Capita is a British-based company that provides software products and services, as well as digital and consulting services. It is also involved in IT and network services and runs a huge business in the United Kingdom, Ireland, throughout mainland Europe, Dubai, or South Africa.
Its share price is a spiral lower as it began falling even before the COVID-19 2020 pandemic. The stiff competition in the space coupled with difficulty to scale the business has led Capita’s share price lower.
When Does Capita Martin Report Q4 Earnings?
Capita prepares to release is Q4 2020 earnings next week on the 4th of March, 2021.
Market Expectations from Capita’s Earnings Statement?
The market estimates revenues for the quarter of about GBP4.56 billion, declining by 4.43% when compared to the similar period one year before. Capita has a market capitalization of about a billion dollars and an estimated enterprise value of $2.69 billion.
Capita Shares: Technical Analysis
When the pandemic reached the Western world last April, the stock markets around the world collapsed. So did Capita’s share price.
However, in the meantime, the U.S. stock market indices climbed to new all-time highs. All of them. Also, the U.K. stock market recovered the lost ground, albeit not trading with such a bid tone as seen in America.
Yet, Capita’s share price was unable to bounce. The horizontal price action is suggestive of a bearish flag pattern. The measured move of it spells real trouble for the business model; thus shorting the stock here is risky. Investors are better off waiting for the earnings to be announced next week and see the outcome. If there would be a positive surprise, investors should wait one day before buying, as suggested by a well-known behavioral finance anomaly. From a technical perspective, a break and close of the upper edge of the channel should trigger more interest toward the channel’s measured move.
What Is the Outlook for the Capita Share Price?
Capita announced recently that its pensions arm signed a contract extension with universities superannuation schemes. In the same field, Capita launched a new profiling tool for financial advisors. Also, at the start of the month, Capita announced that it won a contract to provide help to job seekers in Scotland affected by the pandemic. Despite the efforts, the price outlook remains heavy for Capita’s share price. The inability to bounce from the lows while the overall stock market did, spells troubles for Capita’s shares as investors question the business model. A negative earnings surprise should put pressure at the lows and opens the gates for more downside, as suggested by the horizontal consolidation.