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Why Under Armour, Akamai, and Chegg Jumped Today

Steve Symington, The Motley Fool

After a painful start to the week, with major U.S. benchmarks extending October's losses, the indexes rebounded on Tuesday as investors absorbed a bevy of corporate earnings reports.

Additionally, some individual stocks easily outpaced the broader market's gains, including Under Armour (NYSE: UA) (NYSE: UAA), Akamai (NASDAQ: AKAM), and Chegg (NYSE: CHGG). Read on to learn why these three stood out from the rest today.

Digital world map with stock market charts indicating gains overlaying it

Image source: Getty Images.

Under Armour picks up the pace

Class C shares of Under Armour soared 24.8% after the performance footwear and athletic apparel specialist announced strong Q3 results and boosted its full-year guidance. 

Under Armour's quarterly revenue grew 2.4% to $1.443 billion, while net income jumped over 40% to $75.3 million, or $0.17 per share. On an adjusted (non-GAAP) basis -- which excludes items like stock-based compensation and restructuring expenses -- Under Armour's earnings were $112 million, or $0.25 per share.

Analysts, on average, were looking for revenue of $1.41 billion and adjusted earnings of $0.13 per share.

Chairman and CEO Kevin Plank claimed the company's performance indicates the its "multi-year transformation is on track," adding:

As we work through this chapter, we are staying sharply focused on our brand by connecting even more deeply with our consumers while delivering industry-leading, innovative products and premium experiences. Coupled with increasingly greater business discipline and resulting efficiencies, we continue to gain confidence in our long-term path and ability to deliver for our consumers, customers and shareholders.

To that end, Under Armour now sees adjusted full-year earnings per share in the range of $0.19 to $0.22, up from its previous guidance for $0.14 to $0.19.

Akama distributes an impressive beat

Akamai stock gained 17% after the content distribution leader handily beat expectations in its third-quarter report. Revenue grew 7% to $670 million, helped by a 37% increase in cloud security solutions (to $169 million). On the bottom line, adjusted net income soared 43% to $157.8 million, or $0.94 per share. Most analysts were modeling earnings of $0.83 per share on revenue of $664 million. 

CEO Dr. Tom Leighton called the results "excellent," noting this marks the company's fourth straight quarter of adjusted operating margin expansion.

"We are well on our way to achieving our 30% margin goal in 2020," Leighton added, "while continuing to invest in innovation and new products to drive future growth."

Akamai's board further approved a new $1.1 billion share repurchase program, adding to the $124 million remaining on its existing authorization. The new program will start next month and remain in effect through the end of 2021.

Chegg passes with flying colors

Finally, shares of Chegg popped 14.5%. The student-centric connected learning platform delivered its second beat-and-raise performance in as many quarters, with third-quarter revenue climbing 19% year over year to $74.2 million, well above the $68 million to $69 million it expected three months ago. That translated to adjusted net income of $8.7 million, or $0.07 per share.

"We had a great Q3, driven by 37% Chegg Services revenues growth and 45% subscriber growth, year-over-year," stated co-Chairman and CEO Dan Rosensweig. "As we come out of another back to school season, the success we experienced gives us confidence to, once again, raise our guidance for the year, as well as provide a strong initial outlook for 2019."

In particular, Chegg now expects full-year 2018 revenue of $315 million to $318 million, up from its previous range of $306 million to $311 million. For 2019, it's targeting 2019 revenue of $388 million, around $8 million above Wall Street's models.

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Steve Symington owns shares of Under Armour (C Shares). The Motley Fool owns shares of and recommends Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool has a disclosure policy.