Investing
Time to Buy These Top-Rated Stocks After Massive Earnings Beats
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Investors are usually on the lookout for companies that post impressive earnings beats during quarterly results.
Easily surpassing bottom-line expectations is a sign that business operations are strengthening. More importantly, earnings estimate revisions tend to rise which is a large catalyst to the upward price movement of a stock.
Here are three top-rated stocks that appear to be scoping out this scenario after crushing earnings expectations.
e.l.f. Beauty (ELF)
One stock making an assertive case for more upside after reporting earnings is e.l.f Beauty which currently sports a Zacks Rank #1 (Strong Buy).
The cosmetic leader crushed its fiscal first-quarter earnings expectations after market hours on Tuesday with EPS at $1.10 compared to estimates of $0.58 a share. More impressive, this skyrocketed 182% from earnings of $0.39 a share in the prior-year quarter.
e.l.f. Beauty continues to expand its brand with CEO Tarang Amin stating this was the company’s 18th consecutive quarter of delivering both net sales and market share gains. Amin elaborated that only five publicly traded consumer companies have grown for 18 straight quarters and averaged at least 20% sales growth in every quarter over that period.
To the delight of investors, e.l.f. Beauty raised its net sales and full-year profit outlook with the trend of rising earnings estimates likely to continue. According to Zacks estimates, e.l.f. Beauty’s earnings are now forecasted to rise 10% in its current fiscal 2024 and climb another 20% in FY25 at $2.20 per share. Notably, FY25 EPS projections would represent a mind-boggling 424% growth over the last five years with 2021 earnings at $0.42 a share.
Toyota Motors (TM)
Also sporting a Zacks Rank #1 (Strong Buy) Toyota Motors stock should be catching investors’ attention after the company obliterated its fiscal first-quarter earnings on Tuesday as well.
It’s noteworthy that Toyota’s Automotive-Foreign Industry is in the top 8% of over 250 Zacks industries and the company appears to be capitalizing on its strong business environment. Toyota’s first-quarter earnings of $7.05 per share blasted estimates of $3.92 a share by 80% and soared 70% from Q1 EPS of $4.14 a year ago.
The shocking profit increase was attributed to the easing of a chip shortage which helped the company ramp up production. Earnings estimates had already soared over the last 60 days and may keep going up.
Toyota’s current fiscal 2024 earnings are expected to expand 27% at $16.94 a share compared to EPS of $13.28 in its FY23. Fiscal 2025 earnings are projected to jump another 13% to $19.10 a share. Even better, FY25 projections would also represent 27% growth over the last five years with Toyota’s 2021 EPS at $14.99.
Crestwood Equity Partners (CEQP)
Lastly, Crestwood Equity Partners’ stock sports a Zacks Rank #2 (Buy) and looks attractive after the Master Limit Partnership (MLP) blasted second-quarter earnings expectations on Tuesday.
Crestwood provides a wide range of fee-based infrastructure solutions in major U.S. Shale spaces including the Bakken Shale, Powder River Basin, Delaware Basin, and Williston Basin among others.
Second-quarter earnings of $1.16 per share easily surpassed EPS estimates of $0.26 by an astonishing 346% despite the company coming up -14% short on its top line.
Quarterly highlights included Crestwood putting into service a three-product gathering system for wells in the Williston basin with results exceeding expectations. Crestwood also achieved record Delaware Basin natural gas processing volumes.
Earnings estimate revisions are nicely up for Crestwood in the last two months and it’s plausible that this could continue following the staggering Q1 earnings beat. Furthermore, the growth along Crestwood’s bottom line is very enticing with the company expected to sustain probability and capitalize on its lucrative earnings potential.
To that point, fiscal 2023 earnings are now forecasted at $1.21 per share compared to an adjusted loss of -$0.29 a share in 2022. Plus, FY24 earnings are expected to soar another 79% at $2.17 per share with it being notable that Crestwood has an “A” Zacks Style Scores grade for Growth.
Takeaway
The earnings potential of these companies is very appealing and easily surpassing their quarterly bottom-line expectations reconfirmed this. In correlation with such, earnings estimates should continue to rise making now an ideal time to buy e.l.f. Beauty, Toyota Motors, and Crestwood Equity Partners stock.
Toyota Motor Corporation (TM): Free Stock Analysis Report
Crestwood Equity Partners LP (CEQP): Free Stock Analysis Report
e.l.f. Beauty (ELF): Free Stock Analysis Report
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