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Unlike last quarter, this earnings season is proving more treacherous for investors. Slight misses or even a lack of better-than-expected forward guidance is being punished in stocks like Meta Platforms. Meanwhile, bears pounced on AI juggernaut Super Micro Computer for simply not pre-announcing earnings like it did last quarter.
Overall, Wall Street is providing clues that a lot of the recent good news has been priced into stocks. Furthermore, even the strongest bull markets experience ebbs and flows and do not trend higher in a straight line. Nonetheless, earnings and underlying fundamentals drive stocks in the long term, and bull markets tend to last much longer than most anticipate.
Below are the three of the strongest earnings reports of this earnings season thus far:
Robinhood Markets
Zacks Rank #2 (Buy) stock Robinhood is one of the most popular brokerages in the United States. Robinhood was the first major broker to “democratize” trading by offering a commission-free investing app. The app rose to prominence during the meme stock craze that was spurred on by retail investing groups on the social media platforms.
Consistent Positive EPS Surprises
Last night, HOOD reported first-quarter earnings that trounced Zacks Consensus Estimates by 260%. Over the past four quarters, positive earnings beats have become the norm, with an average EPS beat of 230%!
Record Net Deposits
Net deposits are one of the most important metrics to monitor for brokers. HOOD net deposits reached a record $11.2 billion in Q1, translating to a 44% annualized growth rate and contributing to a 30% growth rate over the last twelve months.
Robinhood Gold Is Growing
Robinhood recently announced a new “Gold” credit card. HOOD has already gained a healthy 260,000 new subscribers.
Arm Holdings
Zacks Rank #2 (Buy) stock ARM Holdings is a dominant player in the semiconductor industry due to the company’s energy-efficient designs, which are critical to the function of smartphones, laptops, and AI servers. Though ARM shares have come down to Earth after an explosive debut, the company’s fundamentals are very much intact.
Strong Revenue Growth Expected
Revenue is expected to remain solid and steady, growing 23.19% in 2025 and expected to grow more than 20% in 2026.
Bullish CEO Comments
One statement from the ARM CEO in the conference call stood out to me: “From cloud to edge, all AI software models, from GPT to Llama, rely and run on the Arm compute platform. As these models become larger and smarter, their requirements for more compute with greater power and efficiency can only be realized through Arm.” My interpretation of this statement is that Arm is one of the best AI “pure plays” on Wall Street.
Coinbase Global
Coinbase is the leading crypto exchange in the United States. Recently, COIN smashed earnings estimates by reporting EPS of $1.64 billion versus estimates of $1.32 billion. However, what’s most impressive about COIN is that despite volatility in the crypto industry, the company’s cash hoard has grown steadily since going public back in 2021.
Bottom Line
Though earnings reactions were relatively muted this quarter, these three companies are firing on all cylinders.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Meta, Super Micro Computer, Robinhood Markets, Arm Holdings and Coinbase
For Immediate Release
Chicago, IL – May 10, 2024 – Today, Zacks Investment Ideas feature highlights Meta Platforms (META - Free Report) , Super Micro Computer (SMCI - Free Report) , Robinhood Markets (HOOD - Free Report) , Arm Holdings (ARM - Free Report) and Coinbase Global (COIN - Free Report) .
EPS Season: 3 Standout Reports
Unlike last quarter, this earnings season is proving more treacherous for investors. Slight misses or even a lack of better-than-expected forward guidance is being punished in stocks like Meta Platforms. Meanwhile, bears pounced on AI juggernaut Super Micro Computer for simply not pre-announcing earnings like it did last quarter.
Overall, Wall Street is providing clues that a lot of the recent good news has been priced into stocks. Furthermore, even the strongest bull markets experience ebbs and flows and do not trend higher in a straight line. Nonetheless, earnings and underlying fundamentals drive stocks in the long term, and bull markets tend to last much longer than most anticipate.
Below are the three of the strongest earnings reports of this earnings season thus far:
Robinhood Markets
Zacks Rank #2 (Buy) stock Robinhood is one of the most popular brokerages in the United States. Robinhood was the first major broker to “democratize” trading by offering a commission-free investing app. The app rose to prominence during the meme stock craze that was spurred on by retail investing groups on the social media platforms.
Consistent Positive EPS Surprises
Last night, HOOD reported first-quarter earnings that trounced Zacks Consensus Estimates by 260%. Over the past four quarters, positive earnings beats have become the norm, with an average EPS beat of 230%!
Record Net Deposits
Net deposits are one of the most important metrics to monitor for brokers. HOOD net deposits reached a record $11.2 billion in Q1, translating to a 44% annualized growth rate and contributing to a 30% growth rate over the last twelve months.
Robinhood Gold Is Growing
Robinhood recently announced a new “Gold” credit card. HOOD has already gained a healthy 260,000 new subscribers.
Arm Holdings
Zacks Rank #2 (Buy) stock ARM Holdings is a dominant player in the semiconductor industry due to the company’s energy-efficient designs, which are critical to the function of smartphones, laptops, and AI servers. Though ARM shares have come down to Earth after an explosive debut, the company’s fundamentals are very much intact.
Strong Revenue Growth Expected
Revenue is expected to remain solid and steady, growing 23.19% in 2025 and expected to grow more than 20% in 2026.
Bullish CEO Comments
One statement from the ARM CEO in the conference call stood out to me: “From cloud to edge, all AI software models, from GPT to Llama, rely and run on the Arm compute platform. As these models become larger and smarter, their requirements for more compute with greater power and efficiency can only be realized through Arm.” My interpretation of this statement is that Arm is one of the best AI “pure plays” on Wall Street.
Coinbase Global
Coinbase is the leading crypto exchange in the United States. Recently, COIN smashed earnings estimates by reporting EPS of $1.64 billion versus estimates of $1.32 billion. However, what’s most impressive about COIN is that despite volatility in the crypto industry, the company’s cash hoard has grown steadily since going public back in 2021.
Bottom Line
Though earnings reactions were relatively muted this quarter, these three companies are firing on all cylinders.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.