Weekly Snapshot: Revenues to Watch This Week (CRWD, DOCU, ORCL, SFIX)
STocs were punished on Friday to end another tough session, booking heavy losses for the day and for the week. The S&P 500 index fell for the fourth time in five days on Friday as geopolitical tensions between Russia and Ukraine sparked more fears of slowing European economic growth, overshadowing a jobs report in February which caused the unemployment rate to fall to a two-year low of 3.8. %.
However, the buoyant labor market and seemingly strong economy were not enough to convince investors to ignore the headwinds of rising inflation and tighter monetary policy. Stocks also came under pressure from rising oil prices, with sanctions on Russia threatening to cause oil and natural gas supply disruptions. The Dow Jones Industrial Average fell 179.93 points, or 0.53% to close at 33,614.73. The S&P 500 index lost 34.62 points, or 0.79%, to end at 4,328.87. The tech-heavy Nasdaq composite index fell 224.50 points to close at 13,313.44, losing 1.66%.
As it stands, the S&P, which fell 1.7% for the week, losing its 200- and 50-day averages, continues to struggle to regain its key support levels. The Nasdaq fell 3.1% in the five-day session, while the Dow Jones fell 1.8%. It was the fourth consecutive week of decline for the blue chip index. The story of the day continues on geopolitical tensions between Russia and Ukraine, which topped a strong jobs report in February.
The Labor Department said Friday that 678,000 non-farm payroll jobs were added in February, beating estimates of 440,000. Meanwhile, average hourly earnings rose 1 cent to $31.58 and hours worked rose. increased by 0.1 hour. But the deteriorating situation in Ukraine is fueling markets, and given the speed at which the situation is worsening, investors are unwilling to hold stocks over the weekend. Investors with a long-term view can take advantage of the sell-off by taking advantage of the weakness.
It remains to be seen how investors will react next week as more developments emerge from Ukraine. “Buying the dip” has been the strategy of choice for investors who have been on the sidelines waiting for better entry points. It will be interesting to see if this trend continues. And this is where the patience and discipline of investors for high-quality stocks – despite the back and forth between price and value – must kick into high gear. As for gains, here are the ones I’ll be watching this week.
Point correction (SFIX) – Post Closing Reports, Tuesday, March 8
Wall Street expects Stitch Fix to lose 29 cents per share on revenue of $515.12 million. That compares to the quarterly loss of 20 cents per share on revenue of $504.09 million a year ago.
What to watch: What will it take for Stitch Fix stock to stop falling apart? Shares of the online personal styling company have been punished over the past year, plunging nearly 20% in thirty days, while falling 71% in the past six months. Not only has the stock lost 40% of its value since the start of the year, but if you’ve bought and held the stock over the past twelve months, you’ve probably lost close to 90% of your investment. In addition to fears of competitive pressures, investors worried about Stitch Fix’s ability to maintain profitability over time. Now might be a good time to buy stocks. While fundamental issues remain, Stitch Fix has improved its profitability metrics by engaging in new product offerings like Freestyle, which has helped drive engagement and volumes, and there are cost benefits as well. products and improved partnerships with key suppliers. This trend suggests that Stitch Fix no longer needs to grow the active customer base to increase revenue and profits. That said, to reverse the stock’s decline on Tuesday, the market will want to see an acceleration in revenue growth, as well as improved profit margins.
CrowdStrike (CRWD) – Post Closing Reports, Wednesday, March 9
Wall Street expects CrowdStrike to earn 20 cents per share on revenue of $412.36 million. That compares to the year-ago quarter where earnings were 13 cents per share on revenue of $264.93 million.
Keep an eye on: CrowdStrike’s status within the next-gen endpoint security industry has grown over the past couple of years as enterprises shift to digitization and remote working. Cybersecurity has played a critical role as more and more workloads migrate to the cloud. This will likely be the case for the foreseeable future, especially as governments and enterprises adopt software-defined and cloud-native cyber defense architectures. It’s a point CrowdStrike CEO George Kurtz made in a recent interview with CNBC about the impact of the Russian invasion of Ukraine: “Governments and businesses need to be ready because cyber will play an essential role in any modern war. Part of the challenge in cyber is that there really aren’t any standards. So what happens with this escalation is going to be really interesting. In other words, CrowdStrike’s market is likely to rise accordingly. However, that didn’t stop CrowdStrike’s stock from falling along with the rest of the market. Stocks have fallen nearly 31% in the past six months, trailing the 3.5% decline in the S&P 500 index. CrowdStrike has a lot to prove on Wednesday and its forecast for the next two quarters will determine the title reaction.
Oracle (ORCL) – Post Closing Reports, Wednesday, March 9
Wall Street expects Oracle to earn $1.17 per share on revenue of $10.52 billion. That compares to the year-ago quarter where earnings were $1.16 per share on revenue of $10.09 billion.
Keep an eye on: Despite being down 10.3% year-to-date, while down about 20% from recent highs, Oracle shares are up 17% in the past 12 months, outperforming the 14% rise in the S&P 500 Index. And during the recent market correction, Oracle stock was one of the best performing names among large-cap software technologies. Still, stocks still look relatively undervalued, given the company’s consistent execution over the past three quarters. But the company’s $28.3 billion cash deal for health information services provider Cerner (CERN) has drawn mixed reviews from analysts. It’s an expensive deal at $95 per share, especially considering that Cerner’s fiscal 2021 revenue hit less than $6 billion. Oracle is no stranger to big acquisitions as a way to gain traction in the software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) markets. Currently seen as a game of transformation, based on its business transition to a cloud subscription-based model, Oracle is set to continue on Wednesday to demonstrate how this deal will support its fundamentals and how it will support the recent rate of growth.
DocuSign (DOCUMENT) – Post Closing Reports, Thursday, March 10
Wall Street expects DocuSign to earn 48 cents per share on revenue of $561.62 million. That compares to the year-ago quarter where earnings were 37 cents per share on revenue of $430.90 million.
What to watch: Shares of DocuSign have crashed in recent months, falling more than 65% in six months. The shares are down 34% since the start of the year, compared to an 8% drop for the S&P 500 index. The stock has also fallen some 56% in the past twelve months. Enabling individuals and businesses to digitize an agreement process has been a key factor in DocuSign’s rise during the pandemic as businesses shifted to remote working. In addition to being the leader in electronic signatures, DocuSign aims to support the entire transaction process, including supporting any action required once agreements are signed. However, with the pandemic less of a problem, the market has become concerned about DocuSign’s ability to sustain its impressive growth, particularly in revenue, platform enrollments and free cash flow. Nonetheless, to reverse the negative downward trend in share price, DocuSign will need to issue a strong revenue growth forecast for the next quarter and fiscal year 2022.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.