3 Earnings Winners Poised to Outperform the Market

Sound financial performance indicates that a company may be a good investment choice. The earnings season provides investors another window of opportunity to see which reporting companies exceeded expectations with solid financials and positive outlooks. These earnings winners present new and experienced investors with opportunities to get in on a company with strong growth potential. 

That is why investing in earnings season winners is one of the best thematic strategies investors can use to rebalance their portfolios, ride the winners’ momentum or mitigate the long-term risk from companies that poorly performed during the previous quarter. If you are in the market to complete your portfolio or deploy some trading capital, these three winners might be worth checking out before the rest of the market jumps in.

Dexcom (DXCM)

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Dexcom (NASDAQ:DXCM) designs and manufactures medical devices focused on continuous glucose monitoring (CGM) systems used by healthcare providers and diabetes patients. It has an integrated system product called Dexcom G6, which allows it to work with electronic interfaces and medical devices that collectively help automate insulin pumps, insulin dosing systems and other diabetes management devices. Its other products include Dexcom Real-time API for third-party health applications integration and its Clarity system for cloud integration in mobile devices.

DXCM’s revenue grew by 27% year-over-year (YoY), and organic GAAP operating income also increased by 190 basis points YoY. Plus, earnings beat analyst expectations by 47.06%, a giant leap from last year’s non-GAAP earnings. The company recently received regulatory clearance for a Dexcom G7 launch in the Canadian Market. Dexcom also raised its FY 2023 revenue guidance to 23% to 24% growth and a 28% increase in EBITDA margin. That makes DXCM one of our top choices in this quarter’s earnings winners.

Emcor Group (EME)

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Emcor Group (NYSE:EME) is a specialty contractor for mechanical and electrical construction, infrastructure and building services that offer the design, integration and maintenance of electrical power transmissions, generation and distribution service systems. These services cater to critical infrastructure systems in virtually every economic sector. Emcor also offers services that cover facility environments, such as lighting, air conditioning, fire protection, specialty welding and power generation systems. EME is also in a definitive acquisition agreement with ECM Holding Group. ECM is one of the leading providers of efficiency retrofit services for weatherization, lighting, water and airflow management solutions. This transaction, once completed, is expected to add further expanded services to Emcor Group’s specialized offerings.

On the earnings front, EME reported a record quarterly revenue of $3.21 billion, a 13.5% increase YoY. The company also reported a $3.61 EPS, exceeding analyst estimates by 33.21%. The revenue growth has been driven mainly by its U.S. construction segment. Its strong performance year to date led to the company upgrading its 2023 revenue guidance to $12.5 billion and its non-GAAP diluted EPS to $12.25 to $12.65 from its previous $10.75 to $11.25 guidance. That makes EME another top investment contender in this quarter’s earnings winner.

AppFolio (APPF)

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AppFolio (NASDAQ:APPF) is a cloud business management solution that caters to the real estate industry and helps businesses automate, streamline and digitally transform critical operations. The company’s platform is aimed to help the real estate industry have a platform interconnected in a singularly growing ecosystem. That includes property owners, real estate investment managers, property managers and residents. APPF’s solutions, AppFolio Property Manager Plus, AppFolio Property Manager and AppFolio’s platform, provide various services, including payments, tenant screening and insurance. 

AppFolio made a comeback in its financial results for the quarter. Revenue grew by 32% for Q3 2023, and EPS beat analysts’ estimates with its reported earnings of 225% surprise. The AppFolio Property Manager platform grew to 7.8 million units, a 9.85% increase YoY. The company’s continued focus on creating exceptional shareholder value has paid off with its stellar quarter. No wonder Analysts see it as a Strong Buy. With a potential turnaround recovery for the end of the year, we see APPF as a strong contender in our list of earnings release winners.

On the date of publication, Rick Orford did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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