Earnings Predictions for the Week Beginning November 02, 2020

Profiting From Trading Options!

Compare Exiting Before and After Earnings!

by Ian Harvey

Sunday, November 01, 2020


Options Trades to Consider Based on Expected Earnings Reports:

Monday, November 02, 2020

Option trade to consider: Buy the SWKS NOV 20 2020 145.000 CALL at approximately $5.50 (up to $6.00).

Wednesday, November 04, 2020

Option trade to consider: Buy the UPWK NOV 20 2020 20.000 CALL at approximately $0.90 (up to $1.00).

Thursday, November 05, 2020

Option trade to consider: Buy the BABA NOV 20 2020 325.000 CALL at approximately $7.40 (up to $8.00).

Option trade to consider: Buy the SQ NOV 20 2020 170.000 CALL at approximately $5.30 (up to $5.50).

Option trade to consider: Buy the DBX NOV 20 2020 20.000 CALL at approximately $0.50 (up to $0.55).


Monday, November 02, 2020


Semiconductor firm Skyworks Solutions Inc (NASDAQ: SWKS), a smartphone chip supplier, will report earnings after the market closes. The consensus earnings estimate is for $1.52 per share on revenue of $840.22 million; but the Whisper number is a little higher at $1.59 per share.

The company's guidance was for earnings of approximately $1.51 per share on revenue of $830.00 million to $850.00 million. Consensus estimates are for year-over-year earnings growth of 2.70% with revenue increasing by 1.55%.

For the last reported quarter, it was expected that Skyworks would post earnings of $1.13 per share when it actually produced earnings of $1.25, delivering a surprise of +10.62%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Increasing popularity of the company's products instil confidence in the stock. Shares of the company have returned 20.1% in the year-to-date period against the industry’s increase of 7.8%.

The company derives about half of its revenue from Apple (NASDAQ: AAPL), supplying the iPhone with 4G connectivity chips. The balance of sales comes from various other smartphone makers and other devices that are in need of a wireless network or Wi-Fi connectivity.

“Armchair Traders” made potential profits on Skyworks of 156% - read about it HERE.

Influencing Factors.....

Overall earnings estimates have been revised higher since the company's last earnings release.

Continued momentum seen in Skyworks’ 5G and Wi-Fi 6 solutions is likely to have cushioned revenue growth. Demand continues to be high owing to increased need for high-speed connectivity amid the COVID-19 induced surge in the remote work, video streaming and web-based learning trends.

In fiscal third-quarter conference call, management noted 5G subscriptions, globally, are continuing to grow with estimates set to hit $3 billion over the next five years.

Increasing demand for 5G handsets, especially in China, is anticipated to have driven the company’s performance. Also, in the third quarter conference call, management noted that newly released 3GPP standards have validated the extension of 5G technology into Internet of Things (IoT), Vehicle-to-everything (V2X) as well as other services.

Momentum in deal wins from various customers across industrial IoT, automotive, aerospace and defense verticals has continued in the fiscal fourth quarter.

There has been significant traction witnessed for Sky5 platform that is powering smartphone launches at China-based OEMs like Oppo, Xiaomi and Vivo as well as Korea-based player Samsung. The Sky5 platform was adopted by leading automobile manufacturers like Ford and BMW in fiscal third quarter.

Projected momentum in new iPhone sales has been positive. Skyworks supplies radio frequency chips to Apple and derives a significant portion of its revenues from the company.

There has been growing momentum for Skyworks’ bulk acoustic wave (BAW) filters, especially in mobile and broad markets. The company has been witnessing significant design wins for BAW-enabled devices. During the third quarter earnings call, management noted that total shipments of BAW-enabled devices have crossed 150 million units.

Summary.....

No matter the political outcome, connectivity chips will play an important role in the build-out of 5G in the coming years. And as new wireless services become available, consumers will need a new phone or other device that can connect to it. That's where Skyworks Solutions comes in.

