It's been hard for investors to predict exactly how the stock market will move on any given day in 2023. After a huge rally in January, many stock indexes have paused in their gains, but they've also avoided giving back ground even as economic data presents an uncertain outlook. On Thursday morning, futures on the Nasdaq Composite (^IXIC -0.52%) fell back about half a percent, reflecting mixed earnings from some of the index's biggest components.
However, the news wasn't all bad across the Nasdaq, and a couple of stocks in particular gave investors just about everything they wanted to see. Read on to find out why Roku (ROKU 1.91%) and Crocs (CROX 1.47%) are building on past gains and aiming even higher for the remainder of the year and beyond.
Roku puts on a good show
Shares of Roku were up 9% in premarket trading early Thursday, adding to a 12% gain in Wednesday's regular session. The streaming television company reported fourth-quarter financial results that showed continued strains but also expressed optimism about how 2023 could go.
Roku's financials reflected the macroeconomic challenges in the current business environment. Revenue of $867 million for the quarter was up less than 1% year over year, and Roku lost $237 million, reversing a modest profit in the year-ago period. Even using adjusted pre-tax operating earnings as a guide, Roku wasn't able to keep up positive performance.
However, Roku's weakness came largely from a drop in device sales. From a platform perspective, the company remained healthy, with active accounts jumping 16% to 70 million and total streaming time rising 23% to 23.9 billion hours. Roku TV gained market share and sustained its leadership position across North America, and investors are enthusiastic about the launch of its Roku Smart Home products and their potential ability to diversify the company's revenue streams beyond connected television.
In the long run, shareholders expect Roku to benefit from the shift of advertising spending toward connected TV. Even if short-term impacts lead to further losses in the first quarter of 2023, Roku believes it's heading in the right direction.
Crocs rocks
Elsewhere, shares of Crocs rose 7% in premarket trading. The footwear stock has now tripled since the middle of 2022 and has done a spectacular job of rebounding toward the record highs it set late in 2021.
The fourth-quarter financial results Crocs announced kept the stock moving in the right direction. Revenue of $945 million soared 61% year over year, with a considerable contribution from its direct-to-consumer business both via its own retail stores and over its e-commerce channel. Despite weaker margins, adjusted earnings of $2.65 per share were 23% higher than in the same period the previous year.
Admittedly, a big portion of the revenue gains came from Crocs' acquisition of Heydude, which also put pressure on margins. However, Crocs still expects 2023 to go well, projecting revenue growth of 10% to 13% that would take sales to as much as $4 billion for the year.
Long-term investors have seen huge spikes in Crocs stock over the years, with the footwear maker going in and out of style. Yet despite the risks involved with Crocs, shareholders are focusing on the momentum that the company has generated lately, and they're hopeful that improving economic conditions could give the business more growth prospects this year and beyond.
