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Earnings: 3 Hot Stocks to Watch This Week

By Daniel Sparks – Nov 6, 2018 at 5:31PM

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Don't miss earnings reports for these three fast-growing businesses -- one of which will be reporting its first quarter as a public company.

While megacap tech stocks Apple and Facebook stole the show with their earnings releases last week, some smaller names in tech are poised to get some attention this week. Square (SQ 1.74%), Roku (ROKU 1.22%), and Upwork (UPWK 1.18%), in particular, are three companies worth watching.

All set to report earnings after market close on Wednesday, Nov. 7, here's a preview of some key areas for investors to watch for each of these companies.

A man using the Square Cash App

Square's Cash App. Image source: Square.

Square

Financial-technology company Square has been on a roll recently -- and investors expect more of the same. After posting its fifth quarter in a row of accelerating revenue growth in its second quarter, featuring an impressive 60% year-over-year increase in adjusted revenue, the consensus analyst estimate for the company's third-quarter top line implies a 61% year-over-year jump -- yet another acceleration.

Investors also expect further improvement in Square's profitability. On average, analysts expect Square to report adjusted earnings per share of $0.11, up from $0.07 in the year-ago quarter. In the company's second quarter of 2018, Square reported adjusted earnings per share of $0.13, up from $0.07 in the second quarter of 2017. Can the company grow its earnings meaningfully again?

Roku

Roku, too, has been impressing investors recently with accelerating growth. Shares of the TV streaming platform company surged after the company reported 57% year-over-year revenue growth for its second quarter. This was a huge jump from the 36% growth the company posted in its first quarter. 

Driving Roku's strong momentum recently has been surging growth in platform revenue, or revenue primarily from advertising and subscription revenue share on the company's streaming TV platform. Platform revenue surged in Roku's second quarter, rising 96% year over year. Can platform revenue growth accelerate again, or was Roku's second-quarter growth as good as it gets?

Upwork

Finally, there's Upwork -- a company some investors may have not heard of yet because it didn't go public until October of this year. The company operates an online marketplace enabling businesses to find and work with freelancers.

Upwork's gross services volume (GSV), or the total amount that clients spend on Upwork's platform, has been growing rapidly. GSV in 2017 increased 20% over 2016 -- and this growth rate accelerated for the first six months of 2018, with GSV rising 30% compared to the same period in 2017. 

Because this will be Upwork's first quarterly update as a publicly traded company, there's a lot of uncertainty about what it will report. However, given the company's recent acceleration in GSV, investors will likely be looking for year-over-year growth in GSV of at least 30% for the period.

Square, Roku, and Upwork will all post their third-quarter financial results after market close on Wednesday.

Daniel Sparks owns shares of Apple and Square. The Motley Fool owns shares of and recommends Apple, Facebook, and Square. The Motley Fool has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, short November 2018 $155 calls on Facebook, long November 2018 $135 puts on Facebook, and short January 2019 $80 calls on Square. The Motley Fool recommends Upwork. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Block, Inc. Stock Quote
Block, Inc.
SQ
$55.08 (1.74%) $0.94
Roku Stock Quote
Roku
ROKU
$58.89 (1.22%) $0.71
Upwork Inc. Stock Quote
Upwork Inc.
UPWK
$13.73 (1.18%) $0.16

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