Several companies are scheduled to report earnings in the upcoming week, including some potential standouts. The earnings season is gaining momentum, with 22% of S&P 500 members anticipated to release their quarterly results next week. Thus far, most of the companies that have reported third-quarter earnings have surpassed earnings and revenue expectations, according to FactSet data.
In this environment, CNBC Pro analyzed Bespoke Investment Group data to identify companies reporting next week that frequently surprise investors positively and demonstrate strong post-earnings performances. These companies have exceeded analysts’ earnings per share estimates 70% of the time and have seen stock prices rise by 2% or more on earnings day.
ServiceNow is highlighted as making the most significant post-earnings gain on the list, with an average increase of approximately 3.3%. The enterprise software company also has a robust historical earnings performance, surpassing analysts’ earnings per share estimates 90% of the time. Michael Turrin, an analyst at Wells Fargo, is optimistic about ServiceNow, recently reaffirming his overweight rating on the stock and raising his price target to $1,025 per share from $935. This adjustment indicates a potential upside of over 11.5% for the stock, which has already increased by 30.3% this year. Turrin emphasized ServiceNow’s strong platform, balanced growth profile, and proven management team in an October 6 note to clients. He also described the company’s Xanadu product release as a “major step forward” in advancing its artificial intelligence strategy. On Monday, ServiceNow announced an investment of $1.5 billion in the U.K. over the next five years to expand its U.K. business, driven by increased demand for data center infrastructure and AI.
Monolithic Power, a power circuits manufacturer, has an impressive earnings beat rate of 88%. Its shares have risen by more than 48.5% this year, outperforming the broader market, and the stock typically moves around 2.6% on earnings day, according to Bespoke. Oppenheimer analyst Rick Schafer included Monolithic Power among his top semiconductor picks, noting its potential to benefit from AI-related growth. He expects companies exposed to AI to provide optimistic results and outlooks following a challenging year in 2023.
Impinj, another company on the list, has exceeded earnings expectations 88% of the time, with its stock gaining an average of 3.2% post-report. Specializing in radio-frequency identification devices, Impinj has seen remarkable growth this year, with a year-to-date increase of approximately 160.3%. However, analysts surveyed by FactSet suggest the stock might face a decline, as the consensus price target indicates a potential downside of about 13.6%. Nonetheless, the consensus among analysts is to maintain a buy rating on the stock.
