It’s earnings season once again, so analysts and investors are hard at work trying to figure out which names will yield the biggest returns on the announcement, which will shed the most light on a particular industry or the economy as a whole, or which ones are most likely to disappoint.
But when looking at larger companies, it may not always be profitable to look at the immediate future because there may be any number of factors hitting numbers in a particular quarter. Also, and perhaps partly for this reason, shares of larger companies may not move as much as smaller ones on an earnings report.
So here are a few with good earnings growth potential that are also seeing some momentum in share prices.
Alteryx, Inc. AYX
Irvine, CA-based Alteryx is a member of the hot and continually emerging Internet software industry that is primarily engaged in offering software infrastructure and tools for management of digital workflows.
The fact that this is one of the more attractive industries (top 21%) means that there are positive drivers common for all players. The increased digitization of our lives, growing dependence on the cloud, the SaaS-based delivery model and growing regulation of the segment (negative short term but opening up opportunities in the long term) are some of these.
Alteryx’s platform-based offerings for on premise or cloud-based data analytics include the Alteryx Designer, Alteryx Server and Alteryx Analytics Gallery. The company promises secure, easily scalable and easily sharable infrastructure to its customers.
The Zacks #1 ranked company topped the December quarter earnings estimate by 50.0% and recorded a 4-quarter surprise history of 103.5%. While the current quarter estimate revision trend isn’t encouraging, its fiscal 2019 and 2020 estimates are up 12.5% and 16.4%, respectively in the last 30 days.
Moreover, the shares are trading at 95.4% of their 52-week high, indicating that modest upside potential remains. Particularly since there is some momentum in the shares: the relative price change (YTD price change of stock/YTD price change of S&P 500) is 20.16.
CommScope Holding Company, Inc. COMM
Hickory, NC-based CommScope Holding operates in the communications infrastructure industry (top 3%). Consequently, like other players in the industry, its growth comes from the soaring data consumption that accompanies increased use of Internet-connected and other communication devices.
It follows that this necessitates huge investments in the network, whether serving individuals or enterprises, and whether facilitating wireless, broadband or other communications. The advent of 5G will naturally inflate these costs. On the other hand, the data transfer speeds and latency should boost consumption as well as the chargeable rates, thus ultimately benefiting the segment.
CommScope also provides end-to-end solutions that make for a sticky customer base.
The Zacks #1 ranked company beat the December quarter earnings estimate by 18.6% and recorded a 4-quarter surprise history of 4.8%. While the current quarter earnings estimate is up marginally in the last 30 days, its fiscal 2019 estimate is up 36.1%.
Moreover, the shares are trading at 63.7% of their 52-week high, indicating significant upside potential. The relative price change is 40.37.
Ionis Pharmaceuticals, Inc. IONS
Carlsbad, CA-based Ionis Pharmaceuticals is part of the large and happening Medical – Drugs industry (top 18%) that deals in drug development for therapeutic use in neuroscience, cardiovascular, rare disease immunology and oncology segments.
So on the one hand, growing demand and a faster drug approval process eliminating outdated and cumbersome steps are positives. On the other, increasing government pressure to lower prices, growing competition from new players as well as generics and biosimilars are negatives.
The company’s focus is on RNA-targeted drug discovery and development for severe and rare diseases, which is one of the more attractive segments.
The Zacks #2 ranked company beat the December quarter earnings estimate by 6,150.0% and recorded a 4-quarter surprise history of 1,542.0%. While the current quarter and fiscal 2019 earnings estimates are moving around quite a bit, its fiscal 2020 estimate is up 254.5% in the last 60 days.
Moreover, the shares are trading at 83.9% of their 52-week high, indicating that some upside potential exists. The relative price change is 32.84.
Apache Corporation APA
Apache Corporation is an oil & gas exploration and production company, so it isn’t part of an attractive industry like the others. But the company produces not just crude but also natural gas and NLG, which is in increasing demand today.
Moreover, it has production interests at key locations across the world including the Gulf of Mexico, the Anadarko Basin, the Permian Basin, the Gulf Coast, the Western Sedimentary Basin of Canada, offshore Western Australia, Egypt, Poland and China.
The Zacks #2 ranked company beat the December quarter earnings estimate by 24.0% and recorded a 4-quarter surprise history of 34.1%. The company’s 2019 and 2020 earnings estimates are up 7.7% and 5.5%, respectively.
Moreover, the shares are trading at 73.6% of their 52-week high, indicating upside potential. The relative price change is 20.1.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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