Tesla Will Report Its Q2 earnings Today. Tesla stock Investors will be focussed on any Model 3 commentary.
This week has been a busy one on the earnings calendar. With the most awaited earnings, that of Cupertino based Apple (NASDAQ:AAPL), now behind us, all eyes will be focussed on the next set of earnings reports. Not far behind Apple in terms of popularity, car-maker Tesla Inc (NASDAQ:TSLA) will be the biggest earnings announcement of the day. Apart from the quarterly report card of the Elon Musk-led company, investors will also be looking forward to the quarterly updates from Fitbit (NYSE:FIT) and San Francisco, California based Zynga (NASDAQ:ZNGA).
Tesla Q2 earnings, without a doubt, will be the biggest announcement for the day. Wall Street expects the company to report a loss of $1.8 a share on a revenue of $2.55 billion. The consensus numbers imply a 19 cent increase in the loss per share, compared to the year-ago quarter. The earnings whisper, at -$1.76, implies a 4 cent beat. On the top line front, the analyst estimates imply over 100% growth, on a year-over-year basis. As outlined in our detailed Tesla earnings preview, the below-expectations delivery numbers have weighed on the stock. The miss on the vehicle deliveries earned Tesla stock multiple rating downgrades on Wall Street. Tesla stock price is yet to recover from the aftershocks. The last closing price of $319.57 a share is 13.7% lower than where Tesla stock opened at on the day of the vehicle deliveries announcement.
Tesla stock seems to have completely priced in the vehicle delivery miss, bouncing off its 100-day SMA (Simple Moving Average) in early July. However, the stock has been facing a strong resistance from its 50-day SMA, moving lower after failing to breach the key trend line on July 26. With the vehicle delivery miss already factored into the stock price (recent fall in TSLA stock price following the news), a strong delivery guidance for 2H 2017, driven by Model 3 sales could help Tesla stock break out above the key resistance level. Any model 3 commentary will have the complete attention of Tesla investors. A positive/negative surprise here could help decide the post-earnings trajectory of Tesla stock, which is known to make big moves following earnings announcements.
Fitbit Inc.(NYSE:FIT) Q2 Earnings: No End To The Decline?
San Francisco, California-based, Fitbit is another name which will on investors radar today. The manufacturer of fitness bands/activity trackers will report its Q2 2017 earnings after the bell today. The Wall Street consensus expects the company to report a loss per share of 15 cents, a steep fall from the 12 cent EPS the company had reported in the year-ago quarter. On the top line front, revenue consensus of $341.57 million marks a 41.8% year-over-year drop. The consensus has fallen from expectations for an 11 cent loss 90 days ago. The falling expectations could have put Fitbit in a position to deliver an earnings beat, with the current Fitbit Q2 earnings whisper number calling for a 14 cent loss, a cent better than Wall Street estimates.
Morgan Stanley analyst Katy Huberty released some bearish commentary ahead of the earnings release, cutting her Fitbit target price to $6.5, cutting 50 cents off the earlier target price of $7 a share. The analyst wrote that Fitbit needs to deliver key software improvements in order to gain a strong position on in the wearables market. In this context, any commentary on software product upgrades/improvements should be closely observed. The Fitbit management clearly needs a plan to quickly turn around the topline/earnings decline Fitbit has fallen into. The 30% year-to-date decline in Fitbit stock price is reflective of Fitbit's fall from a leadership position in the wearables market. Clearly, Fitbit bears are in charge of the counter and no meaningful plan to counter the rising competition will see the bulls take the stock further lower. to put it another way, Fitbit bulls need more than just an earnings beat.
Is Zynga Truly On A Turnaround Path?
Shares of Zynga have been in a solid uptrend over the last three months. The Frank D. Gibeau led video game developer is expected to report an EPS of 2 cents, on a revenue of $206.8 million. The Wall Street estimates imply a 2 cent EPS increase and an 18.4% top line growth over Q2 2016. If the company does meet the Wall Street estimates, the 18% top line growth will be the fastest top line growth print the company has reported for over 8 quarters.
Zynga has a strong track record of trumping analyst estimates, having met/beaten the Wall Street EPS estimate in each of the last 4 quarters. The case for an earnings beat is also supported by the Zynga Q2 earnings whisper of 3 cents a share, which implies a 1 cent beat. As pointed out by MotleyFool's Keith Noonan, the company's 'live services' is playing a central role in Zynga's comeback and any commentary on this front could well decide the post earnings movement of Zynga stock. Zynga is clearly on a turnaround, with revenues accelerating sequentially for the last 3 quarters, while the year-on-year growth rate has been accelerating. Q2 2017 will likely see a continuation of this trend.
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