On Friday, all three major averages ended near all-time highs. The S&P 500 rose 0.9% whereas the Dow Jones Industrial Average rose 0.7% as it was powered by Salesforce.com Inc CRM, Apple AAPL, and Microsoft MSFT. The business landscape is shaped by supply chain bottlenecks and increased demand as the economy recovers, bringing inflation at 13-year highs. This week, Zoom Video Communications ZM, CrowdStrike Holdings CWRD, and DocuSign DOCU are among the few companies reporting earnings.
On Monday after close, Zoom is expected to report earnings of $1.16 per share on revenue of $990.96 million. Although shares have underperformed the S&P 500 over the past six months, falling almost 10%, compared to 17% rise of the index, they rose as much as 47% since May, as if investors and analysts are unsure how to evaluate the company's post-pandemic outlook. However, this pandemic winner has been actively diversifying its revenue by entering the contact center space as well as launching an Events platform for virtual and hybrid events which enables event organizers to earn from ticketed live events. But Zoom needs to deliver beat-and strong guidance to prove it can deliver.
On Tuesday after close, CrowdStrike is expected to report earnings of 9 cents per share on revenue of $323.16 million. When it comes and cybersecurity specialists, CrowdStrike has been one of the winners with its stock has surged nearly 20% in the past week. Without question, cybersecurity is the industry to be in as hacker sophistication is rising, increasing the need for companies to defend themselves as they develop their digital presence. The direct result of these attacks is a public embarrassment associated with breaches and payment demands, and companies cannot afford to lose the trust of their customers.
The market is worth $200 billion but it is projected to grow to approximately a 10% compound annual growth rate within the decade. CrowdStrike needs to demonstrate its ability to stand out in a crowded industry.
On Thursday after the close, Broadcom Inc AVGO is expected to report earnings of $6.88 per share on revenue of $6.76 billion. Although the company isn't getting the same level of attention such as Nvidia Corporation NVDA or Advanced Micro Devices AMD, it has proven to benefit from growth trends in the semiconductor market as these chips power everything that ‘matters' these days, from smartphones to cloud, data-centers and both residential and office networking equipment.
Moreover, its timely acquisitions enabled it to fortify its position, expand its operating margins as it shifted its revenue mix towards infrastructure software. It is focusing on data center growth which accounts for 35% of total revenue, but its strong portfolio of services helps insulate the company from any adverse impact of a potential slowdown on the semiconductor front.
But it needs upward semiconductor revenue guidance and strong data center results to maintain the excitement.
After the close on Thursday, DocuSign DOCU is expected to report revenue of $487.50 million with a bottom line of 40 cents per share. Its shares have strongly rebounded over the past six months as they rose more than 30%, almost double the S&P's 16% gain. Digitizing the agreement process ended up being one of the best abilities to have during a global pandemic that prohibited physical contact, but the company's growth is not showing any signs of slowing down as management is guiding for 40% YoY growth in the current fiscal year.
Moreover, it is diversifying the revenue model with a contract lifecycle management platform. Executives claim that the total addressable market is near $50 billion, which highlights how under-penetrated the market is. But, to assure investors, it needs to outline its path towards profitability on Thursday.
As earnings season slowly comes to a close, there are tons of more reasons for optimism given the rate of both top- and bottom-line estimate beats across many sectors, as well as the upward guidance a lot of companies delivered.
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