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5 Spectacular Earnings Charts

Earnings season picks up steam this week as over 300 companies are expected to report.

Among them are some of the most popular stocks on the market as well as many “old economy” stocks in industries like paints and coatings, energy, and chemicals. The transports will also join in with several railroads and airlines reporting.

Out of all the companies reporting this week, however, are five that stand out because they are earnings all-stars. Two of them have perfect 5-year earnings surprise records, even with the pandemic.

That’s incredibly impressive and tells you the skill with which management makes information available to the analysts. It really is a two-way street and it takes good communication between the company and analysts to have a great earnings surprise record.

This week, will these 5 companies be able to beat again?

And more importantly, what will guidance for 2023 look like?

5 Spectacular Earnings Charts

1.    Microsoft MSFT

Microsoft has only missed once in 5 years and it was last year, in 2022. It’s still a tremendous earnings surprise record.

Shares of Microsoft are down 19% in the last year but they are still relatively expensive, with a forward P/E of 25.

Earnings are expected to be up 3.3% in fiscal 2023 and another 14.3% in fiscal 2024.

But will Microsoft rain on the parade this week?

2.    Intuitive Surgical Inc. ISRG

Intuitive Surgical has beat 3 out of the last 4 quarters and has only missed 3 times in the last 5 years. Two of those misses were before the pandemic so it has a good post-pandemic track record.

Shares of Intuitive Surgical are down just 6.3% in the last year. Earnings are expected to be down 5% in 2022 and up 13% in 2023.

The stock isn’t cheap, however. Intuitive Surgical trades with a forward P/E of 48.

Is Intuitive Surgical’s valuation a problem with the Fed tightening?

3.    Tesla TSLA

Tesla has beat 7 quarters in a row. It’s last earnings miss was in early 2021.

Shares of Tesla have fallen 58% in the last year but are off the recent lows. Earnings are expected to be up 76% in 2022 and another 16% in 2023 but 4 estimates were cut for 2023 in the last week.

Tesla now trades with a forward P/E of 28.

Is the selling overdone in Tesla?

4.    ServiceNow, Inc. NOW

ServiceNow hasn’t missed on earnings in 5 years. That’s an impressive accomplishment during a pandemic.

Shares of ServiceNow have fallen just 13% in the last year as earnings are expected to be up 23.6% in 2022 and 22.3% in 2023.

You will not get the shares “cheap”. ServiceNow still trades with a forward P/E of 49.

Is ServiceNow worth the high valuation?

5.    Visa Inc. V

Visa has the best earnings surprise track record in the S&P 500. It hasn’t missed since it went IPO in 2008. It’s so impressive.

Shares of Visa haven’t plunged like some stocks, but it has been treading water over the last 2 years. Visa is up 11% during that time, but that’s beating the S&P 500 which is up just 4.6% during that same time.

Earnings are expected to rise 10.5% in fiscal 2023 and 14.7% in fiscal 2024. Visa trades with a forward P/E of 27.

Is Visa a deal with that earnings growth?

[In full disclosure, Tracey owns shares of MSFT in her personal portfolio.]

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