Technology stocks have fallen out of favor during recent sessions, with investors piling up in value stocks, which are typically companies more sensitive to economic cycles, in the wake of positive COVID-19 vaccine announcements from Pfizer (NYSE 🙂 and Moderna ( NASDAQ :).
Although Tuesday's session showed that stocks fell, as economic jitters over disappointment and an increase in virus cases weighed in, we still expect the rotation from technology stocks to value together to continue.
Even with a rotation from the high-flying tech sector, there are some stocks in the space worth holding on to, given their recent blockbuster quarterly earnings and strong potential for long-term growth. Here are three that should be on your radar:
1. Pinterest
Pinterest (NYSE 🙂 has had a tear this year, with shares of it in San Francisco, California-based social media company that's up about 240% in 2020 as users and advertisers alike flock to its platform during the COVID-19 pandemic.
The stock ended Tuesday at $ 63.35, pulling back to its all-time high of $ 68.90 touched on October 29, bringing the social media image-sharing platform to a market cap of about $ 31.5 billion.
Pinterest reported on earnings and revenues when it released its third quarter financial results on Oct. 28, benefiting from the expansion of budget allocations from advertisers trying to avoid the toxic and controversial content seen on other social media platforms , such as Facebook (NASDAQ 🙂 and Twitter (NYSE :).
CEO Ben Silbermann said during the company's earnings call that advertisers "want to have positivity in building their brands, and that also contributes to our growth."
The technology company posted earnings per share of $ 0.13, an improvement from earnings per share of $ 0.01 in the same quarter a year earlier. Sales were up 58% year-on-year to $ 442.62 million, which was much higher than the estimated $ 383.47 million.
Pinterest reported that its worldwide monthly active users (MAUs) were up 37% year-on-year to 442 million in the last quarter, with strong gains in both the US (+ 13%) and worldwide (+ 46% ). Average revenue per user (ARPU) also increased 31% domestically to $ 3.85 and 66% internationally to $ 0.21.
In the company's profit statement, Chief Financial Officer Todd Morgenfeld said:
"We are extremely pleased with the breadth of our business, driven by recovering advertiser demand and positive returns from our investments in advertiser products and international expansion."
Looking ahead, Pinterest's fourth-quarter outlook – including its main Christmas shopping season – made it clear that the company does not anticipate any slowdown in the coming months, with sales expected to rise 60% in the following quarter.
2. Snap
Snap (NYSE 🙂 thrived in 2020 as investors became increasingly optimistic about Snapchat's parent company for Snapchat during the coronavirus outbreak. social media.
Stocks of the Santa Monica, California-based company are up 140% since the start of the year, well ahead of its benchmark earnings of about 12% over the same period. The stock closed at $ 39.27 yesterday, ahead of its all-time high of $ 45.60 reached on Nov. 6. At current levels, it has a market cap of $ 57.7 billion.
The social media technology company, once thought to be dead in the water, managed to reach consensus on estimates when it released third-quarter revenues on October 20, thanks to accelerated ad spend on its platform.
Snap said the third quarter results were boosted by advertisers looking for "platforms that share their company values", an implicit reference to Facebook's handling of hateful content and misinformation, which prompted several advertisers to boycott the company over the summer.
The multimedia messaging app unexpectedly reported an adjusted profit of $ 0.01 per share, compared to expectations for a loss of $ 0.05 per share. Revenue, meanwhile, was up 52% ??from the same period a year earlier to $ 678.67 million, well ahead of forecasts for $ 557.02 million revenue.
It reported that Daily Active Users (DAUs) were up nearly 19% from the same period last year to a record high of 249 million. The company initially had estimated users in the range of 242 million to 244 million.
Snap's overall average revenue per user increased 28% year-over-year to a record $ 2.73 in the third quarter, indicating that the social media company has improved its ability to further monetize its user base.
In a promising sign, Snap said it expects revenue to grow 47% to 50% year-over-year for the fourth quarter, and DAUs are expected to rise to 257 million.
"While there is ongoing uncertainty about the macro operating environment, we are pleased with the strength of the underlying momentum we have built with our advertising partners, and remain very optimistic about the long-term outlook for our business", said Snap & # 39; s Chief Financial Officer Derek Andersen in the earnings report:
3. Roku
Roku (NASDAQ 🙂 is soaring this year thanks to the rapid growth in the number of users, which has translated into higher ad revenues for the streaming media platform provider.
Shares of Roku are up 77% this year. The stock settled at $ 237.13 last night – not far from its all-time high of $ 255.66 on Nov. 6 – giving it a market capitalization of $ 29.4 billion.
Roku reported one when it released its third-quarter results on Nov. 5, along with better-than-expected revenues, thanks to the strong growth of its ad-supported video-on-demand services.
The company said in its earnings statement:
"In the third quarter, Roku delivered excellent financial and operating results, led by strong demand for TV streaming products, strong ad growth and the expansion of content distribution partnerships."
The streaming video platform said it made $ 0.09 per share, compared to an estimated loss of $ 0.42 per share. Sales rose to $ 451.66 million, an impressive 73% from the same quarter a year earlier.
Roku & # 39; s active accounts from the third quarter were up 43% from the same period a year earlier to 46 million. Those accounts streamed 14.8 billion hours through Roku & # 39; s hub, up from 14.6 billion hours in the previous quarter.
Further supporting the optimism around the company was that average revenue per user came in with double-digit percentage gains in the third quarter, increasing 20% ??year-over-year to $ 27.
Roku said it expects revenues to increase by about 40% in the fourth quarter, although it offered no formal guidance given questions about the economic impact of COVD-19.
