5 Stocks To Watch This Week 10/26/14

We’ve got a huge week ahead for social media stocks. Over the next 5 days we will be getting earnings releases from Twitter (TWTR), Facebook (FB), and LinkedIn (LNKD). Other highly anticipated reports will be coming from Hepatitis C drugmaker Gilead Sciences (GILD) and travel site Expedia (EXPE).

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Monday

Twitter kicks off the week for social media earnings on Monday. After struggling for awhile to meet analyst expectations on monthly active user (MAU) growth, Twitter finally put up a satisfactory quarter this summer. With 271 million MAUs at its back Twitter has been focusing on product improvements to increase the amount of time users spend on its platform, increasing the value of its advertisements. Most notably this quarter Twitter launched Audio Cards, a feature which enables music and podcasts to be played directly on Twitter via Soundcloud. Twitter has a great track record of beating the Street’s EPS consensus and the Estimize consensus believes that pattern will hold on Monday.

Tuesday

Just as Twitter was boosted by mobile engagement last quarter, Facebook posted a monstrous quarter. In July Facebook reported earnings of 42 cents per share while Wall Street was estimating 33 cents and the Estimize community forecast 36 cents. For many investors last quarter was a watershed moment where Facebook finally shed the poor reputation it acquired from its disastrous IPO and grabbed the world’s attention with its massive profitability. This week analysts on Estimize are predicting Facebook will beat the Street by 5 cents per share on the bottom line and $45 million on revenue.

Gilead Sciences is also scheduled to release earnings on Tuesday. Last quarter Gilead posted one of the largest beats against the Estimize consensus ever recorded by earning $2.36 per share while Estimize was at $1.94. For comparison the Wall Street consensus was just $1.80. Gilead’s earnings spike was driven by its new Hepatitis C drug, Sovaldi. On October 10 Gilead won approval to sell a new Hepatitis C drug, Harvoni. Harvoni did not go on sale during Gilead’s 3rd quarter, but investors will look for management to provide commentary on the new drug’s highly anticipated launch during the conference call.

Thursday

LinkedIn reports Thursday after the close. LinkedIn has a great record of beating the Wall Street consensus. Thursday the Estimize the community expects the social network for professionals to maintain its streak and top the Wall Street consensus by 4 cents (8.5%) per share. Analysts on Estimize also forecast that LinkedIn will beat the Street’s revenue consensus by $7 million (1.2%), a difference of lower relative magnitude. Over the past 2 years the Estimize consensus has been more accurate than Wall Street every quarter on LinkedIn and we are seeing a fairly wide differential again this period. Keep a close eye on the Estimize consensus going into the report on Thursday.

 

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Expedia is also set to report on Thursday. Throughout the quarter Wall Street has brought its earnings consensus down for the travel company from $1.80 to $1.75. The Estimize consensus climbed slightly throughout the period settling at $1.80. Both groups have similar revenue expectations, but the Estimize community expects Expedia to report 5 cents more in profit per share. Expedia has been a hot stock this year increasing in price from roughly $69 to $81.50. On Thursday Expedia will need to beat the Street by a nickel per share to match investors’ expectations.

Disclosure: There can be no assurance that the information we considered is accurate or complete, nor can there be any assurance that our assumptions are correct.

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