What to Expect this Week: 7/07/25

Hi everyone,

Welcome back, we hope that you had a great holiday weekend. We are excited to jump back into our weekly insight into some companies who are releasing earnings this week. For each one, we’ll break down recent achievements or headlines, analyze their 2025 financial outlook using the latest data, and share our take on where we think the stock could be headed over the next 6 to 12 months.

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Weekly Earnings Spotlight: July 7 30-July 11, 2025:

Wednesday June 9th: AZZ Inc (AZZ)

Thursday July 10th: Delta (DAL), WD-40 (WDFC)

Friday July 11th: Unity (U)

AZZ Inc. (AZZ)

AZZ Inc. provides galvanizing and metal coating services, as well as electrical equipment for industrial and infrastructure markets. Their operations are split between Metal Coatings and Infrastructure Solutions, making them an important supplier for construction, utility, and energy industries.

Recent Highlights:

In recent quarters, AZZ has benefited from a strong demand environment, especially in infrastructure and utility sectors. The company has continued integrating its 2022 acquisition of Precoat Metals, the largest independent metal coil coater in North America. This acquisition has been a significant growth lever, driving revenue expansion and margin improvement. Additionally, AZZ completed the divestiture of its Infrastructure Solutions segment to sharpen focus on core metal coatings and coil coatings, which we view as a smart strategic realignment.

Financially, AZZ reduced its net debt by over $40 million year-over-year and continues to optimize its capital structure. We like seeing this kind of financial discipline, especially when paired with smart acquisitions that build long-term value.

Financial Guidance for 2025:

AZZ recently reaffirmed its FY25 earnings guidance of $4.00–$4.50 per share, with revenue guidance in the range of $1.5 billion to $1.6 billion. The company has shown consistent free cash flow generation and aims to further reduce debt while maintaining a modest dividend yield (~1.4%). Analysts covering AZZ have a consensus rating of “Buy”, with price targets ranging from $95 to $110, compared to a current share price of $99.62 (as of July 5, 2025).

Stock Outlook:

AZZ is a solid long-term industrial play with strong fundamentals. We like the focus on cash flow, debt reduction, and smart capital allocation through acquisitions. Its end markets (construction, manufacturing, infrastructure) remain resilient, and the move to double down on coatings looks like the right call. We currently do not hold a position in AZZ but are watching this upcoming earnings release closely for any pullback opportunities to start one.

Delta Air Lines (DAL)

Delta Air Lines is one of the largest U.S. carriers, known for its premium service strategy, international routes, and operational efficiency. The airline has rebounded strongly post-COVID and is leaning into long-term profitability by upgrading its fleet and enhancing digital experiences.

Recent Highlights:

Delta recently reported record-high load factors and continued pricing strength in premium cabins. The airline’s international and transatlantic routes have seen especially strong demand, aided by favorable travel trends. In Q1 2025, Delta announced it would resume paying dividends, signaling confidence in its financial health. On the technology side, Delta is rolling out biometric boarding, and they've expanded partnerships with companies like American Express (which continues to be a strong revenue driver via co-branded cards).

Operationally, Delta continues to lead in on-time arrivals and customer satisfaction rankings among U.S. airlines. We think these intangibles matter over the long haul.

Financial Guidance for 2025:

Delta expects full-year adjusted EPS of $6.00–$7.00 and operating margins of 10%–12%. Analysts remain optimistic, with most maintaining “Buy” or “Strong Buy” ratings and price targets ranging from $45 to $58 per share (current price: $47.60). Delta also reduced net debt to under $20 billion and has committed to further deleveraging while maintaining healthy capex for fleet upgrades.

Comparability:

Delta ($DAL) remains the industry leader, with strong margins, solid international demand, and a healthy balance sheet. Here's some other big airlines for comparison:

• United ($UAL): Closest peer to Delta, with comparable international exposure and revenue, but slightly lower margins and a smaller market cap.

• American ($AAL): Similar revenue levels, but far more debt-heavy and lower profitability. Still playing catch-up in financial health.

• Southwest ($LUV): Stronger in domestic travel, but significantly smaller revenue base and facing operational issues due to Boeing delays.

Stock Outlook:

We like Delta’s position in the airline sector. It’s profitable, operationally sound, and shareholder-friendly. The consistent demand for premium and international travel provides a cushion against pricing volatility in domestic markets. While fuel prices and labor contracts are always a risk, we feel DAL is a solid long-term hold. We maintain a small position in Delta and may add more if guidance for Q3 remains strong.

Unity Software Inc. (U)

Unity is a leading platform for real-time 3D content development, primarily used in gaming, architecture, automotive, and simulations. Unity's engine powers nearly 70% of mobile games worldwide and is also making inroads into non-gaming industries.

Recent Highlights:

In 2024, Unity completed its restructuring efforts, shedding non-core assets and streamlining operations after its merger with IronSource. These moves helped reset investor expectations and focus on profitability. In Q1 2025, Unity reported improving margins and a sharp reduction in losses, along with growing traction in its AI-powered asset creation tools for developers.

The company also recently expanded partnerships with Meta and Apple to support new XR platforms and spatial computing. We view this positively as Unity positions itself at the center of next-gen content creation.

Financial Guidance for 2025:

Unity guided full-year revenue between $2.2 billion and $2.35 billion, with adjusted EBITDA expected to be near break-even or slightly positive. The stock has shown volatility, but most analysts maintain a “Hold” or “Buy” rating, with price targets ranging from $18 to $29 (current price: $26 as of July 5, 2025). Unity’s cash position remains strong, and the company has committed to avoiding further shareholder dilution.

Stock Outlook:
Unity is a speculative growth play, but a compelling one if they can hit profitability targets. The market clearly believes in their tech and ecosystem, and the recent focus on lean operations is encouraging. While not currently in our portfolio, Unity is on our radar, especially if they beat earnings and guide toward stronger margin improvement in H2 2025.

Thanks for reading along! In previous Tuesdays and Wednesdays, we’ve highlighted some of our favorite stocks like Robinhood and Dutch Bros. But this week will be a bit different. With the Big Beautiful Bill recently passed, our post will cover everything included in it and share our perspective on how it relates to the market. Please follow along!

Disclaimer: This information is not financial advice. The information provided in this newsletter is for educational and informational purposes only and should not be considered financial or investment advice. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions. Investments involve risk, and past performance is not indicative of future results.