Earnings Previews: Stitch Fix, Dick’s Sporting Goods, GoHealth

A very light schedule of companies reporting earnings continues next week with only a relative handful of companies that attract significant investor interest scheduled to report.

There are no earnings reports scheduled for release after markets close today, and there is just one of note on Monday when China-based electric vehicle maker Xpeng reports.

Among the stocks that reported after markets closed Thursday and before they reopened Friday morning were Broadcom, Costco, Gap, Big Lots, and Smith & Wesson. The latter posted a big quarter but the outlook for the year ahead is murky at best.

After markets close Monday two young firms are scheduled to report earnings reports, while one venerable consumer discretionary company reports before Tuesday’s opening bell. We’ve also added some observations on the consumer discretionary sector following the previews.

Stitch Fix

Stitch Fix Inc. (NASDAQ: SFIX) is set to report fiscal second-quarter results after markets close Monday. The personal styling company posted a share price gain of 128% in 2020. A good showing, considering the stock traded at less than its November 2017 IPO price of $15 a share. The stock has tacked on another 8% in 2021.

Analyst sentiment on the stock is mixed. So far this year, two brokerages have maintained the equivalent of Buy ratings on the stock and lifted their price targets. Two others have dropped the ratings from the equivalent of Buy to Hold while raising their price targets. The stock trades at around $64 a share, currently around 13% higher than the consensus price target of $56.13. At the high target of $95, the potential upside is 48%.

The consensus third-quarter estimate calls for a net loss per share of $0.22, far worse than the $0.11 earnings per share posted in the same quarter last year. The revenue estimate for the quarter is $512.2 million, up 13% year over year. For the 2021 fiscal year, analysts are looking for a net loss per share of $0.26 on sales of $2.1 billion

Shares are richly priced at roughly 1.2 times expected sales for the next 12 months. The stock traded down about 11% at one point Friday morning, before paring its drop to around 6% to $65.50, in a 52-week range of $10.90 to $113.76. The company is not expected to post an annual profit until 2023.

GoHealth

GoHealth Inc. (NASDAQ: GOCO) also reports results after Monday’s closing bell. It operates a U.S. online marketplace for health insurance. Like property and casualty insurer Lemonade, GoHealth came public last summer, with the difference that by the end of the year, Lemonade had added 76% to its share price while GoHealth had lost nearly 40%. It may be some consolation that GoHealth’s share price decline of 14% so far in 2021 is about half that of Lemonade.

Analysts expect GoHealth to post earnings per share (EPS) of $0.45 in the quarter on revenue of $436.4 million. For the 2020 fiscal year, estimates call for a loss of $0.26 per share on sales of $868.2 million. For the record, Lemonade posted 2020 revenue of $94 million and a net loss per share of $0.60.

At a current price of around $11.75 a share, GoHealth stock trades at around 52 times expected 2020 EPS, 14 times expected 2021 earnings and less than 10 times expected 2022 EPS.

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