It makes sense to watch LexinFintech Holdings Ltd. (LX) And Houghton Mifflin Harcourt Company (HMHC)

LexinFintech Holdings Ltd. (NASDAQ: LX) shares are -37.29% down in the year-to-date (YTD) period and have moved -2.30% or -$0.2 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +21.92% lower. Comparatively, the stock is -49.73% down YTD and 10.81% over the trailing 3-month period. If we look at the shorter duration, its week performance is 3.32% and -3.11% over the month.

Analyst Recommendations

On June 16, 2020, China Renaissance recommended the LX stock is a Buy, while earlier, CLSA had Initiated the stock as a Outperform on July 16, 2020. 12 analysts offering the recommendations for the stock have a consensus rating of 1.80 to suggest that the LX stock is a “Strong Buy. 0 of the 12 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 9 recommend buying, with 2 rating it as an Overweight.

The stock currently trades at $8.51 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $12.77. The forecasts give the LexinFintech Holdings Ltd. stock a price target range of $124.51 on the higher side while at least one analyst think the stock could plunge to a low of $61.80. The two limits represent an upside potential of 93.17% or 86.23%.

Earnings Forecast

Analysts estimate the earnings to decrease 0.00% in the current quarter to $0.39, down from the $0.54 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $0.91, up 26.10% from $1.83 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.59 and $0.59. Wall Street estimates earnings per share to be at an average of $2.19 for the next year.

Houghton Mifflin Harcourt Company (NASDAQ:HMHC), on the other hand, is trading around $2.19 with a market cap of $295.70M and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $2.90 and spell out a more modest performance – a 24.48% return. Some analysts are even forecasting -$3.18 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Houghton Mifflin Harcourt Company (HMHC) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

HMHC’s operating margin was negative on the trailing 12 months basis, remaining steady at -31.70%, while the operating expenses over the recent quarter were at $113.43 million. This represented a 54.85% of the company’s total revenues which amounted $251.22 million. With this in place, we can see that the company’s diluted EPS declined -$0.30 on the year-over-year period, shrinking to -$0.33 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $2.17 billion from $2.2 billion over the previous quarter. The cash flow from operating activities totaled -$189.28 million, significantly higher than the -$265.93 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$213.63 million.

Insider activity

Insiders have transacted a total of 107 times at Houghton Mifflin Harcourt Company over the last 6 months, with insider purchases undertaken 57 times and accounting for 804,767 shares. Insider sales totaled 346,557 shares over the same period, with these deals completed in 50 transactions. Looking at these numbers, we realize that net purchases over that period are 7.0 shares. Insiders now hold a total of 895.91k shares after the latest sales, with 397.10% net shares purchased.

Major holders

Insiders own 0.70% of the company shares, while shares held by institutions stand at 94.00% with a share float percentage of 124.84M. Investors are also buoyed by the number of investors in a company, with Houghton Mifflin Harcourt Company having a total of 173 institutions that hold shares in the company. The top two institutional holders are Anchorage Capital Group, LLC with over 19.47 million shares worth more than $35.23 million. As of Jun 29, 2020, Anchorage Capital Group, LLC held 15.47% of shares outstanding.

The other major institutional holder is Wellington Management Company, LLP, with the investment firm holding over 15.37 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $27.82 million and represent 12.21% of shares outstanding.