Earnings Previews: Canoo, Nu Holdings

By Paul Ausick Updated Sep 12, 2023 at 11:51 AM EDT · Published May 12, 2023 at 10:01 AM EDT

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In early trading on Friday, the Dow Jones industrials were up 0.15%, the S&P 500 up 0.26% and the Nasdaq 0.23% higher.

After U.S. markets closed on Thursday, Faraday Future reported a diluted net loss per share of $0.07, well below the single analyst estimate calling for a loss per share of $0.43. The company did not report any revenue but did report net income of $6.5 million, thanks to a change in its fair value measurement from a loss of $149 million in the first quarter of last year to a gain of $94.92 million this year. Shares traded up 18% Friday morning.

News Corp. reported better-than-expected earnings per share (EPS) and revenue, but the company’s only division to post a year-over-year revenue increase was its Dow Jones unit. The company is cutting headcount and implementing other cost-saving measures. Shares were up about 7.7%.

Petrobras reported first-quarter revenue of $26.77 billion, slightly higher than expectations, and net income of $7.34 billion. Based on approximately 6.5 billion shares outstanding, earnings per American depositary receipt (ADR) came in at about $1.13, also higher than analysts expected. ADRs traded up about 2.2%.
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No notable earnings reports are due out Friday afternoon. Before U.S. markets open on Monday, Bitfarms and Workhorse are scheduled to release quarterly results.

Here is a look at two companies scheduled to report results later on Monday.

Canoo

Over the past 12 months, shares of electric vehicle (EV) maker Canoo Inc. (NASDAQ: GOEV) have dropped by nearly 80%, and the stock has not traded above $1.00 in three months.

Five U.S. challengers to Tesla’s dominance in the EV market have fared poorly over the past year. Shares of Faraday Future, down about 90% in the past year, and Lordstown, down about 80%, join Canoo in the sub-$1.00 share price range. Lucid and Rivian have seen share price declines of 55% and nearly 40% in the past year, but their shares trade at about $7.00 and $11.00, respectively.

Canoo, however, is not giving up. The company just announced that it will build an assembly plant in Oklahoma City to match its battery-making facility in nearby Pryor.

Just four brokerages cover the stock, and three of them have Buy or Strong Buy ratings. At a recent price of around $0.60 a share, the upside potential based on a median price target of $2.33 is about 275%. The high price target is $10.00.

No revenue is forecast for the first quarter, and Canoo posted no revenue last year. The company is expected to post a loss per share of $0.20 for the first quarter and $0.73 for the 2023 fiscal year. Last year the company lost $0.51 per share in the first quarter and $1.89 for the full year. In the 2023 fiscal year, the consensus revenue estimate is $167.18 million.

The enterprise value to sales multiple for 2023 is 2.0. Based on revenue of $878.68 million in 2024 and $2.19 billion in 2025, the multiples are3 0.4 and 0.2, respectively. The stock’s 52-week trading range is $0.50 to $5.00. Total shareholder return for the past year is negative 77.65%.
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Nu Holdings

Brazil-based Nu Holdings Ltd. (NYSE: NU) is a fast-growing fintech player in Brazil and other Latin American countries. Warren Buffett’s Berkshire Hathaway first acquired shares in Nu back in 2021, before the company was publicly traded. That $500 million investment has grown to about 107 million shares with a current value of more than $630 million, a profit of 26% in two years.

Of 19 analysts covering the stock, 11 have a Buy or Strong Buy rating, and six more have Hold ratings. At a share price of around $6.00, the upside potential based on a median price target of $7.00 is 16.7%. At the high price target of $12.40, the upside potential is 107%.
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First-quarter revenue is forecast at $1.54 billion, which would be up 6.11% sequentially and by 76.0% compared to the year-ago quarter. Analysts expect Nu to post adjusted EPS of $0.02, equal to the prior quarter’s EPS and better than the year-ago quarter’s break-even finish. For the full year, adjusted EPS are forecast at $0.11 per share, up 175% on sales of $6.66 billion, up 38.9%.

The stock trades at 51.6 times expected 2023 earnings, 25.2 times estimated 2024 earnings of $0.23 per share and 13.4 times estimated 2025 earnings of $0.44 per share. The stock’s 52-week range is $3.26 to $5.98. Nu does not pay a dividend, and total shareholder return for the past year was 60.16%.