About half an hour after Wednesday’s opening bell, the Dow Jones industrials traded 0.35% lower, the S&P 500 was down 0.49% and the Nasdaq had retreated 0.45%. Equity prices were bouncing around and probably will until the petroleum inventory report is issued later in the morning.
After markets closed Tuesday, Enphase Energy beat estimates for both earnings per share (EPS) and revenue. Revenue rose by more than 75% year over year, and the company issued first-quarter guidance in line with expectations. Shares traded down about 0.4% early Wednesday.
Fortinet beat the consensus EPS estimate and missed on revenue. The company’s first-quarter guidance was in line with estimates, and its full-year guidance was slightly higher than analysts expected. Shares traded up 13.5% Wednesday morning.
Lumen beat both top-line and bottom-line estimates, but free cash flow fell from $776 million in the prior quarter to $126 million. Because the company eliminated its generous dividend, there was nothing to offset the decline in free cash flow, and fiscal-year guidance for cash came in low. Shares traded down more than 18%.
Before markets opened on Wednesday, CVS Health also topped estimates on the top and bottom lines. The company issued in-line guidance and shares traded up 3.9%.
Fox posted better-than-expected revenue and EPS. World Cup and NFL advertising boosted ad revenue by 4%. Shares traded up by about 6%.
Uber beat consensus estimates on both the top and bottom lines. CEO Dara Khosrowshahi said that Uber eventually would eliminate its stake in Chinese ride-sharing firm DiDi and that the company expects to have positive free cash flow in the “foreseeable future.” The stock traded up 3%.
Affirm, Disney, MGM Resorts and Robinhood are on deck to report quarterly results after U.S. markets close on Wednesday. First thing Thursday morning, AbbVie, Cameco, Canopy Growth and PepsiCo will report earnings.
Here is a look at what to expect when the following four firms report quarterly results after U.S. markets close Thursday or before they open on Friday.
24/7 Wall St.Cloudflare
Shares of cloud services provider Cloudflare Inc. (NYSE: NET) have tumbled by more than 45% in the past year. The stock dropped by almost $100 per share between its high in late March and its low in early November. Since the beginning of the year, the stock is up 29%, and more analysts have boosted their ratings on the stock since the company reported third-quarter earnings in November. Cloudflare was also an early adopter of artificial intelligence in its products, and that should give it a leg up as far as its marketing message goes. Cloudflare reports quarterly results late on Thursday.
Of 27 brokerages covering Cloudflare stock, 13 have a Buy or Strong Buy rating and 13 more have Hold ratings. At a recent share price of around $58.00, the implied upside on a median price target of $59.00 is 1.7%. The upside potential is 63.8% based on a high price target of $95.00.
Fourth-quarter revenue is forecast at $274.17 million, which would be up 8.0% sequentially and by 41.6% year over year. Analysts expect the company to post EPS of $0.04, down 25.8% sequentially, and better than the break-even quarter last year. For the full year, Cloudflare is expected to report EPS of $0.11, compared to last year’s loss of $0.05 per share, on sales of $943.69 million, up 48.5%.
Cloudflare stock trades at about 388.4 to estimated 2023 earnings of $0.15 and 248 times estimated 2024 earnings of $0.24 per share. The stock’s 52-week trading range is $37.37 to $132.45. Cloudflare does not pay a dividend, and total shareholder return for the past year was negative 45.5%.
Enbridge
Energy infrastructure giant Enbridge Inc. (NYSE: ENB) has seen its share price drop by about 6% over the past 12 months. Look for Enbridge to post its results on Friday morning.
The Calgary-based company is trying to shepherd a $500 million tunnel project underneath the Straits of Mackinac that separates Michigan’s upper and lower peninsulas. In 2018, the company’s crude oil pipeline to the East Coast, known as Line 5, was damaged when it was hit by an anchor from a passing freighter, effectively shutting down the pipeline. Opposition to the Michigan pipeline is strong, and, in 2019, Michigan Governor Gretchen Whitmer ordered Enbridge to cease operations on Line 5, an order the company has ignored. The state has sued the company, and the case is being heard in federal court.
Of 23 brokerages covering the stock, 11 have a Buy or Strong Buy rating and the other 12 rate it at Hold. At a price of around $41.00 a share, the upside potential based on a median price target of $42.35 is 3.3%. At the high price target of $48.30, the upside potential is about 17.8%.
Analysts are forecasting fourth-quarter revenue of $10.33 billion, up 23.3% sequentially and 4.3% higher year over year. Adjusted EPS are forecast at $0.55, up 12.4% sequentially and up a penny year over year. For the full 2022 fiscal year, analysts expect Enbridge to report EPS of $2.20, up 1.3%, on sales of $39.64 billion, up 6.5%.
Enbridge stock trades at 18.6 times expected 2022 EPS, 17.9 times estimated 2023 earnings of $2.27 and 17.8 times estimated 2024 earnings of $2.29 per share. The stock’s 52-week range is $35.02 to $47.67, and the company pays an annual dividend of $2.61 (yield of 6.41%). Total shareholder return over the past year was essentially zero.
24/7 Wall St.Lyft
Ride-hailing operator Lyft Inc. (NASDAQ: LYFT) has suffered a share price decline of more than 50% over the past year, much worse than rival Uber’s decline of some 7% (not including a boost Wednesday morning after reporting earnings). For 2023 to date, however, Lyft stock is up nearly 63%, sharply more than Uber’s jump of 41%. Lyft pays its drivers more and charges its riders more than Uber, and both face regulatory risk in a California court ruling that could reclassify drivers as employees, not contractors. Lyft reports results after markets close on Thursday.
The 42 analysts covering Lyft stock have cooled to its prospects, with 18 having a Buy or Strong Buy rating and 23 a Hold rating. At a share price of around $18.00, the stock trades right at its median price target. At the high target of $60.00, the upside potential is 233%.
Fourth-quarter revenue is forecast at $1.15 billion, up 9.6% sequentially and by 18.6% year over year. The company is expected to report adjusted EPS of $0.13, up 21.5% sequentially and 30.0% higher year over year. For the full 2022 fiscal year, analysts anticipate EPS of $0.41, solidly better than last year’s loss per share of $0.25, on sales of $4.08 billion, up 27.1%.
Lyft stock trades at 44.0 times expected 2022 EPS, 19.6 times estimated 2023 EPS of $0.92 and 11.1 times estimated 2024 earnings of $1.62 per share. The stock’s 52-week range is $9.66 to $45.65. Lyft does not pay a dividend, and total shareholder return for the past 12 months was negative 56.3%.
PayPal
PayPal Holdings Inc. (NASDAQ: PYPL) has seen its share price drop by 32.3% over the past 12 months. The company recently announced that it will lay off about 7% (around 2,000) of its workforce, the by-now standard response to any economic headwind that threatens a company’s bottom line. Company CEO Dan Schulman posted a comment on LinkedIn about PayPal’s “commitment to both purpose and profit, to action and impact at scale, and to delivering sustainable growth that benefits all people.” Except now-former employees.
PayPal does face new competition from a digital wallet due later this year called EWS from a group of seven giant U.S. banks. These banks are also the drivers behind Zelle, a bug-riddled peer-to-peer payment, so maybe PayPal does not have too much to worry about. The company reports fourth-quarter results after markets close on Thursday.
Of 49 analysts covering the stock, 35 rate it as a Buy or Strong Buy and 13 have Hold ratings. At a share price of around $82.00, the upside potential based on a median price target of $100.00 is 22%. At the high target of $200.50, the upside potential is about 145%.
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