In this article, we discuss 10 most anticipated quarterly earnings releases to watch. If you want to read about some more anticipated earnings releases, click 5 Most Anticipated Quarterly Earnings Releases to Watch.
It is earnings season on Wall Street and the overall market situation has been complicated by the rise in interest rates and fears of an impending recession. According to data released by software firm FactSet, more than half of all companies on the benchmark S&P 500 have already released their earnings for the first three months of 2022. Despite growth concerns, a whopping 80% of these firms have reported earnings per share that are above analyst estimates. This number is 3% above the five-year average.
In April, FactSet had predicted that firms on the S&P 500 would report earnings growth of over 10% for the fifth straight quarter. In the last five years, the actual earnings of companies on the index have beaten estimated earnings by around 9%. On aggregate so far in the first quarter of 2022, this number is well-below average, clocking in at around 3.4%. FaceSet has attributed this weakness to the “comparison to unusually high earnings growth in Q1 2021 and continuing macroeconomic headwinds”.
Even large companies like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), which comprise more than one-fifth of the total benchmark index along with two other tech giants, are dealing with inflationary headwinds as they report their earnings. Sectors like information technology, financials, communication services, and health care have all posted positive surprises, with consumer discretionary the standout loser so far.
Our Methodology
The companies that are expected to declare their earnings on Thursday, May 12, were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks were also considered.
Hedge fund sentiment was included as a classifier as well. The hedge fund sentiment around each stock was calculated using the data of around 900 elite hedge funds tracked by Insider Monkey in Q4 2021.
Speedcurve Performance Analytics
Most Anticipated Quarterly Earnings Releases to Watch
10. Veru Inc. (NASDAQ:VERU)
Number of Hedge Fund Holders: 8
Veru Inc. (NASDAQ:VERU) is a biopharma firm focused on the development of medicines for managing cancers. The stock has gained in recent weeks after the company announced positive results from a phase 3 trial of its investigational therapy, sabizabulin, as a treatment for COVID-19 patients. The US Food and Drug Administration has set up a meeting to discuss the pre-emergency use authorization for the drug. As virus cases surge in China, the new drug is attracting lots of global interest as well.
On April 12, Oppenheimer analyst Leland Gershell maintained an Outperform rating on Veru Inc. (NASDAQ:VERU) and raised the price target on the shares to $36 from $25, noting the value of pipeline drugs that presented “a substantial near-term revenue opportunity” for the firm.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Perceptive Advisors is a leading shareholder in Veru Inc. (NASDAQ:VERU), with 4.4 million shares worth more than $26 million.
Just like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Veru Inc. (NASDAQ:VERU) is one of the stocks that elite investors are monitoring.
9. Aurora Cannabis Inc. (NASDAQ:ACB)
Number of Hedge Fund Holders: 11
Aurora Cannabis Inc. (NASDAQ:ACB) makes and sells cannabis products. On April 11, the stock surged as authorities in New Jersey indicated that a select group of cannabis firms will be allowed to sell recreational marijuana products within weeks. The successful passage of the federal bill legalizing marijuana from the House has also boosted the shares ahead of the earnings. Aurora purchased rival TerraFarma for $38 million in March. The latter is a vertically integrated cannabis firm.
On February 11, Cantor Fitzgerald analyst Pablo Zuanic kept a Neutral rating on Aurora Cannabis Inc. (NASDAQ:ACB) stock but lowered the price target to C$7.60 from C$10.75, identifying cash gross profit growth and limited flow through of cost savings to the bottom line as some of the reasons behind the target decrease.
At the end of the fourth quarter of 2021, 11 hedge funds in the database of Insider Monkey held stakes worth $69 million in Aurora Cannabis Inc. (NASDAQ: ACB), compared to 8 the preceding quarter worth $53 million.
8. Endava plc (NYSE:DAVA)
Number of Hedge Fund Holders: 14
Endava plc (NYSE:DAVA) provides technology services. On March 23, the company announced that it had launched its first operations in Canada. The firm intends to expand beyond the financial services sector in Canada in 2022. Analysts expect the company to grow at a compound annual growth rate of over 30% in the next few years, largely due to the diverse range of services it offers in the tech domain, that include products for the healthcare, mobility, and retail verticals.
