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6 Technology Stocks Poised to Outshine This Earnings Season
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The technology sector had a turbulent ride in the first quarter, thanks to the slew of bad news, which includes the Russian hacking of computers at the 2018 Olympics, data-misuse scandal at Facebook , and the first fatality by a driverless car.
However, the aforementioned factors have now been cornered with the commencement of the current reporting cycle, as the sector has emerged as one of the best performers, so far.
According to the latest Zacks Earnings Preview, as of Apr 27, 64.7% of the sector’s total market capitalization in the S&P 500 index has reported results, with 92.9% beating EPS estimates and 89.3% surpassing top-line projections. Moreover, total earnings for these tech companies are up 31.3%, year over year, on 11.4% higher revenues.
The technology sector is now expected to record solid growth this earnings season. The bottom line for the sector is projected to increase 27.9% on 12.5% higher revenues, which would follow the previous quarter’s earnings and revenue growth of 24.2% and 11.1%, respectively.
The encouraging growth projections can be mainly attributed to the rising demand for cloud-based platforms, rapid adoption of Artificial Intelligence (AI) tools, Augmented/Virtual (AR/VR) reality devices, autonomous cars, advanced driver assisted systems (ADAS), as well as Internet of Things (IoT)-related software and hardware.
Moreover, a stabilizing PC-market coupled with improved IT spending outlook bodes well for the tech sector.
Therefore, now it is wise to invest in such stocks, in order to catch the post-earnings rally. However, this is easier said than done. Striking the right chord needs a fair amount of luck.
How Should You Make the Right Choice?
With the existence of a number of companies in the tech sector, finding the right stocks which have the potential to beat on earnings could be a daunting task. Our proprietary methodology, however, makes it fairly simple for you. You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold), and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks which have the best chances to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Here, we would like to highlight some stocks in the technology sector which are likely to beat estimates this earnings season.
6 Prominent Picks
Microchip Technology Inc. (MCHP - Free Report) is one such technology stock that investors can opt for. The stock carries a Zacks Rank of 2 and has an Earnings ESP of +0.15%. The stock surpassed the Zacks Consensus Estimate over the preceding four quarters, coming up with an average positive surprise of 5.3%. The long-term estimated earnings growth rate for the company is pegged at 14.6%.
We also suggest investing in Mettler-Toledo International, Inc. (MTD - Free Report) . This Zacks #2 Ranked company has an Earnings ESP of +3.44%. Its results outpaced the Zacks Consensus Estimate in each of the last four quarters, the average positive earnings surprise being 2.3%. The company has a long-term earnings growth prediction of 12.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortinet, Inc. (FTNT - Free Report) is a solid bet which carries a Zacks Rank of 2 and has an Earnings ESP of +2.70%. The company delivered an average positive earnings surprise of approximately 20.1%, over the trailing four quarters, and has long-term earnings growth expectation of 16.8%.
Another stock that you can pick is CyberArk Software Ltd. (CYBR - Free Report) , with a Zacks Rank #3 and an Earnings ESP of +3.53%. The company’s results beat the Zacks Consensus Estimate, over the past four quarters, delivering an average positive earnings surprise of 19.9%. It has a long-term earnings growth expectation of 18%.
One can also invest in FormFactor, Inc. (FORM - Free Report) , which carries a Zacks Rank of 3 and has an Earnings ESP of +16.13%. Its results exceeded the Zacks Consensus Estimate thrice and missed in the other, in the last four quarters, generating an average positive earnings surprise of 16%. The stock has a long-term earnings growth projection of 13.7%.
Investors can also count on HubSpot, Inc. (HUBS - Free Report) , with a Zacks Rank #3, and an Earnings ESP of +5.60%. The company’s results outpaced the Zacks Consensus Estimate, over the preceding four quarters, recording an impressive average positive earnings surprise of 208.5%. The anticipated long-term earnings growth rate for the company is 50%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius. Click for details >>
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6 Technology Stocks Poised to Outshine This Earnings Season
The technology sector had a turbulent ride in the first quarter, thanks to the slew of bad news, which includes the Russian hacking of computers at the 2018 Olympics, data-misuse scandal at Facebook , and the first fatality by a driverless car.
