The earnings keep coming, and some notable names are reporting next week, companies that have seen their fair share of volatility in 2020. Ranging from cannabis to cruise lines to the appealing but murky industry of sports betting, the stocks to watch this week are Canopy Growth (CGC 12.17%), Royal Caribbean (RCL 3.65%), and DraftKings (DKNG 1.90%).
Canopy Growth
Canopy Growth was having a tough time long before COVID-19 hit. The cannabis maker had a share price pushing $50 in April 2019, but a string of missteps and failure to live up to high market expectations has led shares to fall to just one-third of their all-time highs as of this writing.
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Sales growth has been tremendous with annual gains ranging from 214% in fiscal 2017 to 76% in fiscal 2020. Despite revenue coming in at $399 million Canadian dollars ($298 million) last year, the company turned in a loss of CA$1.39 billion -- its highest net loss ever.
Canopy Growth is scheduled to report on Aug. 10, and estimates are calling for a loss of CA$0.46 per share. That would be an improvement over the CA$0.54 per share loss reported in the year-ago period, but it still leaves Canopy Growth as a company struggling to find profitability. With investors clearly no longer cutting this stock any slack in terms of financial performance, the company will need to deliver in order for shares to find any bullish momentum.
Royal Caribbean
2020 is simply a wash for cruise lines. Royal Caribbean recently announced that it would be suspending all cruises until November, prolonging a revenue fallout that's putting cruise lines in a precarious situation. That must be especially discouraging for investors as Royal Caribbean was steadily growing revenue leading up to the outbreak.
Royal Caribbean also reports on Aug. 10, and estimates are calling for a loss of $4.55 per share. The brunt of the negative impact from the coronavirus outbreak and shutdowns happened in the second quarter, and the cruise operator is going to feel that pain. More intriguing will be management's commentary on plans moving forward. First-quarter losses totaled $1.44 billion. The company put together a war chest of $3.89 billion in cash at of the end of the first quarter and has since taken on more debt, but that will only take the company so far as it is burning approximately $1 billion of cash quarterly "during [this] prolonged suspension of operations."
DraftKings
There has been lots of investor enthusiasm over the potential of sports betting. DraftKings is standing out as a leader in that fledgling opportunity, but the COVID-19 pandemic has most certainly put a snag in the rollout of this broader industry. It will be interesting to see how much of an increase in revenue has been achieved thanks to golf -- the one sport that remained prevalent during the second quarter.
Analysts are calling for a loss of $0.14 per share in the second quarter on just $65 million of revenue (with an estimated full-year loss of $0.62 per share). Obviously, those figures do not exactly add up to a company with a $12 billion market cap, but DraftKings is a growth stock positioned to claim substantial market share in a massive new corner of the gambling industry. Prior to its integration with SBTech, DraftKings alone reported 30% revenue growth in the first quarter. No doubt, growth and its continued momentum will be the focal point of DraftKings' results this week.
Perhaps even more crucial than the numbers we'll see this week is the fate of major fall sports. Football is big money, and it's still questionable whether the NFL and college football will get their full seasons in. If not, it would be a big loss of potential income for DraftKings and its sports betting peers.
DraftKings is scheduled to report its second-quarter results on Aug. 14.
