Schaeffer's Trading Floor Blog

Earnings on Deck: Twitter Inc, Garmin Ltd., and SodaStream International Ltd

Taking a closer look at TWTR, GRMN, and SODA ahead of their earnings results

by 7/29/2014 11:26 AM
Stocks quoted in this article:

U.S. markets are trading higher today, thanks in part to a round of well-received corporate earnings reports. After tonight's close, quarterly results from microblogging site Twitter Inc (NYSE:TWTR) will hit the Street, while reports from navigation concern Garmin Ltd. (NASDAQ:GRMN) and at-home beverage issue SodaStream International Ltd (NASDAQ:SODA) are due ahead of tomorrow's open. Here's a quick look at TWTR, GRMN, and SODA as earnings approach.

  • In the two times TWTR has reported earnings since going public last fall, the company has exceeded analysts' bottom-line estimates each time. However, the stock's post-earnings price action hasn't translated, with the shares averaging a single-session loss of 16.4%, which widens to 19.5% going out one week. Another slump in the wake of its quarterly report could have the brokerage bunch re-evaluating their tune on Twitter Inc, which could pressure the shares lower. Roughly 29% of covering analysts maintain a "strong buy" rating toward a stock that's shed about 40% this year, while the average 12-month price target of $42.94 sits at a 12.4% premium to the stock's current perch at $38.20.

  • Over the past eight quarters, GRMN has bested consensus profit estimates six times, resulting in an average one-week post-earnings gain of 1.6% for the stock. This positive price action only highlights the equity's withstanding technical tenacity, with the shares up around 53% year-over-year to trade at $56.98. Should the equity once again benefit from a well-received earnings report, a round of upgrades and/or price-target hikes could help propel GRMN even further north. At present, no fewer than 70% of covering analysts rate GRMN a "hold" or "strong sell," while the consensus 12-month price target of $59.51 represents a slim 4.4% premium to present trading levels. In fact, although J.P. Morgan Securities raised its price target for Garmin Ltd. by $1 to $51 overnight, it still sits at a discount to the stock's current price.

  • Finally, SODA -- which is down 39% year-to-date at $30.11, despite last Thursday's gap higher -- has been a historic underperformer in the wake of its quarterly results, shedding an average of 0.7% in the session after reporting. Given the equity's dismal technical showing in 2014, short interest accounts for a lofty 31.2% of the stock's available float, and would take more than six sessions to cover, at SODA's average daily pace of trading. For SodaStream International Ltd's second quarter, analysts are calling for a profit of 31 cents per share -- a 29-cent decline over what the company earned one year ago.

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