Which Stocks Look Ready to Surge or Sink After 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 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 Workday.

Workday has beaten the EPS consensus each quarter since it went public last year. During that period, the stock was up two quarters and down two quarters. Last year, the stock fell the next session after it reported results. ...

Last quarter, the provider of cloud-based enterprise software posted a net loss of -$36 million, or -21 cents per share, for the second quarter, compared to a net loss of -$26.9 million, or -78 cents per share, for the same period last year.

The company reported an adjusted net loss of -3 cents per share. Revenue rose 72% to $107.6 million.

Analysts were expecting an adjusted net loss of -18 cents per share on revenue of $100.6 million.

"We executed well. Notably, we crossed the 500 customer mark as we continue to grow our business across North America, Europe, and Asia. We remain extremely focused on maintaining the industry's highest levels of customer success and on fostering our unique employee culture of fun and innovation as we expand our workforce around the world," Chairman and CEO Aneel Bhusri said.

The vast majority of Workday's sales are currently in U.S. dollars, so the impact of exchange rates is minimal. Subscription revenues for its cloud applications totaled $81.1 million, up 92% from last year. ...

Outside of earnings, Workday offers solutions that help companies handle functions like payroll, financial management, time tracking, procurement, and employee expense management. It considers itself to be a leader in delivering a single comprehensive solution for customers. Its tools address what the company likes to refer to as "human capital management," or HCM.

The cloud/SaaS model is highly successful and resonates with IT managers. The whole debate over cloud versus on-premise software is basically over in our view, with subscription-based cloud offerings winning the day. It is the reason Oracle (ORCL) and SAP (SAP) have moved aggressively to match upstart competitors like Workday.

While Workday is disruptive to a degree, though, it has not created a new market. It will grow by taking share from established players.

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.
  • 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.)

    View Comments