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5 Tech Stocks Likely to Beat on Q1 Earnings Despite Coronavirus
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The first-quarter earnings season is under way, with the coronavirus pandemic weighing on corporate profits and ravaging the global economy in the backdrop. Thus, it goes without saying that the tech sector releases will reflect the effects of the outbreak.
Firstly, consumer confidence in the United States dropped to near a three-year low in March as households were fretting over the future course of the economy. Notably, Lynn Franco, senior director of Economic Indicators at The Conference Board, confirmed that the March decline in confidence indicated a severe contraction and not just a temporary blip. And with confidence taking a beating, consumer spending is widely expected to take a hit. Understandably demand for PCs, tablets and mobile phones, to name a few, has probably diminished in the first quarter, something that doesn’t bode well for hardware, software and IT service providers.
Manufacturers of computers, smartphones, smart watches, laptops, PCs, smart speakers and various other components were highly impacted in the first quarter due to the closure of factories in China in the wake of the coronavirus outbreak. This is more concerning as China exports nearly 50% of the world’s technologies, and hence the global tech sector will face massive supply disruptions because of the pandemic and its outcome on production in China.
Tech bigwigs like Apple Inc. (AAPL - Free Report) and Microsoft Corporation (MSFT - Free Report) have already issued warnings about lower-than-expected earnings result for the quarter ending March 2020 due to global supply chain disturbances and the steepest drop in consumer demand in China.
The semiconductor industry, in the meanwhile, may not have been directly impacted by the pandemic but has probably suffered from disruption of production at electronic manufacturing companies. Needless to say, electronic manufacturers represent the bulk of the world’s largest chip purchasers.
There are several chip packaging and testing plants in China. But China has shutdown many such plants or reduced operations due to the challenging macroeconomic environment and that may have had an impact on chipmakers’ first-quarter earnings.
But not everything is as dispiriting. The coronavirus outbreak has compelled people to work and study from home, which has no doubt been a blessing in disguise for software vendors that provide remote working facilities. Prominent among such companies are Zoom, Slack, GoToMyPC, Zoho Remotely, Microsoft Office365 and Atlassian. Internet publishers and broadcasters are also thus seeing a rise in demand.
Most importantly, tech stocks engaged in cloud computing have most likely gained in the first quarter for the same social-distancing reasons.
With majority of people now working or learning remotely, most of the companies need to move a bulk portion of their workload to the cloud. To top it, consumers have started to shop online as well. Thus, any consumer-oriented business needs to have a digital presence built on the cloud in order to survive the virus onslaught.
5 Tech Stocks to Report Explosive Earnings
Investing in some solid tech players expected to report a significant uptick in first-quarter earnings seems prudent now. These stocks flaunt a positive Earnings ESP — our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Shopify Inc. (SHOP - Free Report) provides a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized businesses. The company is expected to report earnings results for the quarter ending March 2020 on May 6. Shopify has an Earnings ESP of +16.08%. The company’s expected earnings growth rate for the next year is a whopping 2,050%. The stock has a Zacks Rank #2 (Buy).
Etsy, Inc. (ETSY - Free Report) offers e-commerce services. It provides marketplaces to buy and sell goods. The company is expected to report earnings results for the quarter ending March 2020 on May 6. Etsy has an Earnings ESP of +8.17%. The company’s expected earnings growth rate for the next year is a solid 189.7%. The stock has a Zacks Rank #2.
InterDigital, Inc. (IDCC - Free Report) is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company is expected to report earnings results for the quarter ending March 2020 on May 7. InterDigital has an Earnings ESP of +152.0%. The company’s expected earnings growth rate for the current and next year is an encouraging 57.6% and 76%, respectively. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Plantronics, Inc. is a global leader in audio communications for businesses and consumers. The company is expected to report earnings results for the quarter ending March 2020 on May 5. Plantronics has an Earnings ESP of +329.63%. The company has a superb earnings growth of 9.6% for the past five years. The stock has a Zacks Rank #2.
Pixelworks, Inc.’s (PXLW - Free Report) broadband content includes video, computer graphics and visual Web information delivered at high speeds via cable and telecommunications lines to homes. The company is expected to report earnings results for the quarter ending March 2020 on May 7. Pixelworks has an Earnings ESP of +5.26%. The company’s expected earnings growth rate for the current year is a promising 25%.The stock has a Zacks Rank #1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
5 Tech Stocks Likely to Beat on Q1 Earnings Despite Coronavirus
The first-quarter earnings season is under way, with the coronavirus pandemic weighing on corporate profits and ravaging the global economy in the backdrop. Thus, it goes without saying that the tech sector releases will reflect the effects of the outbreak.
