10 Serious Earnings Season Winners from the Week of August 10
Earnings season may be winding down, but there are many companies still reporting earnings. What was already a global slowdown taking place is having to deal with a U.S. and China trade war, issues around Brexit and a global interest rate picture that is looking lower and lower. Through all of this there are some serious earnings winners and earnings losers.
24/7 Wall St. has evaluated ten serious earnings season winners that saw their shares rise handily after earnings during the trading week of August 10, 2019. We have evaluated their moves and offered color around each one. These are not the only winners, and preference was given to companies within the S&P 500 and other larger companies which are well known. That said, there were some serious movers that were too big to ignore.
Here are ten earnings season winners that saw their shares rise handily from the week of August 10, 2019.
Carvana Co. (NYSE: CVNA) was trading at about $57.90 ahead of earnings on Wednesday, but its stock surged 25% to $72.47 on Thursday in the earnings reaction. And to add more gains on top of euphoria, Carvana shares rose another 7.8% to $78.10 on Friday as more net buyers came into the fray and as analysts raised their target prices. What is amazing here, particularly within that persistent theme of ‘peak auto’ that has been wrecking so many companies tied to new and used cars, is that Wall Street analysts expect Carvana to lose money in 2019 and 2020. All in all, Carvana shares rose almost 35% in the two days after earnings.
CVS Health Corporation (NYSE: CVS) has been down and out in 2019 as the sector and selling models have been under fire. That said, on August 7 CVS handily beat expectations on earnings and revenues and the company raised its guidance. along with showing strength in its Aetna unit. CVS’s pre-earnings close of $54.09 went up to $58.12 on August 7 and shares rose for the next two days to end the week at $59.29. That’s a 9.6% post-earnings gain for the week, and for what may be deemed a turnaround stock it has a 52-week high that is up at $82.15 and it is valued at less than 9 times expected 2019 earnings.
InnerWorkings, Inc. (NASDAQ: INWK), a marketing execution firm, has been cutting costs and optimizing client relationships to focus on improving its profitability. As such, it raised its EBITDA guidance for the year and it sees higher new revenue in the second half of 2019 after record contract signings and onboarding additional revenues after its recently-announced acquisition of Madden Communications. That said, the gross revenue of $284.1 million represented an increase of only 1% compared to $282.0 million in the second quarter of 2018; but that gain would have been 3% had the currency impact not been there. Its gross profit was $69.1 million, or 24.3% of gross revenue, versus $64.9 million (23.0% of gross revenue) from a year earlier. InnerWorkings closed up 58.5% at $4.50 on Friday with the 2.9 million shares trading hands being close to 15-times normal trading volume. That $4.50 share price comes with a $233 million market cap, and its 52-week range is $2.58 to $8.12.
Jacobs Engineering Group Inc. (NYSE: JEC) saw some volatility along with the markets this week, but the company’s revenues beat expectations on August 5 and the company said it is a company that will win if and when the infrastructure spending growth that needs to occur actually does occur. Jacobs saw its gross revenue rise 8% from a year ago to $3.2 billion, while its net revenue grew organically by 11.1%. After closing at $79.67 the prior week, its shares rose to $81.00 the following Monday and ended up closing out the week with a small gain on Friday at $85.90. That’s a gain of about 8%, and the Refinitiv consensus analyst target price is up at $91.14.
MercadoLibre, Inc. (NASDAQ: MELI) was trading at $613.50 on August 7, but after earnings the stock screamed higher to $688.10 on August 8 and then managed to rise another $2.00 on Friday to close out at $690.10. Its new all-time high is $698.74. This company’s $750 million investment from PayPal to help make sure MercadoLibre can become “the Amazon of Latin America” has also helped handily. That’s a gain of 12.5% after earnings this week, and MercadoLibre’s market cap is now over $39 billion. Its shares have appreciated so much that the consensus analyst target price from Refinitiv is still down around $650.
Roku, Inc. (NASDAQ: ROKU) might want to consider changing its name to Rock-You if it can keep up its pace of leading the cord-cutting revolution. Roku shares rose over 20% on Thursday alone as a narrower loss of 8-cents per share was followed by massive platform and subscriber growth. Wall Street analysts also stepped all over themselves to raise their price targets on the digital media platform provider. An additional 2.7% gain to $125.32 on Friday was versus a pre-earnings close of $100.97. That’s nearly a 25% post-earnings gain all said and done and Roku’s market capitalization is still only $14 billion.
Take-Two Interactive Software, Inc. (NASDAQ: TTWO) may have been a brief focus for “video games playing a role in inciting violence,” but its Grand Theft Auto and NBA 2K franchises just keeps delivering. Despite pressure on net earnings after expenses, Take-Two’s revenue beat consensus estimates allowed the company to raise its full-year guidance. Despite a 1.9% drop to $128.87 on Friday, this stock had dropped down to $115.38 on Monday. That’s a recovery of almost 12% from the lows and is still handily higher than the prior Friday’s close of $121.69.
TransDigm Group Incorporated (NYSE: TDG) reported its third quarter (fiscal) results on August 6, and engineered aircraft components also decided to deliver a special cash dividend of $30.00 per common share that helped energize its earnings reaction. Still, the stock had been at $461.33 ahead of earnings and rose to $524.39 after earnings — and despite a 1.1% drop on Friday it still closed out the week at $544.73. Investors love dividends, but the $30 per share payout compares to more than $80.00 in appreciation. TransDigm closed up 18% on Friday versus its pre-earnings level.
Tyson Foods, Inc. (NYSE: TSN) had already been having a strong year, but the meat and protein producer managed to close up after strong earnings even in the wake of confirming a DOJ subpoena regarding allegations of price manipulation. While it has yet to directly benefit from the China pig fever that is destroying the pig populations in China, Tyson is looking for higher meat and protein prices later on in 2019 and into 2020 as a result. Tyson Foods was at 479.76 the prior Friday, and even a small drop of 33-cents on Friday came with a closing bell price of $88.37. That’s a post-earnings gain for the week of 10.8% and the analyst community still sees Tyson rising to over $90.00.
Zoetis Inc. (NYSE: ZTS) is a medical and pharma stock, but with a focus on animal health medicines, vaccines, and diagnostic products it has none of the traditional politician attempts to beat down its drug prices. Its shares have hit record highs as pet products are lifting its revenue in its 2019 outlook after the company already beat earnings estimates. With a 0.77% gain to $125.07 on Friday for more than a $59 billion market capitalization, Zoetis saw its post earnings reaction early in the week go from $112.57 up to $121.17. That’s an 11.1% gain all in from after earnings, and that is well over $5 billion in additional market value. The Refinitiv consensus analyst price target is now $128.00 and some firms see Zoetis rising well above $130.00 ahead.
For those looking for defensive dividend paying companies that that may be immune to the trade war fallout, here are 5 picks from Wall Street.