The third-quarter 2024 earnings season is advancing in top gear. By the end of this week, we will cross the half way mark of Wall Street’s benchmark – S&P 500 Index’s – earnings release. This week is the most crucial for this reporting cycle. Five “Magnificent 7” stocks are set to release their quarterly financial numbers.
Aside from these five behemoths, a long-list of big companies will report earnings results this week, too. Earnings reports of two such stocks that market participants should closely watch are — Intercontinental Exchange Inc. ICE and Roblox Corp. RBLX. These two stocks have double-digit price upside potential for the short term.
Third-Quarter Earnings Season So Far
As of Oct 25, 182 companies of the broad-market index — the S&P 500 — have reported their quarterly financial numbers. Total earnings of these companies are down 2.1% year over year on 4.5% higher revenues, with 75.8% beating earnings per share (EPS) estimates and 58.8% beating revenue estimates.
Looking at the third quarter as a whole, total earnings for the S&P 500 Index are expected to be up 1.5% from the same period last year on 5% higher revenues. This follows 10.2% year-over-year EPS growth on 5.5% higher revenues in the previous quarter.
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
2 Stocks to Buy Ahead of Earnings Results on Thursday
We have narrowed our search to two large-cap stocks set to report earnings results this month. Each of these stocks carries a Zacks Rank #2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better (Rank #1 or 2) and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our two picks in the past six months.
Image Source: Zacks Investment Research
Intercontinental Exchange
Intercontinental Exchange has been benefiting from its compelling product and service portfolio, the broad range of risk management services and strength in global data services. Continued strength in ICE’s energy franchise and improving recurring market data revenues are likely to sustain growth.
Strategic buyouts help Intercontinental Exchange achieve cost synergies that are in sync with its aim of generating long-term value for shareholders. ICE is well-poised for growth due to accelerated digitization in the U.S. residential mortgage industry. ICE has an Earnings ESP of +0.48%. The company will report on Oct 31, before the opening bell.
Impressive Earnings Estimate Revisions for ICE Stock
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $2.35 billion, suggesting an improvement of 17.2% year over year and earnings per share of $1.55, indicating an increase of 6.2% year over year. The company pulled off positive earnings surprises in three of the last four reported quarters and matched estimates in the other, delivering an average beat of 2.4%.
Moreover, Intercontinental Exchange has witnessed positive earnings estimate revisions for 2024 in the last seven days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 16.7% and 9.1%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 6.2% and 11.6%, respectively.
Strong Upside Left for ICE Shares
The average short-term price target of brokerage firms represents an increase of 10.7% from the last closing price of $166.44. The brokerage target price is currently in the range of $162-$200. This indicates a maximum upside of 20.2% and a maximum downside of just 2.7%.
Roblox Corp.
Roblox develops and operates an online entertainment platform. RBLX offers Roblox Client, an application that allows users to explore 3D digital worlds; and Roblox Studio, a toolset that lets developers and creators build, publish and operate 3D experiences and other content.
RBLX also provides Roblox Cloud, a solution that provides services and infrastructure to power the human co-experience platform. RBLX has an Earnings ESP of +14.68%. The company will report on Oct 31, before the opening bell.
RBLX Stock’s Earnings Estimate Revisions on the Rise
For third-quarter 2024, the Zacks Consensus Estimate currently shows revenues of $1.02 billion, suggesting an improvement of 22% year over year and earnings per share of -$0.38, indicating an improvement of 15.6% year over year. The company delivered positive earnings surprises in the last four reported quarters with an average beat of 13.7%.
Moreover, Roblox has witnessed positive earnings estimate revisions for 2024 in the last seven days. At present, the Zacks Consensus Estimate indicates a year-over-year increase of 20.2% and 16%, respectively, for revenues and EPS in 2024. The current Zacks Consensus Estimate for 2025 revenues and EPS reflects an upside of 19.2% and 5.4%, respectively.
Solid Upside Left for ICE Shares
The average short-term price target of brokerage firms represents an increase of 11.7% from the last closing price of $42.30. The brokerage target price is currently in the range of $60-$29. This indicates a maximum upside of 41.8% and a maximum downside of 31.4%.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpIntercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
Roblox Corporation (RBLX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
