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What's in Store for ContextLogic (WISH) in Q2 Earnings?
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ContextLogic Inc. (WISH - Free Report) is scheduled to report second-quarter 2021 results on Aug 12.
For the second quarter, the company expects revenues of $715-$730 million, with year-over-year growth of2-4%. The Zacks Consensus Estimate for the same is pegged at $724.1million.
Further, the Zacks Consensus Estimate for loss is pegged at 14 cents per share, which has been unchanged over the past 30 days.
Factors at Play
Solid momentum across the company’s Marketplace business, owing to its strength in Core Marketplace and ProductBoost, is expected to have continued benefiting its performance in the to-be-reported quarter.
ContextLogic’s growing monetization efforts, deepening focus on lifetime value (LTV) users, and strong endeavors to bring more high-frequency products like CPG items are likely to have driven growth in Core Marketplace revenues in the second quarter.
Expanding CPG inventory, bolstering merchant network on the heels of global expansion (especially in Japan and Korea), and product experiments are likely to have aided the performance of Core Marketplace.
Recovery in advertising spending by merchants along with the growing momentum across the company’s IntenseBoost variation is anticipated to have driven growth in the second-quarter ProductBoost revenues.
All these factors are expected to have added strength to the company’s monthly active user (MAU) base in the to-be-reported quarter.
Apart from the Marketplace business, ContextLogics’s robust Logistics business is anticipated to have contributed well to its overall top-line growth.
The solid adoption of the company’s end-to-end shipping solutions, bolstering shipping efficiencies, and a strong focus on the optimization of average Time-to-Door (TTD) are expected to have aided the performance of the Logistics business in the quarter under review.
Increasing listings on Wish Express on the back of growing local and forward-deployed inventory are expected to have been a major positive. The company’s partnerships with local carriers are also expected to have continued strengthening its logistics capabilities in the second quarter.
In addition to these, growing momentum across Wish Local in various countries like Brazil, Mexico, Spain and Italy, owing to the company’s strength in its brick-and-mortar store network, is expected to have been a major tailwind.
However, ContextLogic’s declining advertising spend due to the lower LTV of users in the emerging markets amid the pandemic is likely to have been a serious challenge for its MAU expansion.
Mounting expenses, especially sales and marketing, due to rising digital advertising costs are anticipated to have hindered the margin expansion of the company in the second quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for ContextLogic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ContextLogic has an Earnings ESP of -7.14% and a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
Image: Bigstock
What's in Store for ContextLogic (WISH) in Q2 Earnings?
ContextLogic Inc. (WISH - Free Report) is scheduled to report second-quarter 2021 results on Aug 12.
For the second quarter, the company expects revenues of $715-$730 million, with year-over-year growth of2-4%. The Zacks Consensus Estimate for the same is pegged at $724.1million.
Further, the Zacks Consensus Estimate for loss is pegged at 14 cents per share, which has been unchanged over the past 30 days.
Factors at Play
Solid momentum across the company’s Marketplace business, owing to its strength in Core Marketplace and ProductBoost, is expected to have continued benefiting its performance in the to-be-reported quarter.
ContextLogic’s growing monetization efforts, deepening focus on lifetime value (LTV) users, and strong endeavors to bring more high-frequency products like CPG items are likely to have driven growth in Core Marketplace revenues in the second quarter.
Expanding CPG inventory, bolstering merchant network on the heels of global expansion (especially in Japan and Korea), and product experiments are likely to have aided the performance of Core Marketplace.
Recovery in advertising spending by merchants along with the growing momentum across the company’s IntenseBoost variation is anticipated to have driven growth in the second-quarter ProductBoost revenues.
ContextLogic Inc. Price and EPS Surprise
ContextLogic Inc. price-eps-surprise | ContextLogic Inc. Quote
All these factors are expected to have added strength to the company’s monthly active user (MAU) base in the to-be-reported quarter.
Apart from the Marketplace business, ContextLogics’s robust Logistics business is anticipated to have contributed well to its overall top-line growth.
The solid adoption of the company’s end-to-end shipping solutions, bolstering shipping efficiencies, and a strong focus on the optimization of average Time-to-Door (TTD) are expected to have aided the performance of the Logistics business in the quarter under review.
Increasing listings on Wish Express on the back of growing local and forward-deployed inventory are expected to have been a major positive. The company’s partnerships with local carriers are also expected to have continued strengthening its logistics capabilities in the second quarter.
In addition to these, growing momentum across Wish Local in various countries like Brazil, Mexico, Spain and Italy, owing to the company’s strength in its brick-and-mortar store network, is expected to have been a major tailwind.
However, ContextLogic’s declining advertising spend due to the lower LTV of users in the emerging markets amid the pandemic is likely to have been a serious challenge for its MAU expansion.
Mounting expenses, especially sales and marketing, due to rising digital advertising costs are anticipated to have hindered the margin expansion of the company in the second quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for ContextLogic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ContextLogic has an Earnings ESP of -7.14% and a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
Agilent Technologies (A - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cisco Systems (CSCO - Free Report) has an Earnings ESP of +1.82% and a Zacks Rank of 3, at present.
Cree has an Earnings ESP of +2.7% and a Zacks Rank of 3, at present.