This Week's Earnings Repertoire

During the previous shortened week, COVID-19 outbreaks grew while vaccine developments provided a glimpse of hope of finally putting an end to COVID-19. This week, Zoom Video Communications, Inc. ZM, CrowdStrike Holdings, Inc. CRWD, DocuSign Inc DOCU, salesforce.com, inc. CRM, Five Below FIVE, and Kroger KR are set to deliver their earnings reports.

Zoom

The question on everyone's mind is can Zoom maintain its growth momentum? On Monday afternoon, Wall Street expects Zoom to report earnings of 76 cents per share on revenue of $693.95 million. Just one year ago, Zoom delivered earnings of 9 cents per share on revenue of $166.59 million. The economy might have plunged during the coronavirus pandemic, but Zoom stock skyrocketed as its cloud-based video collaboration platform became the textbook definition of the work and study-at-home lifestyle. However, its stock fell 15% with positive coronavirus vaccine developments so investors will be watching churn rates to see the percentage of users who are cancelling their subscriptions.

Crowd Funding

Software stocks altogether have gone on a massive rally March and cybersecurity stocks were among the biggest winners as companies needed additional security for their home-office setting. CrowdStrike surged as much as 202% year to date, with 93% and 13% gains over six months and last thirty days, respectively. But CrowdStrike also needs to show it can maintain its strong growth when corporations decide to return to an office setting.

Wall Street expects CrowdStrike to breakeven on revenue of $212.60 million. Exactly one year ago, it lost 7 cents per share while generating revenue of $125.12 million.

DocuSign

After close on Thursday, Wall Street expects the digital signature company to earn 13 cents per share on revenue of $361.15 million. One year ago, it earned 11 cents per share on revenue of $249.50 million. By providing individuals and businesses the ability to digitize an agreement process, it greatly benefited from remote work and social distancing. Its stock skyrocketed 80% during the past six months with almost 210% year to date, whereas the S&P rose only 12% during the same timeframe. But its valuation is being questioned with the upcoming vaccine. DocuSign needs to show it diversify its offerings, such as its contract lifecycle management platform.

Salesforce

Wall Street expects Salesforce to earn 75 cents per share on revenue of $5.25 billion. This figure equals earnings during the same quarter last year, whereas revenue amounted to $4.51 billion.

The company's SaaS business model and its customer relationship management services have become a must have for developing companies. But after Dow Jones report that the cloud giant is in advanced talks to acquire Slack WORK at an undisclosed amount, the stock retracted. With its negotiating and collaborating features Slack would immediately position Salesforce to challenge Microsoft MSFT enterprise dominance it owes to Office365. But with Slack now valued at $22 billion,  it would Salesforce's largest acquisition and based on how the market received the news, investors seem concerned.

Five Below

The youth-focused retailer has been one of the rare specialty retailers to outperform the COVID-19 storm that left many retailers fighting for mere existence. While temporary store closures did hurt its sales during fiscal first quarter, the retailer managed to bounce back to growth in its fiscal second quarter, with sales inching higher by 2%. But Five Below needs to show gains in both store expansion and sales growth to support management's ambitious plans to expand its footprint.

Kroger

Although demand for consumer staples remains elevated, rivals like Walmart Inc WMT and Costco Wholesale Corporation COST reported slowing sales gains. Yet, Wall Street expects this leading grocery store chain to report head-turning growth metrics, while forecasting a revenue boost of 7% for the quarter.

The question of the week

Besides their earnings reports, the above companies have an important question to answer. Considering these companies greatly benefited from remote work, they need to prove they can keep their growth momentum even if positive vaccine developments encourage consumers to go back to offices and stores.

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