Applied Digital Corporation (APLD) reports fourth-quarter loss, beats revenue estimates

Applied Digital Corporation (APLD) reported quarterly loss of $0.07 per share versus the Zacks Consensus Estimate of a loss of $0.05. This compares to a loss of $0.06 per share a year ago. These figures are adjusted for one-time items.

This quarterly report represents an earnings surprise of -40%. A quarter ago, the company was expected to post a loss of $0.05 per share when in fact it posted a loss of $0.01, representing a surprise of 80%.

The company has topped consensus earnings per share estimates three times over the last four quarters.

Applied Digital Corporation, which belongs to the Zacks Financial – Miscellaneous Services industry, posted revenues of $22.04 million for the quarter ended May 2023, surpassing the Zacks Consensus Estimate by 0.13%. This compares to revenues of $7.5 million in the same period last year. The company has surpassed the consensus revenue estimate twice over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Applied Digital Corporation shares are up 319.6% year to date, while the S&P 500 is up 18.2%.

What’s next for Applied Digital Corporation?

While Applied Digital Corporation has outperformed the market this year, the question that comes to investors’ minds is: What’s next for this stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

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 report, the estimate revision trend for Applied Digital Corporation is mixed. 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 #3 (Hold) for the stock. As such, the stock is expected to perform in line with 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 upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is $0.03 on $50.24 million in revenue for the coming quarter and $0.37 on $307.09 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Financial – Miscellaneous Services currently ranks in the bottom 29% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same sector, Greystone Housing Impact Investors (GHI), is yet to release its results for the quarter ending June 2023. The results are expected to be released on August 3.

This provider of tax-exempt financing for college, senior living, and multifamily housing is expected to report quarterly earnings of $0.44 per share in its upcoming report, representing a year-over-year change of -40.5%. The consensus earnings per share estimate for the quarter remained unchanged over the past 30 days.

Greystone Housing Impact Investors revenue is expected to be $26.5 million, an increase of 53.8% compared to the same quarter last year.

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