Following quarterly updates last week from Netflix, PayPal, and more, earnings season continues to ramp up. Three hot stocks worth watching this week are cleaning robot company iRobot (NASDAQ:IRBT), social network Twitter (NYSE:TWTR), and e-commerce and cloud-computing giant Amazon (NASDAQ:AMZN).
All three of these companies will be held to high standards when they release their earnings reports. Each of these companies' stocks has significantly outperformed the market over the past year, with shares of iRobot, Twitter, and Amazon rising 18%, 62%, and 81% over the past 12 months, respectively. Can these three companies deliver the strong growth investors are looking for?
Scheduled to report its financial results on Tuesday after market close, iRobot is the first of these three companies to report earnings this week. The consumer robot company set the bar high in its second quarter, when it crushed analyst estimates with revenue and earnings per share of $226 million and $0.37, respectively -- above consensus analyst estimates for revenue and EPS of $220 million and $0.18. Revenue and EPS were up 24% and 37% year over year.
Investors will be looking for more signs of strong momentum in the company's third quarter. Reporting growth across all of its major geographic regions in Q2, including double-digit year-over-year growth in iRobot's important domestic market, the company has strong tailwinds at its back. Investors should look for third-quarter year-over-year revenue growth of around 20%.
Though Twitter kept up its recent trend of reporting better-than-expected revenue in its second quarter, the company fell short of expectations on its key monthly active user metric. Monthly active users increased 9 million compared to the year-ago quarter, but they were down 1 million sequentially.
While investors should expect more strong revenue growth from Twitter in Q2 -- somewhere in the ballpark of about 20% year over year -- the company's user metrics are bound to receive some extra scrutiny. For Twitter's monthly active users, investors should expect another sequential decline, as management warned the metric could fall again in Q3 as the company continues to prioritize the health of its platform by removing bad accounts.
With Twitter's monthly active users at 335 million in Q2, it wouldn't be surprising to see the metric fall by about 1 to 2 million sequentially.
Twitter is scheduled to report its quarterly results on Oct. 25 before market open.
Amazon reported strong revenue growth and a massive increase in earnings per share when it shared its second-quarter results this summer. Revenue jumped 39% year over year to $52.9 billion, and earnings per share soared from $0.40 in the year-ago quarter to $5.07 in the second quarter of 2018.
For Amazon's third quarter, management expects sales growth to decelerate. The company guided for revenue to rise 23% to 31% year over year to between $54 billion and $57.5 billion. But investors should expect more monstrous improvement in Amazon's earnings per share, as management guided for its third-quarter operating income to rise from $347 million in the year-ago quarter to between $1.4 billion and $2.4 billion in Q3.
Amazon reports its third-quarter results on Oct. 25 after market close.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, iRobot, Netflix, PayPal Holdings, and Twitter. The Motley Fool has the following options: short January 2019 $82 calls on PayPal Holdings. The Motley Fool has a disclosure policy.