Investing

Earnings Previews: Hecla Mining, Li Auto, Roblox

Paul Ausick

Published: May 8, 2023 12:08 pm

In late-morning trading on Monday, the Dow Jones industrials were down 0.29%, the S&P 500 down 0.12% and the 0.22% lower.

Before U.S. markets opened on Monday, BioNTech beat consensus estimates for both earnings per share (EPS) and revenue. The Germany-based firm also confirmed its earlier estimate of around $5 billion in revenue from its COVID-19 vaccine. Shares traded up 1.4%.

Tyson Foods missed estimates on both the top and bottom lines. In its outlook for fiscal 2023, beef production is expected to decline by 4%, pork production is forecast roughly flat and chicken production is expected to rise by 3%. The company has forecast adjusted operating margins in the three segments ranging from down 2% to up 1% year over year. Shares traded down about 16%.

Devon Energy, Lucid and Palantir are on deck to report results after U.S. markets close on Monday, with Duke Energy, Fox, Fisker and Nikola set to report results the following morning. Later on Tuesday, look for results from Affirm, Airbnb, Luminar, Occidental Petroleum and Rivian.

The following four companies are scheduled to report quarterly earnings first thing Wednesday morning.

Hecla Mining

Idaho-based Hecla Mining Co. (NYSE: HL) is the largest U.S. producer of silver. Over the past 12 months, the stock price has risen by about 21%. Silver prices have bounced around in the past year, and took a serious bounce higher beginning in early March, adding about 25% in the past two months. Silver production in the first quarter was 10% higher sequentially. The company has targeted 17 million ounces of production this year, rising to 20 million ounces by 2025.

Hedge funds and ETF issuers boosted their holdings in Hecla stock by as much as 23% (State Street) in the first quarter. Goldman Sachs added 325% to its holdings in Hecla during the quarter, to around 1% of Hecla stock outstanding. About 66% of Hecla’s float is owned by institutional investors.

Of eight brokerages covering the stock, two have Hold ratings and six have Buy or Strong Buy ratings. At the recent trading price of around $6.20, the upside potential to the median price target of $7.50 is 21%. At the high price target of $8.25, the upside potential is 33%.

First-quarter revenue is forecast to be flat sequentially and rise by 4.5% year over year to $194.84 million. Hecla is expected to post EPS of $0.02, flat both sequentially and year over year. For the full 2023 fiscal year, EPS are forecast to increase by 183% to $0.14, and revenue is expected to increase by 20.2% to $864.1 million.

Hecla stock trades at 43.4 times expected 2023 EPS, 48.8 times estimated 2024 earnings of $0.13 and 41.9 times estimated 2025 earnings of $0.15 per share. Its 52-week trading range is $3.41 to $7.00, and the company pays an annual dividend of $0.02 per share (yield of 0.37%). Total shareholder return in the past year is 24.58%.

Li Auto

Beijing-based electric vehicle (EV) maker Li Auto Inc. (NASDAQ: LI) has seen its share price increase by about 13.6% over the past 12 months. Shares have gained more than 20% since the beginning of 2023. Last month, Li delivered more than 25,000 units, the first of China’s premium-priced EV makers to reach that milestone. Tesla still outsells Li by about 3 to 1 in China, but the Chinese automaker is well ahead of Xpeng and Nio, its main rivals in the premium market of EVs priced above $43,400.

Of 25 brokerages covering Li Auto, 24 have a Buy or Strong Buy rating. At a share price of around $24.60, the upside potential based on a median price target of $32.10 is 30.5%. At the high price target of $58.00, the upside potential is around 135%.

First-quarter revenue is forecast at $2.7 billion, up 5.4% sequentially and by 78.8% year over year. Analysts have forecast EPS of $0.11, down 20% sequentially but up 5.7% year over year. For the 2023 fiscal year, current estimates call for EPS of $0.35, up from EPS of $0.01 in 2022, on sales of $13.4 billion, up about 104%.

The stock trades at 70.0 times expected 2023 earnings, 40.1 times estimated 2024 earnings and 23.3 times estimated 2025 earnings of $1.06 per share. The stock’s 52-week range is $12.52 to $41.49, and the company does not pay a dividend. Total shareholder return in the past year is 17.57%.

Roblox

Interactive entertainment platform Roblox Corp. (NYSE: RBLX) has seen its stock price rise by about 18.6% over the past 12 months, thanks to a year-to-date gain of around 18.5%. Then Roblox reported preliminary March metrics that included a drop of 1.7% in daily active users to 66.2 million, still higher than last year’s average of 65 million. The March numbers may have been okay, but that was not good enough. Maybe Wednesday’s earnings report will juice the shares. But Roblox needs to show revenue growth and a solid outlook for more because the company still pursues growth rather than profitability.

Of 27 analysts covering the stock, 13 have a Buy or Strong Buy rating and eight more rate it at Hold. At a price of around $36.00 a share, the implied gain based on a median price target of $45.00 is 20%. At the high target of $65.00, the upside potential is about 80%.

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The consensus first-quarter revenue estimate is $766.02 million, down 14.8% sequentially but up 22.4% year over year. Analysts also expect Roblox to post a loss per share of $0.40, compared to the prior quarter’s loss of $0.48 per share and the year-ago quarter’s loss of $0.27. For the full fiscal year, the company is expected to post a loss of $1.72 per share, compared to last year’s loss of $1.55 per share. Revenue is forecast at $3.37 billion, up 17.3%.

Roblox is not expected to post a profit in 2023, 2024 or 2025. For 2023, 2024 and 2025, the company’s enterprise value to sales multiple is 6.1, 5.3 and 4.7, respectively. The stock’s 52-week range is $21.65 to $53.88, and the company does not pay a dividend. The total shareholder return for the past year was 29.79%.