On February 17, Citi analyst Ashwin Shirvaikar kept a Buy rating on Endava plc (NYSE:DAVA) and lowered the price target to $180 from $195, noting that the firm continued to benefit from “a robust demand environment for digital transformation services”.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Driehaus Capital is a leading shareholder in Endava plc (NYSE:DAVA), with 737,067 shares worth more than $123 million.
In its Q4 2021 investor letter, Baron Funds highlighted a few stocks and Endava plc (NYSE:DAVA) was one of them. Here is what the fund said:
“Endava plc (NYSE:DAVA) provides consulting and outsourced software development for business customers. Shares outperformed after the company reported better-than-expected quarterly results with 55% revenue growth and 89% EPS growth. Full-year financial guidance was raised to reflect strong demand across all verticals and geographies. Management expects organic revenue growth to exceed 30% this year and 20% over the long term with upside from accretive acquisitions. We continue to own the stock because we believe Endava plc (NYSE:DAVA) will continue gaining share in a large global market for IT services.”
7. FIGS, Inc. (NYSE:FIGS)
Number of Hedge Fund Holders: 16
FIGS, Inc. (NYSE:FIGS) operates as a healthcare apparel and lifestyle company. In March, the company guided 2022 above market estimates, saying it expected net revenues to be up to $560 million in the year against consensus expectations of around $547 million. The revenues for the company have climbed 400% in the past three years, attesting to the success of the brand. The turnover in the medical field is also high, resulting in robust demand for the products of the company as new buyers enter the market.
On April 7, Truist analyst Beth Reed initiated coverage of FIGS, Inc. (NYSE:FIGS) stock with a Buy rating and a price target of $32, backing the firm to top $1 billion in sales by 2025 as it grows market share and offers an expanding suite of lifestyle products to health professionals.
At the end of the fourth quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $510 million in FIGS, Inc. (NYSE:FIGS), compared to 21 in the preceding quarter worth $821 million.
In its Q4 2021 investor letter, Baron Funds highlighted a few stocks and FIGS, Inc. (NYSE:FIGS) was one of them. Here is what the fund said:
“During the fourth quarter, the Fund increased its position in FIGS, Inc. (NYSE:FIGS), an IPO from earlier in the year, at what we believe were attractive prices for a longterm investment. Figs, a founder-led health care apparel and lifestyle brand, is one of the fastest growing and most profitable digitally native, direct-to-consumer companies in the world. The traditional health care apparel market underserved the needs of health care professionals by selling commoditized products through an antiquated distribution network. FIGS, Inc. (NYSE:FIGS) reimagined the health care professional’s uniform, engineering it for function and style. And by selling directly to consumers, Figs engages with customers in authentic and meaningful ways, giving the company a unique data advantage that the competition cannot replicate. This has enabled the company to maintain best-in-class customer acquisition costs even as it has scaled. With fewer than 2 million active customers out of 21 million health care professionals in the U.S., and even more internationally, we believe Figs has a long growth runway ahead.”
6. Himax Technologies, Inc. (NASDAQ:HIMX)
Number of Hedge Fund Holders: 20
Himax Technologies, Inc. (NASDAQ:HIMX) is a semiconductor firm. The firm has 3,023 active patents spread across a range of sectors in the auto space. The dividend yield of the stock, an important consideration for investors in light of soaring inflation, is expected to climb to 15% in the next few months, even as the profits the company makes fund capital spending on research and development. The profits have surged from around 25% in 2020 to almost double in 2021. A global chip shortage has helped provide margin optimization and pricing power as well.
On April 7, Nomura analyst Donnie Teng downgraded Himax Technologies, Inc. (NASDAQ:HIMX) stock to Neutral from Buy with a price target of $11, noting that the outlook for the firm was overshadowed by weaker end demand and pricing pressure.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm Yiheng Capital is a leading shareholder in Himax Technologies, Inc. (NASDAQ:HIMX), with 8.9 million shares worth more than $142 million.
In addition to Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Himax Technologies, Inc. (NASDAQ:HIMX) is one of the stocks that hedge funds have their eye on.
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Disclosure. None. 10 Most Anticipated Quarterly Earnings Releases to Watch is originally published on Insider Monkey.