Firstly, consumer confidence in the United States dropped to near a three-year low in March as households were fretting over the future course of the economy. Notably, Lynn Franco, senior director of Economic Indicators at The Conference Board, confirmed that the March decline in confidence indicated a severe contraction and not just a temporary blip. And with confidence taking a beating, consumer spending is widely expected to take a hit. Understandably demand for PCs, tablets and mobile phones, to name a few, has probably diminished in the first quarter, something that doesn’t bode well for hardware, software and IT service providers.
Manufacturers of computers, smartphones, smart watches, laptops, PCs, smart speakers and various other components were highly impacted in the first quarter due to the closure of factories in China in the wake of the coronavirus outbreak. This is more concerning as China exports nearly 50% of the world’s technologies, and hence the global tech sector will face massive supply disruptions because of the pandemic and its outcome on production in China.
Tech bigwigs like Apple Inc. (AAPL - Free Report) and Microsoft Corporation (MSFT - Free Report) have already issued warnings about lower-than-expected earnings result for the quarter ending March 2020 due to global supply chain disturbances and the steepest drop in consumer demand in China.
The semiconductor industry, in the meanwhile, may not have been directly impacted by the pandemic but has probably suffered from disruption of production at electronic manufacturing companies. Needless to say, electronic manufacturers represent the bulk of the world’s largest chip purchasers.
There are several chip packaging and testing plants in China. But China has shutdown many such plants or reduced operations due to the challenging macroeconomic environment and that may have had an impact on chipmakers’ first-quarter earnings.
But not everything is as dispiriting. The coronavirus outbreak has compelled people to work and study from home, which has no doubt been a blessing in disguise for software vendors that provide remote working facilities. Prominent among such companies are Zoom, Slack, GoToMyPC, Zoho Remotely, Microsoft Office365 and Atlassian. Internet publishers and broadcasters are also thus seeing a rise in demand.
Most importantly, tech stocks engaged in cloud computing have most likely gained in the first quarter for the same social-distancing reasons.
With majority of people now working or learning remotely, most of the companies need to move a bulk portion of their workload to the cloud. To top it, consumers have started to shop online as well. Thus, any consumer-oriented business needs to have a digital presence built on the cloud in order to survive the virus onslaught.
5 Tech Stocks to Report Explosive Earnings
Investing in some solid tech players expected to report a significant uptick in first-quarter earnings seems prudent now. These stocks flaunt a positive Earnings ESP — our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Shopify Inc. (SHOP - Free Report) provides a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized businesses. The company is expected to report earnings results for the quarter ending March 2020 on May 6. Shopify has an Earnings ESP of +16.08%. The company’s expected earnings growth rate for the next year is a whopping 2,050%. The stock has a Zacks Rank #2 (Buy).
Etsy, Inc. (ETSY - Free Report) offers e-commerce services. It provides marketplaces to buy and sell goods. The company is expected to report earnings results for the quarter ending March 2020 on May 6. Etsy has an Earnings ESP of +8.17%. The company’s expected earnings growth rate for the next year is a solid 189.7%. The stock has a Zacks Rank #2.
InterDigital, Inc. (IDCC - Free Report) is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company is expected to report earnings results for the quarter ending March 2020 on May 7. InterDigital has an Earnings ESP of +152.0%. The company’s expected earnings growth rate for the current and next year is an encouraging 57.6% and 76%, respectively. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Plantronics, Inc. is a global leader in audio communications for businesses and consumers. The company is expected to report earnings results for the quarter ending March 2020 on May 5. Plantronics has an Earnings ESP of +329.63%. The company has a superb earnings growth of 9.6% for the past five years. The stock has a Zacks Rank #2.
Pixelworks, Inc.’s (PXLW - Free Report) broadband content includes video, computer graphics and visual Web information delivered at high speeds via cable and telecommunications lines to homes. The company is expected to report earnings results for the quarter ending March 2020 on May 7. Pixelworks has an Earnings ESP of +5.26%. The company’s expected earnings growth rate for the current year is a promising 25%.The stock has a Zacks Rank #1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>