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3 Highly Ranked Stocks to Consider as Earnings Approach
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Several stocks currently holding spots on the Zacks Rank #1 (Strong Buy) list are standing out ahead of their fourth quarter reports on Thursday, March 7.
Here is a look at three of these highly-ranked stocks that investors will want to consider as earnings approach.
Specialty casual apparel retailer American Eagle Outfitters is too hard to overlook at the moment considering its intriguing growth and reasonable valuation. American Eagle Outfitters' fourth quarter earnings are expected to climb 35% to $0.50 a share versus $0.37 a share in the prior-year quarter. Even better, the Zacks ESP (Expected Surprise Prediction) indicates AEO could top its bottom line expectations with the Most Accurate Estimate having Q4 EPS at $0.51 a share and 1% above the Zacks Consensus.
Top line expansion stands out as well as Q4 sales are projected to rise 11% to $1.66 billion. Total sales are slated to increase 5% to $5.25 billion as American Eagle Outfitters wraps up its fiscal 2024. Most intriguing, AEO shares trade at a reasonable 15.5X forward earnings multiple with annual EPS now forecasted to soar 46% in FY24 and projected to rise another 10% in FY25 to $1.55 per share. In correlation with its expansion, AEO shares have climbed +79% over the last year to easily top the broader indexes and the Zacks Retail-Apparel and Shoes Market’s +29%.
While DocuSign’s stock has dipped -16% over the last year it could be time for a rebound as the use of its agreement cloud services is still at a growth point. Indicative of such, DocuSign’s Q4 sales are expected to rise 6% to $698.05 million. More compelling is that total sales are now projected to jump 9% in FY24 and are forecasted to rise another 5% in FY25 to $2.9 billion.
Operating costs appear to be under control despite Q4 earnings expected to dip -1% to $0.64 a share. Still, DocuSign would end its FY24 with annual earnings up 41% to $2.87 per share. The Zacks ESP indicates DocuSign should reach its Q4 earnings expectations with it also noteworthy that the company has surpassed its bottom line expectations for six consecutive quarters. Better-than-expected guidance would be a strong catalyst for DocuSign’s stock with FY25 EPS expected to be virtually flat. With that being said, the revenue expansion indicates investors shouldn’t overlook DocuSign’s future earnings potential.
Jumping back to the retail sector, The Gap’s stock is very intriguing ahead of its Q4 report on Thursday. Although The Gap faces increasing competition from other specialty apparel retailers such as American Eagle Outfitters and Urban Outfitters (URBN - Free Report) , the company’s international exposure has kept it in the conversation with some of its upcoming peers.
Reassuringly, The Gap’s Q4 earnings are expected to climb swing to $0.20 a share compared to an adjusted loss of -$0.75 per share a year ago. Better still, the Zacks ESP suggests The Gap may widely exceed earnings expectations with the Most Accurate Estimate having Q4 EPS at $0.31 a share and 55% above Zacks estimates.
Image Source: Zacks Investment Research
The anticipation of The Gap’s bottom line recovery has sent its stock soaring +64% in the last year but GPS shares still trade reasonably at 16X forward earnings with annual EPS projected at $1.14 per share in FY24 compared to a loss of -$0.40 a share in FY23. Plus, FY25 EPS is anticipated to rise another 4%.
Image Source: Zacks Investment Research
Takeaway
Expected to reach or exceed their earnings expectations it wouldn’t be surprising if American Eagle Outfitters, DocuSign, and The Gap’s stock moved higher in the following weeks if they can indeed deliver and offer a favorable outlook.
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3 Highly Ranked Stocks to Consider as Earnings Approach
Several stocks currently holding spots on the Zacks Rank #1 (Strong Buy) list are standing out ahead of their fourth quarter reports on Thursday, March 7.
Here is a look at three of these highly-ranked stocks that investors will want to consider as earnings approach.
American Eagle Outfitters (AEO - Free Report)
Specialty casual apparel retailer American Eagle Outfitters is too hard to overlook at the moment considering its intriguing growth and reasonable valuation. American Eagle Outfitters' fourth quarter earnings are expected to climb 35% to $0.50 a share versus $0.37 a share in the prior-year quarter. Even better, the Zacks ESP (Expected Surprise Prediction) indicates AEO could top its bottom line expectations with the Most Accurate Estimate having Q4 EPS at $0.51 a share and 1% above the Zacks Consensus.
Top line expansion stands out as well as Q4 sales are projected to rise 11% to $1.66 billion. Total sales are slated to increase 5% to $5.25 billion as American Eagle Outfitters wraps up its fiscal 2024. Most intriguing, AEO shares trade at a reasonable 15.5X forward earnings multiple with annual EPS now forecasted to soar 46% in FY24 and projected to rise another 10% in FY25 to $1.55 per share. In correlation with its expansion, AEO shares have climbed +79% over the last year to easily top the broader indexes and the Zacks Retail-Apparel and Shoes Market’s +29%.
Image Source: Zacks Investment Research
DocuSign (DOCU - Free Report)
While DocuSign’s stock has dipped -16% over the last year it could be time for a rebound as the use of its agreement cloud services is still at a growth point. Indicative of such, DocuSign’s Q4 sales are expected to rise 6% to $698.05 million. More compelling is that total sales are now projected to jump 9% in FY24 and are forecasted to rise another 5% in FY25 to $2.9 billion.
Operating costs appear to be under control despite Q4 earnings expected to dip -1% to $0.64 a share. Still, DocuSign would end its FY24 with annual earnings up 41% to $2.87 per share. The Zacks ESP indicates DocuSign should reach its Q4 earnings expectations with it also noteworthy that the company has surpassed its bottom line expectations for six consecutive quarters. Better-than-expected guidance would be a strong catalyst for DocuSign’s stock with FY25 EPS expected to be virtually flat. With that being said, the revenue expansion indicates investors shouldn’t overlook DocuSign’s future earnings potential.
Image Source: Zacks Investment Research
The Gap (GPS - Free Report)
Jumping back to the retail sector, The Gap’s stock is very intriguing ahead of its Q4 report on Thursday. Although The Gap faces increasing competition from other specialty apparel retailers such as American Eagle Outfitters and Urban Outfitters (URBN - Free Report) , the company’s international exposure has kept it in the conversation with some of its upcoming peers.
Reassuringly, The Gap’s Q4 earnings are expected to climb swing to $0.20 a share compared to an adjusted loss of -$0.75 per share a year ago. Better still, the Zacks ESP suggests The Gap may widely exceed earnings expectations with the Most Accurate Estimate having Q4 EPS at $0.31 a share and 55% above Zacks estimates.
Image Source: Zacks Investment Research
The anticipation of The Gap’s bottom line recovery has sent its stock soaring +64% in the last year but GPS shares still trade reasonably at 16X forward earnings with annual EPS projected at $1.14 per share in FY24 compared to a loss of -$0.40 a share in FY23. Plus, FY25 EPS is anticipated to rise another 4%.
Image Source: Zacks Investment Research
Takeaway
Expected to reach or exceed their earnings expectations it wouldn’t be surprising if American Eagle Outfitters, DocuSign, and The Gap’s stock moved higher in the following weeks if they can indeed deliver and offer a favorable outlook.