I call these kinds of companies my COVID-19 list. It’s not that they’re infected, it’s just that they have been affected either positively or negatively by the closures that have happened across the world. The shift to online spending has certainly helped companies like Amazon, and the closing of malls and the concern about going out in public affected retailers like Macy’s negatively. As we look forward to this week, these companies may give us a handle on the direction of consumer spending.
While we’re highlighting five companies in this post, there are a number of other companies that have earnings that could be on it. Here’s a partial list alng with the expected move based on next week’s option expiration:
Peloton Interactive Inc (NASDAQ: PTON): Earnings on August 5 AMC and a +/-$7.11 expected move
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Twilio Inc (NYSE: TWLO): Earnings on August 4 AMC and a +/-$29.83 expected move
Carvana Co (NYSE: CVNA): Earnings on August 5 AMC and a +/-$17.47 expected move
Etsy Inc (NASDAQ: ETSY): Earnings on August 5 AMC and a +/-$15.40 expected move
Square Inc (NYSE: SQ): Earnings on August 5 AMC and a +/-$13.12 expected move
Roku Inc (NASDAQ: ROKU): Earnings on August 5 AMC and a +/-$21.17 expected move
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Here are four companies that are at the center of the COVID-19 pandemic that announce earnings next week.
COVID-19 Stock #1: Clorox Co (NYSE: CLX)
You probably don’t have to think very long or hard to decide whether Clorox was likely affected positively or negatively by COVID. Clearly the desire to clean everything many times over is potentially a huge opportunity for Clorox. The only question is whether the price has already priced in that future.
The company is set to announce today before the market opens (BMO). Current analyst estimates for the current quarter are for $1.99 against $1.88 last year on 2.7% revenue growth. It does seem that the valuation may have a hard time justifying the current price if the company doesn’t beat the expectations and raise guidance.
The options market is currently expecting a +/- $7.08 move this week.
COVID-19 Stock #2: Activision Blizzard, Inc (NASDAQ: ATVI)
What do you do if you can’t go to the movie, a restaurant and everything closes early? If you look at Apple’s earnings, it certainly appears that the extra discretionary income may have been underappreciated despite the high unemployment. For a company that is focused on gaming, it would make sense for them to see an uptick in earnings and revenue growth.
The company is expected to announce earnings on August 4 after the market close (AMC). Analysts are expecting Q2 EPS to come in at $0.68 compared to $0.38 last year on 40.6% revenue growth. That is pretty phenomenal. While the positive revisions have been significant, they taper off next quarter and from the 2020 fiscal year to 2021. The current 5-year projected growth rate is 21.68% compared to 11.89% in the previous five years.
The options market is currently expecting a +/- $7.39 move this week.
COVID-19 Stock #3: Walt Disney Co (NYSE: DIS)
If ATVI and CLX were impacted positively, Disney has been one of the most impacted companies because of the global nature of the pandemic. With all of their parks having been closed at one point this year and the fact the California park is still closed for the foreseeable future. The company has also continued to delay the premier of its live-action version of Mulan.
The company announces its earnings on August 4 after the market close. Analysts are currently expecting the company to lose $0.64 compared to a profit of $1.35 last year on 4.1% lower revenues. Even 2021 earnings are expected to be nearly half of what they were for 2019. It will be interesting to see whether the company will offer guidance.
The options market is currently expecting a +/- $6.46 move this week.
COVID-19 Stock #4: Fortinet Inc (NASDAQ: FTNT)
This company may be lesser known for many investors, but it is a cloud security company that has zero debt. The trend of working from home and doing everything virtually places a company like this is a great position if they have the products. The company has more than doubled off the march low and is looking to take the next leg higher in its bullish journey. However, they have to deliver.
The company announces its earnings on August 6 after the market close. Analysts are current projecting Q2 EPS of $0.65 compared on $0.58 last year on 15.9% higher revenues. That growth is expected into the current year and next year with 14.2% and 16.7% estimated EPS growth.
FTNT doesn’t have weekly options, but the market maker move, based on the implied volatility difference in the August and September option expirations, is +/- $11.03.