Option trade to consider: Buy the SWKS NOV 20 2020 145.000 CALL at approximately $5.50 (UP TO $6.00).

 (for those members requiring further guidance.....

STOP-LOSS – $2.20

SELL – $11.00)


Wednesday, November 04, 2020


A notable online recruitment services’ provider Upwork Inc (NASDAQ: UPWK), which is uniquely poised to benefit from the gig economy, will report earnings after the market closes. It is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2020. The consensus earnings estimate is for $0.08 per share on revenue of $90.4 million.

For the last reported quarter, it was expected that Upwork would post a loss of $0.09 per share when it actually produced a loss of $0.09, delivering no surprise.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

According to research, the gig economy is projected to grow at a 17% compound annual growth rate (CAGR) until 2023 due to evolving social attitudes and digitization rates around the globe.

The gig economy is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform. The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and demand for flexible lifestyles.

About Upwork.....

Upwork is a global freelancing platform that helps businesses and independent professionals connect and collaborate remotely. The company makes money by connecting freelancers with projects through its platform for a fee and charging employers fees related to payment processing and other related servicing charges. Upwork is headquartered in Santa Clara, Calif., with offices in San Francisco and Chicago.

The company was formed in 2014 through the merger of Elance (founded in 1998) and oDesk (2003), two prior competitors in the freelance space. Upwork changed to its current moniker in 2015 and went public in 2018, raising net proceeds of $109.4 million at $15 per share. It now trades near $8 per share, equating to a market cap of ~$900 million.

Influencing Factors.....

Upwork will have benefited from the continued remote working trend owing to the COVID-19 crisis.

A surge in hiring of freelance talent as businesses resort to stringent cost-saving practices are likely to have resulted in healthy adoption of Upwork’s services.

Upwork is striving hard to attract large business organizations to hire freelance talent through its Work Together Talent Grants program. Upwork collaborated with Citrix to utilize the latter’s virtual desktop solution to make it easier for clients to work with freelance resources.

To increase the visibility and awareness about its platform, Upwork launched an extensive advertising and multichannel messaging campaign. Also, Upwork collaborated with Business Talent Group, a talent marketplace platform, in the second quarter of 2020 to enhance number of professional business consultants and attract more business organizations. 

In the second quarter, management noted that it added 4000 new clients. The momentum in new clients’ addition is likely to have driven the top line.

Spending from existing clients is anticipated to have a positive impact on the third quarter performance. In the second-quarter conference call, management had stated that the existing clients are increasingly utilizing the freelancing talent on its platform. To boost utilization of freelance talent by enterprises on its platform, Upwork launched 50 new solutions pages in the second quarter of 2020.

Upwork is witnessing higher demand for freelancers in the customers support operations as well as Web, Mobile and Software Development category along with networking category as enterprises transition to remote work set up.

The company is working on improving adoption rates for the technical freelance talent. The company is making improvement to semantic search on its platform so that increases significance of search results.

In the second quarter, the company had launched Upwork Expert-Vetted Talent solution which will enable clients to find resources through a combination of vetting and curation that is powered by both machines and humans. The premium offering is expected to have witnessed healthy incremental adoption rates along with Upwork’s Bring Your Own Talent functionality offering and should have positively impacted performance.

Summary.....

Growth at Upwork has continued at a steady pace right through the months of the pandemic, and the struggles of businesses in 2020 may be laying the groundwork for even more lasting growth in the future.

Employers have shifted part or all of their workforce to remote work during the pandemic, some of their larger customers have been moving employees as well as freelancers onto their platform to simplify payroll and management of the remote workforce. Upwork is working on expanding the availability of those options, which embeds the company's products deeper into their clients' core business.

Longer term, the pandemic will prove to be a tailwind for a company that's evolving from a matchmaker to the leading provider of flexible talent solutions in the gig economy. Despite a run-up in the share price this year, it still sells for 10% below the closing price on the first day of trading after its initial public offering.

