5 Top Rated Stocks That Crushed Earnings Estimates This Quarter

Analysts and investors are generally concerned about the pace of economic recovery due to the resurgence of COVID-19 cases. According to the CDC Director Dr. Rochelle Walensky, the Delta variant now accounts for 83% of all sequenced COVID-19 cases in the United States. Furthermore, uncertainty regarding the timing of the Federal Reserve’s tapering activities could sustain stock market volatility in the near term.

However, the major stock market indexes have advanced significantly of late thanks to the strong corporate earnings results and investors’ optimism surrounding the Senate’s approval of the $1.2 trillion bipartisan infrastructure plan on August 10. According to a FactSet research report, more S&P 500 companies beat the EPS estimates in the second quarter than average.

So, we think it is wise to bet on Activision Blizzard, Inc. (ATVI), Regeneron Pharmaceuticals, Inc. (REGN), Western Digital Corporation (WDC), Continental Resources, Inc. (CLR), and Yelp Inc. (YELP). The companies crushed earnings estimates in their last reported quarter and have the potential to continue advancing in the coming quarters.

Activision Blizzard, Inc. (ATVI)

ATVI in Santa Monica, Calif., develops and publishes interactive entertainment content and services. The company operates through three segments: Activision Publishing, Inc.; Blizzard Entertainment, Inc.; and King Digital Entertainment.

ATVI’s revenue increased 18.8% year-over-year to $2.30 billion for its  fiscal second quarter, ended June 30, 2021. Its non-GAAP operating income grew 25.4% year-over-year to $1.02 billion, while its non-GAAP net income increased 49.1% year-over-year to $941 million. In addition, the company’s non-GAAP EPS increased 48.1% year-over-year to $1.20.

Analysts expect ATVI’s EPS and revenue to increase 17.8% and 13.4%, respectively,  year-over-year to $4.44 and $9.95 billion in its fiscal year 2022. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has soared 11% to close yesterday’s trading session at $85.17.

ATVI’s POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting. It has a B grade for Value and Quality.

In the 23-stock Entertainment - Toys & Video Games, it is ranked #7. In addition to the POWR Rating grades we've just highlighted, we’ve also rated it for Growth, Momentum, Stability, and Sentiment. Get all ATVI’s ratings here.

Regeneron Pharmaceuticals, Inc. (REGN)

REGN discovers, invents, develops, manufactures, and commercializes medicines for treating various medical conditions worldwide. It has collaborations with Zai Lab Limited (ZLAB), Intellia Therapeutics, Inc. (NTLA), and Biomedical Advanced Research Development Authority, as well as an agreement with the U.S. Department of Health and Human Services. REGN is based in Tarrytown, N.Y.

The company’s revenue increased 163% year-over-year to $5.14 billion for its fiscal second quarter, ended June 30, 2021. Its total assets grew 25.2% year-over-year to $21.48 billion, while its non-GAAP net income increased 238.8% year-over-year to $2.89 billion. Also, the company’s non-GAAP EPS increased 260.3% year-over-year to $25.80.

For its fiscal year 2021, analysts expect REGN’s EPS and revenue to increase 49.4% and 42.4%, respectively, year-over-year to $47.02 and $12.1. It surpassed the consensus EPS estimates in each of the trailing four quarters. The stock’s price has surged 25.2% over the past six months to close yesterday’s trading session at $608.

REGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

It has a B grade for Growth, Value, Sentiment, and Quality. Click here to access REGN’s ratings for Momentum and Stability as well. REGN is ranked #10 of 503 stocks in the Biotech industry.

Click here to checkout our Healthcare Sector Report for 2021

Western Digital Corporation (WDC)

WDC, which is headquartered in San Jose, Calif., develops, manufactures, and sells data storage devices and solutions. It offers client devices, including hard disk drives and solid-state drives for computing devices. In addition, it provides data center devices and solutions that comprise enterprise helium hard drives and enterprise SSDs.

