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Earnings: 2 Hot Stocks to Watch This Week

By Daniel Sparks – Updated Aug 6, 2019 at 7:07AM

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Both of these companies have seen their stocks soar this year. Can they keep impressing investors?

As an intensifying trade war between the U.S. and China is grabbing headlines this week, earnings season continues. The next few days are packed with reports from companies across many industries. But two hot stocks, in particular, will be interesting to watch.

Investors will be looking for news company The New York Times (NYT 0.03%) to continue demonstrating impressive momentum in its digital subscriptions and for streaming-TV platform Roku (ROKU -0.52%) to maintain its torrid pace of growth. With these companies' shares up 57% and 227% year to date, respectively, you can bet investors will be giving their latest updates a closer look.

Here's a preview of some key items to watch when both companies report their second-quarter results this week.

A newspaper on a desk, next to a coffee cup and a tablet

Image source: Getty Images.

The New York Times

With the company scheduled to report second-quarter results before market open on Wednesday, Aug. 7, investors will be hoping The New York Times' growing digital business can continue driving meaningful revenue growth for the company, as has been the case in recent quarters. This is why investors should turn their attention to the company's revenue growth rates for digital subscriptions and digital advertising when its second-quarter results are released.

In Q1, The New York Times added 223,000 net new digital subscriptions, driving a 15.1% year-over-year increase in digital subscription revenue to $109.9 million. For the company's second quarter, management said it expected its year-over-year growth rate for its digital subscription revenue to be in the mid-teens once again.

First-quarter digital advertising revenue rose $18.9% year over year to $55.5 million, accounting for 44.4% of total advertising revenue during the period. In Q2, management expects its digital advertising revenue to increase by a rate in the mid-teens.

Roku

For Roku, investors will be paying attention to the company's revenue growth rate. The streaming-TV platform specialist's top line surged 51% year over year in Q1, marking an acceleration from 46% growth in the fourth quarter of 2018. Strong top-line growth has been driven by the company's soaring platform revenue, or revenue from ads, subscriptions, and transactions on its streaming-TV platform. In Q1, platform revenue rose 79% year over year to $134 million. This meant platform revenue accounted for 65% of total revenue, up from 55% of revenue in the year-ago quarter.

This strength in Roku's platform should drive more strong revenue growth in Q2. Management guided for second-quarter revenue to be between $220 million and $225 million. Analysts, on average, expect revenue to come in at the high end of this range -- at $224.2 million. This would translate to 43% year-over-year growth.

Roku also reports its second-quarter results after market close on Aug. 7.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Roku. The Motley Fool recommends The New York Times. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The New York Times Stock Quote
The New York Times
NYT
$30.05 (0.03%) $0.01
Roku Stock Quote
Roku
ROKU
$59.39 (-0.52%) $0.31

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