In the first half-hour of Monday trading, the Dow Jones industrials were up 0.2%, while the S&P 500 was down 0.27% and the Nasdaq 0.19% lower.
Before markets opened Monday morning, Zim Integrated Shipping reported fourth-quarter revenue that topped revenue and earnings per share (EPS) expectations. Zim also declared a fourth-quarter dividend of $6.40, bringing its total dividend for the past four quarters to $16.95, representing about 44% of its full-year net income of $4.63 billion. Shares traded up almost 22% in Monday’s premarket.
After markets close Monday, Gitlab is set to report quarterly earnings. Here is a look at what analysts expect to hear from three firms reporting quarterly results after markets close on Tuesday.
Lennar
Homebuilder Lennar Corp. (NYSE: LEN) has seen its share price rise by more than 10% over the past 12 months. The stock has added 22% over the past six months and posted its 52-week high late last month. After missing EPS estimates in the March quarter of 2019, Lennar has beaten the consensus estimate in 15 consecutive quarters. Sales have topped estimates in 12 of those 15 quarters.
For the quarter just ended, however, sales have been soft, even for the traditionally weak time of year for home sales, the result of higher mortgage rates. Turmoil in the banking sector caused by the insolvency closures of Silicon Valley Bank and Signature Bank of New York will not help the homebuilding industry either.
Of 22 analysts covering the stock, 13 have a Buy or Strong Buy rating and eight more rate it at Hold. At a recent price of around $97.00 a share, the upside potential to a median price target of $114.00 is 17.5%. At a high target of $152.00, the upside potential is 56.7%.
For its first quarter of fiscal 2023, Lennar is expected to report revenue of $5.99 billion, which would be down 41.1% sequentially and by 3.4% year over year. Adjusted EPS are pegged at $1.55, down 69.2% sequentially and 42.6% lower year over year. For the full 2023 fiscal year ending in November, EPS are forecast at $9.14, down 49%, on sales of $27.79 billion, down 17.5%.
Lennar stock trades at 10.4 times expected 2023 EPS, 9.6 times estimated 2024 earnings of $9.95 and 8.3 times estimated 2025 earnings of $11.46 per share. The stock’s 52-week trading range is $62.54 to $109.28. Lennar pays an annual dividend of $1.50 (yield of 1.52%). Total shareholder return for the past year is 12.6%.
24/7 Wall St.SentinelOne
Shares of cybersecurity software provider SentinelOne Inc. (NYSE: S) have plunged by more than 60% over the past 12 months, including a decline of 13% so far in March alone. The company is bedeviled by its high SG&A spending. Since coming public in mid-2021, operating income has never been positive, and SentinelOne posted an operating loss of $104.1 million in the prior quarter. Revenue has been growing steadily as well, but a plan from management on how the company becomes profitable could provide the share price with a nice boost.
Of 29 brokerages covering SentinelOne, 16 have a Buy or Strong Buy rating and the other 13 have Hold ratings. At a share price of around $14.00, the upside potential based on a median price target of $18.00 is about 28.6%. At the high price target of $49.00, the upside potential is 250%.
Fourth-quarter revenue is forecast at $124.69 million, up 8.1% sequentially and 90.0% higher year over year. The company’s adjusted loss per share is forecast at $0.16, flat sequentially, and a penny better year over year. For the full 2023 fiscal year that ended in January, the company is expected to post a loss per share of $0.73, compared to a loss of $1.03 per share last fiscal year, on sales of $420.72 million, up 105.4%.
SentinelOne is not expected to post a profit in 2023, 2024 or 2025. The stock’s 2023 enterprise value to sales multiple is 7.7, 4.3 times estimated 2024 sales of $621.26 million and 3.4 times estimated 2025 sales of $949.42 million. The stock’s 52-week range is $12.69 to $42.84. The company does not pay a dividend, and the total return for the past year was negative 60.53%.
StoneCo
StoneCo Ltd. (NASDAQ: STNE) provides fintech services to merchants and their partners in Brazil. The company is headquartered in the Cayman Islands and is a subsidiary of HR Holdings. Over the past 12 months, the shares have dropped about 8%. Since posting an all-time high of $95.12 just over two years ago, the stock is down by about 90%.
Contrary to what most people expect, Berkshire Hathaway owns a stake of 3.4% in the Brazilian firm, most of which it acquired in late 2018. Cathie Wood’s Ark Invest owned a stake of 958,000 shares in the first quarter of 2022 but has cut its stake by about 60% since then. Ark sold 151,000 thousand shares in the fourth quarter of 2022.
Analysts have adopted a holding pattern on the shares, with 13 of 19 having Hold ratings and five more rating the stock at Buy. At a share price of around $8.70, the upside potential based on a median price target of $12.19 is 40.1%. At the high price target of $42.61, the upside potential is about 390%.
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