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3 Things to Watch in the Stock Market This Week

By Demitri Kalogeropoulos - May 1, 2021 at 8:30AM

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Roku is one of several hot stocks primed to have a volatile few trading days ahead.

Stocks were flat last week, as both the Dow Jones Industrial Average (^DJI 0.00%) and the S&P 500 (^GSPC 1.05%) held close to all time highs, up over 10% so far in 2021.

The flood of corporate earnings reports continues over the next few trading days as hundreds of companies report first-quarter results. That list includes Roku (ROKU 2.15%), Beyond Meat (BYND 7.18%), and Match (MTCH 2.58%), whose announcements we'll preview.

A man watches TV.

Image source: Getty Images.

Roku tunes in

Streaming TV specialist Roku steps up to the earnings plate on Thursday afternoon in what could be a wild week for the stock. Shares have soared since the start of the pandemic thanks to the new premium people have placed on at-home entertainment. But investors are also worried about a sharp slowdown, especially after Netflix missed subscriber estimates earlier this month.

Roku's last announcement contained some eye-popping growth and financial metrics. Streaming hours were up 55% in Q4, and the base of active accounts jumped to 51.2 million from 36.9 million. Average revenue per user jumped 24% to nearly $29.

The fiscal Q1 shouldn't be as impressive, in part because that period is usually Roku's slowest of the year. That weakness might be compounded by a shift away from TV as vaccine distribution reduces the need for social distancing. Still, look for CEO Anthony Wood and his team to discuss bold bets, including on original content, as they seek to capitalize on all the growth they've seen in the past year.

Beyond Meat sizzles

Beyond Meat stock enjoyed several rallies through the pandemic, but shares are cooling off heading into Thursday's earnings announcement. The plant-based-meat leader is firmly in growth mode, with its products finding more distribution at supermarket chains, fast-food restaurants, and big-box retailers. Production just started in China, which promises to add a significant international avenue for market share gains.

Yet sales growth hasn't impressed Wall Street in recent quarters, and the expected 17% increase this week might continue that trend. Investors aren't expecting big profits, either, as spending remains elevated.

Shareholders might look past those challenges if they see evidence of growing market share and enthusiastic uptake of new releases such as its meatball and sausage link products. That's the best way Beyond Meat can defend against surging competition in this growing consumer foods niche.

Match swipes right

Investors have high expectations heading into Match's earnings report on Wednesday. The online dating platform gave shareholders plenty to celebrate in late 2020, with revenue rising 17% in the year as both earnings and cash flow improved.

Look for more gains across these metrics to start 2021, thanks to continued success in products such as Tinder and Hinge in an era of social distancing.

Executives are targeting sales of around $2.8 billion this year, which would translate into growth in the mid- to high-teens percentage range. These gains will be supplemented by acquisitions such as Match's recent purchase of Hyperconnect.

The big question is whether the company will see a pullback in engagement as the pandemic threat ends. Usage metrics in key markets such as the U.S. over the past few weeks might provide some hints about that slowdown. But Match is still likely to maintain its optimistic long-term growth outlook despite the volatility that will come over the next few quarters.

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Stocks Mentioned

Roku Stock Quote
Roku
ROKU
$83.91 (2.15%) $1.77
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$30,775.43 (0.00%) $0.00
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,825.33 (1.05%) $39.95
Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$179.95 (2.90%) $5.08
Beyond Meat Stock Quote
Beyond Meat
BYND
$25.66 (7.18%) $1.72
Match Group, Inc. Stock Quote
Match Group, Inc.
MTCH
$71.49 (2.58%) $1.80

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

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