7 Hot Stocks Worth a Look After Earnings

Happy earnings season, all! In this week’s episode of Hypergrowth Investing, we’re checking in on some of our favorite hot stocks to talk about how they’ve fared this quarter.

QuantumScape

There was lots of volatility with QuantumScape (QS) stock this week. But that volatility has to do with short coverings going into earnings, not the numbers themselves. The company has shipped prototypes to automakers, who are in the process of testing its breakthrough batteries. Now, due to the nature of the companies’ agreements, QuantumScape can’t disclose any testing details. But it has said that the tests are going well, which will likely translate to a smooth operational ramp over the coming quarters. Plus, QuantumScape is very disciplined in its cash control; it extended its runway to 2025, when commercial operations are expected to start. Those are all great developments. So, the real question is, can QS sustain an ongoing rally?

Roku

Roku (ROKU) reported earnings last week, too. Wall Street was very pleased, and ROKU popped nicely. Like QuantumScape, the company is excelling when it comes to cutting costs and managing cash. Roku is accelerating its user and engagement growth in a very bullish way. Active accounts rose 16% YoY last quarter – the third consecutive quarter of accelerating growth – and it’s the same story for streaming hours growth. Roku is adding more users and getting those users more engaged. And since ad dollars follow eyeballs, this development is really bullish. Although, given that we’re in an ad recession, that growth isn’t translating into revenue expansion just yet. But recessions don’t last forever…

Twilio

Another favorite reported earnings last week, and its stock popped, too. We’re talking about Twilio (TWLO). The company is guiding for a big year ahead. Twilio powers modern communications; and that demand is resilient and secular. It will keep growing. In truth, that was never a concern. So, what is? Margins. For a long time, the company spent at all costs to grow. But that has shifted. Twilio is now taking the same approach as many others – grow responsibly. The company is cutting expenses and guiding toward big margin expansion. And the Street likes that approach.

Datadog

Datadog (DDOG) didn’t do too well with its recent earnings. What’s up there? The company offered weak guidance for the upcoming year, and that’s because of the challenging macroeconomic backdrop. Does that change the narrative for this potential observability titan?

Shopify

Shopify (SHOP) released a poor earnings report, and as a result, the stock got crushed. It seems the company didn’t get the memo to “grow responsibly.” While the company is making some smart long-term investments, the market is not rewarding them because they come at the expense of margins. Indeed, profit margins are not improving and actually continue to deteriorate – and the company expects that trend to persist. So, when it comes to next moves, it all depends on your investment style.

Crocs

Fellow retail stock Crocs (CROX), on the other hand, showed fantastic earnings and rose rather nicely last week. This company is killing it – 60%-plus revenue growth last quarter, guiding for 30% growth next quarter. Though that trend is slowing, the company is still sustaining massive growth. And that means Crocs’ success is based on more than just a passing trend. 

Toast

And last but not least, Toast (TOST) – like, Shopify, the stock was crushed on earnings. It really ran up going into its report and then got clobbered, all despite the company reporting a double-beat quarter with great growth and margin expansion, not to mention management’s guidance for that trend to persist over the next year. Fundamentally, Toast’s earnings were fantastic. It seems that the Street just got ahead of itself with this one.

Check out our in-depth analysis of these stocks and more on YouTube!

On the date of publication, Seth Kuczinski did not have (either directly or indirectly) any positions in the securities mentioned in this article.