The U.S. Tech sector earnings season shifts into high gear this week.
While most of the focus was on the mega-cap names that reported yesterday (Tuesday), including (NASDAQ:), (NASDAQ:), and Google-parent (NASDAQ:), the same attention is almost certain to be paid to both (NASDAQ:), which reports today (Wednesday) and Amazon (NASDAQ:), which releases results on Thursday, as both are anticipated to beat earnings estimates in a big way.
That said, there are several other fast-growing tech sector stocks set to enjoy explosive earnings and revenue growth thanks to surging demand for their innovative products.
Here are three names that will be reporting next week that are well worth looking at.
1. Roku
- Earnings Date: Wednesday, Aug. 4
- EPS Growth Estimate: +134.3% YoY
- Revenue Growth Estimate: +73.8% YoY
- Year-To-Date Performance: +38.3%
- Market Cap: $60.8 Billion
Roku (NASDAQ:) has seen its shares significantly outperform the broader market this year, as the fast-growing streaming video platform continues to benefit from broad strength in its core advertising revenue business.
ROKU stock—which is up 38.3% year-to-date and 194.5% in the last 12 months—rallied to a new record high of $490.42 on Tuesday, before closing the session at $459.37. At current levels, the San Jose, California-based streaming video pioneer has a market cap of $60.8 billion.
Roku, which reported a surprise profit along with better-than-expected when it released first quarter financial results in early May, is projected to report second quarter earnings after the U.S. market closes on Wednesday, Aug. 4.
The high-flying streaming media platform provider has either matched or beaten Wall Street estimates for 15 consecutive quarters, thanks to its rapid user growth, which has translated into higher advertising revenue.
Consensus expectations call for Q2 earnings per share (EPS) of $0.12, substantially improving from a loss per share of $0.35 in the year-ago period. Revenue is forecast to jump 74% year-over-year to $618.8 million, reflecting strong growth in advertising and the expansion of content distribution partnerships.
As such, investors will focus on the company’s thriving platform business—which includes advertising—to see if it can maintain its torrid pace of growth. Roku’s platform sales surged 101% to a record $466.5 million in the first quarter.
Traders will also pay close attention to Roku’s update regarding its active user accounts as well as average revenue per user (ARPU)—two key metrics for the streaming company. Roku’s active accounts as of the first quarter rose 35% from the year-ago period to 53.6 million, while ARPU clocked in with a double-digit percentage gain, increasing 32% year-over-year to a record-high of $32.14.
Looking ahead, market players will concentrate on comments from Roku’s management regarding the outlook for the current quarter and beyond, as the current operating environment has created a perfect backdrop for the streaming media platform to thrive.
2. Cloudflare
- Earnings Date: Thursday, Aug. 5
- EPS Growth Estimate: ~0.0% YoY
- Revenue Growth Estimate: +46.5% YoY
- Year-To-Date Performance: +51.9%
- Market Cap: $36.2 Billion
Cloudflare (NYSE:), which provides web security and infrastructure services, has been one of the best-performing names in the fast-growing cloud and edge computing sector.
The content delivery network and web security firm—which has seen shares climb 51.9% year-to-date and 209% in the past 12 months—has benefitted from mounting demand for its cloud-based networking and cybersecurity services.
NET stock, which reached an all-time high of $117.40 on July 23, ended at $115.47 last night, earning the San Francisco, California-based provider of cloud-based networking and cybersecurity services a valuation of $36.2 billion.
Cloudflare shattered sales records for the and provided upbeat guidance. It is projected to report second quarter financial results on Thursday, Aug. 5 after the close.
Consensus estimates call for the cloud networking and security solution provider to post a loss of $0.03 per share, unchanged from the year-ago period. Revenue is expected to jump almost 47% year-over-over to $146.1 million, reflecting robust demand for its web security, content delivery, and enterprise networking services and solutions.
Beyond the top-and-bottom line numbers, investors will keep an eye on Cloudflare’s customer count. The network security firm said it had a total of 4.1 million customers as of the end of the first quarter, of which nearly 120,000 are paying customers. Even more impressive, large customers that spend at least $100,000 annually jumped 70% year-over-year to 945 in Q1.
Market players will also focus on the cybersecurity technology company’s outlook for the rest of the year and beyond. Cloudflare previously projected a full-year fiscal 2021 loss per share in a range of $0.10 to $0.11 on revenue of $612 million to $616 million.
3. DraftKings
- Earnings Date: Friday, Aug. 6
- EPS Growth Estimate: +3.6% YoY
- Revenue Growth Estimate: +220.5% YoY
- Year-To-Date Performance: +4.7%
- Market Cap: $19.7 Billion
DraftKings (NASDAQ:)—widely considered the leader in the online sports gambling industry—has seen its shares underperform the broader market this year as Americans headed back to brick-and-mortar casinos in greater numbers amid the economy reopening.
Shares of the Boston, Massachusetts-based sportsbook operator, which went public through a special purpose acquisition company (SPAC) in April of last year, are up less than 5% so far this year, compared to the ‘s 17.2% gain over the same timeframe.
DKNG stock settled at $48.77 yesterday, more than 34% below its record high of $74.32 touched on Mar. 22. At current levels, DraftKings has a valuation of $19.7 billion, making it the most valuable company in the sports-betting industry.
The Company, which reported a smaller-than-expected loss and booming when it released first quarter results in early May, is slated to next report earnings ahead of the opening bell on Friday, Aug. 6.
Consensus calls for a loss of $0.53 per share for the second quarter, improving from a loss of $0.55 per share in the year-ago period. Revenue is forecast to soar 220.5% from the same period a year earlier to $240.4 million, as Americans flocked to its sports-betting platform after more states legalized online sports gambling.
As such, investors will focus on DraftKing’s average monthly unique paying customers to get a better indication of how well its key business performed. The important metric jumped 108% year-over-year in Q1 to 1.5 million, while average revenue per monthly unique payer rose 49% to $61.
Market participants will also scrutinize DraftKing’s update regarding its outlook for the rest of 2021 as the sports-betting company looks set to continue to deliver on its key priorities, which include entering new states, acquiring and retaining customers, and investing in product and technology to create new offerings.