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Top 5 Tech Stocks Set to Beat on Earnings in the Next 7 Days
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The fourth-quarter 2023 earnings season has so far shown stability, mostly in line with expectations. As of Jan 26, 124 companies on the S&P 500 Index have reported their financial numbers. Total earnings for these 52 index members are down 0.4% from the same period last year on 3.4% higher revenues, with 79% beating EPS estimates and 69.4% beating revenue estimates.
At present, total earnings of the S&P 500 Index in fourth-quarter 2024 are expected to be up 1.1% on 2.4% higher revenues. This follows the 3.8% earnings growth on 2% higher revenues in the third quarter and three back-to-back quarters of declining earnings before that.
Meanwhile, several technology companies are slated to declare their quarterly financial numbers within the next seven days. A handful of those stocks with a favorable Zacks Rank are poised to beat on earnings results. Investment in these stocks should be fruitful in the near-term.
Technology Sector in Q4
The explosion of artificial intelligence (AI) in both production processes and final products has created tremendous opportunities for the overall technology space. The tech rally in 2023 was led by a massive thrust toward AI, especially generative AI.
The data-centric computing architecture, especially, cloud computing, the Internet of Things (IoT) and the metaverse, has expanded the horizon for the technology sector. The pandemic-led social transformation has established digitization as the new normal. The outbreak of coronavirus quickly changed the lifestyle and outlook of people.
Smart devices need computing and learning capabilities to perform face detection, image recognition and video analytics capabilities. These require high processing power, speed and memory, low power consumption, and better graphic processors and solutions, which bode well for the semiconductor industry.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
Meta Platforms Inc. (META - Free Report) is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. META is considered to have pioneered the concept of social networking.
However, as developed regions mature, Meta Platforms has taken measures to drive penetration in the emerging markets of South East Asia, Latin America and Africa. Of all places, India deserves a-special mention in terms of user growth. The world’s second-largest populated country offers tremendous potential for META. With China off the radar, India can prove to be a terrific growth engine for META.
Meta Platforms has an Earnings ESP of +0.51%. It has an expected earnings growth rate of 23% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.
Meta Platforms recorded earnings surprises in the last four reported quarters, with an average beat of 27.5%. The company is set to release earnings results on Feb 1, after the closing bell.
Fortive Corp. (FTV - Free Report) has been benefiting from strong revenue growth across Intelligent Operating Solutions and Precision Technologies business segments. FTV’s Solid customer demand momentum across most geographies and increased orders for software offerings bode well.
FTV remains focused on improving Fortive Business System to drive innovation and sustainable results. Frequent product launches and synergies from strategic acquisition bodes well for FTV in the long run.
Fortive has an Earnings ESP of +0.64%. It has an expected earnings growth rate of 7.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 30 days.
Fortive recorded earnings surprises in three out of the last four reported quarters, with an average beat of 2.8%. The company is set to release earnings results on Jan 31, before the opening bell.
PTC Inc. (PTC - Free Report) has been benefiting from solid momentum across the product lifecycle management business segment. Steady demand for products (digital transformation and SaaS) is being cushioned by the acquisition of ServiceMax and continued momentum in PTC’s Onshape and Creo verticals.
Going ahead, the acquisition of Pure Systems will strengthen PTC’s position in the rapidly growing Application Lifecycle Management market. Frequent product launches and strategic collaboration also bode well for PTC.
PTC has an Earnings ESP of +2.12%. It has an expected earnings growth rate of 12.4% for the current year (ending September 2024). PTC recorded earnings surprises in two out of the last four reported quarters, with an average beat of 2.4%. The company is set to release earnings results on Jan 31, after the closing bell.
Roper Technologies Inc. (ROP - Free Report) is benefiting from strength across all its segments. Momentum across the Deltek, Vertafore, Frontline and Aderant businesses of ROP is aiding the Application Software unit.
Strong momentum in the DAT & Loadlink businesses and excellent bookings in the iPipeline business are boosting ROP’s Network Software unit’s performance. Strength across the Neptune and Verathon businesses augurs well for the Tech Enabled Products unit. ROP’s bullish forecast for 2023 sparks optimism.
Roper Technologies has an Earnings ESP of +1.69%. It has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 90 days.
Roper Technologies recorded earnings surprises in the last four reported quarters, with an average beat of 2.7%. The company is set to release earnings results on Jan 31, before the opening bell.
Fabrinet (FN - Free Report) provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, industrial lasers and sensors.
FN offers a broad range of advanced optical capabilities across the entire manufacturing process, including process engineering, design for manufacturability, supply-chain management, manufacturing, final assembly and test.
FN manufactures, assembles, and tests products for customers at its main manufacturing facilities in Bangkok, Thailand. FN designs and manufactures its own bulk optical materials and components at its facilities in Fuzhou, the People's Republic of China, and New Jersey, USA.
Fabrinet has an Earnings ESP of +2.13%. It has an expected earnings growth rate of 8.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 30 days.
Fabrinet recorded earnings surprises in the last four reported quarters, with an average beat of 3.4%. The company is set to release earnings results on Feb 5, after the closing bell.
