3 Stocks Breaking Out After Q3 Earnings

Stocks to buy

This earnings season has been a bit of a quandary. Several leading tech companies that normally hit home runs with their financial results missed the mark, sending their stock prices lower as a result. Tesla (NASDAQ:TSLA) and Google’s parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are two major tech concerns that disappointed with their Q3 prints. At the same time, there have been several smaller and less influential tech concerns that have seen their share prices rise sharply after surprising investors with their Q3 earnings. Social media companies, fintech concerns and chipmakers that endured punishing downturns in their stock over the past year have now reversed higher following solid Q3 results and impressive forward guidance. These stocks present a great opportunity for investors to ride a post-earnings bump higher. Here are three breakout stocks to consider.

Pinterest (PINS)

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Look at Pinterest (NYSE:PINS) go. Shares of the social media company are up 19% after it reported third-quarter financial results that beat Wall Street forecasts across the board. Pinterest announced earnings per share (EPS) of 28 cents compared to 20 cents expected on Wall Street. Revenue for the three months ended Sept. 30 rose 11% from a year earlier to $763.2 million, which was better than the $743.5 million that was expected.

Pinterest said that the number of global monthly active users on its platform rose 8% during Q3 from a year earlier to 482 million. Analysts had penciled in 473 million monthly users. Additionally, the average revenue per user was $1.61, which beat analyst projections of $1.59. In terms of forward guidance, Pinterest said it expects revenue growth of 11% to 13% in the current fourth quarter of the year, which is better than the 11.3% growth anticipated by analysts who track the company’s progress. Pinterest added that its Q4 operating expenses will likely decline by 9% to 13% year-over-year.

The post-Q3 earnings bounce brings PINS stock to a year-to-date gain of 30%.

SoFi Technologies (SOFI)

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Shares of SoFi Technologies (NASDAQ:SOFI) are also breaking out after the financial technology company delivered a solid earnings beat and raised its forward guidance. Due to exceptional growth in its student loan segment, SoFi reported a Q3 loss of 3 cents per share, much less than the loss of 6 cents forecasted on Wall Street. The company’s Q3 adjusted net revenue totaled $530.7 million, ahead of the $511.3 million expected. Student loan originations for Q3 amounted to $919.3 million — 41% higher than a forecast of $651.5 million.

SoFi also reported personal and home loans of $3.89 billion and $355.7 million, respectively, each of which topped analyst estimates. Looking ahead, SoFi Technologies raised its forward guidance for all of this year, saying it now expects revenue of $2.05 billion, up from $1.97 billion previously. Analysts and investors cheered the Q3 print, which was the best the company has produced since the Covid-19 pandemic. SOFI stock rose 9% after the Q3 results were made public, and the company’s share price is now up 68% on the year.

Intel (INTC)

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Shares of Intel (NASDAQ:INTC) popped 7% higher after the microchip and semiconductor company issued third-quarter financial results that had analysts on Wall Street cheering. Intel announced EPS of 41 cents versus 22 cents that had been forecast. Revenue came in at $14.16 billion versus $13.53 billion that was expected. The company’s gross margin for the quarter was flat at 45.8%, and revenue for the quarter was 8% lower than a year earlier. However, Intel executives said they foresee positive revenue growth in the current fourth quarter and reiterated plans to cut costs by $3 billion this year.

The commitment to cost controls seems to be what really led investors to bid up INTC stock. The company made a point to emphasize that its operating expenses declined 15% in Q3 from a year ago. Also, management at Intel singled out the company’s progress in pivoting to become a foundry business that doesn’t just design microchips and semiconductors but fabricates them as well. While chip manufacturing is still a small part of Intel’s business, with only $311 million of sales in Q3, the unit’s revenue grew nearly 300% from a year earlier.

With the Q3 pop, INTC stock is now up 37% in 2023 and continuing to rise.

On the date of publication, Joel Baglole held a long position in GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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