Which Stocks Look Ready to Pop and Drop with Earnings This 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 25- to 40-page Earnings Preview report for the week ahead each Friday.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including Priceline.com (PCLN), Home Depot (HD), First Solar (FSLR), Target (TGT), Groupon (GRPN), Dollar Tree (DLTR), Splunk (SPLK), Salesforce.com (CRM), Palo Alto Networks (PANW), Deckers Outdoor (DECK), and Monster Beverage (MNST).

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

Priceline has beaten analyst EPS estimates each quarter over the past two years. During that span, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen each of the last four years. ...

Last quarter, revenue from Priceline's international travel sites like Booking.com, Agoda.com and Rentalcars.com contributed to 30% growth in overseas (41% ex currencies) markets, where the company derives the majority of its revenue.

"The group's business performance exceeded expectations in the quarter, showing resilience in the face of weak economic conditions in major markets," CEO Jeffery Boyd said in summing up the quarter.

Gross bookings, which reflect all travel-related charges including taxes and fees that the company charges but aren't part of its revenue stream, jumped by 25% year over year (up 34% ex currencies) to $7.83 billion.

Priceline's revenue grew by 17% to $1.71 billion, topping the $1.66 billion consensus estimate and the midpoint of its implied guidance of $1.63 billion.

Priceline said it earned $596.6 million, or $11.66 per share, for the three months ended September 30th, up from net income of $469.5 million, or $9.17 per share, in the prior-year period.

Excluding non-cash items like stock option expense, Priceline earned $12.40 per share, which beat the analyst consensus estimate by 58 cents per share.

Adjusted EBITDA for Q3 amounted to $781 million, which exceeded Priceline's guidance range of $690 million to $765 million. It represented 21% growth compared to last year's Q3. ...

Outside of earnings, we believe Priceline is uniquely positioned to capture a big chunk of the international travel market. The breadth of its brands around the globe is a huge strength for Priceline. As we've repeatedly pointed out, Priceline's multiple websites in local languages help capture keystrokes in those markets and uniquely position it to benefit from international travel. Its business in Asia Pacific is growing strongly and Europe appears to have stabilized. It can still benefit from intra-European travel. Italy, Spain, and Greece might be hurting economically, but they are still warm-weather countries that are just a short flight away from the cold-weather climates of Northern Europe.

In the U.S., the NYOP (name your own price) business isn't as strong as it once was due to tighter airline inventory and more competition for discounters, but the company isn't ignoring it, though it is putting more emphasis into its Express Deals platform. Mobile is also a focus as it is a good platform for people prone to impetuous, last-minute travel decisions.. ...

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 Q4 so far were:

  • to be bullish on Netflix (NFLX) ahead of earnings.
  • to be bullish on Michael Kors (KORS) ahead of earnings.
  • to be bearish on Akamai (AKAM) ahead of earnings.
  • A daily investment service that is committed to creating long-term wealth for its members, BullMarket.com's Recommended List of stocks is up 104.9% from 2009-2012 versus a 57.9% return for the S&P, a 47.0% outperformance, topping the benchmark each year since the start of the Great Recession. Subscribers receive actionable market commentary, access to 40+ stock ideas on the Recommended List, and real-time trade alerts. Plus, sign up for a free trial today to view Bull Market's in-depth Special Reports - including its annual High Yield and MLP reports - and its timely Earnings Previews, which are published every Friday during the heart of earnings season. Get a Risk-Free Trial to Bull Market Today! (Please note returns are unaudited.)

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