Option trade to consider: Buy the UPWK NOV 20 2020 20.000 CALL at approximately $0.90 (UP TO $1.00).

(for those members requiring further guidance.....

STOP-LOSS – $0.40

SELL – $1.80)


Thursday, November 05, 2020


The Chinese e-commerce goliath Alibaba Group Holding Ltd (NYSE:BABA), an online and mobile commerce company, will report earnings before the market opens. The consensus earnings estimate is for $2.11 per share on revenue of $22.89 billion; but the Whisper number is slightly higher at $2.25 per share.

Consensus estimates are for year-over-year earnings growth of 17.88% with revenue increasing by 37.47%.

Over the past three years, Alibaba earnings swelled 25% annually and sales 44%. That meets the 25% or higher threshold an investor would want to see in a top growth stock.

In the past three quarters, Alibaba averaged 21% EPS growth. While that is below the three-year average, it's still strong in the coronavirus market.

Alibaba stock has out-climbed its U.S. counterpart Amazon over the last six months. The company is also coming off a strong quarter and the Chinese economy has started to return to growth.

BABA stock has jumped 55% in the past six months, against Amazon’s 35%. And the gap has grown wider over the last three months, with BABA up 20% vs. AMZN’s -4% decline. This is part of a larger run that’s seen Alibaba climb 260% in the past five years and it currently hovers around 5% off its highs. And the company’s valuation is hardly stretched considering where it has traded over the last several years.

Influencing Factors.....

Overall earnings estimates have been revised higher since the company's last earnings release.

Alibaba reportedly controls two-thirds of China’s e-commerce market through Taobao and Tmall. The company’s ability to expand its reach in the world’s most populated country, alongside the likes of JD.com JD, could help it grow for years to come. And it’s worth remembering that China’s middle class could hit 550 million by 2022.

Last quarter, BABA’s annual active consumers hit 742 million, with its mobile MAUs up 28 million sequentially to 874 million. This helped Alibaba’s sales pop 30% and its adjusted earnings climbed 18% to top estimates.

Alibaba, like Amazon, has a digital media unit and an ever-expanding cloud computing segment. The company’s cloud unit surged 59% last quarter to account for nearly 10% of total sales, with its media space up 9%. Note that China is one of the only countries where Netflix doesn’t operate.

More recently, the company announced on October 18 that it would spend $3.6 billion to take a controlling stake of Sun Art Retail Group, which is China’s largest big-box retailer and Walmart’s biggest competitor in the world’s second largest economy.

BABA also stands to benefit from Ant Group’s record-breaking IPO. The technology and financial-services giant, run by Jack Ma, owns widely popular mobile-payments platform Alipay that competes alongside Tencent’s WeChat Pay. Alibaba holds a 33% stake in the fintech firm that’s set to expand as part of China’s booming digital payments economy.

Singles day – does not factor into the earnings at this stage but will have future ramifications. Singles Day on Nov. 11 is an unofficial Chinese holiday. The holiday has surpassed Cyber Monday as the largest online shopping day of the year globally.  

Alibaba owns the trademark to Singles Day and is the largest participating retailer. 

Also, Alibaba has added three additional days to the 2020 Singles Day holiday shopping season. The added dates are Nov. 1, 2 and 3.

An estimated 300 million new users are expected to participate in the shopping event in 2020. Alibaba segment Tmall Global is expected to add 2,600 new brands for the event including Prada, Cartier and Chloe.

Alibaba adding several days could break records.

A survey from AlixPartners suggests spending will rise, with 39% of consumers saying they would spend more than in 2019.

Summary.....

Alibaba is the e-commerce and cloud services leader in China, and it is a pandemic winner. Since that time, the stock has proved me right by gaining 61.2% in under seven months. At best, Alibaba is a winner of another coronavirus outbreak in China. At worst, it’s immune from potential coronavirus downside.

