Industry Spotlight

Software earnings: What to expect from Slack, Adobe and DocuSign share prices?

Slack [WORK], Adobe [ADBE], DocuSign [DOCU] and Domo [DOMO] all report quarterly earnings on Thursday. Each company has seen plenty of share price movement recently as coronavirus fears engulf global markets. 

For Adobe the outbreak has seen a selloff in its share price as the tech giant pulled out of a number of high profile public events. While Slack’s share price has barely slipped as traders buy into companies that enable homeworking.

But how much will share prices move when quarterly earnings come out?

 

Slack share price

What’s happening with Slack’s share price?

As a work-messaging app, the firm’s share price is proving more resilient than others to coronavirus fears. Slack’s share price is up over 9% so far this year, having made substantial gains over February.

 

 

What are analysts expecting?

Wall Street is expecting a loss of -0.05 a share, with revenue at $174 million. According to Heidi Chung on Yahoo Finance, options markets are "implying a 13.75% move in either direction for the stock following earnings."

 

How likely is an earnings beat?

Slack has beaten analyst expectations for the past two quarters. Last quarter, losses per share came in at $0.02, easily beating a $0.09 forecasted loss. According to analyst Gregg Moskowit at Mizuho Securities, it's looking likely that Slack “will report meaningful upside to the Street’s billings and revenue estimates.”

$174million

Slack's predicted revenue

 

What are the long-term expectations?

Mizuho Securities lifted its share price target on Slack by $2 to $22, while Baird named Slack a “tactical Fresh pick”. An average $27.68 price target is 10.5% higher than the current asking price.

 

Adobe share price

What’s happening with Adobe's share price?

Adobe's share price is currently trading flat since the start of the year, having been up over 14% in February. Much of the blame can be placed on the coronavirus. Contagion fears have seen Adobe cancel a number of public events, including the live part of its annual Adobe Summit in Las Vegas. See pictured Adobe CEO, Shantanu Narayen.

 

 

What are analysts expecting?

Analysts are expecting earnings of $2.23 a share, up from the $1.71 seen in the same quarter last year. Revenue is expected to come in at $3.05 billion, up 19.6% from this time last year. Much of the growth is likely to come from Adobe's data and analytic businesses.

 

How likely is an earnings beat?

Adobe has beaten analyst expectations for the past four quarters. However, Q4 only just managed to top expectations - earnings per share come in at $2.29, ahead of the expected $2.26.

$3.05billion

Adobe's predicted revenue - a 19.6% rise from last year

 

What are the long-term expectations?

Of the 31 analysts tracking Adobe on Yahoo Finance, 25 rate it either a Strong Buy or Buy. An average 12-month share price target of $360.46 would see an 8.2% upside on the current share price.

 


DocuSign share price

What’s happening with DocuSign's share price?

Electronic signature technology company DocuSign's share price is one of the few stocks to have benefitted from the coronavirus outbreak. Since the start of the year, the stock has gained over 5% and hit a 52-week high of $92.55 in mid-February.


 

 

What are analysts expecting?

DocuSign is expected to post earnings of $0.5 per share when it releases Q1 numbers, a 16.7% decline from the same quarter last year. Analysts expect revenue to come in at $266.49 million, up 33.4%.

 

How likely is an earnings beat?

DocuSign delivered a huge beat last quarter, with earnings coming in at $0.11 vs an expected $0.03. Yet another beat is in no way guaranteed, with the company missing forecasts in Q3 2019.

$266.49million

DocuSign's predicted revenue - a 33.4% rise from last year

 

What are the long-term expectations?

Analysts have pegged an $85.54 12-month price target on DocuSign’s share price. Hitting this would represent a 7.2% upside on the current price. However, if coronavirus fears persist, it's feasible that the stock could go further.

 

Domo share price

What’s happening with Domo's share price?

Domo's share price is down over 32% since the start of the year, but rewind to 24 February and the stock was up over 24%. Can a decent set of results fight off the effects of the coronavirus when the cloud computing company reports Thursday?

 

 

What are analysts expecting?

Analysts are expecting a loss of $0.96 a share, a fraction higher than the $0.94 per share loss the company saw in the same quarter last year. Revenue is expected to come in at $45.71 million, up 16%.

 

How likely is an earnings beat?

Domo has beaten Wall Street's expectations for the past four quarters. According to Zacks, the $0.85 loss it posted last quarter represented a surprise of 16.67%. Yet with no recent analyst views differing from the consensus, a surprise of that size looks unlikely.

$45.71million

Domo's predicted revenue - a 16% rise from last year

 

What are the long-term expectations?

Of the six analysts tracking the share price on Yahoo Finance, 5 rate it a Strong Buy or a Buy. The stock carries an average $29.83 12 month share price target. Hitting this would represent over 109% upside on the current share price; certainly a stock to watch.

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