As the calendar flips to August, the summer doldrums are ready to hit the market in what is typically the worst month for stocks. A surge in COVID-19 cases across the U.S. also has many investors on edge, renewing worries around a stalled economic recovery.
EverQuote (EVER -3.62%), Nikola (NKLA 2.94%), and Wynn Resorts (WYNN -1.42%) all report earnings in the first week of August. Let's see why these are the stocks to watch this week.
Image source: Getty Images.
EverQuote
Online insurance marketplace EverQuote kicks off earnings among this group by reporting its second-quarter results after the market closes Monday. Management is guiding for revenue to jump 30% year over year -- or almost twice the 16% rate the company expects industry-wide spending on online insurance advertising to grow each year through 2024.
That ad spending is how EverQuote generates revenue: It has over 100 carriers in its marketplace, especially in auto insurance, where most of the top insurers participate. It also has a network of over 85,000 agents.
The auto market is currently EverQuote's biggest vertical, because its platform is eminently scalable. But it is increasingly expanding into new markets, including home, life, and health insurance. It acquired specialized health insurer Crosspointe last September to facilitate its entry into that category.
All five analysts who cover EverQuote rate it a buy, and the consensus price target of $52.75 per share points to nearly 75% upside potential.
Image source: Nikola.
Nikola
There is good reason investors have been down on Nikola, a maker of electric and hydrogen fuel cell trucks. And the challenges were summed up when the company's founder and former CEO Trevor Milton was charged with three counts of fraud by federal prosecutors last week for allegedly making false and misleading statements to investors.
The word "former" is key here, though, as Milton stepped down from the company last year (the alleged criminal acts were committed between 2019 and 2020). So when the company reports second-quarter earnings on Tuesday, it will arguably have the most heavy lifting to do to convince investors it's still not some smoke-and-mirrors operation.
That shouldn't be too hard. In May, it signed agreements with Total Transportation Services for 100 semi trucks, and in mid-July, it added 51 more dealerships in nine states, bringing total sales and service locations up to 116 sites.
The stock of this alternative-fuel truck maker is in the tank, however, down 85% since last June. Pessimism might be so bad for this company, not to mention the shadow of its founder still hanging over it, that Nikola could give investors a big surprise.
Image source: Getty Images.
Wynn Resorts
Casino operator Wynn Resorts (WYNN -1.42%) is third to report with earnings coming on Wednesday, and there is a lot of doubt around how it will fare. Macao, where Wynn generates most of its revenue and profits, is still limping back to recovery, growing at a far slower rate than originally anticipated, and Las Vegas could feel the impact of new mask mandates going into effect.
Although the latter situation won't affect the company's second-quarter results, it will hang over the report as investors mull what this potential step backward in the recovery from COVID-19 means for the future of Las Vegas and the resorts that operate there.
In short, neither destination is bound to serve as a bright spot for the company, and analysts expect the global casino operator to post an adjusted loss of $1.52 per share, substantially better than the loss of $6.12 per share a year ago, but that's a pretty low hurdle to clear.
We'll get a better idea of how Macao performed in July by the time Wynn Resorts reports, but few are expecting major gains, and that could weigh even more heavily on the company. Shares of Wynn were up 20% at the beginning of June, but they have quickly lost ground in the past two months -- the stock is now down about 13% year to date.
