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MARKETS LIVE BLOG:

STOCKS SHED GAINS, TESLA SURGES DAY AFTER EARNINGS

Tesla shares jump after EV maker vows to speed up launch of more affordable models

Applied DNA Sciences (APDN) Reports Q3 Loss, Tops Revenue Estimates

Zacks Equity Research
·3 min read

Applied DNA Sciences (APDN) came out with a quarterly loss of $0.33 per share versus the Zacks Consensus Estimate of a loss of $0.36. This compares to loss of $0.46 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 8.33%. A quarter ago, it was expected that this DNA-based security technology company would post a loss of $0.30 per share when it actually produced a loss of $0.28, delivering a surprise of 6.67%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Applied DNA Sciences , which belongs to the Zacks Security and Safety Services industry, posted revenues of $4.3 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 19.33%. This compares to year-ago revenues of $1.7 million. The company has topped consensus revenue estimates three times over the last four quarters.

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The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Applied DNA Sciences shares have added about 14.7% since the beginning of the year versus the S&P 500's decline of -11.7%.

What's Next for Applied DNA Sciences?

While Applied DNA Sciences has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Applied DNA Sciences: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.27 on $4.1 million in revenues for the coming quarter and -$1.44 on $18.01 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Security and Safety Services is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Clear Secure (YOU), another stock in the same industry, has yet to report results for the quarter ended June 2022. The results are expected to be released on August 15.

This airport security company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of -141.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Clear Secure's revenues are expected to be $100.21 million, up 81.6% from the year-ago quarter.


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