Investing

Earnings Previews: Amazon, Apple, Robinhood

Here is a look at three companies set to report results after markets close on Thursday.

Amazon

In mid-July, Amazon.com Inc. (NASDAQ: AMZN) posted a new all-time high share price. Since then, the stock has dropped 25%. For the past 12-month period, shares have lost 16.6%, virtually all of it in 2022.

Another vote to unionize some 1,500 Amazon employees at a Staten Island sorting facility started Monday, and that follows a successful vote at another New York location, where the union won an election at an Amazon warehouse that employs 8,300 people. Investors appear to be getting increasingly concerned about unionization among Amazon’s 1.1 million workers.

Because the company does not pay a dividend, share price growth is what keeps investors driving up Amazon’s value. The company needs a plan, and investors are going to want to hear it soon.

All but two of 52 analysts surveyed give Amazon stock a Buy or Strong Buy rating. Of the two holdouts, one rates the stock at Hold and the other at Strong Sell. At a recent price of around $2,787.80 a share, the upside potential based on a median price target of $4,000 is 43.5%. At the high price target of $5,000, the upside potential is 79.4%.

Analysts are looking for first-quarter revenue of $116.52 billion, which would be down 15.2% sequentially but up 7.3% year over year. Adjusted earnings per share (EPS) are expected to be $8.50, down 69.4% sequentially and 46.2% lower year over year. For the full 2022 fiscal year, EPS are expected to come in at $47.86, down 26.2%, on sales of $540.24 billion, up 15%.

Amazon stock trades at 58.2 times expected 2022 EPS, 38.4 times estimated 2023 earnings of $72.69 and 25.0 times estimated 2024 earnings of $111.56 per share. The stock’s 52-week range is $2,671.45 to $3,773.08. Amazon does not pay a dividend. Total shareholder return over the past 12 months was negative 18.2%.

Apple

The largest U.S.-listed company by market cap has added about 17.5% to its share price over the past 12 months. That’s about half its 2021 share price increase. For the year to date, however, Apple Inc. (NASDAQ: AAPL) shares are down 13.7%. The COVID-19 lockdowns in China have forced the recent closure of two facilities of Apple’s main iPhone supplier, Foxconn. Demand for the iPhone 13 has been strong all through the March quarter, and services revenues (an even higher margin business than iPhones) are also expected to rise sharply.

Of 44 analysts covering Apple, 34 give the stock a Buy or Strong Buy rating, and another eight rate the shares at Hold. At a share price of around $156.80, the upside potential based on a median price target of $192 is about 22.4%. At the high price target of $226, the upside potential is more than 44%.

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