Here’s what to watch when earnings season rolls on next week with three key reports that you can move the whole sector of the market. Whether it is good or bad news remains to be seen.
In the end, it was a good season earnings so far. Between results and leadership, it seems almost sure that corporate cash flow is growing faster than it has since 2011. At the same time, Heading 3% return in USD spooked some investors. As a result, the S&P 500 index in the main there where it was three weeks ago.
With a long-term point of view, I still believe that is a buying opportunity. History shows that stocks can rise even with a yield above 3% or even 4%. And the type of revenue growth is generated at the time of stock usually leads to a rally.
But when the rally starts, the main question remains. And these three reports can go a long way toward answering it. The tech giant, which brought down the whole sector, amid concerns that growth will get a chance to strengthen their bull case. One of the most controversial stocks in the market to try and prove that his ship was saved. And classic high-multiple growth stocks will show how much investors are willing to pay for quality.
Next week will be big for the market as a whole, as these three reports, will likely color how investors react. Here’s what to watch for:
Watch: important (shop)
Source: important via Flickr
Income statement date: may 1 before market open
For the most part, investors seem to agree that an important (NYSE Ticker:shop) has a valuable business. The question boils down to, that is.
To be sure, the seller Andrew left of citron research has criticized the company. But even his case is to carry a flow in the range of 5-6x revenues. Regardless of the accuracy of claims citron on customer churn and partner practice, important has a real opportunity to service small businesses. And in an era when consumers increasingly prefer to “small” to “large”, that creates attractive multi-year growth bands.
It also creates the opportunity for shopify in the report on Tuesday morning. The first left at the Board in October sent the stock tumbling store from $120 to $90. But to start at the beginning of December, the campaign will run for approximately 70% higher in barely three months, before left again and took aim.
From the street all the same story — the average target price of $145 implies 17% potential growth from strong first quarter could lead the story again. In the 1st quarter beat can calm the fears of investors, and turn your attention to investment opportunities platform shopify But this scenario requires both strong earnings, which may. It also requires the market is willing to pay more than the company of 10x and 200X earnings for this opportunity.
This last aspect, that this market can be tricky. If investors are ready to jump, but that bodes well for other high-flyers in space, as the area of the ink (USA:KV) and growth stocks in all directions.
What to watch: Apple (aapl stock)
Source: Yuanbin Du Via Flickr
Income statement date: may 1 after the market closes
Financial report 2nd quarter from Apple. (Indexshares aapl) is just huge – and not just for Apple. Shares plunged 9% in just the last eight trading sessions, as worries about iPhone sales x continue to grow. These questions bled into other sectors – in particular, the chip space. In the Philadelphia semiconductor Index (known as ‘SOX’) fell more than 7% during this period.
Apple has the chance to stop the bleeding on Tuesday Afternoon – but I’m not rushing to the company just yet. Analysts have explicitly included the story here. Estimates continue to come down with Bernstein to cut the forecast for Friday. One of the analysts this week wrote that the street is in “full panic mode“, since the circuit check the power supply show weak demand.
Even if the numbers beat Apple, it may not be enough to change that feeling. The old bear case for aapl was founded on the idea that smartphone sales are on peak. As replacement cycles lengthen and shoddy products improve iPhone sales are slow, and in the end, growth will be negative.
Moreover, some analysts and investors believe that the peak has been reached. And a ban on mass quarter, Apple probably can’t change his mind on Tuesday. Still beat on Tuesday at least finish the last correction and stabilization as sharply and stocks of many suppliers. And considering Apple is still a huge market capitalization of about $ 900 billion, a rebound in Apple shares can move the broad indexes (in particular, price-weighted DOW) on Wednesday.
What to watch: Tesla (TSLA)
Source: Shutterstock From
Income statement date: may 2 after the market closes
Quick-and-dirty method of measurement in the statement of income, as a rule, first see if the number of quarter beat analysts ‘ forecasts for revenue and earnings per share. For Tesla Inc (Nasdaq:TSLA,) on Wednesday, sales and profits are going to receive limited attention from investors, in the best case.
The only figures which, most likely, what really matters is the company’s cash burn during the quarter and liquidity at the end of the 1st quarter. Analysts, investors and even rating Agency Moody’s believe that Tesla will increase capital this year. CEO Elon Musk says the opposite. The figures, published on Wednesday, after lunch would be better if the skeptics are right.
These two figures in the side, the shares of Tesla on Thursday, will likely go down to the company’s post-earnings conference call. Presentations about the model 3 production, musk will have a chance to convince the street – and the market that the company is moving in the right direction.
This is undoubtedly the biggest quarter for Tesla – and it leads to a very real risk of a significant decline in tsla stock. I recommended TSLA in early 2017, ahead of its big run — but it’s hard to have the same optimism at the moment. The schedule does not look very healthy, with the early April rally, based on the best production and fading already. Investors are tired of missed targets and broken promises. Analyst price targets came gradually decreasing, and will continue to do so, if Q1 is disappointing at all.
Tesla just didn’t have much room for error in this report. If the Musk will be able to work your magic and convince the market that it saved the ship, there is a simple way to $300 and beyond. But given all the difficulties and all the news lately, it seems, is a big question. If investors interpret the report in Q1, means that Tesla will issue more shares and that model 3 the targets will be missed, the decline of TSLA will accelerate.
Hilary Kramer editor, GameChangers, breakout stocks, high octane trader, absolute capital return and cost on. She is experienced in investment and market strategist with more than 25 years of experience in portfolio management, market analysis, shares, trade and risk management. She has extensive experience in global financial management, asset allocation, investment banking and direct investment businesses, and is regularly called on to provide its analysis on Bloomberg, CNBC, Fox Business network and other media.