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Earnings Previews: MongoDB, SentinelOne, Stitch Fix, Toll Brothers

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The three major U.S. equity indexes closed mixed on Friday. The Dow Jones industrials ended the day up by 0.10%, while the S&P 500 closed 0.12% lower and the Nasdaq down 0.18%. Six of 11 sectors closed lower, with energy (−0.60%) and technology (−0.55%) falling the most. Materials (1.1%) and industrials (0.62%) posted the largest gains.
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The Bureau of Labor Statistics (BLS) employment situation report Friday morning sent U.S. markets lower at the opening bell, but as the day went on, traders refused to let equities fall much below the break-even line. After Monday’s opening bell, the Institute for Supply Management (ISM) reports its non-manufacturing index for November. Economists are expecting a reading of 53.5%, lower than October’s level of 54.4%. On Friday, the BLS will issue its report on the producer price index (PPI) for November. Economists are expecting the index to rise by 0.2%, as it did in October. Core PPI is expected to be flat compared to an increase of 0.2% month over month in October.

All three major indexes were showing losses in Monday’s premarket trading.

Before markets opened on Monday, SAIC reported results that beat analysts’ estimates on both the top and bottom lines. The company also raised fiscal year earnings and revenue guidance. Shares traded up about 2% in Monday’s premarket.

AutoZone and Signet Jewelers are on deck to report earnings before U.S. markets open on Tuesday.

Here is a preview of four companies set to report quarterly results later on Tuesday.

MongoDB

MongoDB Inc. (NASDAQ: MDB) offers a database platform for enterprise-level customers that runs in the cloud, on-site or in a hybrid setup. The shares are down by more than 64% over the past 12 months but have added 14% since the beginning of the December quarter.

Last week’s report on personal income and expenditures gave Federal Reserve Chair Jerome Powell a chance to soften his position on continued massive interest rate hikes. That was good news for MongoDB and its enterprise customers. The company’s revenue has been increasing steadily for five years, but it has only posted a profit in one of the quarters during those years. That needs to change.

Of 26 analysts covering the stock, 19 have a Buy or Strong Buy rating and the other seven have Hold ratings. At a recent share price of around $160.20, the upside potential based on a median price target of $300.00 is 87.3%. At the high target of $575.00, the upside potential is nearly 260%.

The revenue forecast for the company’s third quarter of fiscal 2023 is $3.04.73 million, which would be up 0.4% sequentially and by 34.3% year over year. Analysts are forecasting a per-share loss of $0.17, better than the prior quarter’s loss of $0.23 per share but worse than the $0.11 loss per share in the year-ago quarter. For the full fiscal year ending in January, analysts anticipate a loss per share of $0.31, down from last year’s loss of $0.59, on sales of $1.21 billion, up 39.2%.
MongoDB stock trades at an enterprise value to sales multiple of 8.7 times expected 2023 sales, 6.8 times estimated 2024 sales of $1.54 billion and 5.2 times estimated 2025 sales of $2.01 billion. The stock’s 52-week trading range is $135.15 to $570.58. The company does not pay a dividend. Total shareholder return for the past year was negative 64.4%.
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SentinelOne

Shares of cybersecurity software provider SentinelOne Inc. (NYSE: S) have plunged by about 68% over the past 12 months. The company, which came public in July 2021, reached a post-IPO high in late December, and the shares have shed nearly 73% since then. The company’s security analytics software is compatible with Amazon’s just-released Security Lake, and that gave the shares a lift last week. That was a welcome reprieve from a 4% decline following CrowdStrike’s weak report on Tuesday.

Of 20 brokerages covering the company, 15 rate the stock a Buy or Strong Buy, and the other five have a Hold rating. At a share price of around $14.80, the upside potential based on a median price target of $30.00 is about 105%. At the high price target of $54.00, the upside potential is 265%.

Third-quarter revenue is forecast at $111 million, up 8.3% sequentially and nearly double year over year. The company’s adjusted loss per share is forecast at $0.25, compared to the prior quarter’s loss of $0.20 and the year-ago quarterly loss of $0.15. For the full 2023 fiscal year that ends in January, the company is expected to post a loss per share of $0.81, compared to a loss of $1.03 per share last fiscal year, on sales of $416.32 million, up 103.3%.

SentinelOne is not expected to post a profit in 2023, 2024 or 2025. The stock’s 2023 enterprise value to sales multiple is 7.1 times, as well as 4.3 times estimated 2024 sales of $682.84 million and 3.0 times estimated 2025 sales of $1 billion. The stock’s 52-week range is $13.27 to $53.97. The company does not pay a dividend, and the total return for the past year was negative 68%.

Stitch Fix

Online apparel retailer Stitch Fix Inc. (NASDAQ: SFIX) has seen its stock price drop by about 84% over the past 12 months. The stock tumbled to its 52-week low in late October and bounced higher before adding about 22.6% in the past six weeks. The bar for the company’s first quarter of fiscal 2023 has been set pretty low, and any miss on revenue or loss-per-share estimates could sink the stock even more.
Analysts are decidedly cool on Stitch Fix stock. Of 18 brokerages covering the shares, 15 have a Hold rating and none rates the stock a Buy. At a share price of around $3.80, the upside potential based on a median price target of $5.00 is 31.6%. At the high target of $7.00, the upside potential is 84.2%.
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Fiscal first-quarter revenue is forecast at $459.55 million, down 4.8% sequentially and nearly 21% lower year over year. Stitch Fix is expected to post an adjusted per-share loss of $0.46, compared to a loss of $0.89 in the prior quarter and a loss per share of $0.02 a year ago. For the full fiscal year ending in July, the adjusted net loss is forecast at $1.41, better than last year’s loss of $1.90 per share. Full-year revenue is forecast at $1.91 billion, down about 12.8% compared to the prior year.

Stitch Fix is not expected to post a profit in 2023, 2024 or 2025. The enterprise value to sales multiple in each of those years is 0.2. The stock’s 52-week range is $3.09 to $26.25. Stitch Fix does not pay a dividend, and the total shareholder return for the past year is negative 83.6%.

Toll Brothers

Shares of homebuilder Toll Brothers Inc. (NYSE: TOL) have dropped by almost 30% over the past 12 months. Since posting an all-time high in mid-December of last year, the stock price has fallen by more than 36%.

When the company reported third-quarter results in August, new orders were down 60% year over year, and there has been little to indicate that home buyers are returning to the market. Among the many bad things that could still happen in the homebuilding industry are impairment charges related to land values and unsold inventories. Builders have some room to lower prices thanks to previously high margins that have improved their balance sheets.

Sentiment on the stock is better than lukewarm but not exactly bullish. Of 18 brokerages covering the company, eight have a Buy or Strong Buy rating and eight have rated the shares at Hold. At a share price of around $47.90, the upside potential based on a median price target of $51.00 is 6.5%. At the high price target of $66.00, the upside potential is more than 37%.


When the company reports fourth-quarter fiscal 2022 results, analysts expect to see revenue of $3.21 billion, up 10.5% sequentially and by 5.6% year over year. Adjusted EPS are forecast at $3.94, up 67.5% sequentially and 30.5% higher year over year. For the full fiscal year ended in October, analysts expect EPS of $9.28, up 40%, on sales of $9.77 billion, up 11.2%.

Toll Brothers stock trades at 5.2 times expected 2022 EPS, 5.8 times estimated 2023 earnings of $8.23 and 6.0 times estimated 2024 earnings of $7.97 per share. The stock’s 52-week range is $39.53 to $75.61. The company pays an annual dividend of $0.77 (yield of 1.31%). Total shareholder return for the past year was negative 28.8%.

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