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Earnings: 3 Hot Stocks to Watch

Earnings: 3 Hot Stocks to Watch

Posted On April 12, 2019 2:21 pm
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Earnings season is almost in full swing — and a range of notable names are lined up to report results this month. Three worth watching in the coming weeks are social network Facebook(NASDAQ:FB), financial-technology specialist PayPal (NASDAQ:PYPL), and coffee giant Starbucks (NASDAQ:SBUX).

The stakes are high for all three companies, as their stocks have been soaring. Facebook, PayPal, and Starbucks have seen their stocks rise 35%, 27%, and 18% respectively so far this year. Can these companies’ latest results live up to expectations?

Here’s an overview of some key items to watch when these companies report their latest quarterly results.

Facebook

The key narrative to watch for Facebook remains the company’s decelerating revenue growth. In the social network’s first quarter of 2018, revenue was growing 49% year over year. But by the fourth quarter of last year, Facebook’s quarterly year-over-year revenue growth rate had slowed to 30% year over year.

This deceleration is expected to persist. In its fourth-quarter earnings call, management said it expects its first-quarter year-over-year revenue growth rate to “decelerate by a mid-single digit percentage on a constant currency basis compared to the Q4 rate.” Analysts, on average, expect Facebook to report first-quarter revenue of $14.98 billion, representing 25.2% year-over-year growth.

Facebook will report its first-quarter results after market close on Wednesday, April 24.

PayPal

Mobile-payments and financial-technology company PayPal will also report its first-quarter results after market close on Wednesday, April 24.

While the company’s financial results will be important, investors should be sure to check on the company’s customer data. Active account growth, in particular, is foundational for the company’s long-term health.

The company added 13.8 million net new active accounts in the fourth quarter of 2018. However, net new active account additions were 10.9 million when excluding new accounts from acquisitions. Notably, this was higher than the 9.1 million active accounts added in the third quarter of 2018.

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