The earnings season started in full swing and hasn’t disappointed. But it’s almost coming to an end and this means it’s time to look forward to another impressive quarter. While not all companies managed to beat expectations and impress investors, there are a few which stood out.
For investors who were waiting for the most recent updates to come out before they made their move, now is the time to grab Q3 earnings winners that have gained momentum after the recent results. These companies are expected to continue with the same growth trajectory and could report an even better fourth quarter. Here are the top three stocks to buy after Q3 earnings reports.
Walt Disney (DIS)
This year hasn’t been kind to Disney (NYSE:DIS), but it looks like the worst is over. The company is in its 100th year of business, and many of its recent challenges appear to be tackled for the time being. It has a diversified business and an ability to leverage the best-performing segments.
Disney’s two main businesses, its television networks and amusement parks, have seen a steady revenue increase attributed to increased viewers and attendance, respectively. In its experience segment, which includes theme parks, cruises, hotels and licensed products, it saw a 13% year-over-year (YOY) rise in revenue to hit $8.2 billion in the recent quarter. Management plans to invest $60 billion into theme parks over the coming decade, which includes the Disney Cruise Line business as well.
DIS stock had dropped to a nine-year low of $78.73, but the quarterly results gave it a much-needed push. It is trading at $94.49 right now and is up 6% year-to-date (YTD). The encouraging results have helped the stock gain momentum, and buying the stock below $100 is a good chance to take home noticeable gains.
The company’s streaming business is competing with some of the biggest names in the industry, and it saw an impressive subscriber growth in the quarter which took the total subscribers to 66.1 million.
With the upcoming holiday season, Disney could report even better numbers in the start of 2024. It has also seen a steady improvement in its free cash flow which is another reason to invest in the stock. In the fourth quarter, the free cash flow stood at $3.4 billion representing over a 100% growth as compared to the previous year. Considering the financial strengths of the company, this is one stock that is worth adding to the portfolio for a strong 2024.
Palantir Technologies (PLTR)
One company to be highly optimistic about is Palantir Technologies (NYSE:PLTR). Set to benefit from recent developments in artificial intelligence (AI), it has already seen a rise in the demand from businesses who want to adopt AI. PLTR is an AI stock that is enjoying the hype surrounding the technology.
It is already up 210% YTD and is trading at $19.80. Looking at the company’s valuation and market potential, it appears to be undervalued, and snapping it up at the current level could mean a strong upside in the near term.
The biggest advantage of investing in PLTR stock is the company’s impressive clientele across multiple industries. In the third quarter, it successfully managed to close 80 deals each worth $1 million or more across different industries. It is this diversification that brings stability to the company.
Once criticized for relying heavily on government clients, Palantir Technologies saw its commercial business deliver a 33% YOY rise in terms of customers. It has managed to increase its commercial customers over the past three years and is striving for more. The company sets itself apart with unique products that are offered on its new Artificial Intelligence Platform (AIP).
The expansion of this platform shows the efficiency of the company’s product offerings. Palantir reported a revenue of $558 million in the recent quarter, up 17% YOY. It has also managed to reduce its overhead expenses which has led to an increased operating income in the quarter as compared to a loss in the same quarter the prior year.
Palantir is a profitable company with ample growth potential. The stock has gained momentum after the smashing recent results, making it another one of the top Q3 earnings winners.
Spotify Technology (SPOT)
Spotify (NYSE:SPOT) stock has benefited significantly after its better-than-expected quarterly results. The company’s operating earnings finally turned profitable after a few quarters of losses. Spotify managed to report a profit even during recent market turmoil when consumer spending was low. This is a sign that some of its best days have just started.
Spotify saw an 11% YOY increase in revenue, primarily driven by ad-supported users. It saw a 32% YOY rise in its ad-supported user base and managed to increase the premium subscriber count by 6 million. Spotify had 226 million premium users at the end of September, and it is likely this momentum will continue until the end of this year. It is one of the best stocks to buy after Q3 earnings based on these details.
Spotify also raised its prices which led to a higher revenue. It has entered into a partnership with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) that will enhance user experience and drive an increase in the user base. It aims to use Google’s AI tools to enhance the listening experience of users.
SPOT stock is up over 118% YTD and is trading at $178 today. While the stock isn’t cheap, it has gained tremendous interest and momentum after its outstanding Q3 results. Profits are expected to continue growing, and the stock could move further upwards. Several analysts have raised the price target of SPOT stock after the impressive results. For investors who can tolerate a little risk, this is a stock worth owning as it is one of the best Q3 earnings winners.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
