Analysis of the Most Interesting Earnings Reports: VEEV, CGC, ZS, DOYU

Within this analysis we focus on the 4 most interesting stocks that have released the earnings reports in the past week:

  • Veeva Systems Inc (VEEV)
  • Canopy Growth Corp (CGC)
  • Zscaler Inc (ZS)
  • Douyu International Holdings Ltd (DOYU)

The analysis will take into consideration the financial data reported in the earnings report just released (+ data from the last 5 years) and the stock price performance compared to key levels. The explanation of both sections can be found at the end of the article.


Summary

Before going deeper into the individual companies, let’s see together some key data relating to the earnings report released. In particular, the following information is shown in the table:

  • EPS surprise:
    • indicates how much the EPS (Earnings-Per-Share) reported were higher / lower than analysts’ expectations
  • Stock price reaction:
    • indicates the reaction of the stock price on the day of publication of the earnings report
  • Key Data Growth:
    • indicates how much the 3 main items (revenue, net income and net margin) have increased / decreased compared to the same quarter of 12 months before

Veeva Systems Inc (VEEV)

Veeva Systems Inc. operates as a provider of industry-specific, cloud-based software solutions for the life sciences industry. It offers enterprise applications, a multichannel platform, customer relationship management, and content management solutions. 

FINANCIALS:

During the last quarter, VEEV reported $337 million in revenue, up 37,7% compared to $245 million reported in the same quarter 12 months earlier. In the same period, net income increased by 18,0% to $87 million, compared to net income of $73 million in the previous period, while net margin was 25,7% worsened by -14,3% compared to the same quarter 12 months earlier.

Focusing on annual data, VEEV revenue in the last 4 quarters totaled $1.196 million, an increase of 117,3% compared to $551 million in revenue reported 3 years ago. During the same period, VEEV reported a 304,9% increase in net income to $314 million, compared to $78 million net income in the previous period, while the net margin improved by 86,3% .

KEY CHART LEVELS:

There are not many considerations to make on the VEEV chart, in fact, in reaction to the earnings report released it has jumped to historic highs and in front of itself it has only the goal of making further, day after day.


Canopy Growth Corp (CGC)

Canopy Growth Corporation is a cannabis company. It offers dry cannabis and oil products primarily under the Tweed brand. 

FINANCIALS:

During the last quarter, CGC reported $77 million in revenue, up 8,9% compared to $70 million reported in the same quarter 12 months earlier. In the same period, net income decreased by -268,8% to -$926 million, compared to net loss of -$251 million in the previous period, while net margin was -1207,3% worsened by -238,5% compared to the same quarter 12 months earlier.

Focusing on annual data, CGC revenue in the last 4 quarters totaled $283 million, an increase of 844,7% compared to $30 million in revenue reported 3 years ago. During the same period, CGC reported a -16373,7% decrease in net income to -$939 million, compared to -$6 million net loss in the previous period, while the net margin worsened by -1643,9% .

KEY CHART LEVELS:

Completely different situation for Canopy Growth. Until the day of the earnings report, CGC made an impressive rally gaining 60% in just over 10 days and exceeding the 200-day moving average (black line), then falling by 20% in reaction to the release. Currently the chart situation is difficult to interpret, the first support that could stop the drop in prices is on the 50-day moving average (red line).


Zscaler Inc (ZS)

Zscaler Inc. operates as a cloud security company. It focuses on transforming networks and applications for a mobile and cloud-first. The company’s flagship services consist of Zscaler Internet Access and Zscaler Private Access engages on securing connections between users and applications, regardless of device, location or network.

FINANCIALS:

During the last quarter, ZS reported $111 million in revenue, up 39,7% compared to $79 million reported in the same quarter 12 months earlier. In the same period, net income decreased by -58,2% to -$19 million, compared to net loss of -$12 million in the previous period, while net margin was -17,5% worsened by -13,2% compared to the same quarter 12 months earlier.

Focusing on annual data, ZS revenue in the last 4 quarters totaled $392 million, an increase of 387,5% compared to $80 million in revenue reported 3 years ago. During the same period, ZS reported a -96,1% decrease in net income to -$71 million, compared to -$36 million net loss in the previous period, while the net margin improved by 59,8% .

KEY CHART LEVELS:

ZS has a similar situation to VEEV. In reaction to the earnings report, it jumped 29%, surpassing the previous historical maximum recorded in July 2019 (after the rally started with the 2018 IPO). In front of himself, ZS has no particular objectives if not to make further historical maximums.


Douyu International Holdings Ltd (DOYU)

DouYu International Holdings Limited provides a game-centric live streaming platform primarily in China. The company operates its platform on both PC and mobile apps.

FINANCIALS:

During the last quarter, DOYU reported $322 million in revenue, up 44,9% compared to $222 million reported in the same quarter 12 months earlier. In the same period, net income increased by 1214,3% to $37 million, compared to net income of $3 million in the previous period, while net margin was 11,4% , improved by 806,8% compared to the same quarter 12 months earlier.

Focusing on annual data, DOYU revenue in the last 4 quarters totaled $1.140 million, an increase of 905,9% compared to $113 million in revenue reported 3 years ago. During the same period, DOYU reported a 135,2% increase in net income to $40 million, compared to -$113 million net loss in the previous period, while the net margin improved by 103,5% .

KEY CHART LEVELS:

Very special graphic situation for DOYU. In the 2 days before the earnings report it had fallen by 15% stopping exactly on the support drawn in the graph. As soon as the earnings report was released, it jumped by 18%, exceeding the 200-day moving average (black line) and continuing the rally in the following days. The first goal is resistance in the $ 9.49 area, only 6% away, while the long-term goal is to return to the IPO prices of July 2019 (32% away).


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FINANCIAL DATA & KEY CHART LEVELS

– explanation –

FINANCIAL DATA

This section shows some key financial data contained in the company’s income statement, updated to the latest available earnings report. The 2 tables are as follows:

FIRST TABLE – “Key Data in the past 5 years”

“Key Data in the past 5 years” table shows the amount of Revenue, Net Income and Net Margin (the percentage of Revenue that turns into Net Income) reported in the last year or in the last 4 quarters (TTM-trailing 12-months). In the same table you can find the percentage increase (or decrease) of the 3 items in the last 3 years.

To the right of the table you find a chart containing the trend of Revenue in the last 5 years (green columns) and the trend of Net Income (red line) in the same period. Inside the same chart you will find a semi-transparent line that show the trend line of the Revenue in the last years.

This section is useful for understanding if the company has been growing in recent years.

SECOND TABLE – “Key Data in the last Earnings Report”

“Key Data in the last Earnings Report” table shows the data of the same items of the previous table, but with reference to the last earnings report released by the company in comparison with the same quarter of 12 months before.

On the right of the table you will find the relative chart containing the trend of Revenue (green columns) and Net Income (red columns) in the 2 quarters taken into consideration (current versus last year’s quarter).

This section is useful for understanding if the company has grown in the last quarter compared to the same quarter of last year.

Data are expressed in millions of dollars.

KEY CHART LEVELS

For each of the companies, a chart is shown containing the following key chart levels:

  • Simple moving average 50-day (red line) and 200-day (black line)
  • Resistance and Support

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Sources & additional info

*Chart by stockcharts.com
*EPS surprise and company description by barchart.com


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