Businesses Exceeding Expectations Next Week
A handful of companies reporting their earnings next week have a proven history of surpassing Wall Street’s expectations. Notably, Palo Alto Networks and Intuit are among them. Recent second-quarter revenues have eased concerns about slowing economic growth, with over 80% of S&P 500 companies that reported thus far delivering positive revenue surprises, according to FactSet data. Strong earnings can often boost stock prices, so CNBC Pro reviewed data for firms that often lower revenue expectations ahead of their reports and subsequently support their results.
The following stocks averaged 75% of their earnings expectations and experienced at least a 1% movement on their reporting day. For instance, Palo Alto Networks stands out with an average yield movement of 1.1% and an impressive revenue growth rate of 94%. Although shares of the cybersecurity firm have dropped over 3% this year, they have gained more than 5% just this week. Recently, Palo Alto Networks announced its intention to acquire the Israeli identity security platform, Cyberark, for around $25 billion, which has led to increased upgrades and price targets from analysts. On Tuesday, Deutsche Bank analyst Brad Zelnick upgraded the company from Hold to Buy, raising the price target substantially from $20 to $220. He noted, “Following the announced Cybr deal, the core business appears to be humming well despite recent stock fluctuations and investor concerns.”
Intuit also has a strong record of exceeding analyst expectations, boasting an average beat rate of 87%. This year, shares of the financial planning company have appreciated by over 14%. Known for its adoption of artificial intelligence, Intuit reported during its revenue call in May that internally deployed AI tools have bolstered developer productivity. Bank of America remains optimistic about Intuit’s stance in the AI sector, with analyst Brad Sills stating that the company views itself as a leading beneficiary of AI in its software.
Additionally, the “Consumer Segment,” which includes products like Turbo Tax, Credit Karma, QuickBooks, and MailChimp, shows significant traction with over 90% and 77% success rates in leveraging AI across various offerings.