Option trade to consider: Buy the BABA NOV 20 2020 325.000 CALL at approximately $7.40 (UP TO $8.00).

(for those members requiring further guidance.....

STOP-LOSS – $3.00

SELL – $14.80)


Payment processing and point-of-sale upstart Square Inc. (NYSE:SQ) will report earnings after the market closes. The consensus earnings estimate is for $0.17 per share on revenue of $1.99 billion; but the Whisper number is higher at $0.23 per share.

Consensus estimates are for earnings to decline year-over-year by 34.62% with revenue increasing by 57.13%.

For the last reported quarter, it was expected that Square would post a loss of $0.07 per share when it actually produced earnings of $0.18, delivering a surprise of +357.14%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Square has come a long way from the firm that only sold small smartphone and tablet-connected credit card readers geared toward small businesses and the self-employed.

Today, its portfolio includes a range of point-of-sale offerings, a broader payment infrastructure, including online, as well as debit cards, small business loans, peer to peer payments, bitcoin buying and more. The company’s Cash App competes against PayPal and JPMorgan Chase.

Our memberships have done extremely well with Square options trades this year – view the past results.

Last Friday Square shares dropped about 9% following a report from The Wall Street Journal that the Credit Karma is in talks to sell its tax preparation business to the mobile payments company. This provides us with a cheaper entry price and hopefully, this has now settled down somewhat!

Square has been aggressively building out features for its Cash App, which now supports cryptocurrency and stock trading, as well as peer-to-peer (P2P) money transfers and Cash Card debit card payments.

Square's strategy revolves around developing an ecosystem for the app that can handle various use cases, boosting overall engagement in the process. How well a tax preparation service would theoretically integrate with Square's platform remains to be seen.

Influencing Factors.....

Short interest has decreased by 5.7% and overall earnings estimates have been revised higher since the company's last earnings release.

Many of Square’s clients such as coffee shops, restaurants, bars, and smaller brick-and-mortar businesses, have been negatively impacted by the coronavirus. Still, Square’s Q1 revenue jumped 44% to top estimates. And its second quarter results were even more impressive, as people opted to get their stimulus checks directly deposited in the Cash App.

SQ’s second quarter revenue soared 64%, which marked its strongest growth as a public firm and came despite the fact that gross payment volume dipped 15%. Cash App’s gross profit surged 167% to $281 million. The company said that the app had over 30 million monthly transacting active customers and over 7 million spending on its Cash Card.

Overall, Wall Street was happy to see Square customers using more of its banking features. The company’s longer-term goal is to become the bank of the future. Plus, its seller business saw volumes return to growth in July. And its online gross payment volume jumped 50% to account for 25% of seller volume in the second quarter.

E-commerce sales are booming. While many transactions are made over a website or platform’s checkout process, Square can handle online sales.

Many of its customers are small- and medium-sized businesses. These companies and restaurants are adapting to the novel coronavirus and offering pickup and delivery options — even during some lockdowns.

Square has exposure to bitcoin, the price of which is booming. Bitcoin is at its highest price since June 2019 and has had plenty of momentum lately. For Square, its Cash App (which bitcoin is a part of) is driving growth right now.

Summary.....

Square has crushed rival PayPal over the last three years, up over 370%, despite some ups and downs. And even though it has easily crushed both its industry and PYPL over the past several years, SQ trades at a discount to both at 8.3X vs. 9.3X forward 12-month sales.

Option trade to consider: Buy the SQ NOV 20 2020 170.000 CALL at approximately $5.30 (UP TO $5.50).

(for those members requiring further guidance.....

STOP-LOSS – $2.55

SELL – $10.60)      


San Francisco-headquartered company Dropbox Inc (NASDAQ: DBX), which provides an online file-sharing collaboration platform worldwide, will report earnings after the market closes.

Equities research analysts predict that Dropbox will report sales of $482.57 million for the current fiscal quarter. Dropbox reported sales of $428.20 million in the same quarter last year, which would suggest a positive year over year growth rate of 12.7%.

