4 Growth Stocks To Watch This Week Ahead Of Their Earnings Report
Looking to buy growth stocks for your late July watchlist? Well, there are plenty of options for investors of all types. With the second-quarter earnings kicking into high gear in the stock market today, there comes a slew of analyst expectations, forecasts to digest ahead of their release.
For better or for worse, companies are judged by their ability to beat market expectations. Therefore, you could assume that all eyes are on companies reporting earnings in the stock market this week. But as you sip your morning coffee reading the reports from analysts, bear in mind that these are just estimates. And they are usually not consistent from one analyst to another. That’s because one analyst may use different metrics to come up with his estimates compared to others.
As important as the numbers will be on the earnings report, there are also a lot of uncertainties on how the stock market will perform this week. Last week, we saw major banks like Goldman Sachs (NYSE: GS) and JPMorgan Chase (NYSE: JPM) posted stellar earnings to start the season. Yet, these impressive beats did not send the bank stocks flying. Whilst it is true that the broader stock market has been trading sideways as of late, those who have compelling revenue growth stories could attract interest from more investors. With all these in mind, do you have these top growth stocks on your list today?
Best Growth Stocks To Watch In July 2021
- Netflix Inc. (NASDAQ: NFLX)
- Domino’s Pizza Inc. (NYSE: DPZ)
- Snap Inc. (NYSE: SNAP)
- Chipotle Mexican Grill Inc. (NYSE: CMG)
When you think about Netflix, you may only think about its video streaming. But this company is rapidly evolving, and last week it made an announcement to offer video games on its service within the next year. It’s no secret that subscriber growth has been slowing significantly as reopening gains pace and competition among streaming services ramps up. Another major reason is that the company has also been rolling out fewer TV shows and movies due to lockdown-related production slowdowns.
Netflix has been telling investors that it will resume its strong growth rate in the second half of the year. And a lot of that has to do with its recent new releases. This then brings us to the real question, could Tuesday’s report from the company be able to back up those claims with numbers? Of course, another big question many investors are looking for is whether Netflix is feeling the heat from Disney’s (NYSE: DIS) fast-growing streaming service. And the report this week will show investors if it’s still the leader in the streaming space. With all that being said, with the growth narrative for Netflix stock starting to lose its luster, would its video gaming initiative make NFLX stock a good buy?
Domino’s Pizza has been one of the best growth stocks to buy in the stock market. In fact, DPZ stock was a favorite among investors long before the pandemic struck. Like with most restaurants, the early days of the pandemic were tough on DPZ stock. However, it has bounced back significantly thanks to its digital ordering and delivery services. From the company’s first-quarter report, revenue came in 16.7% higher year-over-year amid positive domestic and international same-store sales growth. The company is slated to report its second-quarter earnings on July 22.
If anything, the pizza giant has clearly demonstrated that it can navigate the crisis well. More impressively, the recent news that it has launched robotic delivery services in the US to cut down the risk of transmission is also getting many investors very excited. If you have been a long-term shareholder, you would be glad to know that since 2009, the shares have gone up about 150 times. That’s staggering to think of. While pizzas don’t always sound exciting, the company could potentially still reward investors in the years ahead. The question is, can DPZ stock grow at the same pace as it did for the past decade?
Social media company Snap Inc. believes that reinventing the camera represents the best opportunity to improve people’s lives and communication. It is mostly known for its social media platform, Snapchat. The company is growing fast, and it appears not to be slowing down at the moment. Snap’s first-quarter revenue came in 66% higher year-over-year. And more impressively, it’s guiding for 81% to 85% year-over-year revenue growth in the second quarter.
In fact, this marks the company’s highest ever growth rates in both areas over the past three years. This is a testament to its relentless product innovation and shows the strength of its business. But what really caught my attention is its bottom-line growth. The company reported positive free cash flow for the first time from its first quarter, and its operating cash flow was $137 million. This is a more than 20 fold increase from the meager $6 million operating cash flows it had in the same quarter last year. With Snap’s improving fundamentals, is SNAP stock a buy ahead of its earnings report?
Chipotle Mexican Grill
Chipotle is another fast-food chain on this list, specializing in tacos and burritos. The company has been on a tear since the stock market downturn in March 2020, rising more than 170% to date. Unlike much of the restaurant industry, the fast-casual eatery was already takeout-friendly even before the pandemic. The company also enjoyed huge sales growth in its first quarter as the company benefited from strong business execution. Revenue came in 23.4% higher year-over-year in the first quarter of 2021.
For the quarter, one particular metric to note was the 134% year-over-year increase in digital sales Chipotle served up. Investors should look to see if the company was able to keep up this strong momentum in digital sales in the latest quarter. Chipotle will be reporting its second-quarter results after the closing bells on July 20. Seeing how Chipotle has invested into its digital sales, it continues to show adaptability. Besides, there’s a great chance the company is still in a good position to post record transactions. More impressively, Chipotle has invested heavily in automation, which would lower the labor costs over the long term. With CMG stock trading near its all-time high, would you bet on it to continue its momentum?