Earnings Predictions
for the
Week Beginning February 19, 2018

Ride The Stock Market Roller-Coaster Upwards
for
Greater Profit!

by Ian Harvey

February 19, 2018

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Roller-Coaster!----- Roller-Coaster Ride!

Options Trades to Consider Based on Expected Earnings Reports:

Tuesday, February 20

The Home Depot, Inc. (NYSE:HD), the leader in the home-improvement retail space, is expected to report earnings before the market opens. The consensus earnings estimate is $1.62 per share, rising 12.5%, on revenue increasing 6.6% to $23.65 billion. And the Earnings Whisper number is $1.65 per share.

Overall earnings estimates have been revised higher since the company's last earnings release.

Demand is being helped by millennials finally shifting to homeownership and away from rentals, and confidence among builders remains high. Housing starts also surged in January with permits hitting the highest level since 2007.

HD has upped earnings-growth guidance in recent quarters, which included the expected impact of stock buybacks. The company had previously indicated it planned to repurchase an additional $2.1 billion of shares in Q4, bringing the total for fiscal 2017 to $8 billion. In December, the board of directors announced a new $15 billion share repurchase program. 

Several dynamics have helped Home Depot's upwards progression;

  • Pro customers,
  • "One Home Depot” - its integrated omnichannel retail experience, and
  • the exclusive and innovative products line it offers that keep customers coming back.

Option trade to consider: Buy the HD MARCH 16 2018 190.000 CALL at approximately $3.80.

Domino's Pizza, Inc. (NYSE:DPZ), a pizza retail chain that operates in over 80 markets with 12,119 locations, will report earnings before the market opens. The consensus earnings estimate is $1.94 per share on revenue of $904.00 million. The Earnings Whisper number is $2.02 per share. Consensus estimates are for year-over-year earnings growth of 31.08% with revenue increasing by 10.32%.

Domino's has seen its market share soar in the past decade. It accounted for a whopping 30% of the U.S. delivery industry last year -- up from 19% in 2007.

Short interest has decreased by 21.6% since the company's last earnings release while the stock has drifted higher by 10.4% from its open following the earnings release to be 12.8% above its 200 day moving average of $195.69. Overall earnings estimates have been revised higher since the company's last earnings release.

Domino's has been posting tantalizing growth for over a decade now…..

  • In 2015 DPZ kicked into high gear when comparable-store sales shot into the double digits.
  • In 2016 the chain then followed that performance with another double-digit expansion.
  • In 2017 growth just below 10% for the first time in three fiscal years, but it would still indicate healthy market share gains against rivals.

Because…..

  • The chain's delivery focus means that its stores are tiny -- just 1,500 square feet. That makes Domino's locations cheap and easy to launch, which helps explain how the company can ramp up expansion so quickly.
  • Domino's believes it can expand comps by between 3% and 6% each year, in both the domestic and international markets. The company is also targeting adding between 6% and 8% per year to its base of restaurants. That outlook represented a modest increase in both domestic comps and the store count.
  • The chain is likely to come in well ahead of its U.S. growth target for the year while ending up roughly on track in its other big-picture operating goals.

Option trade to consider: Buy the DPZ MARCH 16 2018 220.000 CALL at approximately $10.00.

Wednesday, February 21

Roku Inc. (NASDAQ:ROKU), a television streaming platform, will report earnings after the market closes. The consensus estimate is for a loss of $0.11 per share on revenue of $183.21 million. The Earnings Whisper number is ($0.08) per share. The company's guidance was for revenue of $175.00 million to $190.00 million.

In the September quarter, Roku said active accounts increased 48% year over year to 16.7 million, streaming hours grew 58% to 3.8 billion hours, and average revenue per user climbed 37% to $12.68.

Overall earnings estimates have been revised higher since the company's last earnings release.

The good news for ROKU stock is that Street expectations don't look that high. Consensus estimates imply 24% year-over-year growth. In Q3, Roku crushed those estimates with a 40% increase. Another big top-line beat could send shorts scurrying once again, and send ROKU back toward its highs near $59.

The real driver is roku’s service-agnostic software platform. There are now 16.7 million people relying on Roku, through both the actual set-top devices and the growing number of smart TVs opting to run Roku's operating system. Roku's active accounts have risen 48% over the past year, but platform revenue soared 137% in the third quarter as average revenue per user is spiking as engagement grows.

Option trade to consider: Buy the ROKU MARCH 16 2018 50.000 CALL at approximately $4.70.

Ultra Clean Holdings Inc. (NASDAQ:UCTT), engaged in the design, engineering and manufacture of production tools, modules and subsystems the semiconductor capital equipment industry, will report earnings after the market closes. The consensus earnings estimate is $0.60 per share on revenue of $247.00 million. The Earnings Whisper number is $0.62 per share.

The company's guidance was for earnings of $0.57 to $0.63 per share on revenue of $240.00 million to $250.00 million. Consensus estimates are for year-over-year earnings growth of 66.67% with revenue increasing by 41.51%.

The stock is cheaply priced and the business has great visibility into a strong 2018.

UCTT is a strong buy at this low valuation compared to its growth peers in the semiconductor space.

Overall earnings estimates have been revised higher since the company's last earnings release.

Option trade to consider: Buy the UCTT MARCH 16 2018 20.000 CALL at approximately $1.20.

Thursday, February 22

Universal Display Corporation (NASDAQ:OLED), a provider of technology and materials for OLED displays and lighting, will report after the market closes. Analysts expect Universal Display to earn 82 cents a share, up 49%, on sales of $98 million, up 31%.

The stock has surpassed the Consensus Estimate over the last four quarters with an average positive earnings surprise of 599.4% and has an earnings growth expectation of 30% for 2018.

A big overhang on the company was removed when Universal Display announced new long-term supply and license agreements with major customer Samsung on Feb. 14.

Tax Cuts and Jobs Act of 2017 will lower the tax rate for OLED, a positive effect on earnings and, consequently, free cash flow can increase its intrinsic value significantly.

New investments and partnerships in the OLED market should now be considered in the estimates of fair value.

Option trade to consider: Buy the OLED MARCH 16 2018 165.000 CALL at approximately $7.70.

Option trade to consider: Buy the OLED MARCH 16 2018 165.000 CALL at approximately $7.70.

An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, get on board with the members of Stock Options Made Easy.

Our proven track record says it all!!


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!

Options traders are not successful because they win.

Options traders win because they are successful.


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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”Success is simple. Do what's right, the right way, at the right time.”


Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.





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