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Grid Dynamics (GDYN - Free Report) is a Zacks Rank #3 (Hold) that sports a C for Value and a A for Growth. A large number of its employees are based in Ukraine and that has spooked investors into selling this stock down from $40+ to around $10. Let’s explore more about this stock in this Bull Of The Day article.
Description
Grid Dynamics International Inc. engages in architecting and delivering digital transformation programs principally in the retail, technology and financial sectors. Grid Dynamics International Inc., formerly known as ChaSerg Technology Acquisition Corp, is based in Calif., United States.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For GDYN, I see a great history of beating the Zacks Consensus Estimate. There are four beats over the last four quarters.
Last night after the close the company reported yet another beat. Revenues came in at $66.5M when the expectation was calling for $58.8M. EPS of $0.10 was 1 penny ahead of the consensus estimate.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For CRUS, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter had increased from $0.08 to $0.09.
Next quarter has held steady at $0.06.
The full fiscal year 2021 has remained at $0.35.
Next fiscal year has slipped by a penny to $0.36.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
War In Ukraine
The stock was seeing some selling pressure early in 2022 but things really intensified as Russia began to signal an attack on Ukraine.
The company noted in its earning release:
“We have activated our business continuity plan to maximize the safety of our employees and minimize disruptions to our customers. We have taken care of a majority of our Ukrainian employees and their families. They currently reside in Western Ukraine and neighboring countries. Additionally, we have rapidly accelerated hiring efforts in Central and Western Europe as well as Latin America. We expanded our Global Mobility Program to support our presence across even more geographies. This includes our strategic plan to invest into India. This week Grid Dynamics announced the formation of Grid Dynamics India, and we expect to scale rapidly. On the operational front, our actions are paying off as productivity ramps up. We are grateful to all of our customers for their overwhelming support to our employees and their families and for the commitment they are demonstrating to their relationship with Grid Dynamics".
I expect investors to show solidairity with the Ukraine in a direct way by showing support for this stock.
Valuation
The valuation for Grid Dynamics (GDYN - Free Report) is still a little rich even after the big drop in stock price. I see a forward earnings multiple of 31x, which is a little high, but reasonable given the 121% topline growth the company posted last night. This asset slim business has a low price to book multiple of 2.7x and that should get value investors interested in this name. Price to sales of 4.3x is also low enough to keep both value and growth investors interested.
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Bull Of The Day: Grid Dynamics (GDYN)
Grid Dynamics (GDYN - Free Report) is a Zacks Rank #3 (Hold) that sports a C for Value and a A for Growth. A large number of its employees are based in Ukraine and that has spooked investors into selling this stock down from $40+ to around $10. Let’s explore more about this stock in this Bull Of The Day article.
Description
Grid Dynamics International Inc. engages in architecting and delivering digital transformation programs principally in the retail, technology and financial sectors. Grid Dynamics International Inc., formerly known as ChaSerg Technology Acquisition Corp, is based in Calif., United States.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For GDYN, I see a great history of beating the Zacks Consensus Estimate. There are four beats over the last four quarters.
Last night after the close the company reported yet another beat. Revenues came in at $66.5M when the expectation was calling for $58.8M. EPS of $0.10 was 1 penny ahead of the consensus estimate.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For CRUS, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter had increased from $0.08 to $0.09.
Next quarter has held steady at $0.06.
The full fiscal year 2021 has remained at $0.35.
Next fiscal year has slipped by a penny to $0.36.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
War In Ukraine
The stock was seeing some selling pressure early in 2022 but things really intensified as Russia began to signal an attack on Ukraine.
The company noted in its earning release:
“We have activated our business continuity plan to maximize the safety of our employees and minimize disruptions to our customers. We have taken care of a majority of our Ukrainian employees and their families. They currently reside in Western Ukraine and neighboring countries. Additionally, we have rapidly accelerated hiring efforts in Central and Western Europe as well as Latin America. We expanded our Global Mobility Program to support our presence across even more geographies. This includes our strategic plan to invest into India. This week Grid Dynamics announced the formation of Grid Dynamics India, and we expect to scale rapidly. On the operational front, our actions are paying off as productivity ramps up. We are grateful to all of our customers for their overwhelming support to our employees and their families and for the commitment they are demonstrating to their relationship with Grid Dynamics".
I expect investors to show solidairity with the Ukraine in a direct way by showing support for this stock.
Valuation
The valuation for Grid Dynamics (GDYN - Free Report) is still a little rich even after the big drop in stock price. I see a forward earnings multiple of 31x, which is a little high, but reasonable given the 121% topline growth the company posted last night. This asset slim business has a low price to book multiple of 2.7x and that should get value investors interested in this name. Price to sales of 4.3x is also low enough to keep both value and growth investors interested.
Chart
Grid Dynamics Holdings, Inc. Price and Consensus
Grid Dynamics Holdings, Inc. price-consensus-chart | Grid Dynamics Holdings, Inc. Quote