Back to top

Image: Bigstock

3 Stocks to Consider After Massive Earnings Beats

Read MoreHide Full Article

Quite a few companies are standing out after blowing away their quarterly earnings expectations this week and alluding to the possibility of more upside in their stocks.

Benefitting from strong business environments here are three of these stocks that investors may want to consider at the moment.

Seadrill Limited (SDRL - Free Report) : Past performance is not always an indicator of future success and Seadrill Limited’s stock looks very compelling after posting exhilarating Q3 results on Monday. Emerging from bankruptcy in 2021, the offshore drilling contractor had a far more profitable quarter than the street expected posting a profit of $90 million and $1.10 per share compared to estimates of $0.67 a share.

Zacks Investment Research
Image Source: Zacks Investment Research

Surpassing Q3 earnings expectations by a whopping 64%, sales of $414 million also surpassed top line estimates by 1%. More importantly, the trend of positive earnings estimate revisions over the last 60 days seems likely to continue and suggests that Seadrill's stock could move higher with its Oil and Gas-Drilling Industry currently in the top 26% of over 250 Zacks industries.

Zacks Investment Research
Image Source: Zacks Investment Research

Splunk (SPLK - Free Report) : Easing inflation has boded well for the broader technology sector and Splunk’s Internet-Software Industry is currently in the top 14% of all Zacks industries. Notably, the cloud services and licensed software solutions provider has seen its stock soar +75% in 2023 to largely outperform the broader indexes.

Zacks Investment Research
Image Source: Zacks Investment Research

On Tuesday, Splunk’s Q3 earnings reconfirmed the company’s strengthening outlook with EPS of $1.55 per share beating estimates of $1.12 a share by 38%. Third quarter sales of $1.06 billion came in 4% better than expected.

More impressive was that Spunk's Q3 earnings soared 87% from $0.83 a share in the prior-year quarter with sales rising 14% year over year. Driven by increased demand for its cybersecurity services, Splunk remains a very intriguing growth stock although Cisco Systems (CSCO - Free Report) ) announced in September that it plans to acquire the company.

Still, the proposed acquisition price of $157 a share is 4% above current levels and SPLK shares are closing in on that target with the company now surpassing earnings expectations for 10 consecutive quarters.

Zacks Investment Research
Image Source: Zacks Investment Research

Intuit (INTU - Free Report) : Another tech stock that stands out after beating earnings expectations on Tuesday is Intuit which provides financial accounting and tax preparation software. It's noteworthy that Intuit’s Zacks Computer-Software Industry is in the top 18% percentile at the moment and INTU shares are up +57% YTD.

This strong price performance could continue as Intuit’s fiscal first quarter earnings of $2.47 per share beat expectations by 25% and climbed 47% from $1.66 a share in the prior-year quarter. Quarterly sales of $2.97 billion topped estimates by 3% and rose 14% YoY.

Zacks Investment Research
Image Source: Zacks Investment Research

Intuit has now surpassed earnings expectations for seven consecutive quarters and has continued to expand with double-digit percentage growth forecasted on the company’s top and bottom lines in its current fiscal 2024 and FY25.

Zacks Investment Research
Image Source: Zacks Investment Research

Takeaway

Following strong quarterly results, the earnings outlook for Seadrill Limited, Splunk, and Intuit has continued to brighten and it would be no surprise if their stocks move higher in the coming weeks making them worthy of investors' consideration.  


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Cisco Systems, Inc. (CSCO) - free report >>

Intuit Inc. (INTU) - free report >>

Seadrill Limited (SDRL) - free report >>

Splunk Inc. (SPLK) - free report >>

Published in