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 Palo Alto Networks (PANW), DSW (DSW), Nuance (NUAN), Five Below (FIVE), Tiffany (TIF), Hewltett-Packard (HPQ), and Workday (WDAY).

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

Nuance has beaten analyst EPS estimates five of the past eight quarters, missing the consensus three times. Over that period, the stock has fallen the next session seven times, while being breakeven once. Seasonally, the stock has fallen two of the last four years.. ...

Last quarter, Nuance said it lost -$35 million, or -11 cents per share, compared with year-earlier net income of $79.5 million, or 25 cents per share.

On an adjusted basis to exclude one-time items, it earned 34 cents per share, which topped the 32 cents that Wall Street was expecting.

Overall revenue increased by 9% to $469.8 million, but that was short of the $487.6 million that analysts had projected.

Nuance lowered its guidance for the year, driven in part by a -16% drop in revenue from its mobile and consumer business. The company has been trying to hold the line on price to handset OEMs, which has led to delays in getting deals signed with some of the smaller phone makers, the company said. ...

Outside of earnings, Nuance is the leader in voice recognition technology. Services like voice to text for smartphones and on-demand solutions in the healthcare segment are good potential growth drivers, while we've also always felt that voice-powered search could one day be big.

However, the company has had some recent execution issues. Declining PC sales have hurt some of its desktop business; it has seen pricing pressure in mobile; and a shift towards usage based and term licensing have hurt as well. Most of all, though, the adoption of on-premise Electronic Health Records solutions, funded by the Affordable Care Act, have hurt the company's medical transcription business. ...

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 Q3 so far were:

  • to expect a negative reaction to Cisco's (CSCO) results.
  • to expect a negative reaction to Tesla's (TSLA) results.
  • to expect a positive reaction to 3D Systems (DDD) results.
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