It's earnings season again. We’re back with one of the most highly anticipated events as investors eagerly await to see if their companies have been performing well or if they need to be sold off. The earnings results offer up some information on how the company has performed in the last quarter, and their outlook for future quarters. This gives analysts a basis as well on which companies are worth covering or updating their perspective in their recommendations.
While a single earnings report may not be the be-all-end-all financial metric, it speaks volumes regarding how a company efficiently deploys its capital and returns value to its shareholders. In this article, we will look at some early winners in this earnings season that investors should look into before the entire market jumps in and scoops them.
Stride, Inc. (LRN)
Stride, Inc. is a virtual and blended learning educational services company offering tech-enabled education solutions and education programs. The company offers K-12 education through middle and high school and professional skills training for potential applications interested in staffing, healthcare, technology, and talent development. LRN focuses on two main markets: General Education and Career Learning. Its school-as-a-service program offers a package of instruction, curriculum, and technology systems it administers for its customers.
The company performed spectacularly this quarter, reporting $0.11 EPS and beating estimates by 128.21%, a stellar comeback from negative expectations. Revenue grew by 2.81%; the company achieved a record revenue of $480.20 million, driven by its Career Learning enrollment strength and General Education. The company expects revenue for the next fiscal quarter to be between $490.0 million and $510.0 million. With the comeback in its performance, this may be the best time to check out LRN as your following stock to add to your portfolio.
Analyst Ratings
Analysts rate LRN as a “Strong Buy” based on 3 Strong buys and 1 Hold recommendation. LRN is now trading above its high target price. With its strong financial results, the next question is when will analysts update their outlook and fair value estimate for LRN?
Lindsay Corporation (LNN)
Lindsay Corporation is a road infrastructure and water management company that offers services in the irrigation and infrastructure segment. The company’s irrigation segment takes care of its marketing and manufacturing of various irrigation systems like hose reel irrigation, center pivot, and lateral move, primarily utilized in agriculture. On the other hand, the infrastructure segment focuses on manufacturing safety equipment, specialty barriers, crash cushions, railroad signals, and other road safety-related services and structures.
The company is another one on our list that made a comeback for its fourth quarter. LNN beat earnings estimates by 51.30%, revenue grew by 1.57%, and net income increased 13.92%. The performance has been led mainly by its irrigation business’s growth in Brazil and South America. The company has set new net earnings and earnings per share records for its full fiscal year. This performance can be attributed to its irrigation business’s operating income and margin expansion and gives investors insight on how the company has effectively used its working capital management. This is why LNN holds a spot in a long-term portfolio.
Analyst Ratings
Analysts rate The company a “Moderate Buy” based on 3 Holds and 1 Moderate buy recommendation. The mean target price for LNN is $139.50, and the high target price is $150.00, an upside of 19.41%. The company was rated a Hold by analysts, however, one of the analysts upgraded their outlook on LNN to a Moderate buy, which tells us that others may follow suit once they have updated their models and analysis on LNN.
HealthStream, Inc. (HSTM)
HealthStream, Inc. is a workforce solution provider for the healthcare industry. The company offers subscription-based products that help in clinical development, talent management, certification, engagement, scheduling, and other workforce-specific services that ensure that healthcare providers meet their workflow requirements. HSTM also offers solutions under VerityStream, which provides an enterprise-class platform that helps serve healthcare organizations' customer lifecycle, ranging from credentialing to evaluation.
HealthStream reported a 62.50% earnings beat, quarterly net income growth of 57.63% while revenue was up 5% YoY. Its quarterly revenue and adjusted EBITDA, up 28%, increased the company's full-year outlook for both measures and helped increase its commitment to funding growth investments for innovation. The company has also declared a $0.025 per share dividend for its investors, payable December 22, 2023. This strength in performance and commitment to further increase shareholder value has made HSTM one of our top picks in the earnings season.
Analyst Ratings
Analysts rate HSTM as a “Moderate Buy” based on 1 Strong buy and 3 Hold recommendations from analysts. The target price is $22.00, and the company is already trading above analyst expectations. While some investors may shy away from this, we think that this indicates that its recent price performance and financial results may be the next catalyst for analysts to update their outlook on a positive note for HSTM.
Final Thoughts
Earnings season has always been a heavily followed event in the financial markets. These help set the tone in investors' and analysts' outlooks on the company by providing hints and details on where the business is. Proper due diligence can help investors find diamonds in the rough and push their portfolios through the roof.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
