MMR

What to Expect Performance Food Group Stock This Week

The stock has a history of muted post-earnings reactions

facebook X logo linkedin


Performance Food Group Company (NYSE:PFGC) is a customer-centric food service distribution company in the United States. The company announced will be releasing third quarter earnings results on Wednesday, May 5 before market hours. Ahead of the event, we're going to dig into the stock's long and short-term viability. 

Performance Food Group has managed to beat earnings expectations on three out of the last four earnings reports. However, that's only resulted in one positive post-earnings move, a 4.1% gain back in February. In the last eight reports, PFGC has averaged a post-earnings move of 2.9%, regardless of direction. This time around, the options market is pricing in a slightly larger-than-usual move of 3.9%.  

Year-over-year, PFGC has doubled in value, culminating in a March 15 record high of $59.89. Since the, the shares have consolidated below $60, with their ascending 50-day moving average containing any sharper pullbacks in recent months.

PFGC Chart

There may yet be room for the stock to continue running. From a value perspective, Performance Food Group stock is shaping up to be a promising turnaround play due to its amazing revenue growth. In fiscal 2020, PFGC increased revenues by 27% to $25 billion from $19.7 billion in fiscal 2019, and have grown their top line by 50% since fiscal 2017. Furthermore, PFGC has already bumped its trailing 12 month revenue to $26.67 billion with the addition of the last two quarters, marking a 6% increase.

Where things get shaky for Performance Food Group is on the bottom line. In fiscal 2020, PFGC had $114 million in net losses, which has now extended to -$174.5 million over the past four quarters. In total, Performance Food Group's net income has decrease by $373.2 million since fiscal 2018.

However, the contrast between the company’s growing revenues and its declining net income is precisely what makes PFGC such an interesting turnaround play. Although there is a lot of risk involved when investing in a company with a downward net profit trajectory, the reward potential for Performance Food Group stock could be huge if the company can begin generating profits.

 

AI has exploded ever since ChatGPT set the world on fire near the end of 2022.

Numerous companies with connections to artificial intelligence have seen their stocks soar.

That includes Nvidia, the poster boy of AI.

Its stock has skyrocketed 716% since ChatGPT’s debut. But here’s the thing …

While everyone’s still counting their money from this first AI boom … Nvidia and countless others have moved on to the next stage.

That includes Big Tech, which is currently making a series of peculiar investments in a few strange companies. This has nothing to do with tech. At least on the surface …

Yet, these strange investments could be the early ripples of a massive wave …Without them, ChatGPT could stop operating … Amazon, Google, Microsoft and more could see profits drop drastically.

In fact, Elon Musk says these investments are critical when it comes to solving the number one problem facing AI.

Now, Silicon Valley legend Michael Robinson has identified two companies that could play a significant role in the solution.

Their stocks just may be the key to AI 2.0.

Find out more about these two companies today.
 (ad)