Earnings season continues on Monday, with 152 quarterly financial reports set to be delivered to the market. Here are breakdowns of three of the biggest stocks set to report earnings tomorrow.
Palantir Technologies Inc (PLTR)
Palantir is one of the most talked about stocks in recent times, selling programs that allow companies and governments to make better use of their data. They have made massive partnerships with many government and intelligence agencies, and even boast a $10 Billion contract with the U.S. Army, all of whom use Palantir’s services to better utilize the data they collect.
Those facts have led to a massive surge in the companies’ value, but have also caused many to condemn what their products are being used for. Palantir has supplied data tools to Israel for their war in Gaza, and has developed technology for U.S Immigration and Customs Enforcement (ICE).
The stock started the year trading at $75.19. At Friday’s close, it traded at a striking $200.47. That price comes with high expectations. Wall Street is anticipating around a 50% increase in revenue growth and a quarterly revenue of over $1 Billion. The company achieved that milestone in Q2, but such high expectations leave many analysts noting that at the current price, which represents continuing best-case results for Palantir, the stock has little room for error.
Vertex Pharmaceuticals (VRTX)
Vertex is a pharmaceutical company that specializes in the treatment of rare diseases, and has become well established within the pharmaceutical industry thanks to its leadership in cystic fibrosis treatment.
Vertex’s stock has had a tumultuous year. The stock began the year trading at $405.76 and quickly began to gain momentum due to high market expectations for multiple developmental drugs that were proceeding through clinical trials. On March 17th, the stock reached a peak of $513.76. However, Q1 earnings missed when they were reported on May 5th, causing the stock to plummet nearly 20%. The stock slowly regained value, climbing back up to $472.27 before Q2 earnings. While earnings were not poor, the company also revealed that their pain drug VX-993, which was projected to be a central part of the companies’ future growth, had failed clinical trials.
That caused the floor to fall out from under the stock, once again dropping nearly 20%. Since then, VRTX has slowly been rising in value. Today, it trades at $445.57.
Vertex’s year demonstrates the often-increased volatility of stocks in their sector. The market tends to price biotech stocks at a value that assumes drugs the companies have in clinical trials will succeed, however a drug passing phase one of clinical trials in no way guarantees it will pass the second and third, and there is no way of knowing how drugs are performing mid-trial.
So, keep an eye out for movement in VRTX on Monday. Positive clinical trial reports and/or could send the stock rocketing upward, while the opposite would result in a third fall of the year.
Hims & Hers Health (HIMS)
Few stockholders have been on a wilder ride than those holding HIMS this year.
Hims & Hers is a telehealth company that allows people to be prescribed a variety of medications, including that for hair loss, weight loss, and erectile dysfunction, from home.
After starting the year trading at $25, rapidly growing subscriber counts, strong financial performance, and plans for product expansion caused the stock to absolutely skyrocket. On February 18th, it reached an astronomical high of $72.98.
That high didn’t last. Hype around the stock quickly subsided, plummeting in value back to its year-beginning valuation. It swelled once more before Q1 earnings, which only inspired more market confidence that once again spiked the stock’s price. Q2 earnings, however, did not deliver, and caused the market to pull back. Since then, the stock has drastically fluctuated up, and then back down, finally closing last Friday at a price of $46.38.
At its current price, a return of HIMS to the range of its previous highs would likely require an incredibly strong earnings report. The market reacted so strongly to the companies’ success in the beginning of the year that while their Q2 earnings reported a 72.6% year-over-year growth, the stock still fell.
Analysts are expecting a revenue of $579.85 million for the companies’ Q3 results. Whether or not that would lead to the stock to rise, fall, or stay the same is completely unclear. The stock has moved an average of 13.35% after earning in the past four quarters, and according to TipRanks, options traders are betting on this happening again. So, if you can expect anything for HIMS, expect more chaos.