Image: Bigstock
Top 5 Tech Stocks Set to Beat on Earnings in the Next 7 Days
The fourth-quarter 2023 earnings season has so far shown stability, mostly in line with expectations. As of Jan 26, 124 companies on the S&P 500 Index have reported their financial numbers. Total earnings for these 52 index members are down 0.4% from the same period last year on 3.4% higher revenues, with 79% beating EPS estimates and 69.4% beating revenue estimates.
At present, total earnings of the S&P 500 Index in fourth-quarter 2024 are expected to be up 1.1% on 2.4% higher revenues. This follows the 3.8% earnings growth on 2% higher revenues in the third quarter and three back-to-back quarters of declining earnings before that.
Meanwhile, several technology companies are slated to declare their quarterly financial numbers within the next seven days. A handful of those stocks with a favorable Zacks Rank are poised to beat on earnings results. Investment in these stocks should be fruitful in the near-term.
Technology Sector in Q4
The explosion of artificial intelligence (AI) in both production processes and final products has created tremendous opportunities for the overall technology space. The tech rally in 2023 was led by a massive thrust toward AI, especially generative AI.
The data-centric computing architecture, especially, cloud computing, the Internet of Things (IoT) and the metaverse, has expanded the horizon for the technology sector. The pandemic-led social transformation has established digitization as the new normal. The outbreak of coronavirus quickly changed the lifestyle and outlook of people.
Smart devices need computing and learning capabilities to perform face detection, image recognition and video analytics capabilities. These require high processing power, speed and memory, low power consumption, and better graphic processors and solutions, which bode well for the semiconductor industry.
Our Top Picks
We have narrowed our search to five technology stocks that are poised to beat on earnings results in the next seven days. Each of these stocks carries a Zacks Rank #2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
Meta Platforms Inc. (META - Free Report) is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. META is considered to have pioneered the concept of social networking.
However, as developed regions mature, Meta Platforms has taken measures to drive penetration in the emerging markets of South East Asia, Latin America and Africa. Of all places, India deserves a-special mention in terms of user growth. The world’s second-largest populated country offers tremendous potential for META. With China off the radar, India can prove to be a terrific growth engine for META.
Meta Platforms has an Earnings ESP of +0.51%. It has an expected earnings growth rate of 23% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.
Meta Platforms recorded earnings surprises in the last four reported quarters, with an average beat of 27.5%. The company is set to release earnings results on Feb 1, after the closing bell.
Fortive Corp. (FTV - Free Report) has been benefiting from strong revenue growth across Intelligent Operating Solutions and Precision Technologies business segments. FTV’s Solid customer demand momentum across most geographies and increased orders for software offerings bode well.
FTV remains focused on improving Fortive Business System to drive innovation and sustainable results. Frequent product launches and synergies from strategic acquisition bodes well for FTV in the long run.
Fortive has an Earnings ESP of +0.64%. It has an expected earnings growth rate of 7.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 30 days.
Fortive recorded earnings surprises in three out of the last four reported quarters, with an average beat of 2.8%. The company is set to release earnings results on Jan 31, before the opening bell.
PTC Inc. (PTC - Free Report) has been benefiting from solid momentum across the product lifecycle management business segment. Steady demand for products (digital transformation and SaaS) is being cushioned by the acquisition of ServiceMax and continued momentum in PTC’s Onshape and Creo verticals.
Going ahead, the acquisition of Pure Systems will strengthen PTC’s position in the rapidly growing Application Lifecycle Management market. Frequent product launches and strategic collaboration also bode well for PTC.
PTC has an Earnings ESP of +2.12%. It has an expected earnings growth rate of 12.4% for the current year (ending September 2024). PTC recorded earnings surprises in two out of the last four reported quarters, with an average beat of 2.4%. The company is set to release earnings results on Jan 31, after the closing bell.
Roper Technologies Inc. (ROP - Free Report) is benefiting from strength across all its segments. Momentum across the Deltek, Vertafore, Frontline and Aderant businesses of ROP is aiding the Application Software unit.
Strong momentum in the DAT & Loadlink businesses and excellent bookings in the iPipeline business are boosting ROP’s Network Software unit’s performance. Strength across the Neptune and Verathon businesses augurs well for the Tech Enabled Products unit. ROP’s bullish forecast for 2023 sparks optimism.
Roper Technologies has an Earnings ESP of +1.69%. It has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 90 days.
Roper Technologies recorded earnings surprises in the last four reported quarters, with an average beat of 2.7%. The company is set to release earnings results on Jan 31, before the opening bell.
Fabrinet (FN - Free Report) provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, industrial lasers and sensors.
FN offers a broad range of advanced optical capabilities across the entire manufacturing process, including process engineering, design for manufacturability, supply-chain management, manufacturing, final assembly and test.
FN manufactures, assembles, and tests products for customers at its main manufacturing facilities in Bangkok, Thailand. FN designs and manufactures its own bulk optical materials and components at its facilities in Fuzhou, the People's Republic of China, and New Jersey, USA.
Fabrinet has an Earnings ESP of +2.13%. It has an expected earnings growth rate of 8.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 30 days.
Fabrinet recorded earnings surprises in the last four reported quarters, with an average beat of 3.4%. The company is set to release earnings results on Feb 5, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.