5 Top Rated Stocks That Crushed Earnings Estimates This Quarter

Analysts and investors in general are 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 – Get Rating), Regeneron Pharmaceuticals, Inc. (REGN – Get Rating), Western Digital Corporation (WDC – Get Rating), Continental Resources, Inc. (CLR – Get Rating), and Yelp Inc. (YELP – Get Rating). These companies crushed earnings estimates in their last reported quarter and we think have the potential to continue advancing in the coming quarters.

Activision Blizzard, Inc. (ATVI – Get Rating)

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 – Get Rating)

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 – Get Rating)

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…

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