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3 Stocks to Buy Following Robust Quarterly Results
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Earnings season continues to chug along, with a wide variety of companies reporting daily. This week, in particular, is dominated by mega-cap technology companies, a list that includes the likes of Apple, Amazon, and Meta Platforms, just to name a few.
As usual, there have been several notably strong releases throughout the cycle so far, a few of which have come from Super Micro Computer (SMCI - Free Report) , Netflix (NFLX - Free Report) , and American Express (AXP - Free Report) . All three saw their shares move higher post-earnings and currently sport a favorable Zacks Rank, with the latter reflecting optimism among analysts.
For those seeking post-earnings momentum, let’s take a closer look at each.
Super Micro Computer
Enjoying tailwinds stemming from the AI-frenzy, Super Micro Computer, a Zacks Rank #1 (Strong Buy), is the premier provider of advanced Server Building Block Solutions for 5G/Edge, Data Center, Cloud, Enterprise, Big Data, HPC, and Embedded markets worldwide.
Concerning headline figures, SMCI posted a 2% beat relative to the Zacks Consensus EPS estimate and exceeded sales expectations by 14%, representing growth rates of 70% and 103%, respectively. The better-than-expected results caused buyers to swarm, with SMCI shares now up a staggering 80% year-to-date.
Image Source: Zacks Investment Research
Demand for the company’s solutions has been scorching-hot, with Super Micro Computer continuing to win new partners throughout the period. And undoubtedly a major positive, current customers are demanding even more of its solutions, helping explain the remarkable top line growth. The favorable environment led SMCI to raise its FY24 sales outlook into a band of $14.3 - $14.7 billion.
The stock remains a prime selection for growth investors seeking AI exposure, further reinforced by its Style Score of ‘A’ for Growth. Analysts have already taken their revenue expectations well higher for its current fiscal year and will continue doing so following the guidance lift.
Image Source: Zacks Investment Research
Netflix
Streaming giant Netflix has enjoyed positive earnings estimate revisions across the board, landing it into a Zacks Rank #1 (Strong Buy). Earnings expectations jumped higher following its latest quarterly release.
Image Source: Zacks Investment Research
The company fell short of the Zacks Consensus EPS Estimate by a fair margin but posted revenue 1.3% ahead of expectations, reflecting growth rates of 1650% and 12%, respectively. Subscriber additions throughout the period totaled 13.1 million, well above the 7.7 million mark in the year-ago period and reflecting a Q4 record.
Netflix’s top line is showing signs of acceleration.
Image Source: Zacks Investment Research
In addition, the profitability picture improved in a big way, as operating income throughout the period totaled $1.5 billion vs. $0.5 billion previously, with operating margin improving to 17% from 7% in the same period last year.
American Express
American Express, a current Zacks Rank #2 (Buy), is a well-known diversified financial services company. Earnings expectations have inched higher across the board, with positive revisions following its latest set of quarterly results.
Image Source: Zacks Investment Research
Earnings and revenue both fell short of consensus expectations but reflected solid growth, with earnings climbing 27% and revenue seeing an 11% boost from the year-ago period. Growth has been driven by continued strength among Card Member spending, with credit metrics also remaining strong.
And to top off the results, AXP announced plans of a 17% hike to its quarterly dividend, bringing the payout to $0.70 per share. AXP’s top line remains visibly healthy, as shown below.
Image Source: Zacks Investment Research
Up nearly 9% in 2024, American Express shares have shown solid relative strength compared to the S&P 500’s nearly 4% gain. Price action looks to continue favorably given rising earnings estimate revisions and solid quarterly results.
Bottom Line
Earnings season continues its rapid pace this week, with the likes of several mega-cap technology companies dominating the reporting docket.
So far, we’ve gotten several strong reports, a few of which have come from Super Micro Computer (SMCI - Free Report) , Netflix (NFLX - Free Report) , and American Express (AXP - Free Report) . All three saw shares move higher post-earnings and sport favorable Zacks Ranks, reflecting positive momentum.
