Holiday sales, pipeline updates, and a tax credit extension mark this week’s earnings reports from Fitbit Inc (NYSE:FIT), First Solar, Inc. (NASDAQ:FSLR), Intercept Pharmaceuticals Inc (NASDAQ:ICPT), and Palo Alto Networks Inc (NYSE:PANW)
Fitbit is expected to report its fourth quarter earnings on Monday, February 22 after market close. For this quarter, analysts are expecting revenues of $647.82 million and earnings of $0.25 per share, compared to revenues of $409 million and earnings of $0.19 per share for last quarter.
In this report, analysts will focus on overseas growth and the company’s corporate wellness programs, expected to result in overall user growth. Additionally, software updates on various products such as the Surge, Charge, and Charge HR coupled with international product enhancements are expected to drive growth via social networking optimization. In the third quarter, the company sold 4.8 million devices, marked by the holiday season, while its app rose to the #1 spot on Apple’s App store on Christmas Day.
However, analysts have looming concerns regarding the upcoming report. Many are worried about increasing competition from Apple, Garmin, and Jawbone, creating a tough environment for the company. Furthermore, analysts are also concerned regarding unsold inventory levels and the longevity of the wearables category. Lastly, some analysts are raising red flags that Fitbit is one-product companies, citing similarities with GoPro, a falling stock.
Analyst Brad Erickson of Pacific Crest weighed in on Fitbit on February 18, 2016 with a Buy rating, reducing his price target to $31 from $47 prior to earnings. He cites a few risks for investors, such as, “potential for market saturation, competition, pricing pressure and margin erosion. GoPro is a now a cautionary tale for these types of stories, and we believe it has materially dampened the opportunity for FIT, regardless of its market opportunity or fundamentals.” However, he believes growth opportunities represent a compelling entry point for shares.
According to TipRanks’ statistics, out of the 12 analysts who have rated the company in the past 3 months, 11 gave a Buy rating while 1 remains on the sidelines. The average 12-month price target for the stock is $31.18, marking a 100% upside from where shares last closed.
First Solar, Inc.
First Solar is expected to post its Q4:2015 earnings on Tuesday, February 23 after market close. Analysts are expecting revenues of $929.80 million and earnings of $0.77 per share, compared to the same quarter of last year in which the company posted revenues of $1.01 billion and earnings of $0.76 per share.
For this quarter, analysts are focused on the effects of the recent ITC tax extension through 2019, which gives solar companies a 30% tax reduction to encourage long term projects. Analysts believe the extension will increase demand for utility scale PV (photovoltaic) in 2017. Due to the tax extension, there is less pressure for the company to complete projects in 2016, with some being delayed to 2017, a positive factor for long-term earnings. As a result of the extension, the company has up to 2GW spare capacity to allocate. Now that the tax extension is finalized, analysts believe the company will increase production on projects it placed on the back-burner. In the past quarter the company announced various projects such as a 20 year deal with Southern California Edison.
According to TipRanks’ statistics, out of the 11 analysts who have rated the company in the past 3 months, 10 gave a Buy rating while 1 remains on the sidelines. The average 12-month price target for the stock is $80.13, marking a 28% upside from where shares last closed.
Intercept Pharmaceuticals Inc
Intercept is scheduled to release its Q4:2015 earnings on Tuesday, February 23 before market open. For Q4, analysts expect revenues of $720,000 and a loss per share of ($3.15), compared to the same quarter of last year’s revenues of $445,000 and a loss per share of ($1.65).
As the company does not currently have any FDA approved products, all of its revenues are derived from agreements to commercialize and develop its pipeline products, and therefore investors will be focused on any pipeline updates in this report. Related, analysts are expecting an increase in operating expenses this quarter as the company further develops its pipeline.
Its main pipeline drug, OCA, developed to treat chronic liver diseases such as PBC, NASH, and PSC. It is currently under review to treat this PBC in patients who have not responded to UDCA, the only approved drug to treat this condition. Recently, the FDA announced a 3 month delay of this decision to May 29 as a result of requirement of additional data, which the company submitted.
According to TipRanks’ statistics, out of the 6 analysts who have rated the company in the past 3 months, 4 gave a Buy rating while 1 remains neutral. The average 12-month price target for the stock is $357.20, marking a 118% upside from where shares last closed.
Palo Alto Networks Inc
Palo Alto Networks is set to release its Q2:2016 earnings on Thursday, February 25 after market close. For this quarter, analyst expect the company to post revenues of $318.2 million and earnings of $0.39 per share, compared to revenues of $217.66 million and earning of $0.19 per share from the same quarter of last year.
This past quarter, 56% of resellers beat expectations selling the company’s products. Analysts are generally upbeat about the company, citing success in each product category, such as firewall and antivirus, and a high level of customer satisfaction, which should offset firewall refresh cycle declines.
Ahead of earnings, analyst Gray Powell of Wells Fargo weighed in on the company with an Outperform rating, raising his price target to $225 from $218 on February 10, 2016. He commented on recent high demand and favorable trends for the company. He explains, “While we continue to see a more muted broader spending environment in network security in 2016 vs 2015, we came away from our conversations with a higher degree of confidence in demand trends for PANW. We believe that PANW is in the early stages of a refresh cycle within its existing customer base. In addition, we think that PANW will continue to aggressively gain share against other network security vendors – particularly as larger enterprise buyers increasingly look to consolidate point solutions.”
According to TipRanks’ statistics, out of the 22 analysts who have rated the company in the past 3 months, 20 gave a Buy rating while 1 remains neutral. The average 12-month price target for the stock is $204.73, marking a 61% upside from where shares last closed.