Revenues from the US technology sector begin this week with Netflix (NASDAQ 🙂 and Intel (NASDAQ 🙂 reporting their quarterly results. Notable companies such as Apple (NASDAQ :), Microsoft (NASDAQ :), Amazon.com (NASDAQ 🙂 and Facebook (NASDAQ 🙂 will also print their earnings this month.
Although most of the attention goes to those blockbuster names, three large stocks should be in focus for smart tech investors. All three have been able to accelerate profit and revenue growth in the past thanks to the robust demand for their innovative products and services. This trio is worth considering anticipating their quarterly reports:
1. Snap
EPS estimate: + 17% yoy
Turnover growth estimate: + 44% yoy
Snap (NYSE :), the parent company of the social media messaging app Snapchat, was one of the big winners of 2019, with an astonishing 196% when investors became bullish about the San Francisco-based social media company. Shares have continued where they were last year, so far increasing by 16% in 2020, far better than the benchmark's earnings so far by around 3%. The stock closed Tuesday at $ 19.00 with a market capitalization of $ 26.6 billion.
The social media company, once thought to be dead in the water, managed to do this every quarter last year. We expect this trend to continue when Snap next reports financial results after the US market closes on Tuesday, February 4.
Consensus argues for a loss of $ 0.12 per share for the fourth quarter compared to a loss of $ 0.14 per share in the period a year ago. Turnover is expected to rise 44% from the same period a year earlier to $ 561.9 million.
In addition to the numbers above and below the attention, details regarding the active users will attract attention. Market watchers see if the recent revival of active users has continued after reaching a record high of 210 million in the third quarter. The monthly active user base is just over 500 million, while Twitter (NYSE :), by comparison, has around 335 million users.
Another figure that will be further investigated: the total average revenue of Snap per user. In the third quarter, average revenue per user increased by 33%, demonstrating that the social media company is better able to monetize its user base.
2. HUYA
EPS estimate: + 47% yoy
Turnover growth estimate: + 59% yoy
HUYA (NYSE 🙂 is the largest live streaming platform in China for video games and e-sports. The Guangzhou-based technology company is often regarded as the & # 39; Twitch of China & # 39; – the live streaming platform that Amazon purchased for $ 970 million in 2014. Shares, which ended last night at $ 20.48, started a strong start to the new year, rising 14%. The company has a valuation of $ 8.95 billion.
The live streaming provider is expected to report the fourth quarter results on Tuesday, February 11. Consensus estimates that a profit of $ 0.66 per share is expected, which would indicate a YoY EPS growth rate of around 47%. Turnover rises to 59% of the $ 2.39 billion.
More importantly, investors will be monitoring the HUYA update on their average monthly active users to see if it can maintain its high growth rate. The previous earnings report showed 146.1 million monthly active users, representing an increase of 47.6% compared to 99.0 million in the third quarter of 2018. The total number of paying users of HUYA, which in the third quarter by 28 , 5% rose to 5.3 million, will also be widely viewed.
As China's largest live streaming platform for video games and e-sports, HUYA is positioned to continue to take advantage of the rise of mobile internet penetration, gaming video content and e-sports popularity in the largest video game market.
3. Square
Square (NYSE 🙂 has made a name for itself by offering companies advanced alternative payment processing methods. The offer includes financial and merchant services, a mobile payment platform and hardware such as point of sale equipment. After closing in 2019 with an annual profit of only 11.5%, the shares in San Francisco, which is managed by Twitter CEO Jack Dorsey, have already risen 9% this year. The stock amounted to $ 68.31 yesterday with a market capitalization of $ 29.3 billion.
The provider of digital payments then reports the profit after the bell on Wednesday 26 February. Consensus calls for a earnings per share of $ 0.21 for the fourth quarter, an increase of 50% over earnings of $ 0.14 per share in the period a year ago. Turnover is expected to increase by 27% from the same period to $ 591.27 million.
Perhaps even more important is the update of the mobile payment processor with regard to the growth of the gross payment volume. In the third quarter, the value of all transactions processed on the Square platform increased by 25% yoy to $ 28.2 billion.
Growth rates on Square's revenue from subscriptions and services will be a valuable figure. Revenue for the segment was $ 280 million in the third quarter, an increase of 68% yoy, driven by the rapid growth of Cash App, Square Capital and Instant Deposit services.
