Stocks that crush their earnings estimates are supposed to go up. However, that's not always the case. Every earnings season, regardless of sector or industry, has its share of stocks that report stellar earnings results only to get sold off. The reasons can range from being a sell-the-news event if share prices surged ahead of the results or due to future headwinds and lowered guidance. In either case, here are three potential value stocks that crushed earnings expectations and tanked afterward.
AstraZeneca PLC (NYSE: AZN)
Global biopharmaceutical giant AstraZeneca develops and sells a portfolio of healthcare solutions and medicines to help patients treat and fight serious diseases. Its products treat conditions ranging from diabetes, immunology, cardiovascular disorders and cancer. The company has a vast portfolio of antibody-drug conjugate (ADC) and immunotherapy-drug conjugation (IDC) treatments. These involve using antibodies that target cancer cells and deliver cytotoxic drugs specifically targeting the tumors. They are like guided missiles targeting just the baddies.
AstraZeneca benefitted from its COVID-19 vaccine in 2021, but revenues have sunken with the pandemic in the rearview mirror. AstraZeneca has over 120 projects in Phase 2 and Phase 3 development, with over 20 new approvals in major markets in 2023. The company saw non-COVID revenues grow double digits across regions and disease areas. China revenues grew 37% year-to-date (YTD).
Blowout Q3 2023 earnings
AstraZeneca reported Q3 2023 EPS of $1.73 per share, crushing consensus analyst estimates for 84 cents by more than double or 89 cents. Revenues rose 4.6% YoY to $11.49 billion versus $11.55 billion consensus analyst estimates. Total revenues in the first nine months of 2023 rose 5% to $33.8 billion, but non-COVID medicines saw 15% growth offset by the $2.9 billion decline in COVID-19 medicines. Core EPS rose 17% to $5.80 YTD.
Raising full-year forecast
AstraZeneca expects full-year 2023 total revenues, excluding COVID-19 medicines, to increase by the low teens. It expects core EPS to increase by a low double-digit to low-teens percentage.
AstraZeneca CEO Pascal Soriot commented, "With IDC portfolio, we are aiming to replace the use of traditional chemotherapy across the board. Combinations of our ADCs with our next-generation IO BISPECIFICS portfolio offer the promise of more durable benefits for patients with improved tolerability. We are pioneering new modalities such as epigenetics, oligonucleotides and RNA therapies to unlock entirely new treatment approaches. And we are excited by the curative potential of cell engine therapies."
AstraZeneca analyst ratings and price targets are at MarketBeat. AstraZeneca peers and competitor stocks can be found with the MarketBeat stock screener. Check out the sector heatmap on MarketBeat.
Daily descending triangle breakout
The daily candlestick chart on AZN illustrates a daily descending triangle. The descending trendline formed after peaking at $70.94. The flat-bottom trendline formed at $61.87. The lower highs and flat bottom lows formed the triangle at the apex point. The daily market structure low (MSL) trigger formed at $64.75. AZN rejected off the descending trendline at $65.58 heading into the Q3 2023 earnings report as shares fell to the flat bottom trendline at $61.87 on the gap down. Shares have rebounded and rallied through the descending trendline resistance at $64.14. The daily relative strength index (RSI) is coiled under the 50-band. Pullback support levels are at $63.36, $61.87, $60.34 and $58.41.
Super Group Ltd. (NASDAQ: SGHC)
Global online sports betting and gaming company Super Group operates two global gaming brands, Betway and Spin. Betway is one of the leading sports betting brands operating online and through its mobile app. It has licenses throughout Europe, the Americas and Africa. Betway has over 60 brand partnerships with teams, leagues and sports personalities across the globe. Spin is a leading online casino operator offering a wide range of casino games. The company went public via the SPAC merger in 2022. The company is based out of Saint Peter Port, Guernsey.
Grinding ahead
On November 9, 2023, Super Group reported its Q3 2023 adjusted EPS of EUR1.97, beating analyst estimates of EUR0.01. Revenues rose 16% YoY to EUR356.9 million, beating EUR319.74 million analyst estimates. Profit of EUR10.6 million includes a non-cash charge of EUR14.2 million arising from a change in option liability. Operational EBITDA ex-US was EUR64.1 million, and a loss of EUR10.3 million from the US amounted to operational EBITDA of EUR53.8 million.
Super Group CEO Neal Menashe commented, "Super Group has delivered yet another quarter of solid results, having achieved our highest ever revenue for a third quarter, as well as new all-time highs for both our customer numbers and deposits. I remain encouraged by our very strong customer engagement and continued expansion of our global iGaming offering."
Super Group analyst ratings and price targets are at MarketBeat.
Daily rectangle
The daily candlestick chart on SGHC indicates a rectangle pattern. The rectangle formed its flat-top resistance at $3.88 on August 30, 2023. The flat-bottom support is at $3.24. The daily MSL triggers a breakout at $3.48. The daily RSI is coiled under the 50-band. Pullback support levels are at $3.08, $2.89, $2.84 and $2.68. Pullback support levels are at $3.08, $2.89, $2.84 and $2.68.
Wix.com Ltd. (NASDAQ: WIX)
Website creation platform Wix.com enables users to create professional-looking websites utilizing its drag-and-drop interface with no coding required. Wix provides a vast range of templates for all industries and purposes for its users. It comes with design tools and search engine optimization (SEO) tools like keyword optimization, meta descriptions and sitemaps. They also provide e-commerce shopping storefronts and carts, enabling websites to conduct business transactions. All websites are automatically optimized for mobile devices.
Another blowout quarter
On November 9, 2023, Wix reported a Q3 2023 EPS of $1.10 per share, crushing analyst expectations for 68 cents per share by 42 cents. The company achieved its second consecutive quarter of GAAP profitability. Revenues spiked 13.9% YoY to $393.8 million, beating $389.66 million consensus analyst estimates. Partners saw 38% YoY growth to $119.4 million. More partners continue to join Wix, driving continued increases in monetization. The company closed a multi-year strategic partnership with Intuit Inc. (NASDAQ: INTU).
Raised Outlook
Wix.com raised its Q4 2023 revenue guidance from $400 million to $415 million versus $399.29 consensus analyst estimates.
Wix.com CEO Avishai Abrahami commented, "The strength in our Partner business is especially noteworthy with our team firing on all cylinders and revenue growth continuing to accelerate. We expect an extended growth period ahead for this business as we increase our penetration of the professionals market with higher monetization, particularly as Wix Studio continues to gain traction."
Wix.com analyst ratings and price targets are at MarketBeat.
