Back to top

Image: Bigstock

3 Popular Stocks to Consider as Earnings Approach: DIS, FTNT, SHOP

There will be many notable companies reporting their quarterly results this week, and several have stocks with pleasant ratings regarding the renowned Zacks Rank.

With representation from the consumer discretionary and tech sectors, here are three of these popular stocks that investors may want to consider as their quarterly reports approach on Wednesday, August 6.

 

Disney – DIS

Zacks Rank #2 (Buy)

Reporting results for its fiscal third quarter, Disney’s (DIS - Free Report)  return to prominence as a consumer discretionary leader appears to be around the corner. The media conglomerate has seen its stock rise over +30% in the last year, hitting a 52-week high of $124 a share in late June.   

Cost-cutting initiatives and strategic pivots have led to strong performance across Disney’s core businesses. To that point, Disney has seen a comeback at the box office with major screen hits like Inside Out 2 and Lilo & Stitch topping $1 billion in global receipts while also seeing increased profitability in its streaming platforms such as Disney+ and Hulu. Like Netflix (NFLX - Free Report) , Disney has cracked down on password sharing and introduced extra-member fees for its streaming services, boosting monetization. Plus, the recent release of the latest Fantastic Four movie and the upcoming Freakier Friday reboot are keeping Disney atop the domestic box office, with 2% and 6% growth expected on its top and bottom lines during Q3.

Reassuringly, DIS still checks the box in regard to value at a reasonable 20.1X forward earnings multiple with a price to sales ratio near the optimum level of less than 2X.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Fortinet – FTNT

Zacks Rank #2 (Buy)

In the tech sector, Fortinet (FTNT - Free Report)  is increasing in popularity thanks to its next-generation AI-powered threat detection and post-quantum cryptography readiness, which prepares organizations for a future where quantum computers could break today’s widely used encryption algorithms.

Coming off a record Q1 for revenue, operating margin, and free cash flow, Fortinet’s top line is thought to have stretched 13% to what would be a Q2 peak of $1.62 billion. Furthermore, Q2 EPS is expected to be up 3% to $0.59, with it noteworthy that Fortinet has fueled investor sentiment by exceeding earnings expectations for a remarkable 29 consecutive quarters dating back to May of 2018. Notably, over the last year, FTNT is sitting on gains of more than +70% with the impressive quarterly EPS beats illustrated by the green arrows in the Price, Consensus, and Surprise chart below.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Shopify – SHOP

Zacks Rank #1 (Strong Buy)

Rounding out the list of popular stocks to watch on Wednesday is Shopify (SHOP - Free Report) , which has seen its stock spike over +15% year to date and now has staggering gains of +140% in the last year. Shopify’s commerce platform has continued to grow in popularity after introducing AI-powered tools like its virtual assistant "Sidekick" and trafficguide.ai to help merchants navigate global trade complexities.

Strategic partnerships with Meta Platforms (META - Free Report) , Amazon (AMZN - Free Report) , and TikTok have also expanded Shopify’s ecosystem by increasing merchant reach and engagement. Shopify’s Q2 sales are projected to spike 24% to $2.54 billion, with Q2 EPS expected to rise 8% to $0.28. Furthermore, analysts expect Shopify’s Gross Merchandise Volume (GMV) to reach $81 billion, continuing a streak of seven consecutive quarters of 20%+ GMV growth.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Bottom Line

As it relates to portfolio-worthy stocks to consider, Disney, Fortinet, and Shopify will be three popular companies to watch as their quarterly results approach. To that point, these popular top-rated stocks look poised for more upside, but a post-earnings selloff could lead to even more compelling long-term opportunities.  

Published in