Executive Summary
- Mega-cap U.S. stocks continue to report incredible earnings as the S&P 500 outperforms the rest of the world
- Small and mid-sized companies still face headwinds
- We feature two domestic firms with upcoming earnings focused on security and protection and a now-infamous Chinese company that is scheduled to report important interim sales data
Earnings Outlier
Genasys Inc (NASDAQ:GNSS), a $191-million market cap firm in the information technology sector, kicks off this week’s Event Data Outlook. A global provider of communications systems and solutions, Genasys’ systems are depended on for public safety events, national emergency warning systems, critical infrastructure protection and other mass notifications.
Protecting Packers
Fans of the Green Bay Packers might soon be familiar with this little-known communications and security firm. Genasys announced a partnership with the top football team in the NFC North division last week. According to the company, Genasys Emergency Management (GEM) Enterprise software for emergency and operations communications will now be used at Lambeau Field.
Important Public Safety Player
Perhaps on a more critical note, Genasys has recently announced a series of partnerships with municipalities, both domestic and foreign, to enhance safety. Firefighters in California require emergency alert communications devices. The last several wildfire seasons have been devastating to parts of the western U.S., and protecting those battling the blazes is a top priority.
Negative Stock Price Momentum
Shares of GNSS have been under heavy pressure this year. The stock peaked during the first quarter and has since fallen nearly 50%.
Figure 1: GNSS Stock Price History (1-Year)
Outlier Analysis
On Nov. 9, Wall Street Horizon confirmed the Q4 earnings date on Nov. 22 AMC. For details, contact us. The much earlier than usual earnings date, featuring a large Z-score of -4.67, could imply positive news and figures in GNSS’s upcoming report. Traders should keep this stock on their radars for potentially unusual price action.
Earnings Revision
Axon Enterprise, Inc. (NASDAQ:AXON) is an $11.6-billion market cap public safety company in the industrials sector. Sticking with the theme of personal defense, Axon engages in the development, manufacturing and sale of conducted electrical weapons. It operates through the TASER Weapons and Software and Sensors segments. The software and sensors segment includes wearable devices to protect both first responders and individuals at private companies.
Corporate Event Summary
On Aug. 25, Axon announced the acquisition of My90, which collects anonymized community feedback to generate actionable insights to help police agencies improve trust, safety, and equity. Another corporate event is on Axon’s calendar: The 11th Annual Needham Virtual SaaS 1x1 Conference 2021 takes place on Nov. 18.
Recent Underperformance
Axon’s stock price has wobbled over the last few months while the broader market has climbed. The underperformance comes along with a very concerning statement issued around its upcoming earnings date.
Figure 2: AXON Stock Price History (1-Year)
Revision Analysis
The 11-day delay (from Oct. 26 to Nov. 4) is among the largest earnings date revisions we have seen this earnings season. Traders should monitor this stock later this week for unusual news to be reported in its quarterly filing. For details, contact us.
Interim Data
As earnings season wraps up across the globe, keeping tabs on company-specific interim data grows more important. Interim data often provide evidence of how a firm is performing between usual quarterly or semiannual earnings announcements. Macro traders might be particularly interested in how one notable company is holding up.
China Evergrande Group is scheduled to report its October sales report of unaudited operating statistics of properties on Nov. 15. Evergrande’s interim data are particularly important considering the firm reports earnings just twice a year. WSH projects its next reporting date is not until March 31 (unconfirmed).
Back in the News
Evergrande has been in the news for ongoing turmoil in the Chinese real estate market. The nation’s second-largest property developer is once again facing major problems as it tries to make coupon payment obligations, according to recent reports. The company narrowly avoided default to bondholders just in the last several days.
Shares On Decline
Its stock price has not surprisingly been in free fall in 2021. Trading volume surged in September when Evergrande’s credit situation was most dire. It was feared that the spiralling credit event could trigger a Lehman Brothers-like moment for China. Those concerns faded and global stock markets rallied, but concerns have not vanished. Evergrande investors and global macro traders must pay close attention to important interim data out of this embattled real estate developer.
Figure 3: China Evergrande Group Stock Price History (1-Year)
Conclusion
As another exceptionally strong earnings season concludes on Wall Street, small and mid-sized companies are still enduring headwinds. Macro conditions, such as surging U.S. inflation and a supply chain that remains tied up, are making business operations challenging. Meanwhile, global macro risks are still in play as the Evergrande saga persists. Traders must stay ahead of key corporate event risks by monitoring unusual earnings reports and interim data. Wall Street Horizon empowers traders to effectively manage risk amid this uncertain economic environment.