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3 Stocks That Could Make Huge Moves This Week
Conn’s Conn’s is a furniture and home appliance retailer with 90 locations in the South and Southwest. The company reports earnings on Tuesday morning. Currently, 46% of Conn’s shares are sold short. The retail environment has been very tough since the Great Recession. The company’s comps have slowed, and its in-store financing is under pressure.
Here’s What You Should Watch Over the Short Term Conn’s is expected to report earnings of $0.44 per share. Analysts expect the company to have collected $374 million in sales. For the rest of the fiscal year, expectations are set for $1.7 billion in sales and earnings of $2.20 per share. Over the Long Term Pay attention to the weighted average credit score of those who receive financing. The company’s lack standards led to more losses last year, when the score bottomed out at 602. Along the same lines, allowance for bad debt needs to remain high to provide a margin of safety for the company. It was 10.8% last quarter.
Zoes Kitchen Zoes is an upstart fast casual chain that focuses on healthy Mediterranean cuisine. The company reports earnings on Thursday evening. Currently, 28% of Zoe’s shares are sold short. Zoe’s is a newly IPO’d company that is barely profitable. Currently, it trades for over 1,000 times trailing earnings.
Here’s What You Should Watch Over the Short Term Zoes is expected to report revenue of $61.6 million. Earnings are expected to come in at a loss of $0.01 per share. For the rest of 2015, expectations are set for $220 million in revenue and earnings of $0.06 per share. Over the Long Term With the company expanding so rapidly, same store sales are crucial, as they show Zoes is able to remain popular and gain traffic after being open for a year. Management believes that this figure can grow by 4% to 6% this year.
Ambarella Ambarella is the company providing the technology behind small video cameras that are becoming popular through GoPro and surveillance companies. The company is set to report earnings on Tuesday evening. Currently, 24% of shares are sold short. Some think that Ambarella’s technology will one day become commoditized, leading to much lower profits. Currently, share trades for an expensive 43 times earnings.
Here’s What You Should Watch Over the Short Term Analysts are expecting Ambarella to report revenue of $66.7 million. They are also expecting earnings to come in at $0.58 per share. For the fiscal 2015 year, expectations are set for $279 million in sales with earnings of $2.24 per share. Over the Long Term Gross margins are very important, as they represent the company’s pricing power. They have trended down from 66.6% in 2013 to 63.7% last year.
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