Please ensure Javascript is enabled for purposes of website accessibility

Earnings: 2 Hot Stocks to Watch This Month

By Daniel Sparks - Oct 12, 2019 at 1:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Both of these tech stocks have skyrocketed 38% this year.

As earnings season ramps up, two companies worth watching will be semiconductor company Texas Instruments (TXN -2.78%) and online marketplace eBay (EBAY 0.82%). The two companies' stocks have been soaring; both have risen 38% year to date.

The two companies are scheduled to report their latest quarterly results in less than two weeks. Texas Instruments releases its quarterly update on Oct. 22 and eBay will report the following day.

Given these stocks' robust performance recently, investors will expect solid financial results. Here's what investors should watch for.

A chart showing stock prices and trading volume

Image source: Getty Images.

Texas Instruments

Texas Instruments' stock attracts many dividend investors thanks to its strong financials and lucrative business model, so it's no surprise that investors will be watching the company's revenue and earnings per share (EPS) closely. For Q3, management guided for revenue between $3.65 billion and $3.95 billion.

This revenue would be well below revenue in the year-ago period of $4.26 billion. Of course, this is expected: The company, which operates in the cyclical semiconductor industry, is in the middle of a down cycle.

Management says down cycles in its industry typically last four to five quarters. However, there are never any guarantees. The company forecasts that EPS for the period will be between $1.31 and $1.53, also below EPS of $1.58 in the year-ago period.

Investors should also look for comments from management during Texas Instruments' earnings call about its thoughts on the current cycle. Does management believe a return to revenue growth is on the horizon?


The success of eBay's platform is due to its active buyers. Therefore, this is one metric worth checking on every quarter.

In Q2, the company's base of active buyers increased 4% year over year, to 182 million. While this was in line with year-over-year growth in the key metric in Q1, the company saw an acceleration in the sequential growth of its active buyers. eBay added 2 million active buyers sequentially in Q2. This compares to 1 million sequential additions in Q1. In Q3, investors should look for growth in active buyers to be in line with the 4% year-over-year growth it has seen in recent quarters.

Further, investors should look for more progress in the company's managed payments -- a service that helps sellers manage their payment options. The program has seen impressive adoption since its launch in the fall of 2018.

Management noted in its second-quarter earnings call that it's seeing accelerated adoption of the service, with $636 million in payments already processed and over 6,000 participating sellers. "Managed payments continues to exceed expectations," said eBay CEO Devin Wenig in the company's second-quarter earnings release. Can the new service keep up its impressive early momentum?

Texas Instruments will report its quarterly results on Tuesday, Oct. 22, and eBay will share its latest quarterly figures on Wednesday, Oct. 23.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of Texas Instruments and has the following options: short October 2019 $37 calls on eBay and long January 2021 $18 calls on eBay. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Texas Instruments Incorporated Stock Quote
Texas Instruments Incorporated
$177.71 (-2.78%) $-5.09
eBay Inc. Stock Quote
eBay Inc.
$48.00 (0.82%) $0.39

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.