better than expected profits and revenue but issued downside guidance for the current quarter. Shares traded down about 5.3% in the premarket.

Academy Sports beat estimates on the top and bottom lines. The company raised fiscal-year EPS guidance and guided revenue in line with expectations. The stock traded up more than 6% Wednesday morning.

After markets close Wednesday and before they open again on Thursday, American Eagle Outfitters, Bilibili, FuelCell Energy and GameStop will report quarterly results.


Here is a look at what to expect from three companies reporting results after markets close Thursday or before they open on Friday.

DocuSign

Shares of cloud-based signature and contract management software provider DocuSign Inc. (NASDAQ: DOCU) have dropped by nearly 83% over the past 12 months. The shares posted a new 52-week low on Tuesday, and the 52-week high was set exactly one year ago.

That virtually unbroken slide reflects investor questions about what the company can do to return to its salad days during the pandemic. Revenue growth has stalled, and EPS missed estimates in the prior quarter. Any sign of similar misfortune could cause a stampede for the exits. DocuSign reports its results after markets close on Thursday.

Of 19 brokerages covering the company, five have a Buy or Strong Buy rating and 11 have Hold ratings. At a recent price of around $53.80 a share, the upside potential based on a median price target of $67.50 is about 25.5%. At the high price target of $93.00, the upside potential is 72.9%.

Fiscal second-quarter revenue is forecast at $602.25 million, which would be up 2.3% sequentially and by 17.7% year over year. Adjusted EPS are forecast at $0.42, up 11.5% sequentially but down 10.6% year over year. For the full 2023 fiscal year ending in January, DocuSign is expected to post EPS of $1.69, down nearly 15%, on sales of $2.47 billion, up 17.3%.

DocuSign trades at 31.9 times expected 2023 EPS, 28.6 times estimated 2024 earnings of $1.88 and 23.4 times estimated 2025 earnings of $2.30 per share. The stock’s 52-week range is $53.25 to $311.68. The company does not pay a dividend, and the total shareholder return for the past year is negative 82.7%.

Ideanomics

New York-based Ideanomics Inc. (NASDAQ: IDEX) develops technologies to accelerate the adoption of commercial electric vehicles. These technologies include vehicles, charging, energy systems and financial services. Shares have dropped 75% over the course of the past 12 months, and that decline was not helped by the company’s delayed release of its fiscal 2021 results until last week. The company has not yet filed quarterly reports for the first quarter of this year and plans to do so Friday morning along with second-quarter results.

Ideanomics expects to close a $630 million acquisition of electric van and truck maker Via by the end of this month. As it said in last week’s filing, Ideanomics’ ability to raise capital is “critical.” The company believes that it can remain a “going concern” for at least the next year. It gets to tell its story Friday morning.

Only one analyst covers the stock, giving it a Hold rating and a $1.00 price target. That represents 40% upside to a recent trading price of $0.60 a share.

Ideanomics released its fiscal year 2021 10-K last week, reporting revenue for the year of $114.1 million, up from $26.76 million in 2020. Of that total, $84.3 million came from the United States and $29.7 million from China. Gross profit rose from $2.1 million to $23.22 million for the year and the operating loss for the year rose from $95.6 million in 2020 to $282.8 million last year. On a GAAP basis, Ideanomics posted a per-share loss of $0.57 in 2021, compared to a per-share loss of $0.40 in 2020. The share count last year was 447.8 million, nearly double the 232.7 million shares outstanding in 2020.

Kroger

Grocery store operator Kroger Co. (NYSE: KR) has added about 4% to its share price over the past 12 months. Since posting a 52-week high in early April, the shares have dropped by almost 21%, more than twice as much as the 9.6% drop in the S&P 500 over the same period.

The decline is partly due to investors’ fears that inflation will send customers to discount outlets. But inflation was reasonably kind to competitor Albertsons, which missed analysts’ first-quarter revenue estimate but hammered the EPS estimate. Kroger could do as well or better. The company reports results first thing Friday morning.

Of 25 analysts covering the stock, 14 have a Hold rating. Seven have a Buy or Strong Buy rating, and four have a Sell or Strong Sell rating. At a share price of around $48.50, the upside potential based on a median price target of $53.00 is 9.3%. At the high price target of $75.00, the upside potential is 54.6%.


Fiscal second-quarter revenue is forecast at $34.22 billion, down about 23.3% sequentially and down 8.0% year over year. Adjusted EPS are tabbed at $0.81, down 44.5% sequentially and up by a penny year over year. For the full 2023 fiscal year ending in January, Kroger is expected to post EPS of $3.94, up 7.1%, on sales of $147.55 billion, up 7%.

The stock trades at 12.3 times expected 2023 EPS, 11.9 times estimated 2024 earnings of $4.06 and 11.7 times estimated 2025 earnings of $4.15 per share. The stock’s 52-week range is $38.22 to $62.78. Kroger pays an annual dividend of $1.04 (yield of 2.14%). Total shareholder return for the past year is 6%.

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