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Internet Stock Q3 Earnings List for Oct 29: SHOP, PAYC & More

Zacks Equity Research

Technology stocks are anticipated to display a lackluster performance this earnings season, primarily owing to softness in the semiconductor space. However, an uptick in the Internet stocks is likely to have offered a relief.

A number of notable Internet-based companies have already reported quarterly releases. F5 Networks FFIV, which provides products and services to manage Internet traffic worldwide, reported fourth-quarter fiscal 2019 results wherein both earnings and revenues beat estimates.

Furthermore, PayPal's PYPL third-quarter results surpassed estimates, reflecting an uptrend in net new active accounts, strengthening customer engagement on its platform and providing a portfolio boost.

Meanwhile, although Twitter TWTR missed estimates in the third quarter, the company’s initiatives to add features and focus on effectively tackling abuse issues helped it expand monetized user base.

Factors to Impact Internet Stocks’ Q3 Earnings

The business prospects of Internet companies are boosted by their capabilities to deliver innovative solutions for addressing the evolving consumer preference, which is driven by the need for convenience and easy accessibility. This trend has most likely continued in the third quarter.

Improving Internet speed and penetration, rapid adoption of 4G Volte technology and accelerated deployment of 5G technology are key drivers, which might get reflected in the industry players' quarterly numbers.

Growth in digital advertising, fast uptake of online payment methods, cloud computing and cloud-based gaming as well as expanding online delivery modes are some major catalysts for Internet stocks. All these are expected to have been constant tailwinds to the stocks' performance in the quarter to be reported.

Moreover, increasing demand for cloud infrastructure monitoring, web-based application performance management, human capital management (HCM) and cyber security software are boosting growth prospects of Internet-based entities. This upside is likley to reflect on the companies' impending quarterly results.

Let’s see how the following internet stocks are placed ahead of third-quarter earnings releases on Oct 29.

Our quantitative model predicts an earnings beat for the company with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as this combination increases its chances of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Shopify SHOP third-quarter 2019 results are likely to reflect increasing adoption of merchant-friendly applications amid stiff competition and higher spending.

However, this Zacks Rank #3 stock is unlikely to deliver a positive earnings surprise because it has an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the Zacks Consensus Estimate for earnings has been stable over the past 30 days at 11 cents. (Read more: Shopify to Report Q3 Earnings: What's in the Offing?)

Shopify Inc. Price and EPS Surprise

Shopify Inc. Price and EPS Surprise

Shopify Inc. price-eps-surprise | Shopify Inc. Quote

Paycom’s PAYC third-quarter results are likely to reflect new business wins for human capital management (HCM) solutions, and improvement in sales productivity.

However, this Zacks #3 Ranked player is unlikely to beat on earnings because it has an Earnings ESP of 0.00%.

Notably, the Zacks Consensus Estimate for earnings has been constant over the past 30 days at 69 cents. (Read more: Paycom to Post Q3 Earnings: What's in the Cards?)

Paycom Software, Inc. Price and EPS Surprise

Paycom Software, Inc. Price and EPS Surprise

Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote

Zendesk’s ZEN third-quarter results are likely to have benefited from strong demand for its products across both small and mid-size businesses. Moreover, the introduction of products and offerings is expected to have boosted results.

Although Zendesk has a Zacks Rank of 3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Notably, the Zacks Consensus Estimate for earnings has been steady over the past 30 days at 6 cents. (Read more: Zendesk to Report Q3 Earnings: What's in the Cards?)

Zendesk, Inc. Price and EPS Surprise

Zendesk, Inc. Price and EPS Surprise

Zendesk, Inc. price-eps-surprise | Zendesk, Inc. Quote

Grubhub GRUB third-quarter results are likely to have gained traction from the momentum in gross food sales and active diner base. Its efforts to enhance delivery network and strengthen alliance with new quality-focused restaurant partners bode well. However, a sequential decline of Daily Average Grubs in the third quarter makes us apprehensive.

Grubhub is unlikely to beat estimates because it has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).

The company’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and missed the mark twice, the average negative surprise being 3.1%. (Read more: Grubhub to Report Q3 Earnings: What's in the Cards?)

Grubhub Inc. Price and EPS Surprise

Grubhub Inc. Price and EPS Surprise

Grubhub Inc. price-eps-surprise | Grubhub Inc. Quote

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Shopify Inc. (SHOP) : Free Stock Analysis Report
 
Paycom Software, Inc. (PAYC) : Free Stock Analysis Report
 
F5 Networks, Inc. (FFIV) : Free Stock Analysis Report
 
Twitter, Inc. (TWTR) : Free Stock Analysis Report
 
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
 
Zendesk, Inc. (ZEN) : Free Stock Analysis Report
 
Grubhub Inc. (GRUB) : Free Stock Analysis Report
 
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