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3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - Feb 13, 2021 at 12:54PM

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Roku is one of several hot stocks set to announce earnings results over the next few trading days.

Stocks rose last week, as both the S&P 500 (^GSPC 3.06%) and the Dow Jones Industrial Average (^DJI 2.68%) gained about 1%. The indexes are both in slightly positive territory so far in 2021 after having rallied last year.

Fourth-quarter earnings season continues in the week ahead, with several widely followed stocks on deck to post their results. Let's look at the metrics that could send shares of Walmart (WMT 0.08%), Boston Beer (SAM 3.43%), and Roku (ROKU 2.85%) moving over the next few trading days.

A man watches TV while using a laptop.

Image source: Getty Images.

Walmart's record holiday

Walmart should report some eye-popping metrics in its Thursday quarterly announcement that covers the peak holiday shopping period through late December. Recent reports from peers like Target, Costco Wholesale, and have investors feeling optimistic that sales growth held up compared to Walmart's third-quarter report. Each of these retailing giants enjoyed surprisingly strong traffic and spending in late 2020.

Walmart's last announcement contained some weak spots that investors are hoping will improve this time around. In-store traffic was sharply negative in the U.S. segment, for example, and growth slowed to 6% from 9% in the fiscal second quarter.

Wall Street is just as interested in the chain's outlook for 2021. Major risks around the pandemic and economic growth might keep CEO Doug McMillon and his team cautious about their forecasts. But shareholders are still likely to see strong sales and rising capital returns from this Dividend Aristocrat.

Roku's advertising sales

Expectations could hardly be higher for Roku's fourth-quarter earnings report on Thursday. Its last announcement was a blockbuster, with revenue spiking 73% on what management called "robust demand for TV streaming products." That positive industry environment helped lift key metrics including engagement, membership, and average revenue per user.

We know from Netflix's late January report that people continued to consume streaming content at a robust pace in late 2020. Roku's advertising-based model isn't as stable as that subscription service, but the approach has its pluses, including more immediate revenue streams. Investors will get updates on advertisers' engagement this week, and shareholders will also be listening for updates on Roku's big-picture plans for 2021 in Thursday's announcement.

Boston Beer's profit margin

Boston Beer sells dozens of alcoholic beverage brands, but investors will be focused mainly on just one in Wednesday's announcement: Truly hard seltzer. Demand for that franchise has been so high for so long, Boston Beer has had to push production out to third-party brewers in recent months. But it still managed to achieve industry-leading growth through most of 2020.

This week's report should extend that momentum to the close of the year, with depletions (a measure of sales to consumers) likely jumping about 40% in Q4 and for the full 2020. We'll learn whether new competitors from Constellation Brands and others slowed Truly's market share growth this week.

SAM Gross Profit Margin Chart

SAM Gross Profit Margin data by YCharts

Investors are also keen to hear about Boston Beer's progress at fixing its supply and manufacturing bottlenecks that pressured earnings in 2020. Solving those problems would mean that gross profit margin can finally start expanding again in 2021 after dropping in each of the past two years. 

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Stocks Mentioned

Roku Stock Quote
$98.77 (2.85%) $2.74
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$31,500.68 (2.68%) $823.32
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,911.74 (3.06%) $116.01
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$123.72 (0.08%) $0.10
The Boston Beer Company, Inc. Stock Quote
The Boston Beer Company, Inc.
$341.29 (3.43%) $11.31

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

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