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Tech Stocks' Apr 28 Earnings Roster: FB, SHOP, NOW, TYL & PTC

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·7 min read
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Technology sector is expected to have benefited from continued global digital transformation acceleration, triggered by the COVID-19 crisis, in first-quarter 2021 earnings season.

With the continuation of remote work, online learning as well as telehealth set up, the demand for cloud-computing solutions, internet services and high-compute capabilities’ semiconductors is expected to have contributed to the top line of tech companies.

This is evident from the recently reported performance of International Business Machines IBM. IBM delivered better-than-expected first quarter 2021 results and reported 1% year-over-year revenue growth driven by healthy uptake of its hybrid cloud solutions.

Further, accelerated 5G deployment, recovering automotive sector and robust PC shipments worldwide are expected to have favored the technology sector in the quarter under review.

The rapid proliferation of emerging technologies like AI, Machine Learning (“ML”), analytics, Internet of Things (“IoT”), augmented/virtual reality (AR/VR), which are bolstering the adoption of cutting-edge semiconductors, might have significantly benefited the tech companies in the quarter to be reported.

Re-imposition of shelter-in-place guidelines across several parts of the world due to another wave of infections is expected to have boosted demand for streaming services, online buying and video games. Increased user penetration on social media sites is expected to have benefited the social media companies.

Incidentally, for the first quarter of 2021, Snap SNAP added 51 million daily active users (DAU) on a year-over-year basis and 15 million, sequentially.

However, sluggish IT spending as well as weakness across small and medium-sized businesses hit hard by the pandemic are likely to have put pressure on tech companies’ performance in the first quarter.

Markedly, Intel’s data center business reported 20% decline in first-quarter 2021 revenues due to the negative impact of the pandemic on enterprise and government spending.

A Look at Upcoming Tech Stock Earnings Releases

Investors interested in the technology sector are eagerly awaiting earnings releases from players like Facebook FB, Shopify SHOP, ServiceNow NOW, Tyler Technologies TYL and PTC Inc PTC on Apr 28.

Let’s take a look into how things have been shaping up for these prominent technology companies ahead of their earnings releases.

Facebook’s first-quarter 2021 performance is likely to have gained from improving market share, driven by growing user base and continuing innovation in ad product.

However, intensifying competition from the likes of Google, Snap and Twitter for ad-dollars is a headwind. (Read More: Facebook to Report Q1 Earnings: What's in the Cards?)

Facebook, Inc. Price and EPS Surprise

Facebook, Inc. Price and EPS Surprise
Facebook, Inc. Price and EPS Surprise

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

Our proven model doesn’t conclusively predict an earnings beat for Facebook this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

The social-network giant has a Zacks Rank #3 and a negative Earnings ESP of 0.41%.

Notably, the consensus mark for first-quarter earnings is pegged at $2.36 per share, having been revised 0.4% upward in the past seven days. The figure indicates 38.1% growth from the figure reported in the year-ago quarter.

Meanwhile, momentum in online shopping triggered by the coronavirus pandemic amid e-commerce boom is likely to have contributed to Shopify’s first-quarter performance.

Shopify Inc. Price and EPS Surprise

Shopify Inc. Price and EPS Surprise
Shopify Inc. Price and EPS Surprise

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

Further, gains from roll out of latest solutions including Shopify Balance and Shop Pay Installments, which are aimed at enabling merchants to offer seamless payment options to customers, might get reflected in the to-be-reported quarter’s results.

Nonetheless, Shopify’s increasing investments on product development, fulfillment network, infrastructure and international expansion amid increasing competition in the e-commerce space is likely to have put pressure on first-quarter profitability. (Read More: Shopify to Report Q1 Earnings: What Awaits the Stock?)

Shopify has a favorable combination of a Zacks Rank #3 and an Earnings ESP of +3.96% that increases chances of a beat.

The Zacks Consensus Estimate for Shopify’s first-quarter earnings is currently pegged at 78 cents per share which indicates year over year growth of 310.53%.

ServiceNow’s first-quarter 2021 results are expected to have benefitted from continued healthy uptake of its workflows from enterprises undergoing digital transformation, globally, triggered by the pandemic.

However, re-imposition of lockdowns in several countries and weakness across industries like airlines, retail, hospitality, energy and transportation, which are highly affected by the pandemic, might have hindered business prospects for the company. (Read More: What's in Store for ServiceNow This Earnings Season?)

ServiceNow, Inc. Price and EPS Surprise

ServiceNow, Inc. Price and EPS Surprise
ServiceNow, Inc. Price and EPS Surprise

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

ServiceNow’s combination of a Zacks Rank #3 and an Earnings ESP of 0.00% makes earnings beat prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Further, the Zacks Consensus Estimate for earnings has remained stable at $1.34 per share in the past 30 days reflecting year over year growth of 27.6%.

Tyler Technologies first-quarter 2021 performance is likely to reflect strength in subscription revenues as well as gains from big-value deals in public safety and lower expenses. However, the top line is likely to have been affected by COVID-19-induced macroeconomic and business disruptions.

Tyler Technologies has a Zacks Rank #3 and an Earnings ESP of +0.00%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tyler Technologies, Inc. Price and EPS Surprise

Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. Price and EPS Surprise

Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote

The consensus mark for Tyler Technologies first-quarter earnings has been steady in the past 30 days at $1.31 per share.

PTC’s second-quarter fiscal 2021 performance is expected to have benefited from steady traction in bookings owing to the COVID-19 induced digital transformation wave in the industrial space. The acquisition (concluded in January 2021) of Arena Solutions is likely to have aided top-line growth in the about to-be-reported quarter.

However, exposure to verticals like airlines and retail that are hit hard by the ongoing pandemic, might have limited top-line growth for PTC’s Focused Solutions Group in the fiscal second quarter.

Also, PTC’s combination of a Zacks Rank #3 and an Earnings ESP of 0.00% makes surprise prediction difficult. (Read in Details: PTC Inc to Report Q2 Earnings: What's in the Cards?)

PTC Inc. Price and EPS Surprise

PTC Inc. Price and EPS Surprise
PTC Inc. Price and EPS Surprise

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

Further, the Zacks Consensus Estimate for earnings has been stable at 72 cents per share in the past 30 days.

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International Business Machines Corporation (IBM) : Free Stock Analysis Report

ServiceNow, Inc. (NOW) : Free Stock Analysis Report

Facebook, Inc. (FB) : Free Stock Analysis Report

PTC Inc. (PTC) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

Tyler Technologies, Inc. (TYL) : Free Stock Analysis Report

Snap Inc. (SNAP) : Free Stock Analysis Report

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