Previewing Earnings for Apple, Amazon & Deckers

Indie Research

Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.

During earnings season, BullMarket.com publishes a comprehensive 25- to 40-page Earnings Preview report for the week ahead each Friday.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks still set to report results this week, including Apple (AAPL), Amazon.com (AMZN), and Deckers Outdoor (DECK).

Here is just a tiny sample of what BullMarket.com wrote about Deckers:

Deckers has topped analyst EPS estimates seven of the past eight quarters, missing estimates once. During that period, the stock has risen the next session four of eight quarters. Seasonally, the stock has risen three times in the past four years. ...

Last quarter, Deckers posted a Q2 loss of -$20.1 million, or -53 cents per share, compared to -$7.5 million, or -19 cents per share, a year earlier.

Analysts were looking for EPS of -60 cents.

Revenue rose 13.1% to $174.4 million, topping the $166.8 million analysts were expecting. Retail sales soared 25.0% to $25.2 million from $20.1 million, while same-store sales rose 6.8%. Domestic sales jumped 37.1% to $113.5 million, while e-commerce sales increased 40.1% to $8.0 million. International sales fell -14.7% to $61.0 million, down from $71.5 million last year.

Gross margins fell -50 basis points to 42.2%.

UGG sales fell -0.3% to $107.9 million from $108.3 million.

Looking forward, the company projected a 1% increase in revenue for Q3 and a 19% jump in Q4. EPS in Q3 is expected to fall by -31%, but be up 22% in Q4. ...

Outside of earnings, Deckers looks tantalizingly cheap, trading at under 7.5x next year's consensus excluding its net cash. However, inventories remain a concern and the channel check data hasn't been positive. The recent price cut is also a concern, and we've seen a lot more discounting than in the past as well.

At this point, we think investors should monitor Deckers to see if last year's woes were largely weather related or a bigger fashion-related issue. If it's a fashion- related issue, there is likely more pain ahead given its elevated inventory levels. If investors want to see what happens when a footwear brand runs into inventory issues, they just have to look at Skechers (SKX) with Shape-Ups, and Crocs (CROX) with its classic styles several years ago. ....

The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the correct calls BullMarket.com made for Q3 were:

  • to be bullish on Akamai (AKAM) ahead of earnings.
  • to be bullish on Facebook (FB) ahead of earnings.
  • to be bearish on Chipotle Mexican Grill (CMG) ahead of earnings.
  • A daily investment service that is committed to creating long-term wealth for its members, BullMarket.com's Recommended List of stocks is up 33.3% from 2008-2011 versus a -14.4% return for the S&P, a 47.7% outperformance, topping the benchmark each year since the start of the Great Recession. Subscribers receive actionable market commentary, access to 40+ stock ideas on the Recommended List, and real-time trade alerts. Plus, sign up for a free trial today to view Bull Market's in-depth Special Reports - including its annual High Yield and MLP reports - and its timely Earnings Previews, which are published every Friday during the heart of earnings season. Get a Risk-Free Trial to Bull Market Today! (Please note returns are unaudited.)

    View Comments (0)