Endeavor Group shares spike on solid full-year revenue guidance: is it time to buy?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Aug 17, 2021
  • Endeavor Group shares on Tuesday spiked 9% after raising its full-year 2021 guidance.
  • The company announced its most recent quarterly results Monday after markets closed.
  • Its non-GAAP EPS outperformed expectations while revenue and GAAP EPS came in short of estimates.

On Tuesday, Endeavor Group Holdings Inc. (NYSE:EDR) shares surged 9% following Monday’s upbeat topline guidance for full-year 2021. The company announced its most recent quarterly results after markets closed, beating analyst expectations on non-GAAP EPS. Its GAAP EPS and revenue for the period came short of expectations.

Endeavor’s revenue grew more than 40% from the same quarter a year ago to $1.11 billion but still fell short of the consensus Street estimate of $1.14 billion. On the other hand, its GAAP EPS of -$1.00 fell short of the average analyst expectation of $-0.52 while the non-GAAP earnings per share of $0.19 outperformed expectations by a whopping $0.16.

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The company now expects to post full-year 2021 revenue in the range of $4.80 billion to $4.85 billion up from the previous guidance of $4.76 billion to $4.83 billion. Endeavor also raised full-year adjusted EBITDA guidance to between $765 million and $775 million, up from $735 million and $745 million.

Should you invest in Endeavor shares in Q3 2021?

From a valuation perspective, Endeavor shares trade at a compelling forward price-earnings ratio of 20.43, making the stock attractive to value investors. In addition, analysts expect Endeavor earnings per share to grow by 103% next year, meaning it could gain the attention of growth investors.

Therefore, although the EDR stock price spiked 9% on Tuesday, it may not be too late to buy ahead of next year’s exciting growth. The company’s long-term growth could benefit from the return of sporting events as the covid situation eases.

Source – TradingView

Technical overview: Endeavor Group stock price forecast for August 2021

Technically, Endeavor shares seem to be trading within a descending channel formation in the intraday chart. The stock price recently bounced to avoid crossing to oversold conditions of the 14-day RSI.

Therefore, investors can target extended rebound profits at approximately $26.61 or higher at $27.71. The key support levels are $24.12 and $22.99.

Bottom line: the case for buying Endeavor stock price rebound

In summary, although ENdeavor shares have spiked since announcing its bullish outlook for full-year 2021, the stock still trades several levels below this year’s highs. 

Furthermore, the EDR stock is yet to reach overbought conditions, leaving more room for an upward movement. As such, there may still be time to buy the stock ahead of next year’s prospective growth.

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