Fast-growing technology stocks were some of the top performers of the past year, before a general sell-off hit the group in recent weeks, pulling down the 100 largest stocks on the tech-heavy index.
]
From rising yields prompting investors to reconsider frothy valuations, to the "reopening deal" where investors dumped technical stocks, there are several negative factors currently plaguing the industry.
Despite the downturn, here are three stocks to consider ahead of their respective earnings reports in the coming days amid the continued sell-off in the sector. All three still have plenty of room to grow their respective businesses, making them solid long-term investments.
1. Cloudflare
Date of Income: Thursday, May 6
Estimated earnings per share: + 50% Y-o-Y
Estimated Sales Growth: + 43.6% yoy
Year-to-date performance: + 5.5%
Market Cap: $ 24.9 Billion
Cloudflare (NYSE :), which provides web security and infrastructure services, has seen a remarkable rise since it dropped to a bear market low of $ 15.05 during the peak of the March 2020 coronavirus-related sell-off.
At one point, the San Francisco, California-based technology firm's stock rebounded by more than 500%, thanks to strong demand for its cloud-based network and cybersecurity services.
However, after rising to a record high of $ 95.77 on February 10, the NET stock has lost momentum, falling about 16% to $ 80.19 on Tuesday. Since the beginning of the year, stocks are up 5.5%, underperforming the.
At current valuations, the cybersecurity specialist has a market cap of $ 24.9 billion.
Cloudflare, whose revenues and revenues easily exceed expectations, are expected to report first quarter financial results on Thursday, May 6, after the close.
Consensus estimates prompt the network security firm – which has exceeded or matched Wall Street expectations for five consecutive quarters – to record a loss of $ 0.02 per share, less than a loss of $ 0.04 per share in the same period a year ago.
Revenues are expected to grow nearly 44% to $ 131.0 million, reflecting growing demand for web security, content delivery, and enterprise network services and solutions.
In addition to top-and-bottom-line numbers, investors will keep an eye on Cloudflare's total paying customers, which hit a record high of 111,000 in the previous quarter.
Market players will also focus on the network security company's outlook for the remainder of the year and beyond. Cloudflare previously forecast a full-year 2021 loss in a range of $ 0.08 to $ 0.09 on revenue of $ 591 million.
2. Trade Desk
Date of Income: Monday May 10
EPS Growth Estimate: -14.4% Y-o-Y
Estimated Sales Growth: + 35% YoY
Performance since the start of the year: -16.8%
Market Cap: $ 32.5 Billion
Trade Desk (NASDAQ :), which operates a self-service software platform where customers can purchase and manage data-driven digital ad campaigns, has seen some inventory turbulence lately.
After hitting gains of a whopping 15% year-to-date through mid-February, the TTD stock – which ended yesterday at $ 666.55 – is now 31.5% below the record $ 972.30 reached on December 22.
Despite losses of nearly 17% since the start of the year, the Ventura, California-based digital ad buying specialist – with a market capitalization of $ 32.5 billion – has increased its stock by 129 %, benefiting from a growing wave of digital ad purchases.
Trade Desk, which set fourth quarter and revenue expectations on fire in early February, then reports financial results before opening the US market on Monday, May 10.
The consensus calls for earnings per share of $ 0.77 for the first quarter, down nearly 14% from earnings per share of $ 0.90 in the same period a year ago. However, revenues are expected to increase 35% from the same quarter last year to $ 216.9 billion, thanks to strong growth in Internet TV advertising revenues.
Video streaming over the Internet accounts for 25% of the total sales of the digital advertising company.
As such, investors will be eager to see if Trade Desk continues to boom in its mobile video, connected TV and audio markets, all of which posted double-digit annualized gains in the fourth quarter.
More importantly, investors hope that Trade Desk will provide guidance on the outlook for the remainder of the year, after the online ad agency had previously failed to make a prediction.
3. Palantir Technologies
Date of earnings: Tuesday May 11
EPS Growth Estimate: -47.3% Q-o-Q
Estimated Sales Growth: + 3.1% Q-o-Q
Performance since the beginning of the year: -8.1%
Market Cap: $ 40.0 Billion
After achieving nearly 91% profit in the first four weeks of 2021, Palantir Technologies (NYSE 🙂 – which provides data analysis software and services to government agencies and large corporations – has since lost momentum and has been decreased by 8%. year-to-date, amid a sell-off in high-growth technology stocks.
The PLTR stock closed yesterday's session at $ 21.64, about 52% below its all-time high of $ 45.00, which was reached in late January. At its current level, the Denver, Colorado data mining company has a market cap of $ 40 billion.
Despite recent turmoil, shares of the Peter Thiel-founded analytics software provider are still up 116% since they made their trading debut at $ 10 on September 30, thanks to growing demand for its high-tech software tools.
Palantir is scheduled to report financial results for the third time as a publicly traded company ahead of the opening bell on Tuesday, May 11. As such, it is not faced with year-over-year comparisons.
By consensus estimates, the enterprise software company – which exceeded estimates for and revenue in the two previous quarters – should have first quarter earnings per share of about $ 0.03 per share, down about 50% from earnings per share of approximately $ 0.06 in the previous quarter.
]
Sales are expected to increase 3% from the last quarter to $ 332.1 million amid increased demand for its data analysis software from government agencies around the world, such as the US Food & Drug Administration and the UK National Health Service. .
Palantir generates 56% of its total revenue from government contracts.
As such, investors will continue to focus on the growth of Palantir's public sector revenues, which posted year-over-year earnings of 85% to $ 190 million in the previous quarter.
Commercial company revenue growth, which rose only 4% to $ 132 million in the last quarter, will also be monitored as the technology company seeks to diversify its customer base.
With nearly 140 customers, Palantir aims to expand into several other sectors, such as healthcare, energy and manufacturing.
Investors will continue to pay close attention to Palantir's guidelines for the remainder of the year and beyond. The big data company said in the last quarter that it expects revenue growth of 30% for the full year 2021, slowing down from 47% revenue growth in 2020.
