Earnings season is getting closer to an end, with many of the market’s biggest names having reported so far. Overall, the news has been positive, or at least positive enough to keep broad market indices grinding higher.
But there are still a few big-time earnings reports to keep an eye on. This coming week, the list includes three of the more interesting growth stocks in the market. All three have big growth, big valuation and a likelihood of a big move after earnings.
So without further ado, here are three big earnings reports to watch next week.
Earnings Reports to Watch: Priceline (PCLN)
Priceline Group Inc (NASDAQ:PCLN) reports earnings Monday afternoon. The earnings report will give the company a chance to change the narrative surrounding PCLN stock, or confirm it.
Prcieline has seen a bit of a pullback from all-time highs reached in early August. Disappointing guidance for the current quarter sent PCLN stock down about 8% back in August. Its much smaller rival Trivago NV – ADR (NASDAQ:TRVG) is down over 60% just since July. And a weak Q3 report from Expedia Inc (NASDAQ:EXPE) last week took it down along with PCLN.
Monday’s earnings report looks reasonably important for PCLN and potentially dangerous. The online travel sector might not be quite as healthy as it should be in a strong macro environment. Street earnings-per-share estimates for the quarter have already moved above the high end of guidance, giving Priceline a tougher target to hit.
PCLN continues to trade at a premium to EXPE — and it will have to justify that premium with its Q3 numbers and Q4 guidance. With expectations rising, that may be difficult, and it raises the risk around Monday’s release.
Earnings Reports to Watch: Snap Inc (SNAP)
Snap Inc (NYSE:SNAP) has quietly gained about 30% from all-time lows set after its Q2 report back in August. That run looks like it might hit a roadblock in Snap’s Q3 earnings release on Tuesday afternoon.
As I wrote back in early August, SNAP is a stock that needs a lot of buzz, and I just don’t see it. A price near $15 now is modestly above Street targets, even with several of those targets coming from analysts whose firms underwrote the Snap IPO back in March.
The Q3 release is going to focus on user growth, which has been disappointing this year — and on whether CEO Evan Spiegel can drive enthusiasm toward the story here. With Facebook Inc (NASDAQ:FB) last week citing over 500 million daily active users on its Instagram platform — roughly triple the number on Snapchat — Spiegel’s job is going to be cut out for him.
SNAP stock won’t be profitable until the next decade, which means it needs something to get investors excited. I was skeptical Q2 would offer that excitement, and SNAP fell to an all-time low. I suspect the Q3 report may have the same problem, making it one of the most note worthy earnings reports to watch next week.
Earnings Reports to Watch: Weibo (WB)
On the other hand, Chinese social media play Weibo Corp (ADR) (NASDAQ:WB) looks like it may have some juice heading into its own third quarter report, due Tuesday morning. WB isn’t a stock for the faint of heart: shares have nearly doubled since April, and trade at almost 37x Street EPS estimates for 2018.
But there’s obviously great growth potential here: those same analysts are projecting 88% EPS growth and a 60%+ increase in revenue. Meanwhile, WB shares actually have pulled back a bit heading into the report, falling about 12% from all-time highs reached in September. That should keep expectations moderate and provide some room for gains off an earnings beat.
Weibo will need to post good numbers to jumpstart its rally, but at these levels, that might be a bet worth taking. At the least, I’d rather have WB’s growth and profitability now, rather than waiting 3-4 years for SNAP to provide the same.
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.