Earnings Previews: Affirm, Aurora Cannabis, Toast

Early trading Wednesday had two of the three major U.S. indexes in the green. Tuesday’s up-and-down regular session ended with the Nasdaq up 1% while the Dow Jones industrials and the S&P 500 finished the day down and up a quarter-point, respectively. The monthly consumer price index (CPI) rose 0.3% month over month in April, a steep drop from the 1.2% increase between March and April. The annual rate declined from 8.5% to 8.3%. Core inflation, excluding food and energy, rose 0.6% month over month and stands at 6.2% for the past 12 months.

After markets closed Tuesday, cryptocurrency exchange Coinbase missed analysts’ estimates on both the top and bottom lines. The company said it expects lower trading volume in the current quarter. The stock traded down more than 17% Wednesday morning.

Kinross Gold matched analysts’ consensus earnings estimate but missed the forecast revenue number. The company also said it plans to reduce its capital spending in each of the next three years. Shares were down fractionally in early trading.

Occidental Petroleum traded up by about 2% after beating both the top-line and bottom-line estimates.

SoFi Technologies released its earnings report before markets closed Tuesday, following an early leak of the results. Trading was halted on the stock and shares closed down 12% for the day. In early trading Wednesday, the stock was trading up less than 2%, after meeting the profit estimate and beating on revenue. The decentralized finance company also lowered its revenue guidance for the current quarter but guided full-year sales above estimates.

We already have previewed four companies set to report results late on Wednesday: Bakkt, Coupang, Disney and Rivian.

Here is a look at three companies set to report results after markets close on Thursday.

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Affirm

Since posting an annual high in early November, shares of payment processor Affirm Holdings Inc. (NASDAQ: AFRM) have dropped by more than 66%. The stock tumbled by 11.7% on Tuesday after peer lender Upstart reported a lackluster quarter (Upstart dropped 56.4% on Tuesday). Affirm, a buy-now-pay-later lender, also faces the certainty of having to charge higher interest rates and the likelihood of rising default rates.

Of 14 analysts covering the stock, eight have a Buy or Strong Buy rating and four others rate the stock at Hold. At a recent price of around $18.20 a share, the implied gain based on a median price target of $60.00 is nearly 230%. Based on the high price target of $85.00, the upside potential for the stock is about 367%.

Analysts expect Affirm to report fiscal third-quarter revenue of $344.42 million, which would be down 4.6% sequentially but 49.3% higher year over year. They also expect the company to report an adjusted loss per share of $0.41, better than the prior quarter’s loss of $0.57 per share and the year-ago loss of $1.00 in the third quarter. For the full 2022 fiscal year, Affirm is currently expected to post a loss per share of $1.39, smaller than last year’s loss of $2.59 per share, on revenue of $1.33 billion, up 52.4%.

Affirm is not expected to post a profit in 2022, 2023 or 2024. The enterprise value-to-sales multiple is expected to be 5.0 in 2022. Based on average estimated sales of $1.92 billion and $2.7 billion for 2023 and 2024, respectively, the multiple is 3.5 for 2023 and 2.5 for 2024. The stock’s 52-week trading range is $16.55 to $176.65. Affirm does not pay a dividend. Total shareholder return for the past year was negative 68.1%.

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