3 Momentum Stocks to Watch After Earnings Upgrades


  • Investors keep a close eye on three momentum stocks after their earnings upgrades.
  • Toll Brothers (TOL): The luxury home builder crushed its latest earnings print. 
  • Coinbase (COIN): The crypto exchange is riding a resurgence in Bitcoin and other digital assets. 
  • Airbnb (ABNB): The homestay rental company is back on track after a difficult time during the pandemic. 
momentum stocks - 3 Momentum Stocks to Watch After Earnings Upgrades

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A lot of stocks are marching higher after announcing their latest financial results. And it’s not only the “Magnificent 7” that have momentum in their share price.

Many smaller, less well-known companies are seeing their stocks climb upwards after delivering earnings that surpassed the expectations of analysts and impressed investors. Equally important has been strong forward guidance, which is serving as a catalyst for many companies.

Investors looking to give their portfolio a lift should consider taking a position in one of these stocks. They now have wind in their sails as we exit Q4 of 2023 earnings season. While not every company succeeded with their latest earnings, these names definitely stood out. Let’s examine three such momentum stocks to watch.

Toll Brothers (TOL)

Close up of industrial bricklayer installing bricks on construction site. materials stocks
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Luxury home builder Toll Brothers (NYSE:TOL) just knocked it out of the park with its earnings print, sending its stock up 5%. The company reported earnings per share (EPS) of $2.25 on revenue of $1.95 billion. That beat Wall Street estimates of $1.78 a share and $1.90 billion in revenue. Toll Brothers said that it delivered 1,927 homes for its fiscal first quarter and reported 2,042 signed contracts for future builds. Both those numbers also beat the consensus forecasts of analysts.

Citing a strong start to the year, TOL raised its 2024 guidance, saying it now expects to deliver 10,000 to 10,500 homes, up from a previous estimate of 9,850 to 10,350 units. For the current first quarter of the year, the company said it expects to deliver 2,400 to 2,500 homes. Analysts say the company’s results bode well for the U.S. housing market. This holds especially true as mortgage rates continue to decline from peaking nearly 8% in 2023.

Analysts are now busy revising up their ratings and price targets on TOL stock, which has risen 95% over the past 12 months.

Coinbase (COIN)

Coinbase (COIN), is an American company that operates a cryptocurrency exchange platform. Ethereum (ETH-USD) coin on the background of the Coinbase inscription.
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Cryptocurrencies remain red hot, and so too does Coinbase Global (NASDAQ:COIN). Recently, the cryptocurrency exchange saw its stock jump 12% higher on news that it reported its first profit in two years. COIN, which is the largest crypto exchange in America, reported EPS of $1.04 compared to 27 cents that was forecast on Wall Street. It was the first time the company had reported any profit since the fourth quarter of 2021, which is when the crypto sector entered a bear market.

Also, Coinbase reported that its revenue in the fourth quarter of 2023 totaled $953.8 million, up 58% from $605 million a year earlier and ahead of expectations for $818.3 million. The company said it is benefitting from a resurgence of interest in cryptocurrencies now that the U.S. Securities and Exchange Commission (SEC) has approved spot Bitcoin (BTC-USD) exchange-traded funds (ETFs). Trading revenue from investors on Coinbase’s exchange totaled $493 million in Q4, up 79% from the previous quarter.

COIN has increased 170% in the last 12 months. Several analysts upgraded the stock after the strong earnings print, including JPMorgan Chase (NYSE:JPM), which lifted its rating from sell to hold.

Airbnb (ABNB)

A hand holds up the Airbnb (ABNB) logo outside a home in Estonia.
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Airbnb’s (NASDAQ:ABNB) stock is on an upswing after the company reported better-than-expected financial results for Q4 2023 and offered strong forward guidance. The still unprofitable company that runs an online marketplace for homestays reported a loss per share of 55 cents. But that was better than a loss of 62 cents expected among analysts. Revenue came in at $2.22 billion, topping the $2.17 billion that was forecast on Wall Street. The company’s sales rose 17% from a year earlier.

As for guidance, Airbnb said it expects revenue in the current first quarter will be $2.03 billion to $2.07 billion. Analysts were expecting $2.03 billion in revenue. The company said it continues to look for growth opportunities and plans to invest in under-penetrated markets overseas this year. Also, Airbnb announced plans to buy back up to $6 billion of its own stock. ABNB is now up nearly 10% on the year, gaining 15% over the last 12 months.

Further, analysts at Morgan Stanley (NYSE:MS) lifted their price target on ABNB stock to $120 a share from $105 after the strong print.

On the date of publication, Joel Baglole did not have (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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2024/02/3-momentum-stocks-to-watch-after-earnings-upgrades/.

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