Analysts expect that Dropbox will report full year sales of $1.90 billion for the current year. For the next financial year, analysts forecast that the firm will report sales of $2.10 billion, with estimates ranging from $2.07 billion to $2.14 billion.

Also, Wall Street brokerages expect Dropbox to announce $0.19 earnings per share (EPS) for the current fiscal quarter. Dropbox posted earnings of $0.13 per share during the same quarter last year, which indicates a positive year over year growth rate of 46.2%.

On average, analysts expect that Dropbox will report full-year earnings of $0.77 per share for the current fiscal year, with EPS estimates ranging from $0.74 to $0.82. For the next year, analysts anticipate that the firm will post earnings of $0.91 per share, with EPS estimates ranging from $0.76 to $1.03.

For the last reported quarter, it was expected that Dropbox would post earnings of $0.17 per share when it actually produced earnings of $0.22, delivering a surprise of +29.41%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Influencing Factors.....

Dropbox has been gaining from the evolving workspace demands for seamless enterprise communication tools.

The company offers a platform that enables users to store and share files, photos, videos, songs and spreadsheets. Solid demand for cloud storage, triggered by the coronavirus crisis-led work-from-home wave, has been acting as a tailwind for this Zacks Rank #1 company.

Additionally, integration with leading applications like Zoom Video, Slack and Atlassian are likely to expand the Dropbox paying-user base over the long run.

If HelloSign catches on with new and existing customers, margins and revenue will grow. HelloSign is a service that supports such features as signer attachments and advanced signing and reporting.

Usage is up 25% relative to pre-Covid levels. So, as customers try out the service and experiment with the “smart workspace” feature, user engagement will continue climbing.

Smart workspace is a new feature. Dropbox added it last year and saw engagement rise by 100,000 users sequentially. As 450,000 of its business teams use the new Dropbox, they will figure out efficient ways to suit the work-from-home space.

Tim Regan did not look at the other offerings as competition.

We don’t know where to find our various documents and whether it’s a cloud doc or a Microsoft doc or Adobe, Google, content is everywhere,” he said. “And we are constantly toggling between tools, whether it’s our Slack or Zoom or Atlassian or Dropbox, constantly bouncing around between tools.”

From a practical sense, Dropbox is a “go between” for sharing content among companies and clients who are on a different platform. So long as one of the sharers has a Dropbox account, the recipient may get documents electronically.

Analysts Thoughts.....

Dropbox has earned an average recommendation of “Buy” from the seventeen ratings firms that are presently covering the company. Two equities research analysts have rated the stock with a sell recommendation, three have issued a hold recommendation, ten have issued a buy recommendation and one has assigned a strong buy recommendation to the company.

The average twelve-month price target among brokers that have issued a report on the stock in the last year is $27.25.

Summary…..

Dropbox is an attractive, out of favor technology stock. The work from home trend is only accelerating and in the next few quarters, the company’s sales will grow as a result.

Option trade to consider: Buy the DBX NOV 20 2020 20.000 CALL at approximately $0.50 (UP TO $0.55).

(for those members requiring further guidance.....

STOP-LOSS – $n/a

SELL – $1.00)        



An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, check out the other  memberships available at Stock Options Made Easy.

When To Exit A Trade Based On Earnings?.....

It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” 

As most traders realize, there is a 50/50 chance that the company stock price could go either way after reporting earnings – even if the report is good, the stock price could reverse – and if you hold a call option, means depletion of an already good profit if it exists. A similar situation can be found if you hold a put option, and a report is not that sound (and you expect a profit from this) but the stock price can, at times move upwards due to traders bias or other external conditions......READ MORE.....

The Decision Is Yours!

Before You Trade Consider This Strategy……

"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.

……continue reading this article……


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!

Options traders are not successful because they win.

Options traders win because they are successful.


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy

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