Which Stocks Look Ready to Pop or Drop After Earnings Next Week?

Indie Research

Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.

During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including NetFlix (NFLX), Panera Bread (PNRA), Cree (CREE), F5 Networks (FFIV), Linn Energy (LINE), Microsoft (MSFT), Deckers Outdoor (DECK), and Amazon.com (AMZN).

Here is just a tiny sample of what BullMarket.com wrote about Panera:

Panera has beaten analyst EPS estimates six of eight quarters over the past two years. During that span, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen three times in the last four years. ...

Last quarter, Panera's second-quarter sales results fell short of expectations and the fast-casual restaurant operator cut its sales outlook for the year.

The company reported a 3.8% increase in sales on a same-store basis, which was short of the 4.5% increase that analysts had projected. Management said same-store sales grew by 2.1% during the first 27 days of the third quarter.

"When you look at our monthly one-year comps, we see a trend that we don't like. In April, comps were 4.7%; in May, 4.1%; in June, 2.61% - 2.6%; and in July, 2.1%. Obviously, we're experiencing deceleration. However, on a two-year basis, our comps actually accelerated through the quarter and were 10.1% in April, 10.7% in May and 11.9% in June," co-CEO Ron Shaich said.

Panera's 2Q net income grew by nearly 16% to $51 million, or $1.74 per share, which was 3 cents shy of the consensus analyst estimate. It reported $1.50 per share a year ago.

Total sales grew by 11% to $589.0 million from $530.6 million a year earlier. ...

Outside of earnings, Panera Bread is a well-run fast-casual dining chain with a strong balance sheet, a good mix of company-owned and retail outlets, and has the potential to grow operating cash flow and profits in the mid-teens or higher. It is a solid brand name and has a big runway for expansion.

The rollout of a national cable advertising campaign, meanwhile, could help drive revenue growth. Food costs are also locked in for the rest of the year. ...

The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the correct calls BullMarket.com made for Q2 were:

  • to expect a positive reaction to Tesla's (TSLA) results.
  • to expect a positive reaction to Priceline.com's (PCLN) results.
  • to expect a negative reaction to First Solar's (FSLR) results.
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