Reckless Earnings Predictions: ZM, BBY, DE
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In the market for some reckless earnings predictions, you've come to the right place. You're listening to Motley Fool Money.
Welcome, Fools. I'm your host, Tim Byers. And with me are longtime Fools, Rick Benares, Dave Meyer. Fellas, how we doing? Fully caffeinated. Good weekends. Yes and yes.
Yes to all.
Today, we're going to be making some reckless earnings predictions for three stocks reporting this week. Zoom Communications, Best Buy, so Zoom ticker ZM, Best Buy ticker BBY, and Deering Company ticker DE. Zoom will likely have reported by the time you're listening to this, so please leave us a comment to let us know how well or poorly we did. Now, let's get into it. The reckless predictions game is going to be pretty simple here. And we're going to start with, I'm going to give you the numbers we've got for what we should expect for each of these companies. And you guys are going to tell me, is it going to be a miss? Is it going to be a beat? Or is it going to be a beat and raise? And starting with Zoom, which again, reported this afternoon, consensus is
is $1.21 billion for revenue. Earnings per share, the consensus is $1.43 a share on a non-GAAP basis. Rick and Dave, Rick, starting with you, miss, beat, or beat and raise?
I'm going to go with a beat and raise on this one. I guess I'll explain it later, but I think you just want me to say beat and raise right now.
We're going to get into it.
Dave, how about yourself?
I'm going with beat.
Going with beat. I think I'm going to want you to explain first here, Dave. Just a beat, no raise.
Looking back at the last 10-12 quarters, they have beaten their numbers each time. To me, what I see, I see a little sandbagging.
I was just going to say, all right.
So, because they're not, they're not big beats, but they are, uh, they are ahead of what management has been guiding. So clearly they know how to play this game, uh, if you will. But, uh, yeah. So that's why I say beat. I don't know enough to say if, if, if they'll continue to, if they'll raise based on, uh, expectations. So I'm very curious to hear what Rick has to say about that.
Yeah. Yeah. Rick, let's talk about it. Beating raise. Why you, why you think the raise is coming in here?
Yeah. So, again, Zoom, it's like this toy you stashed away in the 2020 time capsule, but you forget to take out the battery. So, it's still going. And I think people don't realize, this is the fourth consecutive year of single-digit revenue growth for Zoom. So, yeah, single-digit growth, sure, but growth. And I think a lot of investors figured, oh, well, there's no place for Zoom in the post-pandemic future, but it matters. And to me, a funny thing happens when you after years of slow growth, you make sure that you have to impress on the bottom line. And as Dave points out, they have beaten in the past. And yeah, while it's usually like a slim margin, I think there's enough there where they've had enough time and they're starting to build momentum in their latest quarter.
Revenue growth actually started to tick up a little bit that I think business is actually doing a little better. So I figured they still have enough room to beat. Yeah, I think it'd be shocking if it doesn't happen. And I'm not sure the comment section at the podcast will tell how bad Dave and I may have gotten that. But I do think there's going to be enough room for a raise.
Let's talk a little bit, and then we'll move on to Best Buy here, some of the key drivers here. Zoom AI Companion is something that Zoom has been looking for to maybe drive some additional upsell in the seats on its enterprise plan. But this is a platform play here. They have two parts of the business. They have the enterprise business, and then they have the regular The consumer business is the one that's dragging. They make very little, really nothing on it. It's like an anchor to margins. The enterprise business is where they get all the big customers. If I had to ask you both, Are you expecting some outperformance? There's a couple of ways this could go. If they beat, they could beat by just being very operationally efficient, or they could be beating by getting some real traction and generating some platform business, that enterprise business.
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