Stocks notched significant gains last week gain, as both the S&P 500 (SNPINDEX: ^GSPC) and the Dow Jones Industrial Average (DJINDICES: ^DJI) rose by more than a full percentage point.
The increase left the indexes in positive territory so far in 2018, with just under half of the year to go:
Second-quarter earnings season will play a big role in determining which way stocks go from here, and there are plenty of large companies set to post those results over the next few trading days. Below, we'll take a look at a few of the biggest: Netflix (NASDAQ: NFLX) , eBay (NASDAQ: EBAY) and Domino's Pizza (NYSE: DPZ) .
Netflix's subscriber gains
Netflix is one of the market's biggest winners so far this year, and that means investors can expect plenty of volatility around its earnings report on Monday afternoon. The streaming-video giant set several records in its last quarterly outing as sales growth crossed 40%, powered by the addition of 7.4 million subscribers. These TV fans are paying higher prices, on average, too, and that trend helped Netflix push its profitability beyond management's original goal for the year.
CEO Reed Hastings and his team are projecting 6.2 million new members added to the subscriber base this quarter, compared to 5.2 million in the year-ago period. That acceleration includes faster gains in international markets and in Netflix's mature U.S. segment. The company's original content releases will play a key role in the company's hitting, or exceeding, those numbers. And as these shows and movies spur more viewing per member, investors can expect monthly prices to rise at about the same pace.
eBay's buyer pool
eBay will announce its second-quarter results on Wednesday afternoon. The online marketplace has underperformed the stock market so far this year, as its turnaround effort met with a few speed bumps . In its first-quarter report, eBay revealed that the pace of expansion in its pool of active buyers slowed for the first time in over a year. Profitability edged lower, too, as the company spent more on advertising and on adding enhancements to its shopping apps.
Investors will be looking for those growth metrics to improve over time, but the process isn't likely to be a smooth one. In fact, CEO Devin Wenig has warned shareholders to expect volatility as eBay makes big product changes, at times sacrificing short-term results for a better e-commerce infrastructure and shopping experience. Yet overall, the company's rebound effort is projected to continue for its third year, as sales rise by about 8% in 2018 and earnings improve to around $2.28 per share.
Domino's market share
Domino's isn't just one of the most successful fast-food stocks on the market; it's one of the market's biggest winners overall, having soared 2,400% over the last decade. The pizza chain has steadily stolen market share in the delivery niche and is approaching its 30th consecutive quarter of growth in the core U.S. market.
Sales gains sped up to an 8% pace last quarter from 4% in the prior quarter, which left rivals like Papa John's , with its 5% revenue decrease, far behind. And in a demonstration of the power of its franchised model, Domino's managed significantly higher profitability in the first quarter.
The long-run growth plan involves aggressively building out the store base in underrepresented global markets. Domino's also believes it can open many more of its small-format locations in the mature U.S. division, so delivery times fall further. That bigger footprint should help the company grab a slice of the massive takeout market, even as it relies on technological advances to make pizza deliveries quicker and more convenient .
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Demitrios Kalogeropoulos owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
