Membership Collective Group (MCG) reports loss for Q4, beats sales estimates


Membership Collective Group (MCG) emerged with a quarterly loss of $0.07 per share versus the Zacks Consensus estimate of a loss of $0.24. That compares to a loss of $0.21 per share a year ago. These figures are adjusted for one-off effects.

This quarterly report represents an earnings surprise of 70.83%. A quarter ago, this members-only luxury hotel and club operator under the Soho House brand was expected to post a $0.10 per share loss, when in fact it did Loss of $0.46 resulting in -360% surprise.

In the past four quarters, the company has beaten consensus estimates for earnings per share just once.

Membership Collective, a part of the Zacks Internet Services industry, reported revenue of $270.39 million for the quarter ended December 2022, beating Zacks’ consensus estimate by 6.34%. This compares to annual sales of $184.52 million. The company has beaten consensus sales estimates twice in the past four quarters.

The sustainability of the immediate price action of the stock based on recently released numbers and future earnings expectations will depend primarily on management’s comments on the earnings release.

Membership Collective stock is up about 67.4% year-to-date, while the S&P 500 is up 3.8%.

What’s next for Membership Collective?

While Membership Collective has outperformed the market so far this year, the question for investors is: where is the stock going?

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

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a trusted rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the trend in Membership Collective estimate revisions is favorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, current status places the stock at a Zacks #2 rank (Buy). Therefore, the shares are expected to outperform the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the coming quarters and the current fiscal year change over the coming days. Current consensus EPS estimate is -$0.15 on revenue of $255.75 million for the upcoming quarter and -$0.46 on revenue of $1.19 billion for the current fiscal year.

Investors should keep in mind that the outlook for the industry can also have a material impact on the stock’s performance. In terms of Zacks industry ranking, Internet – Services currently ranks in the top 40% of Zacks’ 250+ industries. Our research shows that the top 50% of industries evaluated by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Crexendo (CXDO), is yet to report results for the quarter ending December 2022. The results are expected to be released on March 14th.

This company is expected to report quarterly earnings of $0.03 per share in its forthcoming report, a +50% year-over-year change. The consensus EPS estimate for the quarter has been flat for the last 30 days.

Crexendo’s revenue is expected to be $10.67 million, up 18.5% from the same quarter last year.

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