Earnings Previews: Compass, IonQ, Tencent Music

The three major U.S. equity indexes closed mixed on Thursday. The Dow Jones industrials added 0.08% while the S&P 500 slipped by 0.07% and the Nasdaq fell 0.58%. Just five of 11 sectors ended the day higher, led by energy (3.4%) and financials (1.2%). The producer price index fell by half a point month over month but remains up 9.8% year over year, perhaps indicating that wage and job growth have not yet run their course. In Friday’s premarket session, all three indexes were trading up by around 0.3%.

After markets closed Thursday, Rivian Automotive beat the consensus loss-per-share estimate by a penny and surpassed the revenue estimate. The electric pickup and SUV maker reiterated production estimates for 2022 of 25,000 and said it had received 98,000 preorders for its R1 SUV. Shares were trading down about 0.7% in Friday’s premarket.

Payoneer Global beat both top-line and bottom-line estimates and raised full-year revenue guidance. Shares traded about 20% higher in premarket action.

Toast also beat estimates on both the top and bottom lines. The company raised third-quarter and full-year revenue guidance. Shares traded up about 13%.

ESS Tech hammered the consensus revenue estimate of $380,000, reporting quarterly revenue of $686,000 and a net loss per share of $0.10, much better than the forecast loss of $0.15. Shares traded up more than 7% Friday.

Illumina missed both earnings and revenue estimates, topping off a poor report by lowering profit and revenue estimates for the full year. Shares traded down about 15% in Friday’s premarket.

After U.S. markets close on Friday and before they open on Monday, Bitfarms, Li Auto and Sundial Growers will be reporting results.

Here is a look at three firms scheduled to report quarterly results after markets close Monday.

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Online real-estate brokerage Compass Inc. (NYSE: COMP) posted its 52-week high in mid-August of last year and has been on a steep downward path ever since. The stock sunk to its 52-week low in late June, down 79% for the period. Four straight quarterly revenue decreases, though higher year over year, have fueled investors’ dash for the exits. Operating cash flow has fallen in those four quarters as well. At the very least, a solid turnaround plan had better be in the offing.

Of eight brokerages covering the firm, five have a Buy or Strong Buy rating and the others have Hold ratings. At a recent price of around $4.65 a share, the upside potential based on a median price target of $7.00 is 50.5%. At the high price target of $8.50, the upside potential is nearly 83%.

Second-quarter revenue is forecast at $2.1 billion, which would be up 50.8% sequentially and by 8.2% year over year. Analysts have forecast a loss per share of $0.01, compared to break-even prior and year-ago quarters. For the 2022 fiscal year, current estimates call for a loss per share of $0.61, down from a loss of $1.38 per share in 2021, on sales of $7.54 billion, up about 17.4%.

Compass is not expected to post a profit until 2024. The stock trades at an enterprise value to sales multiple of 0.3 for 2022. The multiple for both 2023 and 2024 is 0.2. The stock’s 52-week range is $3.31 to $17.70, and the company does not pay a dividend. Total shareholder return in the past year was negative 71.6%.

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