We are in the middle of the second quarter 2022 earnings season and next week will be the most important week of this reporting cycle with no less than 1,210 companies expected to release their quarterly figures. Earnings results have been better than expected so far with no visible signs of an impending recession.
Here, we’ve selected five companies that are expected to report results next week. The combination of a favorable Zacks ranking and a possible beating in earnings should drive their stock price. These companies are – Take-Two Interactive Software Inc. TWO, Ionis Pharmaceuticals Inc. IONS, Celsius Holding Inc. CEHL, Grocery Outlet Holding Corp. Go and Lemonade Inc. LMND.
Second quarter results so far
As of August 4, before the opening bell, 410 companies in the S&P 500 index released their financial figures. Total profit for these companies was up 7.8% year-over-year, on revenue up 14.8%, with 77.3% beating EPS estimates and 68.8% beating revenue estimates.
Our latest projection is that for the second quarter as a whole, total S&P 500 earnings will rise 6.3% year over year with revenue up 13.2%. These show a notable improvement from the 2.1% year-over-year earnings growth on 9.7% higher revenue estimated at the start of the reporting cycle.
Our top picks
Five companies are expected to beat earnings estimates next week. Each of these stocks carries a Zacks rank of #2 (buy) and has a positive ESP gain. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks rank of #3 (Hold) or better and a positive earnings ESP, the probability of an earnings overshoot is as high as 70%. These shares should appreciate after the publication of their results. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.
The graph below shows the price performance of our five picks over the past quarter.
Image source: Zacks Investment Research
Interactive Take-Two enjoys strong digital revenue, driven by strong demand for well-known game franchises like Grand Theft Auto and Farmville. The acquisition of Zynga will make TTWO one of the largest mobile game publishers. The deal would unify Take-Two Interactive’s high-end portfolio of PC and console games and Zynga’s major mobile franchises.
TTWO has an ESP on gains of +1.10%. It forecasts an earnings growth rate of 5.1% for the current year (ending March 2023). The Zacks consensus estimate for current year earnings has improved 1.5% over the past 7 days.
Take-Two Interactive has recorded earnings surprises over the past four quarters, with an average pace of 19%. The company is expected to report results on August 8, after the closing bell.
Lemonade offers various insurance products in the United States and Europe. LMND’s insurance products include Stolen or Damaged Property and Personal Liability which protects its customers if they are responsible for an accident or damage to another person or their property. Lemonade also offers tenant, homeowner, pet, car, and life insurance products, as well as homeowners insurance policies. Additionally, LMND operates as an agent for other insurance companies.
Lemonade has a Gain ESP of +12.50%. The Zacks consensus estimate for current year earnings has improved by 0.2 over the past 30 days. LMND has recorded earnings surprises in two of the last four reported quarters, averaging 4.6%. The company is expected to report results on August 8, after the closing bell.
Ionis Pharmaceuticals has various sources of income. IONS has a wide range of programs in partnership with Biogen, AstraZeneca and others. Ionis Pharmaceuticals is increasing investment in its wholly owned pipeline to diversify royalty income from Spinraza (manufactured by Ionis and licensed to Biogen). Some midterm data readings are expected in 2022, which could be a catalyst for the stock.
Ionis Pharmaceuticals has a profit ESP of +27.61%. IONS has recorded earnings surprises in two of the last four reported quarters, averaging 24.4%. The company is expected to release its results on August 9, before the opening bell.
Celsius Fund specializes in bringing healthier and nutritious functional foods, beverages and dietary supplements to market. CELH sells its products through grocery, drug, convenience, club and mass, and health and fitness chains. Celsius Holdings products are manufactured in Mooresville, NC, and Monroe, WI. CELH serves customers in the United States and abroad.
Celsius Holdings has an ESP on earnings of +17.39%. It has an expected earnings growth rate of over 100% for the current year. The Zacks consensus estimate for current-year earnings has improved 75% over the past 90 days.
CELH recorded earnings surprises in three of the last four reported quarters, averaging 206.3%. The company is expected to report results on August 9, after the closing bell.
grocery storeThe flexible sourcing and distribution business model helps offer products at exceptional prices. GO’s opportunistic buying strategy, marketing efforts, store growth efforts and e-commerce initiatives to deepen customer reach look encouraging.
Grocery Outlet reported strong same-store sales in the first quarter of 2022. An upbeat performance and robust traffic trends in the second quarter prompted management to raise its 2022 outlook.
GO has an ESP on gains of +3.55%. It has an expected profit growth rate of 8.9% for the current year. The Zacks consensus estimate for current-year earnings has improved 1% over the past 30 days.
Grocery Outlet has recorded earnings surprises over the past four quarters, with an average pace of 4.8%. The company is expected to report results on August 9, after the closing bell.
Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.
Free: Top Actions for the $30 Trillion Metaverse Boom
The Metaverse is a leap forward for the internet as we know it now – and it will make some investors rich. Like the Internet, the metaverse is set to transform the way we live, work, and play. Zacks has written a new special report to help readers like you aim for big profits. Metaverse – What is it? And how to take advantage of these 5 pioneering actions reveals specific actions set to soar as this emerging technology grows and expands.
Download Zacks Metaverse Report Now >>
Click to get this free report
TakeTwo Interactive Software, Inc. (TTWO): Free Stock Analysis Report
Grocery Outlet Holding Corp. (GO): free inventory analysis report
Ionis Pharmaceuticals, Inc. (IONS): Free Stock Analysis Report
Celsius Holdings Inc. (CELH): Free Stock Analysis Report
Lemonade, Inc. (LMND): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.