Apple Inc. (NASDAQ:AAPL), Etsy Inc (NASDAQ:ETSY) and Advanced Micro Devices, Inc. (NASDAQ:AMD) were just a few of the companies that reported earnings this past week, to mixed results.
But even an earnings beat doesn’t necessarily equal a stock rally. Facebook Inc (NASDAQ:FB) beat both top- and bottom-line estimates, yet FB stock saw an immediate selloff and is now off 1.5% since reporting.
Overall, though, the market is still looking strong to say the least: The Nasdaq keeps posting new highs, 77% of companies that have reported earnings have topped Wall Street’s estimates and FactSet just upped the blending growth estimate to just shy of 13%.
This coming week, earnings reports continue with one tech darling, one pharma laggard and one media giant with some sports-related woes. Here’s what to expect from each.
Earnings Reports to Watch: Snap Inc (SNAP)
Snap Inc (NYSE:SNAP) may have closed 44% higher on its first day on Wall Street, but things have been a lot rockier since that debut. Overall, SNAP has actually lost 10% since its first day. But a rocky start is hardly unusual for any new kid on Wall Street; Facebook had its fair share of bumps before it gained some substantial upward momentum.
Speaking of which, some investors are concerned about Facebook in relation to Snapchat. Instagram, which Facebook acquired years ago, has more or less copied Snapchat’s stories feature, adding/stealing users at an impressive clip.
To that end, user growth for Snapchat will be the main thing of interest to investors when the company reports earnings for the first time ever next week. While monetization is important in the long run, it’s a moot point without users to draw advertisers to the platform in the first place.
Earnings Reports to Watch: Valeant (VRX)
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) gained 7% in just one day earlier this week, but that’s barely a band-aid on the bleeding for shares. In 2017, VRX has lost nearly 30%, contributing to the 70% loss over the past 12 months.
The jump came as the company announced plans to launch 50 new products this year, claiming it could lead to around $100 million in annualized sales. The company’s CEO Joe Papa also said the company was open to changing its name, and is on-pace to pay off its tens of millions in debt.
This news all came out of investor day, the week before the company is expected to report earnings. There’s a decent chance management is trying to front-run some more ugly numbers.
Keep a close eye out for more concrete plans to support the news that led to VRX’s mini recovery a couple days ago.
Earnings Reports to Watch: Disney (DIS)
Walt Disney Co (NYSE:DIS) is up around 10% this year and sitting around an all-time high, most recently making news for layoffs at ESPN. While the news may not be great for some sports fans, it seems to suggest tight management from an investment perspective, which is always good.
When Disney reports earnings next week, mediocre growth is expected. Earnings should tally $1.41 — up around 4% year-over-year, but a few pennies less than analysts expected a few months ago. Revenue growth should more or less mirror the bottom line’s expansion, too.
Over the next five years, though, nearly double-digit earnings growth per year is expected. That’s not too bad for a stock with one hell of a portfolio, a longstanding track record and a 1.4% dividend yield.
Hilary Kramer is the editor of GameChangers, Breakout Stocks, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.
