On May 27, the Conference Board reported that the U.S. Consumer Confidence Index has rebounded this month after five consecutive months of decline. The final reading for May came in at 98, significantly above the Zacks Consensus Estimate of 86. The metric for April was revised marginally downward to 85.7 from 86 reported earlier.

May’s consumer optimism was primarily driven by expectations of a U.S.-China trade deal, the delay by the Trump administration to impose 50% tariffs on the European Union and the ongoing negotiations related to tariff and trade policies with several other major trading partners of the United States. 

At this stage, investment in consumer discretionary stocks should be fruitful. Five such stocks with a favorable Zacks Rank are: Netflix Inc. (NFLX Quick QuoteNFLX - Free Report) , The Walt Disney Co. (DIS Quick QuoteDIS - Free Report) , Charter Communications Inc. (CHTR Quick QuoteCHTR - Free Report) , Roku Inc. (ROKU Quick QuoteROKU - Free Report) and Roblox Corp. (RBLX Quick QuoteRBLX - Free Report) . Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Consumer Confidence Index Northbound

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions — rose to 135.9 in May from 131.1 in April. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — climbed to 72.8 in May from 55.4 in April. However, this sub-index remained below the threshold of 80, which typically signals a recession ahead.

In May, 44% of respondents expect stocks to be higher over the next 12 months, compared with 37.6% in April. With respect to the labor market, 19.2% of respondents expect more jobs to be available in the next six months compared with 13.9% in April.

The chart below shows the price performance of our five picks in the past month.

Image Source: Zacks Investment Research

Netflix Inc.

Netflix handsomely beat the Zacks Consensus Estimate for bottom line while the top line was mostly in line with the consensus mark in first-quarter 2025. Despite trade and tariff-related doldrums, NFLX seems to have maintained healthy engagement levels. NFLX reaffirmed its 2025 guidance irrespective of the possibility of a near-term recession.

On April 1, Netflix launched its Ad Suite in the United States. NFLX will ramp up this Ad Suite in international markets in the ensuing second quarter. The ad-supported offerings will enable management to witness impressive subscribers and ARPU (average revenue per user) growth. 

Netflix’s policies of offering an ad-supported lower-priced tier, abolishing password sharing and effective price increase, should help it to become a defensive play ahead of a possible economic downturn. 

Furthermore, Netflix uses artificial intelligence (AI), data science and machine language extensively to provide consumers with more appropriate and intuitive suggestions. Netflix's AI platform takes into account an individual’s viewing habits and hobbies and accordingly provides recommendations. 

NFLX’s AI model compiles subscriber information and recommends content based on their preferences, which can be customized by end users. AI applications enable NFLX to offer a high-quality streaming service at reduced bandwidths.  

Netflix has an expected revenue and earnings growth rate of 14% and 27.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3% over the last 60 days. 

The Walt Disney Co.

The Walt Disney reported steady second-quarter fiscal 2025 results wherein revenues and earnings increased year-over-year. Domestic Parks & Experiences saw growth at domestic parks, Disney Vacation Club and Disney Cruise Line, partially offset by the decline at international locations including Shanghai Disney Resort and Hong Kong Disneyland Resort.  

In Entertainment, DIS expects double-digit percentage operating income growth in fiscal 2025. ESPN continues to reinforce its position as a sports-dominant platform, with the second quarter delivering its most-watched primetime ever and 32% viewership growth in the key 18-49 demographic.

DIS has successfully transformed its streaming business from a loss-leader to a profitable growth engine. After reporting its first-ever Direct-to-Consumer (DTC) operating profit in fiscal year 2024, the momentum has accelerated in fiscal year 2025 with second-quarter DTC operating income reaching $336 million.

The Walt Disney has an expected revenue and earnings growth rate of 3.8% and 15.1%, respectively, for the current year (ending September 2025). The Zacks Consensus Estimate for current-year earnings has improved 4.6% in the last 30 days.

Charter Communications Inc.

Charter Communications’ first-quarter performance benefited from continued growth in mobile service revenues, which surged 33.5% year over year, adding 514K new mobile lines. CHTR’s Internet revenues grew 1.8%, driven by promotional rate step-ups and rate adjustments. 

Spectrum Mobile’s competitive pricing & expanded 5G coverage remain the key growth drivers. In March 2025, Spectrum Mobile launched satellite-based services through a collaboration with Skylo, a non-terrestrial network service provider.  

CHTR’s Spectrum One continues to win market share with its differentiated offerings like Mobile Speed Boost and Spectrum Mobile Network, each of which runs on its advanced Spectrum WiFi. Spectrum WiFi provides unlimited Internet access to residential customers even when they are outdoors. It will also help CHTR fend off competition.

Charter Communications has an expected revenue and earnings growth rate of 0.3% and 13.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.1% in the last 30 days.

Roku Inc.

Roku benefits from increased user engagement on The Roku Channel and the popularity of the Roku TV program. The Roku OS is the #1 selling TV OS in the United States, with TV unit sales greater than the next two TV operating systems combined. 

The Roku Channel reached U.S. households with approximately 145 million people and remained the #3 app on its platform by both reach and engagement, with streaming hours up 82% year over year. 

More than 80% of streaming hours on The Roku Channel originates from the Roku Experience. Roku continued to expand penetration in the United States, surpassing half of the broadband households.

Roku has an expected revenue and earnings growth rate of 10.5% and 80.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 39.3% in the last 30 days.

Roblox Corp.

Roblox develops and operates an online entertainment platform. RBLX offers Roblox Client, an application that allows users to explore 3D digital worlds; and Roblox Studio, a toolset that allows developers and creators to build, publish and operate 3D experiences and other content. RBLX also provides Roblox Cloud, a solution that provides services and infrastructure to power the human co-experience platform.

Roblox has an expected revenue and earnings growth rate of 22.5% and 2.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.1% in the last 30 days.