However, the aforementioned factors have now been cornered with the commencement of the current reporting cycle, as the sector has emerged as one of the best performers, so far.
According to the latest Zacks Earnings Preview, as of Apr 27, 64.7% of the sector’s total market capitalization in the S&P 500 index has reported results, with 92.9% beating EPS estimates and 89.3% surpassing top-line projections. Moreover, total earnings for these tech companies are up 31.3%, year over year, on 11.4% higher revenues.
The technology sector is now expected to record solid growth this earnings season. The bottom line for the sector is projected to increase 27.9% on 12.5% higher revenues, which would follow the previous quarter’s earnings and revenue growth of 24.2% and 11.1%, respectively.
The encouraging growth projections can be mainly attributed to the rising demand for cloud-based platforms, rapid adoption of Artificial Intelligence (AI) tools, Augmented/Virtual (AR/VR) reality devices, autonomous cars, advanced driver assisted systems (ADAS), as well as Internet of Things (IoT)-related software and hardware.
Moreover, a stabilizing PC-market coupled with improved IT spending outlook bodes well for the tech sector.
Therefore, now it is wise to invest in such stocks, in order to catch the post-earnings rally. However, this is easier said than done. Striking the right chord needs a fair amount of luck.
How Should You Make the Right Choice?
With the existence of a number of companies in the tech sector, finding the right stocks which have the potential to beat on earnings could be a daunting task. Our proprietary methodology, however, makes it fairly simple for you. You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold), and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks which have the best chances to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Here, we would like to highlight some stocks in the technology sector which are likely to beat estimates this earnings season.
6 Prominent Picks
Microchip Technology Inc. (MCHP - Free Report) is one such technology stock that investors can opt for. The stock carries a Zacks Rank of 2 and has an Earnings ESP of +0.15%. The stock surpassed the Zacks Consensus Estimate over the preceding four quarters, coming up with an average positive surprise of 5.3%. The long-term estimated earnings growth rate for the company is pegged at 14.6%.
We also suggest investing in Mettler-Toledo International, Inc. (MTD - Free Report) . This Zacks #2 Ranked company has an Earnings ESP of +3.44%. Its results outpaced the Zacks Consensus Estimate in each of the last four quarters, the average positive earnings surprise being 2.3%. The company has a long-term earnings growth prediction of 12.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortinet, Inc. (FTNT - Free Report) is a solid bet which carries a Zacks Rank of 2 and has an Earnings ESP of +2.70%. The company delivered an average positive earnings surprise of approximately 20.1%, over the trailing four quarters, and has long-term earnings growth expectation of 16.8%.
Another stock that you can pick is CyberArk Software Ltd. (CYBR - Free Report) , with a Zacks Rank #3 and an Earnings ESP of +3.53%. The company’s results beat the Zacks Consensus Estimate, over the past four quarters, delivering an average positive earnings surprise of 19.9%. It has a long-term earnings growth expectation of 18%.
One can also invest in FormFactor, Inc. (FORM - Free Report) , which carries a Zacks Rank of 3 and has an Earnings ESP of +16.13%. Its results exceeded the Zacks Consensus Estimate thrice and missed in the other, in the last four quarters, generating an average positive earnings surprise of 16%. The stock has a long-term earnings growth projection of 13.7%.
Investors can also count on HubSpot, Inc. (HUBS - Free Report) , with a Zacks Rank #3, and an Earnings ESP of +5.60%. The company’s results outpaced the Zacks Consensus Estimate, over the preceding four quarters, recording an impressive average positive earnings surprise of 208.5%. The anticipated long-term earnings growth rate for the company is 50%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>