Earnings Week Ahead: Zoom, Nordson, Five Below and MongoDB in Focus
ZOOM: The San Jose, California-based communications technology company is expected to report its second-quarter earnings of $1.16 per share, which represents year-over-year growth of over 26% from $0.92 per share seen in the same period a year ago.
The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of about 50% to $990.2 million. Zoom will report 2Q FY22 earnings after market close on Monday, August 30th.
Zoom expects to report revenue of $985 million to $990 million and adjusted earnings of $1.14 to $1.15 per share in the second quarter. In its full-year guidance, the company now expects revenue of $3.98 billion – $3.99 billion, and adjusted earnings of $4.56 – $4.61 per share.
“Continuation of WFH and structural increase in usage of video, progress in Phone, and pending FIVN acq supports Zoom Video Communications’ (ZM) longer-term platform opportunities. With Delta variant likely slowing NT churn, FQ2 expectations skew high. Remain EW but positively inclined w/ next legs of growth coming into view,” noted Meta A Marshall, equity analyst at Morgan Stanley.
“Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins are encouraging. Expanding platform with pending FIVN acquisition. Environment post-COVID and large-scale WFH, and timing to reach, less certain.”
NORDSON: The Westlake, Ohio-based medical device manufacturer is expected to report its fiscal third-quarter earnings of $2.07 per share, which represents year-over-year growth of over 45% from $1.42 per share seen in the same period a year ago.
The maker of adhesives and industrial coatings would post revenue growth of about 12% to $600 million. Nordson will report 3Q FY21 earnings on Monday, August 30th. It is important to note that the company beat consensus expectations for EPS four times in a row. Monday’s better-than-expected results could help the stock hit new all-time highs.
“We are tactically constructive into Nordson’s (NDSN) 3Q21 earnings release next week, as we see the likelihood for a 3Q21 beat and full-year guidance raise. Additionally, we think NDSN’s favourable exposure to electronic components shortages (more an upside opportunity than downside risk) is differentiated,” noted Connor Lynagh, equity analyst at Morgan Stanley.
“We are making moderate revisions to our prior estimates, largely reflecting our incrementally positive outlook on NDSN’s end-markets. The impact on our long-term estimates is limited, with FY21 EBITDA only ~3% higher. Near-term, we have raised our 3Q consolidated revenue growth by ~400bps, with ATS ~700bps higher. Consequently, 3Q revenue is ~3% above prior, with EBITDA ~5% higher as well.”
Tuesday (August 31)
Wednesday (September 1)
IN THE SPOTLIGHT: FIVE BELOW
The Philadelphia, Pennsylvania-based discount retailer Five Below is expected to report its second-quarter earnings of $1.11 per share, which represents year-over-year growth of over 45% from $0.50 per share seen in the same period a year ago.
The popular discount store retailer that sells products that cost up to $5 would post revenue growth of more than 50% to $656 million. Five Below will report 2Q FY21 earnings after market close on Wednesday, Sept 1. It is important to note that the company beat consensus expectations for EPS four times in a row.
“Five Below’s (FIVE) profile among pure B&M retailers is nearly unmatched (20% top/bottom-line growth, no debt). It’s driven by a differentiated, defensible model focused on extreme value merchandise across diverse categories. FIVE is exiting the COVID-19 pandemic as a fundamentally stronger and more relevant business, with best-in-class growth characteristics, various company-specific initiatives in place, and solid liquidity,” noted Simeon Gutman, equity analyst at Morgan Stanley.
“However, valuation is near peak the stock seems fairly valued, in our view, with a balanced risk/reward skew. White space store growth (>50% unit runway remaining) and multi-year track record of ~20% square footage growth with >90% productivity.”
Thursday (September 2)
IN THE SPOTLIGHT: MONGODB
MongoDB Inc, which provides an open-source database platform for automating, monitoring, and deployment backups, is expected to report a loss of $0.39 per share in the second quarter, worse than -$0.22 per share seen in the same quarter a year ago.
However, the New York City-based company would post year-over-year revenue growth of over 30% to $182.4 million.
“MongoDB has established itself as one of the most popular databases to support the development of modern net-new apps. Into CY21, we see the business at a crucial inflection point. First, it is poised to garner the majority of revs from its public cloud business – the segment where market growth and share gains are the strongest,” noted Sanjit Singh, equity analyst at Morgan Stanley.
“Second, the acceleration in customer adds suggests that its go-to-market model has matured to scale a modern, cloud-first business. As a result, an equation for durable 30%+ growth emerges (20%+ customer base growth with near 120% net expansion from the existing base) – a growth story that does not look overly demanding given the strategic nature of this asset.”
|AEO||American Eagle Outfitters||$0.54|
|SAIC||Science Applications International||$1.47|
Friday (September 3)
No major earnings are scheduled for release.