Earnings: 3 Hot Growth Stocks to Watch This Week

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As earnings season begins to ramp up, this week includes reports from a handful of closely watched tech darlings. Three companies worth watching are electric-car maker Tesla (NASDAQ:TSLA), social media giant Facebook (NASDAQ:FB), and iPhone-maker Apple (NASDAQ:AAPL).

All three growth stocks have seen their shares soar over the past 12 months. Can the three Wall Street darlings live up to high expectations?

Image source: Getty Images.

Tesla

We already know Tesla had a good first quarter as far as vehicle deliveries go. The company delivered a record 184,800 vehicles during the period, up 109% year over year. The big question for investors, however, is how these strong sales translated to the electric-car maker’s financials. 

Analysts, on average, expect Tesla to report 72% revenue growth and non-GAAP earnings per share of $0.79, up from $0.23 in the year-ago period. 

Tesla is scheduled to report its first-quarter results after market close on Monday, April 26.

Facebook

Reporting a few days later, on Wednesday, April 28, is Facebook. Shareholders will look for strong growth in the company’s top line as advertisers ramp up spending to capitalize on a reopening economy.

In Facebook’s fourth quarter of 2020, revenue rose 33% year over year, an acceleration from 22% growth in the prior quarter. Facebook management said in its fourth-quarter earnings call that it expects its first-quarter revenue growth rate to either remain at about 33% or even modestly accelerate.

Analysts, on average, expect Facebook to grow revenue about 33% year over year, with earnings per share increasing from $1.71 in the year-ago period to $2.36. 

Apple

Growth expectations for Apple during the company’s second quarter of fiscal 2021 are high. But much of this expected growth is simply due to the iPhone-maker’s easy year-ago comparison. During the first three months of 2020, Apple’s business faced both supply and demand challenges as COVID-19 hit China. Revenue during the period only increased 1% year over year and earnings per share rose just 4%. 

Given Apple’s easy year-ago comparison and the company’s broad-based business momentum across all product segments and geographies, the consensus analyst estimate is modeling for Apple’s revenue and earnings per share in fiscal Q2 to increase 32% and 53%, respectively.

Another key area Apple investors should check on is the company’s services segment, which is becoming increasingly important as it grows as a percentage of Apple’s total revenue. The segment, which includes revenue from the App Store, Apple’s subscription services like Apple Music and Apple TV+, and other recurring revenue sources, saw its revenue grow 16% year over year. Investors should look for similarly strong growth (if not even stronger) in this key segment in fiscal Q2.

Apple reports its fiscal second-quarter results on the same day as Facebook after market close on Wednesday, Apr, 28.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.