This is our last Earnings Preview of this quarter. None of our stocks report this week; there are two next week (14th); none the week of the 21st; and one the week of the 28th.
The Week of 11/14
Opko Health (OPK: $9.28)
Earnings Date: Monday, no time set
Consensus: 3Q2016
Revenues: $320 million
EPS: -$0.03
Year Ago Quarter Results
Revenues: $143 million
EPS: $0.25
Key Things to Watch For in the Quarter
Analysts on the Street expect Opko to report extraordinary growth in revenue of 125% to $320 million for the third quarter. However, they are not looking for profits yet as analysts expect a loss of $0.03 per share. But note that the firm has outperformed estimates in previous quarters. In 3Q15 consensus projected EPS of -$0.02, which Opko strongly outperformed by $0.23 per share.
A number of insider transactions have occurred in the early days of November, showing a sense of confidence from senior management. Two executives bought blocks of 10,000 shares at $9.50. The company currently trades at a PE ratio of 41, which is considered quite cheap when compared to the Healthcare industry’s PE of 65. As a firm focused on establishing leading positions in large and rapidly growing medical markets, Opko Health continues to be a bullish position for us here at The Bull Market Report.
Home Depot (HD: $125)
Earnings Date: Tuesday, Approx. 7:00 AM
Consensus: 3Q2016
Revenues: $23 billion
EPS: $1.58
Year Ago Quarter Results
Revenues: $22 billion
EPS: $1.36
Key Things to Watch For in the Quarter
Home Depot is expected to report a 16% increase in earnings per share for the third quarter of 2016. This healthy growth forecast is also represented in a consensus projected revenue increase of 4.5% to $23 billion. As the world’s largest home improvement retailer with over 2,200 stores, Home Depot shows no signs of slowing growth, especially when the number of residential building permits continues to grow at a consistent pace. In addition to dominating market share, Home Depot also provides investors with a relatively cheap entry opportunity. The stock is trading at a PE ratio of 20, which is about 50% lower than the Retail industry’s 36 PE. With strong management and a positive growth outlook, The Bull Market Report remains bullish.
The Week of 11/28
Splunk (SPLK: $60)
Earnings Date: Tuesday – Approx. 4:00 PM
Consensus: 3Q2016
Revenues: $230 million
EPS: $0.08
Year Ago Quarter Results
Revenues: $175 million
EPS: $0.05
Key Things to Watch For in the Quarter
Analysts expect significant growth from Splunk for the third quarter of 2016. Wall Street consensus projects revenue to grow by 32% to $230 million, and earnings per share to grow by 60% to $0.08. Splunk is a multinational corporation that produces software for searching, monitoring, and analyzing large amounts of machine-generated data. Its competitive advantage is enabling customers to gain real-time operational intelligence by harnessing the value of their data. Year-to-date, Splunk’s stock has remained relatively unchanged, only up $1, but has risen sharply since the lows of February when it hit $30. Strong revenues this quarter makes us feel good about this investment for the future. Profits will come in time.