Since the beginning of the year, the benchmark stock indexes have exhibited wild price swings due to concerns over high inflation, Ukraine-Russia tensions, and forthcoming interest rate increases. But despite the poor market sentiment, Block, Inc. (SQ), Farfetch Limited (FTCH), The Beauty Health Company (SKIN), and Overstock.com, Inc. (OSTK) soared in price last week as the companies impressed investors with better-than-expected earnings.
SQ’s EPS for the fourth quarter came in at $0.27, beating the consensus estimate by 20.1%. And although SQ expects its gross payment volume to be lower than expected in the current quarter, its outlook for its fiscal year 2022 is positive after reporting strong fourth quarter and fiscal 2021 numbers and a decline in its net loss for the fourth quarter. Also, its loss was narrower than Wall Street expectations. The company also reported that it expected full-year gross merchandise volume growth of between 28% - 32% for its digital platform and between 20% - 25% for its brand platform.
SKIN reported a 105.5% rise in revenues for the fourth quarter. Its income came in at $1.61 million, excluding items, while analysts looked for a net loss of $0.02 per share. And OSTK reported a fourth-quarter EPS of 68 cents per share, surpassing the consensus estimate of 32 cents per share.
Let’s take a closer look at these stocks.
Block, Inc. (SQ)
San Francisco-based SQ is a technology company that creates tools that enable sellers to accept card payments and provide reporting, analytics, and next-day settlement. The company focuses on financial services. Also, its building block comprises Square, Cash App, Spiral, TIDAL, and TBD54566975.
On Jan. 31, 2022, SQ announced the acquisition of Afterpay Limited. The acquisition is expected to bolster SQ’s strategic priorities for its existing Square and Cash App ecosystems. The acquisition also aims to enable SQ to deliver compelling financial products and services that expand access to more consumers and help drive incremental value for sellers of all sizes.
SQ reported its fourth-quarter earnings on February 24. The company’s net revenues increased 29.1% year-over-year to $4.07 billion for the quarter ended Dec. 31, 2021. Its adjusted net income for its fiscal 2021 increased 110.4% year-over-year to $897.56 million, while its adjusted EPS came in at $1.71, representing an increase of 103.5% year-over-year. Also, its adjusted EBITDA increased 113.8% year-over-year to $1.01 billion.
Analysts expect SQ’s EPS and revenue for fiscal 2023 to increase 44.5% and 20.6% year-over-year to $2.37 and $22.87 billion. It surpassed Wall Street’s EPS estimates in three of the trailing four quarters. Over the past week, the stock has gained 43.7% in price.
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Farfetch Limited (FTCH)
London-based FTCH is a technology platform for the global fashion industry. The company’s segments include digital media, brand platforms, and in-store. Its digital platform segment includes Farfetch Marketplace, BrownsFashions.com, and others. The Brand Platform segment consists of brands owned and licensed by New Guards and has franchised store operations, while the in-store part covers the activities of stores it operates, such as Browns, Stadium Goods, and others.
On Dec. 9, 2021, FTCH announced that it had acquired LUXCLUSIF, a resale platform. The acquisition will enable FTCH to accelerate its resale capabilities by developing key technologies and service features.
FTCH released its earnings for the fourth quarter and full year on Feb. 24, 2022. The company’s gross merchandise value increased 21.9% year-over-year to $1.28 billion for the fourth quarter ended Dec. 31, 2021. Also, its revenue increased 23.2% year-over-year to $665.65 million. In addition, its adjusted EBITDA increased 247.9% year-over-year to $36.10 million.
For its fiscal 2023, FTCH’s EPS is expected to increase 311.1% year-over-year to $0.37. Its revenue for the quarter ending June 30, 2022, is expected to increase 32.9% year-over-year to $660.61 million. It surpassed consensus EPS estimates in three of the trailing four quarters. Over the past week, the stock has gained 33.5% in price.
The Beauty Health Company (SKIN)
SKIN designs, develops, manufactures, markets, and sells aesthetic technologies and products worldwide. The Long Beach, Calif.-based company offers HydraFacial and PERK hydradermabrasion systems that enhance the skin to cleanse, exfoliate, extract, and hydrate simultaneously. It also operates HydraFacial CONNECT, an anesthetics certification program that provides training through live online education programs.
On Feb. 22, 2022, SKIN released its fourth-quarter and full-year earnings. Its net sales increased 105.5% year-over-year to $77.88 million for the fourth quarter, ended Dec. 31, 2021. Its adjusted net income came in at $1.61 million, compared to an adjusted loss of $2 million in the year-ago period. Also, its adjusted EBITDA increased 136.1% year-over-year to $8.48 million.
Analysts expect SKIN’s EPS and revenue for fiscal 2023 to increase 300% and 25.7%, respectively, year-over-year to $0.16 and $407.86 million. Over the past week, the stock has gained 17.2% in price.
Overstock.com, Inc. (OSTK)
OSTK operates as an online retailer in the United States. The Salt Lake City, Utah company operates through Retail, tZero, and Medici Ventures segments. The company offers furniture and home décor, including area rugs, bedding and bath, home improvement, kitchen, and dining items. It provides business advertising products and services on its website. In addition, it is focused on the development and management of financial applications of blockchain technologies.
OSTK announced its fourth quarter and fiscal 2021 results on Feb. 23, 2022. Its cost of sales declined 8.7% year-over-year to $473.81 million for the fourth quarter, ended Dec. 31, 2021. The company’s net income increased 161.7% year-over-year to $32.94 million. Also, its EPS came in at $0.68, representing a 161.5% increase year-over-year.
For its fiscal year 2023, OSTK’s EPS and revenue are expected to increase 28.3% and 12.1%, respectively, year-over-year to $2.81 and $3.24 billion. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has gained 27.1% in price over the past week.
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SQ shares rose $0.35 (+0.27%) in premarket trading Tuesday. Year-to-date, SQ has declined -21.06%, versus a -8.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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