Monday, August 29
Tuesday, August 30
Thursday, September 1
Salesforce.com Inc (NYSE:CRM)
Information Technology - Software | Reports August 29, after the close.
The Estimize consensus is looking for earnings of $0.24 per share on $2.0 billion in revenue, 2 cents higher than Wall Street on the bottom line and inline on the top. Compared to a year earlier, earnings are expected to increase by 25% with revenue increasing 24%.
Despite decent growth expectations, EPS estimates have fallen by 6% since the last quarterly report, and revenue estimates have stayed flat. Salesforce (CRM) is just about flat from the beginning of the year.
What to Watch: The leader in CRM software has continually reported double digit gains in both revenue and profit. Strong growth has been fueled by key partnerships with big tech names such as Microsoft (NASDAQ:MSFT), organic sales growth in its cloud based services, and the acquisition of smaller competitors which have been successfully integrated into their own suite. However, all of this M&A activity has investors worried that growth might be slowing for the company.
Salesforce is one of the leaders in cloud computing and SaaS services. The company’s pipeline of new initiatives continues to grow as they diversify their portfolio of services. In particular, Salesforce is seeing increasing traction from its new pricing strategy surrounding its Lightening UI platform launched late last year. Moreover, adding a layer of analytics to its suite of services will be an important long term driver.
International growth also presents a major opportunity for Salesforce. Nearly 75% of revenue currently come from North America, which is okay for now given the strength of the U.S. dollar but diversifying to other regions should not go unexplored. The biggest news coming out of Salesforce this year is the launch of an Internet of Things cloud on Amazon Web Services.
Palo Alto Networks Inc (NYSE:PANW)
Information Technology - Communications Equipment | Reports August 30, after the close.
The Estimize consensus is looking for earnings per share of 51 cents, one cent above Wall Street and up 81% from the same period last year. That estimate has increased 3% since PANW most recent report in May. Revenue is anticipated to grow by 37% to $390 million, a bit of a slowdown from past quarters. Despite better than expected earnings and revenues since the beginning of the year, Palo Alto (PANW) is still down 20%.
What to Watch: Palo Alto has solidified its status as an industry leading cyber security company. Consistent growth demonstrates the company’s increasing strength from its hybrid SaaS model and strategic partnerships.
Early 2016 featured a key partnership with Proofpoint while also extending the footprint of its cloud ecosystem. Increasing customer adoption coupled with frequent product updates will help boost revenue moving forward
A significant source of concern in the software security space has arisen by virtue of the tight spending environment and competition from tech giants like Cisco. An increasingly competitive landscape could necessitate PANW to raise its spending on sales and marketing thereby limiting its current margin leverage.
Abercrombie & Fitch Company (NYSE:ANF)
Consumer Discretionary - Specialty Retail | Reports August 30, before the open.
The Estimize consensus is looking for earnings per share of -$0.22, one cent above the sell-side consensus and 243% lower than the same period a year earlier. That estimate has come down 211% since ANF’s last quarterly report. Revenue is anticipated to drop 3% to $787 million, on par with last quarter’s results. Abercrombie & Fitch (ANF) is down 16% since the beginning of the year.
What to Watch: The retail space has seen mixed results this season, but teen retailers such as AEO and URBN have been doing remarkably well. Abercrombie is scheduled to report fiscal second quarter 20167 earnings on Tuesday morning, but unfortunately it doesn’t look like they will continue the trend.
In the first quarter, the company saw comparable store sales decrease 4%, after the fourth quarter put up 1% growth. While the namesake Abercrombie stores posted negative SSS of 8%, Hollister was flat for the quarter. Hollister has now been repositioned to compete in the burgeoning fast fashion segment.
The move into fast fashion should provide Abercrombie an edge over its competitors and also drive top line expansion. Concerns still remain around currency headwinds and deep discounting measures that have been taken in order to push inventroy.
Ambarella Inc (NASDAQ:AMBA)
Information Technology - Semiconductors | Reports September 1, after the close.
The Estimize consensus is looking for earnings per share of $0.40 on $64 million in revenue, 3 cents above Wall Street on the bottom line and inline on the top. Compared to a year earlier this reflects a 54% decrease in earnings and a 24% decline in sales. Earnings and revenue estimates have fallen 4% since the last quarterly report. Despite falling fundamentals, Ambarella (AMBA) is up 24% since the beginning of the year.
What to watch: Ambarella has delivered strong earnings since its IPO in 2014 but that hasn’t always been enough to please investors. The stock is making a comeback though, up 24% year-to-date. Unfortunately, some Ambarella’s success is contingent on GoPro which has posted negative revenue growth in each of the past 3 quarters.
The GoPro chipmaker has had a great run since IPOing in 2014, beating the Estimize EPS consensus in all 8 quarters despite the struggles of its biggest client. However, those results started to crack last quarter, with the expectation that negative earnings growth will continue in FQ2 2017. GoPro reported earlier in the season and although they beat on the top and bottom-line for the first time in 3 quarters, growth was deeply negative for both.
Some predict that the release of GoPro’s Hero 5 camera ahead of the holiday season could be a saving grace for AMBA. Even if that doesn’t turn out to be the case, the semiconductor is attempting to diversify its top line away from action cameras and drones and into less volatile products.
Smith & Wesson Holding Corporation (NASDAQ:SWHC)
Consumer Discretionary - Leisure Equipment & Products | Reports September 1, after the close.
The Estimize consensus calls for EPS of $0.57, 5 cents higher than Wall Street’s consensus. Revenue expectations for Smith & Wesson (SWHC) are also slightly higher than the sell-side, with the Estimize community expecting $201 million, as compared to $197 million. Earnings expectations have trended upward by 30% since last quarter, while revenue estimates are up 36%. This puts YoY growth expectations at 79% for EPS and 36% for sales.
What to Watch: After every mass shooting the discussion of gun control starts to inundate mainstream news. Just the threat of more stringent restrictions leads gun enthusiasts sprinting to buy new guns and ammunition. This has been seen in shares of both SWHC and RGR which despite a rollercoaster year, are up 30% and 3%, respectively.
While earnings appear promising on the surface, growth has decelerated over the past 2 quarters, from triple digits in FQ2 and Q3 2016, to 47% last quarter. Reported earnings have surpassed the Estimize EPS consensus in each of the last 7 quarters, and investors will want to see that trend continue on Thursday to justify any continued rally in the stock. The firearm manufacturers trade at a high price to sales ratio which is not supported by its current share prices.
How do you think these companies will perform?