Alpha DNA Earnings Update - thru Aug 5, 2023
August 7, 2023
Earnings season just completed its busiest week for the S&P 500 and for our portfolio as well. We had 34 portfolio companies announce earnings last week and our success rates were strong overall. We had 29 of the 34 companies meet or beat on EPS expectations. And we had only 6 companies deliver a material miss on Revenue expectations. On the guidance front, we had 14 companies provide upward forward guidance and only 4 provide downward forward guidance.
For the entire earnings season, this brings our EPS success rate to 85% for beats which compares very favorably to the S&P 500 at 79% according to FactSet. Our meets/beats rate for Revenue is at 86% for the quarter to date which is very strong. FactSet tracks absolute miss/beats on Revenue (no company is assessed a meets) for the S&P 500 at 65% which is below the 5-year average of 69%. On an apples to apples basis, where no meets are considered, our Revenue beats rate is 72% which looks great again in comparison.
On forward guidance, we have had 20 total companies provide some upward guidance and only 7 provide any kind of downward guidance. That ratio is very strong and we hope to continue it.
The latest report is here at this link: Download Report
Earnings are coming in across the markets a little lighter than last year at this time marking several quarters in a row of earnings decline. However, the EPS beats rate for the S&P 500 is slightly above average so at least the companies are managing to beat the lowered expectations that come in economic decline. The weakness in revenue beats is consistent with the economic decline but the magnitude of the decline is much better than observed during historic recession averages. It will be interesting to watch the earnings dynamic for the rest of 2023 as the declining EPS numbers begin to contend with a market that has been marching upward.
If you would like to talk to one of our portfolio managers about these stocks or about the potential earnings results for any stock you maintain in your portfolio, just reach out to us at 443-288-6444 or email us at firstname.lastname@example.org