Which Stocks Look Ready to Pop and Drop with Earnings Next Week? (VMW, AMZN, SWKS, QCOM, FB)
Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn’t necessarily translate into a huge pop for a stock.
During earnings season, BullMarket.com publishes a comprehensive 25- to 40-page Earnings Preview report for the week ahead each Friday.
Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it’s previewed.
In its latest earnings preview, BullMarket.com looks at several popular stocks, including VMware (VMW), Caterpillar (CAT), Broadcom (BRCM), Amazon.com (AMZN), Skywork Solutions (SWKS), Qualcomm (QCOM), Fusion-io (FIO), Facebook (FB), Potash (POT), Mastercard (MA), and Enterprise Products Partners (EPD).
Here is just a tiny sample of what BullMarket.com wrote about VMware:
VMware has beaten analyst EPS estimates each quarter over the past two years. During that span, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen twice in the last four years. …
Last quarter, the company reported fiscal Q3 net income of $156.8 million, or 36 cents per share, down from $177.5 million, or 41 cents per share, in the same quarter a year ago. The quarter ended in September.
Excluding one-time items VMware reported adjusted earnings of $303.4 million, or 70 cents per share. Analysts expected adjusted earnings of 63 cents per share.
Revenue rose 20% to $1.13 billion, which was in line with Wall Street’s expectations. Revenue from services jumped 29% to $642.6 million. License revenue grew by 11% to $491.1 million.
Operating expenses increased 24%, to $943 million. VMware’s largest source of expenses, sales and
Enterprise license agreements (ELA) were just over 24% of total third quarter bookings versus over 29% in Q2. This is an approximate -5% decline from Q2 and similar to the sequential change VMware experienced in Q3 last year. …
Outside of earnings, VMware is the leader in the server virtualization business, with about a 65% market share. Virtualization allows a single hardware device to act like multiple machines through a software layer that runs on its own operating system. Virtualization has considerable appeal as it is a way for companies to get more bang from their IT resources.
VMware’s core product is its vSphere platform, which was first introduced in 2009. The company says it accelerates the shift to cloud computing for existing datacenters, while also underpinning compatible public cloud offerings, paving the way for the only hybrid cloud model.
Microsoft and its HyperV technology has long been VMware’s biggest competition, and several analysts think Mister Softie’s technology is finally catching up – although this has been an oft-cited threat that hasn’t yet stopped VMware’s growth. A new technology called OpenStack is also considered a possible risk to virtualization. …
The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.
Just a few of the correct calls BullMarket.com made for Q4 so far were:
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