Thanksgiving Week's Earnings Repertoire

With Thanksgiving around the corner, inflation is running at its highest annual rate in almost thirteen years and concerns over rising cases of COVID-19 in the U.S. and Europe are growing. This week's earnings repertoire will be hosting reports from Zoom Video Communications ZM, Best Buy Co Inc BBY, Dell Technologies Inc DELL, and Hewlett Packard HPQ.

Monday

After the close, Zoom needs to show progress toward diversifying its revenue to ease concerns over its ability to maintain its impressive growth rate as schools, universities, and corporations reopen to work and learn in person. Its major bet is to expand into the contact center market. Undeniably, management has already done a good job as far as profitability goes as it expanded the gross margin in each of the last few quarters from approximately 70% to 73%. After the collapse of the Five9 deal, Zoom has directed its efforts towards a service named Zoom Video Engagement Center that is expected to launch in 2022. The Zoom Phone and Zoom Rooms are critical to growing and maintaining its ecosystem, so investors are expecting strong revenue growth guidance.

Tuesday

After Target TGT and Walmart WMT showed last week they can leverage their scale and withstand the adverse effects of the pandemic, nothing less is expected of Best Buy due to strong demand for consumer electronics. But the tech-focused retailer is expected Its investments in omnichannel offerings as well as the transformation of its supply chain has powered the tech-focused retailer to be ahead of its peers, so it is expected not only to show strong third-quarter results before the open but also boost its guidance for the holiday quarter.

Since completing the spinoff of its 81% stake of VMWare Inc VMW in a deal to create two standalone companies, Dell is continuing its strategic shift to grow its capabilities in high-growth end markets, namely edge computing, cloud services, and artificial, while the PC market remains its thriving revenue stream. Infrastructure Solutions Group and Client Solutions Group, which gathers data center revenues and computing hardware as well as software sales, make 80% of total sales and is the company's main growth driver. After the close, investors are expecting to see strong quarter results as well as a bright outlook.

In-office and in-person dynamics have been entirely reshaped by Covid-19 that took the world's population hostage 18 months ago. Fortunately for HP, this trend created the need for faster and stronger computers as home offices and remote learning classrooms needed to be equipped for the task. IT research firms Gartner and IDC reported that PC sales posted their strongest growth in more than a decade during the third quarter despite global supply chain disruptions and the chip shortage. In the quarter, global PC sales grew 5% sequentially as they reached 84.1 million units with desktop shipments jumping 12% YoY to 16.6 million units. Therefore, HP's results should have benefited from these favorable trends, with investors expecting to see evidence that both the growth and recovery of its stock can be sustained with strong guidance.

A Shortened Holiday Week

By the looks of it, Monday and Tuesday will be the most important days of this shortened holiday week earnings-wise. Markets will be closed on Thursday for Thanksgiving, but most companies know better than to report on Wednesday that is a sort of an unofficial start of the national holiday of gratitude.

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