WDC’s revenue increased 15% year-over-year to $4.92 billion for its  fiscal fourth quarter, ended July 2, 2021. Its non-GAAP operating income grew 101% year-over-year to $828 million. Its non-GAAP net income increased 114% year-over-year to $680 million, and the company’s non-GAAP EPS increased 112% year-over-year to $2.16.

Analysts expect WDC’s EPS to increase 207.7% year-over-year to $2 for the quarter ending September 30, 2021. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Its annual revenue is expected to be $20.16 billion in its fiscal year 2022, representing a 21.9% year-over-year rise. The stock has soared 69.6% over the past year to close yesterday’s trading session at $62.38.

WDC’s POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to Buy in our proprietary rating system. In addition, it has an A grade for Growth, and a B grade for Sentiment and Momentum.

To see the additional POWR Ratings for WDC (Value, Stability, and Quality), click here. It is ranked #12 of 45 stocks in the B-rated Technology - Hardware industry.

Continental Resources, Inc. (CLR)

CLR explores for, develops, and produces crude oil and natural gas in the United States. The Oklahoma City, Okla., company sells its crude oil and natural gas production to energy marketing, crude oil refining, and natural gas gathering and processing companies. Its proven reserves are 1,104 million barrels of crude oil equivalent with proved developed reserves of 627 MMBoe.

CLR’s revenue climbed 603.1% year-over-year to $1.23 billion for its  fiscal second quarter, ended June 30, 2021. Its non-GAAP EBITDAX grew 2,651.6% year-over-year to $990.94 million. Its adjusted net income came in at $332.77 million, versus a $255.70 million net loss in the year-ago period. Also, the company’s adjusted EPS came in at $0.91 compared to a $0.71 loss per share in the prior year period.

For the quarter ending September 30, 2021, analysts expect CLR’s EPS to increase 518.8% year-over-year to $2.50. In addition, its annual revenue is expected to increase 78.5% year-over-year to $4.62 billion in its fiscal year 2021. The stock’s price has rallied 177.6% over the past nine months to close yesterday’s trading session at $37.70.

CLR’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system.

The stock has an A grade for Momentum, and a B grade for Growth, Sentiment, and Quality. Within the Energy - Oil & Gas industry, CLR is ranked #11 of 91 stocks. To see CLR’s ratings for Stability and Value as well, click here.

Yelp Inc. (YELP)

YELP operates a platform that connects consumers with local businesses internationally. The company's platform covers various local business categories, including restaurants, shopping, beauty and fitness, health, and other categories. In addition, it provides free and paid advertising products to businesses, which include cost-per-click search advertising and multi-location ad products. YELP is headquartered in San Francisco. The company’s net revenue increased 52% year-over-year to $257 million for its fiscal second quarter, ended June 30, 2021. Its adjusted EBITDA grew 473% year-over-year to $64 million, while its net income came in at $4.21 million, versus  a $23.99 million net loss in the year-ago period. Also, the company’s EPS was  $0.05 compared to a $0.33 loss per share in the prior year period.

Analysts expect YELP’s EPS to increase 433.3% year-over-year to $0.40 in its fiscal year 2022. It surpassed the Street’s EPS estimates in three of the trailing four quarters. Its revenue is expected to be $260.97 million for the quarter ending September 30, 2021, representing an 18.2% year-over-year rise. The stock has gained 65.2% over the past year to close yesterday’s trading session at $38.80.

It’s no surprise that YELP has an overall A rating, which equates to Strong Buy in our POWR Ratings system. In addition, the stock has an A grade for Quality and a B grade for Value.

Click here to see YELP’s ratings for Growth, Momentum, Sentiment, and Stability as well. YELP is ranked #2 of 73 stocks in the Internet industry.

Click here to check out our E-commerce Industry Report for 2021

ATVI shares were trading at $83.68 per share on Friday morning, down $1.49 (-1.75%). Year-to-date, ATVI has declined -9.44%, versus a 19.90% rise in the benchmark S&P 500 index during the same period.

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.

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