Insights

U.S. Stock Market – 5 Companies to Watch

10 September 2018  |  NEWS

Reporting season is a critical time for investors and traders. Whether you’re rebalancing your portfolio or looking for new opportunities to trade, it’s important to keep up to date with the market. This week at Monex, we take a look at the quarterly earnings reports of 5 U.S. companies who have met or surpassed their expectations.

1. DocuSign (NYSE: DOCU)

The company announced the second quarter financial result on 5th September. Earnings and sales are far surpassed expectations. Here's what the company reported compared with market expectations:

  • Earnings per share: 3¢ vs. 1¢ expected 
  • Revenue: $ 167 million vs. $159 million expected, sales growth up 33.1% year-over-year. 
  • Subscription revenue was $158.5 million, an increase of 35% year-over-year. 
  • Non-GAAP gross margin was 81% compared to 79% in the same period last year. 
  • Subscription gross margin was 87% compared to 85% in the same period last year. 
  • Free cash flow was $18.4 million in the second quarter of fiscal 2019 compared to free cash flow of $7.8 million in the same period last year. 

The company had a strong second quarter by adding 25,000 more customers and brought the customer base to 429,000, which was +28% up. Meantime the number of employees was also increased to 2,579 from 2,074 the same period last year. 

For Q3 earnings and sales, the company announced range from $172 to $175 million of revenue assumption under the new guidance compare to $165 million of previous expectation. The company expects to see revenues from billings of $169 million to $179 million.

DocuSign_chart

(Stock price chart from DOCU listed date 2018/4/27-2018/9/7, from yahoo finance)


2. Zscaler Inc. (NYSE: ZS)

The company reported the fourth quarter financial result on 5th September. Strong revenue and billings growth are above market estimation. Here's what the company reported compared with market expectations:

  • Earnings per share: -1¢ vs. -5¢ expected
  • Revenue: $56.2 million vs. $50.7 million expected, sales growth up 53.8% year-over-year.
  • Non-GAAP gross margin was 80.1% compared to 78.3% in the same period last year.
  • Fourth quarter calculated billings grew 72% year-over-year to $95.4 million; fiscal 2018 calculated billings grew 65% year-over-year to $257.6 million.
  • Deferred revenue grew 70% year-over-year to $164.0 million.
  • Free cash flow was $11.9 million, or 21% of total revenue, compared to negative free cash flow of $5.4 million, or 15% of total revenue, in the fourth quarter of fiscal 2017. Free cash flow margin was 26%.

For the first quarter of fiscal 2019, the company expects to see total revenue of $58.0 to $59.0 million compared to previous expectation of $53.32 million. Also, the company announced EPS of -6¢ ~ -5¢ under the new guidance, compare to -6¢ of EPS assumption.

For fiscal year 2019, the company expects to see total revenue of $250 million to $260 million compared to previous expectation of $246 million, and EPS of -13¢ ~ -12¢ under the new guidance, compare to -14¢ of EPS assumption previously.

Zscaler_chart

(Stock price chart from ZS listed date 2018/3/16-2018/9/7, from yahoo finance)


3. Cushman & Wakefield PLC (NYSE: CWK)

Cushman & Wakefield PLC was listed from August 1, 2018, who operates as a commercial real estate company. The Company acquires and develops commercial properties, as well as provides property leasing, facilities management, tenant representation, and valuation services. There are approximately 48,000 employees operate approximately 400 offices in 70 countries. The company is managing 3.5 billion square feet space and enjoying $5.3 billion of fee revenue.

The company announced second quarter assumptions under new guidance: 

  • EPS: new guidance of 46¢ vs. 46¢ previous assumption 
  • Revenue: new guidance of $1.97 billion vs. $1.97 billion of previous expectation.

Cushman_chart

(Stock price chart from CWK listed date 2018/8/1-2018/9/7, from yahoo finance)


4. Okata Inc. (NYSE: OKTA)

The company reported better-than-expected results for the second quarter of its 2019 fiscal year, on 6th September. Here's how the company did: 

  • Earnings per share: -15¢ vs. -19¢ as expected by analysts. 
  • Revenue: $94.6 million, vs. $84.8 million as expected.

With respect to guidance, Okta said that in the fiscal third quarter it's expecting a loss of 12 cents to 11 cents per share on $96 million to $97 million in revenue. That's ahead of the estimates from analysts, which called for a loss of 17 cents per share, excluding certain items, on $88.96 million in revenue.

For its entire 2019 fiscal year Okta is calling for a loss of 48 to 46 cents per share on $372 million to $375 million in revenue. That's also ahead of expectations, which were a loss of 56 cents per share on $357 million in revenue.

Okata_chart

(Stock price chart for last one year 2017/9/11-2018/9/7, from yahoo finance)


5. Palo Alto Networks, Inc. (NYSE: PANW)

Palo Alto Networks announced surpassed expectations in their fourth quarter financial data on 6th September. Here is how the company did:

  • Earnings per share: $1.28 vs. $1.17 expected 
  • Revenue: $658 million vs. $634 million expected, revenue grows 29.3% year-over-year. 
  • Billings grow 29% year-over-year to $868 million, and deferred revenue grows 33% year –over-year to $2.4 billion. 

Palo Alto Networks provided new guidance for the fiscal first quarter 2019 as below: 

  • Total revenue in the range of $625 to $635 million compared to previous expectation of $620 million. 
  • Diluted non-GAAP EPS in the range of $1.04 to $1.06 compared to previous estimation of $1.04.

PaloAlto_chart

(Stock price chart for last one year 2017/9/11-2018/9/7, from yahoo finance)


This report was contributed by Takao Hirose, Contextual Investments, LLC., published on 10/09/2018.

Risk Disclaimer: The information above is of general nature only and does not take into account your objectives, financial situation or investment needs. Prior to you make an investment decision, please make sure you carefully read and fully understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other relevant documents that you can obtain from this website. Monex Securities Australia Pty Ltd (AFSL No. 363972; ABN 84 142 210 179) is the Financial services provider. Financial products trading carries risks and may not be suitable for all investors. You are strongly recommended to seek independent financial advice before making any investment decisions.

,

Related Articles

“Sell in May and go away.” Will the old adage work this year?The S&P 500 fell 6.6 percent in May as geopolitical fears and weak earnings hammered sentiment. It was the first losing month of 20..

This podcast explores how companies like software makers and electronic payment firms are holding their ground despite the tariffs hammering other corners of technology. Listen for more...

Register For Demo Account

Find out how easy it is to invest in international markets and diversify your portfolio.