Earnings season has just begun and investors are eager to see the results for the December quarter. Last year was far from good, with shares falling sharply, although there were some bright spots. Even after a difficult year, forecasters are still forecasting average earnings growth of 4% for the full year.
For the savvy retail investor, signals are available to help locate companies that show signs of solid earnings in the making. The analyst consensus rating is one: a strong buy should always deserve attention. And a company’s web traffic can also indicate corporate health. Exciting companies, with the potential to generate solid earnings returns for investors, will also attract attention through web searches, and tracking web traffic to their sites can provide some clues that will complement the other more traditional metrics.
We can use the website traffic tool at TipRanks to do exactly that: monitor traffic on a company’s site, to see data on site visits, mobile traffic, and monthly unique visitors. Data like this can give us an interesting profile when we start looking at stocks. So, let’s use website traffic, along with other data, and look at a couple of ‘Strong Buy’ stocks whose earnings releases are just around the corner.
JD.com, Inc. (JD)
We’ll start in the realm of e-commerce, where Beijing-based JD.com is a major player in China’s retail market. The company boasts of being the largest retailer and the largest online retailer in China, and has a market capitalization of approximately $94 billion. The company operates as B2C and offers a wide range of products from clothing to cosmetics, electronics and groceries. The company’s network covers 99% of the Chinese population and even offers same-day and next-day delivery. JD’s base includes more than 588 million customers, and the company is known as a leader in e-commerce logistics.
That leadership position is visible in JD’s latest quarterly report, for 3Q22, which showed a top line of $34.2 billion in revenue for a year-over-year gain of 11.4%. The company’s services revenue accounted for $6.5 billion of that total and led the gains with a year-over-year increase of 42.2%. Operating cash flow for the quarter was $6.4 billion, up 11% year-over-year.
JD’s strong revenue was supported by a strong increase in annual active customer accounts. During the 12 months ending September 30, 2022, the company’s customer base increased year-over-year by 6.5% to reach 588.3 million.
When looking at the traffic of the company’s website, we find that the visits to the site show an upward trend. The latest data reported, for the third quarter, showed a total of 24.3 million visits, including 15.4 million on desktop devices and 8.9 million via mobile units. Total visits increased more than 34% annually and have grown another 31% annually and 9.5% sequentially in the fourth quarter to reach a total of 26.67 million. Looking ahead, the January data should be interesting as it will include traffic during the Chinese New Year holidays.
JD is scheduled to report its 4Q22 and FY2022 numbers in early March.
This action has been reviewed by HSBC analyst Charlene Liu, who writes: “We expect margin improvement to continue into 2023 and driven by further rationalization efforts and improved operating efficiencies as revenues rise…. the degree of improvement will likely be more modest compared to 2022e as cost reduction efforts are behind us and marketing spend will increase to fuel further growth as the economy improves. We remain bullish on JD’s commitment to deliver stable returns to shareholders through share repurchases or dividends, which would support valuation.”
Following this stance, Liu gives JD shares a Buy rating, with an $82 price target to suggest a 40% one-year upside potential. (To see Liu’s history, Click here)
Big tech names typically get a lot of attention from Wall Street, and JD.com has 14 recent analyst reviews on file. These include 13 to Buy against a single hold, for a Strong Buy consensus rating. The shares have a trading price of $58.52, and their $81.35 average price target implies a 39% gain for the coming year. (See JD stock forecast on TipRanks)
air mobility of blades (BLDE)
Next on our list is a fascinating company, Blade Air Mobility. This company is part of the new urban air traffic niche and offers its clientele a unique air travel experience, with flexible schedules, multimodal intercity travel options and private lounges in key terminals. Blade operates chartered plane and helicopter routes, with seat reservations for scheduled flights in the New York metropolitan area, from Manhattan to JFK or Newark airports; the Pacific Northwest, connecting Vancouver and Victoria in British Columbia; and even in the south of France, between Nice and Monaco. The company also allows charter or crowdsourced flights to locations around the world.
Current flights, as noted, are by helicopter or chartered jet, but Blade is planning for the future, when urban air travel will adopt electric vertical aircraft (EVA). The company works with investors and partners who are involved in the development of carbon neutral urban flights.
Blade went public in 2021 via a SPAC transaction and has seen a steady increase in revenue ever since. The latest report, from 3Q22, showed $45.7 million in the top line, a 125% YoY gain. For the first three quarters of 2022, the company’s revenue was $108 million, an impressive 154% more than the same period in 2021.
The gains were driven by a 52% year-over-year increase in short-haul revenues, which reflected a combination of strong demand in Europe and Canada, as well as higher prices. The company’s medical transport service, used to move organs for urgent medical necessity, saw revenue increase 801% year-on-year, supported by new transplant center customers and ‘solid’ growth within the network.
As for Blade’s website traffic, it increased sharply from October to December 2022, from ~50,000 to over 137,000. Unique Visitors (UVs) totaled 270,430 in 4Q22, up 84% from 146,960 in 4Q22. same period of the previous year.
Credit Suisse 5-Star Analyst Stephen Ju points to the company’s strong performance and the high potential offered by a future shift to EVA. Ju writes of Blade: “Amid the challenging macroeconomic environment, the Blade consumer remains resilient, which was evident when flown seats more than doubled in 3Q22 despite prices increasing by 25-30%. %. Blade’s market share remains below 1% across all of its New York airport operations (27mm of TAM passengers), offering attractive growth opportunities in the coming years, especially as it reduces travel time by ~ 2 hours to 5 minutes”.
“While the timeline for FAA approval of EVA (electric vertical aircraft) remains uncertain, Blade will conduct a test flight with Beta Technologies in 1Q23 that will highlight the significantly lower noise profile compared to helicopters being As such, the likelihood increases from here Blade will gain regulatory approval to operate closer to the consumer, which should reduce traveler friction and ultimately unlock incremental users over time,” the analyst added.
Ju gives Blade an Outperform (i.e. Buy) rating and sets his price target at $10, suggesting an impressive 139% upside potential over the next 12 months. (To see Ju’s history, Click here)
To some extent, this cutting-edge mobility company has flown under the radar – there are only 3 recent analyst reviews on record. However, they are all positive, giving BLDE its Strong Buy consensus rating. Blade shares are selling for $4.19 and his $7.83 average price target implies an 87% gain is in the offing for the stock. (See BLDE stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.