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Earnings: 3 Stocks to Watch This Month

By Daniel Sparks - Updated Oct 2, 2019 at 9:22AM

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These three growth stocks will be worth watching when they report their third-quarter results.

Primetime for earnings season is just a few weeks away. While many companies will be reporting earnings this month, three worth putting on your calendar are streaming-TV company Netflix (NFLX -3.22%), surgical robot maker Intuitive Surgical (ISRG -1.78%), and robotic vacuum cleaner company iRobot (IRBT -8.74%).

Ahead of their third-quarter results, expectations for all three of these growth stocks are high. Can they deliver?

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Image source: Getty Images.

Netflix

Netflix is the first of these three companies to report earnings. The streaming-TV giant is scheduled to report its third-quarter results on Oct. 16. 

As usual, one of the main items to watch when Netflix reports earnings is its net subscriber additions. This figure will be watched particularly closely this quarter, as the company missed its own guidance on the metric in Q2. Despite this miss, management had big expectations for Q3. With strong subscriber growth in the first two weeks of the quarter on the heels of the buzz for the release of Stranger Things season three, management guided for 7 million new subscribers in Q3. This compares to 2.7 million net subscriber additions in Q2 and 5.45 million additions in the second quarter of 2018. 

Intuitive Surgical

Intuitive Surgical, maker of the da Vinci surgical system, reports its third-quarter results on the following day: Oct. 17. 

The company has seen impressive momentum recently. In its second quarter, Intuitive Surgical shipped 273 da Vinci systems, up 24% year over year. Revenue and non-GAAP (adjusted) earnings per share for the period increased 21% and 18% year over year, respectively. 

A key metric to watch when Intuitive Surgical reports earnings will be its growth in procedures.

Procedure growth bodes well for the demand for the company's systems, instruments and accessories, and services. In the company's second-quarter earnings call, management lifted its outlook for 2019 procedure growth from guidance for 15% to 17% growth to 16% to 17% growth. In Q2, procedures increased 17% year over year.

iRobot

Later in the month, investors will get to check in on iRobot's latest quarterly results.

Shares have been slammed recently, falling from levels above $120 this spring to under $60. Concerns have mounted about the impact of tariffs as a result of the U.S.-China trade war. Indeed, iRobot reduced its full-year guidance earlier this year because of these concerns. Management guided for full-year revenue of between $1.2 billion and $1.25 billion, translating to 10% to 14% year-over-year growth.

Investors should look for updates on sales trends of the company's recent product launches: the Roomba s9 vacuum and the Braava jet m6 mop. The two products were launched during Q2, so they were available during the entire third quarter.

iRobot reports its third-quarter results on Oct. 22. 

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$172.62 (-3.22%) $-5.74
Intuitive Surgical, Inc. Stock Quote
Intuitive Surgical, Inc.
ISRG
$198.99 (-1.78%) $-3.60
iRobot Stock Quote
iRobot
IRBT
$36.02 (-8.74%) $-3.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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