Back to top

Image: Bigstock

5 Top Growth Stocks to Buy Ahead of Q1 Earnings This Month

Read MoreHide Full Article

The first-quarter 2020 earnings season has been set in motion. However, corporate earnings are expected to suffer significantly on account of the coronavirus outbreak that spread like wildfire across the United States and all over the world in the second half of the first quarter.

Global economic activities almost came to a standstill in March as either partial or full lockdowns were imposed. In the absence of any vaccine or line of treatment, enforcing of social distancing was the only option to curb the spread of the deadly virus.

Nevertheless, growth investors are primarily focused on stocks with aggressive earnings or revenue improvement, which should propel their stock price higher in the future. Here are five growth stocks with a favorable Zacks Rank that are set to beat first-quarter earnings estimates this month.

Disappointing Q1 Earnings Results So Far

As of Apr 22, 83 S&P 500 members reported first-quarter 2020 earnings results. Total earnings of these companies are down 23.6% from the same period last year on 2.3% higher revenues. Of the total, 68.7% surpassed EPS estimates and 66.3% outpaced revenue estimates.

Overall, first-quarter  earnings for the S&P 500 Index were projected to be down 14.2% year over year on 1.2% higher revenues. This is in sharp contrast to 4% earnings growth expected in early January. (Read More: Making Sense of the Earnings Picture During the Coronavirus)

5 Growth Stocks Set to Beat Earnings Estimates

We have narrowed down our search to five growth stocks with a positive Earnings ESP that are slated to release earnings reports this month. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and Growth Score of A.  You can see the complete list of today’s Zacks #1 Rank tocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. 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.

 

Limelight Networks Inc. LLNW is a content delivery partner enabling the next wave of Internet business and entertainment in the Americas, Europe, the Middle East, Africa and the Asia Pacific. The Zacks Rank #2 company has an Earnings ESP of +100%.

Limelight Networks has an expected earnings growth rate of 350% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 25% over the last 60 days. The company is set to release earnings results on Apr 23, after the closing bell.

Chemed Corp. CHE provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers in the United States. It operates through two segments, VITAS and Roto-Rooter. The Zacks Rank #2 company has an Earnings ESP of +0.42%.

Chemed has an expected earnings growth rate of 18.9% for the current year. It has a trailing four-quarter positive earnings surprise of 1.5%, on average. The company is set to release earnings results on Apr 28, after the closing bell.

Cigna Corp. CI is a health service organization, provides insurance and related products and services. It operates through Health Services, Integrated Medical, International Markets, and Group Disability and Other segments. The Zacks Rank #2 company has an Earnings ESP of +1.47%.

Cigna has an expected earnings growth rate of 7.5% for the current year. It has a trailing four-quarter positive earnings surprise of 6.6%, on average. The company is set to release earnings results on Apr 30, before the opening bell.

CURO Group Holdings Corp. CURO is a diversified consumer finance company providing consumer finance to a range of underbanked consumers in the United States, Canada and the United Kingdom. The Zacks Rank #1 company has an Earnings ESP of +1.47%.

CURO Group has an expected earnings growth rate of 12% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the last 60 days. It has a trailing four-quarter positive earnings surprise of 16.4%, on average. The company is set to release earnings results on Apr 30, after the closing bell.

Huron Consulting Group Inc. HURN is a professional services firm, provides advisory, technology, and analytic solutions in the United States and internationally. The Zacks Rank #2 company has an Earnings ESP of +3.20%.

Huron Consulting Group has an expected earnings growth rate of 2.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. It has a trailing four-quarter positive earnings surprise of 22.7%, on average. The company is set to release earnings results on Apr 30, after the closing bell.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>