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Earnings Previews: Dell Technologies, Urban Outfitters, Zoom Video

Here is a look at three companies on deck to report results before Monday’s opening bell.

Dell Technologies

Over the past 12 months, shares of Dell Technologies Inc. (NYSE: DELL) have shed more than 25% of their price. The stock hit a new 52-week low in mid-October, and shares have bounced by about 23% since then.

Global personal computer sales fell by 15% year over year in the third quarter. Dell’s sales fell by 20%. Analysts are expecting sharp dips in earnings and revenue. Earlier this week, Dell agreed to a $1 billion settlement related to claims by shareholders that the company’s $67 billion purchase of EMC shortchanged them by billions. The settlement still needs to be approved by the court.

Sentiment among analysts remains tilted toward bullish, with 12 of 19 brokerages having a Buy or Strong Buy rating and the rest rating the stock at Hold. At a recent share price of around $42.00, the upside potential based on a median price target of $51.00 is 21.4%. At the high price target of $72.00, the upside potential is about 71.4%.

The consensus revenue estimate for Dell’s third quarter of fiscal 2023 is $24.62 billion, which would be down 6.8% sequentially and 13.3% lower year over year. Adjusted EPS are forecast at $1.61, down 4.1% sequentially and by 32.0% year over year. For the full fiscal year ending in January, analysts currently expect EPS of $6.75, up 8.4%, on sales of $102.17 billion, up 0.9%.

Dell stock trades at 6.2 times expected 2023 EPS, 6.0 times estimated 2024 earnings of $6.90 and 5.6 times estimated 2025 earnings of $7.46 per share. The stock’s 52-week trading range is $32.90 to $61.54. Dell pays an annual dividend of $1.32 (yield of 3.21%), and the total shareholder return for the past year was negative 23.5%.

Urban Outfitters

Specialty retailer Urban Outfitters Inc. (NASDAQ: URBN) has seen its share price tumble by about 32% over the past 12 months. Since reaching a peak almost exactly one year ago, the stock has fallen by more than 33%. Inventory issues that have plagued most retailers for the past year were also an issue for Urban Outfitters, and clearing that inventory at reduced prices has weighed on gross margins. Investors will want to hear that the situation is improving, not getting worse.

Analysts are cautious on the stock, with eight of 13 having a Hold rating and the other five rating the shares at Buy or Strong Buy. At a price of around $25.40 a share, the stock has outrun its median price target of $24.00. At the high target of $35.50, the implied gain is nearly 40%.

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