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3 Stocks to Buy Following Robust Quarterly Results
Earnings season continues to chug along, with a wide variety of companies reporting daily. This week, in particular, is dominated by mega-cap technology companies, a list that includes the likes of Apple, Amazon, and Meta Platforms, just to name a few.
As usual, there have been several notably strong releases throughout the cycle so far, a few of which have come from Super Micro Computer (SMCI - Free Report) , Netflix (NFLX - Free Report) , and American Express (AXP - Free Report) . All three saw their shares move higher post-earnings and currently sport a favorable Zacks Rank, with the latter reflecting optimism among analysts.
For those seeking post-earnings momentum, let’s take a closer look at each.
Super Micro Computer
Enjoying tailwinds stemming from the AI-frenzy, Super Micro Computer, a Zacks Rank #1 (Strong Buy), is the premier provider of advanced Server Building Block Solutions for 5G/Edge, Data Center, Cloud, Enterprise, Big Data, HPC, and Embedded markets worldwide.
Concerning headline figures, SMCI posted a 2% beat relative to the Zacks Consensus EPS estimate and exceeded sales expectations by 14%, representing growth rates of 70% and 103%, respectively. The better-than-expected results caused buyers to swarm, with SMCI shares now up a staggering 80% year-to-date.
Image Source: Zacks Investment Research
Demand for the company’s solutions has been scorching-hot, with Super Micro Computer continuing to win new partners throughout the period. And undoubtedly a major positive, current customers are demanding even more of its solutions, helping explain the remarkable top line growth. The favorable environment led SMCI to raise its FY24 sales outlook into a band of $14.3 - $14.7 billion.
The stock remains a prime selection for growth investors seeking AI exposure, further reinforced by its Style Score of ‘A’ for Growth. Analysts have already taken their revenue expectations well higher for its current fiscal year and will continue doing so following the guidance lift.
Image Source: Zacks Investment Research
Netflix
Streaming giant Netflix has enjoyed positive earnings estimate revisions across the board, landing it into a Zacks Rank #1 (Strong Buy). Earnings expectations jumped higher following its latest quarterly release.
Image Source: Zacks Investment Research
The company fell short of the Zacks Consensus EPS Estimate by a fair margin but posted revenue 1.3% ahead of expectations, reflecting growth rates of 1650% and 12%, respectively. Subscriber additions throughout the period totaled 13.1 million, well above the 7.7 million mark in the year-ago period and reflecting a Q4 record.
Netflix’s top line is showing signs of acceleration.
Image Source: Zacks Investment Research
In addition, the profitability picture improved in a big way, as operating income throughout the period totaled $1.5 billion vs. $0.5 billion previously, with operating margin improving to 17% from 7% in the same period last year.
American Express
American Express, a current Zacks Rank #2 (Buy), is a well-known diversified financial services company. Earnings expectations have inched higher across the board, with positive revisions following its latest set of quarterly results.
Image Source: Zacks Investment Research
Earnings and revenue both fell short of consensus expectations but reflected solid growth, with earnings climbing 27% and revenue seeing an 11% boost from the year-ago period. Growth has been driven by continued strength among Card Member spending, with credit metrics also remaining strong.
And to top off the results, AXP announced plans of a 17% hike to its quarterly dividend, bringing the payout to $0.70 per share. AXP’s top line remains visibly healthy, as shown below.
Image Source: Zacks Investment Research
Up nearly 9% in 2024, American Express shares have shown solid relative strength compared to the S&P 500’s nearly 4% gain. Price action looks to continue favorably given rising earnings estimate revisions and solid quarterly results.
Bottom Line
Earnings season continues its rapid pace this week, with the likes of several mega-cap technology companies dominating the reporting docket.
So far, we’ve gotten several strong reports, a few of which have come from Super Micro Computer (SMCI - Free Report) , Netflix (NFLX - Free Report) , and American Express (AXP - Free Report) . All three saw shares move higher post-earnings and sport favorable Zacks Ranks, reflecting positive momentum.