On Friday, the Dow Jones industrials closed up 1.00%, the S&P 500 up 1.30% and the Nasdaq 2.19% higher. After the first half hour of trading Tuesday morning, the Dow was down 0.31%, the S&P 500 up 0.47% and the Nasdaq up 1.13%.
U.S. markets were closed Monday in observance of the Memorial Day holiday.
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After U.S. markets close Tuesday, earnings reports from Box, HP and Hewlett Packard Enterprise are due. Tanker shipping company Frontline reports results before markets open on Wednesday.
Here are previews of four companies reporting quarterly results after markets close on Wednesday.
C3.ai
C3.ai Inc. (NYSE: AI) bills itself as an enterprise AI software company offering a platform and environment that its customers use to build and deploy artificial intelligence applications. Last week, the company announced that its Generative AI Product Suite was available for purchase on the Google Cloud Marketplace.
There is no question that the company has prospered this year from its AI products. The stock price has risen by almost 200%, even more than Nvidia’s rise of around 170%. But C3.ai’s path to prosperity has been bumpier. A short-seller report published in April sent shares down by about 38%. An internal review completed earlier this month found that the short-seller reports were not “supported by the facts.”
Analysts remain cautious on the stock, with six of 12 brokerages rating it at Hold and only two having a Buy or Strong Buy rating. At a recent price of around $33.00, the shares already trade well above their median price target of $18.50 and the high price target of $30.00.
For the company’s fourth quarter of fiscal 2023, analysts expect revenue of $71.34 million, which would be up 7.0% sequentially but down 1.4% year over year. C3.ai is forecast to post a quarterly loss per share of $0.17, compared to the prior quarter’s loss of $0.06 and a year-ago loss of $0.21 per share. For the full fiscal year that ended in April, the loss per share estimate is $0.46, down from a loss per share of $0.73 in 2022, on sales of $265.79 million, up 5.2%.
C3.ai is not expected to post a profit in 2024 or 2025. The stock trades at a 2023 enterprise value to sales multiple of 11.0. For 2024 and 2025, the multiple is 9.2 and 7.7, respectively. The stock’s 52-week trading range is $10.13 to $34.68. The company does not pay a dividend, and total shareholder return for the past year was 79.12%.
24/7 Wall St.CrowdStrike
Cloud security platform maker CrowdStrike Holdings Inc. (NASDAQ: CRWD) has seen its share price rise by more than 45% in 2023. But the stock is still down by more than 1.0% over the past 12 months, indicating just how hard tech companies were hit last year. Spending on cybersecurity is rising as businesses beef up their defenses against potential AI attacks, and CrowdStrike is going to have to keep up with competitors like Palo Alto Networks in order to get its share of the work.
Of 46 brokerages covering the firm, 41 have a Buy or Strong Buy rating. At a share price of around $154.00, the upside potential based on a median price target of $165.00 is 7.1%. At the high price target of $235.00, the upside potential is 53.6%.
First-quarter revenue is forecast at $676.23 million, up 6.1% sequentially and by about 40% year over year. Adjusted earnings per share (EPS) are forecast at $0.20, up 6.7% sequentially and 50% higher year over year. For the full fiscal year ending in January, analysts expect CrowdStrike to report EPS of $2.31, up 50.3%, on sales of $3.0 billion, up 33.7%.
CrowdStrike stock trades at 66.6 times expected 2024 EPS, 51.3 times estimated 2025 earnings of $3.00 and 39.00 times estimated 2026 earnings of $3.95 per share. Its 52-week range is $92.25 to $205.73. CrowdStrike does not pay a dividend. Total shareholder return for the past year is negative 1.1%.
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Nordstrom
Department store operator Nordstrom Inc. (NYSE: JWN) shares the earnings stage with Macy’s this week, following Kohl’s earnings report last week that briefly pulled all three stocks higher. The store closed its downtown mall store in San Francisco last month. In March, when it reported fourth-quarter earnings, Nordstrom also announced that it be winding down its Canadian operations. Key indicators for the quarter will be foot traffic, ticket size and growth in the company’s direct-to-customer operations. Another question is how long Nordstrom can keep paying a dividend yield approaching 5%.
Analysts are wary. Of 20 brokerages covering the stock, 11 have a Hold rating and only four have a Buy rating. At a share price of around $16.00, the upside potential based on a median price target of $17.50 is about 9.4. At the high price target of $40.00, the upside potential is about 150%.
For the first quarter of fiscal 2024 that ended in April, revenue is forecast at $3.11 billion, down about 28% sequentially and by 13.9% year over year. Analysts have forecast a loss per share of $0.11 for the quarter, compared to EPS of $0.74 in the prior quarter and a loss per share of $0.06 in the prior year. For the full fiscal year, consensus estimates call for EPS of $1.88, up 12.4%, on sales of $14.79 billion, down 4.8%.
Nordstrom stock trades at 8.6 times expected 2024 EPS, 8.2 times estimated 2025 earnings of $1.96 and 7.5 times estimated 2026 earnings of $2.16 per share. Its 52-week range is $14.03 to $27.72. The company pays an annual dividend of $0.76 (yield of 4.74%). Total shareholder return for the past year was negative 31.93%.
Salesforce
Shares of enterprise software maker Salesforce Inc. (NYSE: CRM) have turned around a 12-month slump, with a year-to-date share price gain of about 65% and a 12-month gain of nearly 35%. Salesforce has mostly completed its job cuts and launched its own AI offering, dubbed EinsteinGPT, but opinion among analysts varies. Most agree that it is just a marker, but how and how quickly Salesforce can get firmly into generative AI is the big question. It does not help that Microsoft is making inroads into traditional Salesforce territory.
Of 43 analysts covering the stock, 32 have a Buy or Strong Buy rating. Another 10 rate it at Hold. At a price of around $218.00 a share, the upside potential based on a median price target of $230.00 is 5.5%. At the high price target of $325.00, the upside potential is 49.1%.
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