Volatility Returns To Patterson Companies Inc. (PDCO), StoneCo Ltd. (STNE)

Patterson Companies Inc. (NASDAQ: PDCO) shares are 40.09% up in the year-to-date (YTD) period and have moved 4.44% or $1.22 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +121.89% lower. Comparatively, the stock is -0.69% down YTD and 43.52% over the trailing 3-month period. If we look at the shorter duration, its week performance is 9.92% and 14.39% over the month.

Analyst Recommendations

On June 25, 2020, Goldman recommended the PDCO stock is a Neutral, while earlier, Piper Sandler had Resumed the stock as a Neutral on July 07, 2020. 15 analysts offering the recommendations for the stock have a consensus rating of 2.60 to suggest that the PDCO stock is a “Moderate Buy. 2 of the 15 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 3 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $28.69 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $23.65. The forecasts give the Patterson Companies Inc. stock a price target range of $30.00 on the higher side while at least one analyst think the stock could plunge to a low of $18.00. The two limits represent an upside potential of 4.37% or -59.39%.

Earnings Forecast

Analysts estimate the earnings to increase 186.70% in the current quarter to $0.23, down from the $0.27 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $1.4, down -2.70% from $1.55 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.27 and $0.42. Wall Street estimates earnings per share to be at an average of $1.6 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 24 over the last 12 months, while SEC filings reveal that there have been 8 insider sales over the same period. Insiders have purchases 244,131 shares while those sold by company executives and officers stand at 18,667. The last 3 months have seen insiders trade a total of 199,033 and 5,415 in purchases and sales respectively.

StoneCo Ltd. (NASDAQ:STNE), on the other hand, is trading around $48.90 with a market cap of $14.97B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $48.23 and spell out a less modest performance – a -1.39% return. Some analysts are even forecasting $0.54 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the StoneCo Ltd. (STNE) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

STNE’s operating expenses over the recent quarter were at $45.69 million. This represented a 63.29% of the company’s total revenues which amounted $124.47 million. With this in place, we can see that the company’s diluted EPS inclined $0.10 on the year-over-year period, growing to $0.16 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 $3.59 billion from $4.21 billion over the previous quarter. Short term investments amounted to $147.54 million while total current assets were at $3.3 billion. The cash flow from operating activities totaled $276.73 million, significantly higher than the -$555.95 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $242.97 million.

Major holders

Insiders own 14.26% of the company shares, while shares held by institutions stand at 66.50% with a share float percentage of 183.62M. Investors are also buoyed by the number of investors in a company, with StoneCo Ltd. having a total of 267 institutions that hold shares in the company. The top two institutional holders are Price (T.Rowe) Associates Inc with over 34.31 million shares worth more than $1.33 billion. As of Jun 29, 2020, Price (T.Rowe) Associates Inc held 19.20% of shares outstanding.

The other major institutional holder is Capital Research Global Investors, with the investment firm holding over 22.17 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $859.14 million and represent 12.41% of shares outstanding.