When Would Be the Best Time to Purchase Hooker Furniture Stock?

Hooker Furniture is due to report earnings on Wednesday, April 14

Apr 12, 2021 at 10:27 AM
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Furniture manufacturer Hooker Furniture Corporation (NASDAQ:HOFT) will present its fourth quarter financial results on Wednesday, April 14. Looking at recent performance in the earnings confessional, HOFT has beat earnings expectations on three out of its four most recent earnings reports.

For the fourth quarter of 2020, Hooker Furniture beat analysts’ estimates by a margin of $0.04 and reported an earnings per share (EPS) of $0.59. For the first quarter of 2021, they reported a miss of nine cents that fell short of expectations by a margin of $0.11. For the second quarter of 2021, Hooker Furniture reported an increase in earnings, rising to $0.48 per share. The company also beat estimates by a margin of $0.14. In the most recent quarterly report, Hooker Furniture reported an EPS of $0.84 and beat expectations by a margin of $0.24.

The last three post-earnings reactions from HOFT have been positive, including a 6.1% pop back in December. Overall, the stock averages a post-earnings move of 5.5% in the last eight quarters, regardless of direction.

After trading as low as $12.47 back on May 14, HOFT is now up at $37.02. The shares are up 15% in 2021, with their 100-day moving average containing the sharper pullbacks along the way.

Overall, Hooker Furniture stock doesn’t offer the most growth potential, despite having a small market cap of $444 million. Revenues have decreased 10% over the past 12 months and are down 20% since fiscal 2019. On the bottom line, losses have been greater with the company losing about $29 million in net income and reaching a total of $12 million in net losses over the past year. Hooker Furniture’s net profits had already fallen by more than 50% in fiscal 2020, which ended in January of last year.

On the bright side, Hooker Furniture has maintained a positive balance sheet, with $93.87 million in cash and just $63.45 million in debt, giving the company plenty of time and resources to bounce back. Hooker Furniture stock would be a more intriguing turnaround play if it hadn’t already increased so much already. 

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