3 Pre-Earnings Plays Still in the Game

According to Factset, S&P 500 earnings growth in the first quarter of this year (21.8%) is expected to mark the best growth since the third quarter of 2018. Granted, this growth estimate compares an economy currently in recovery mode to a pandemic plagued Q1 of 2020 but it is nevertheless encouraging.

But while all eyes will soon be on Q1 2021 earnings reports to gauge the health of corporate America, there are still some intriguing fourth-quarter announcements ahead. Although S&P 500 companies have all but finished the Q4 reporting cycle (with 79% beating EPS expectations), there are still plenty more stocks sitting out there as compelling earnings plays.

Will DocuSign Beat Earnings Estimates?

DocuSign (NASDAQ:DOCU) reports after the close on March 11^th. Last time we heard from the company, a strong third-quarter performance caused its stock to gap higher in heavy volume. This time around the Street will be looking for EPS of $0.22 on revenue of $407.7 million. Based on the rapid adoption of cloud-based document management software, another beat is likely to come.  

With DocuSign's stock now roughly 30% off its September 2020 record high, investors have another chance to get in on a long-term e-commerce winner. The company has largely been lumped in with a group of "pandemic plays" and while this makes sense, the recent selloff in the stock does not. The work from home economy has only accelerated what was already a major growth market in web-based document management.

Even as workplaces ease back into office environments, DocuSign's software solutions will remain in high demand. Sure, the pandemic-driven spike in revenue won't be sustainable post-COVID.

But let's not forget DocuSign holds the top position in the growing eSignature space and has a massive opportunity ahead in the form of the broader $50 billion global agreement cloud market. This extends beyond online document signing and into the realm of paperless preparation, action, and management. Much of the growth will come overseas considering DocuSign's international revenue is still less than 20% of overall revenue.

Will AutoWeb Return to Growth?

At the high end of the risk spectrum, AutoWeb (NASDAQ:AUTO) is another stock that could see a post earnings pop. Ahead of its March 11^th report, research firm Barrington reiterated its 'buy' rating on AutoWeb and gave the stock a $10 long-term price target. This represents more than 300% upside from the current $2.44 share price. The two other analysts that cover the stock also consider it a 'buy' with more modest price targets of $4.25 and $5.00.

Although there seem to be a lot of online auto platforms these days, AutoWeb is a bit different. It helps bridge the gap between U.S. car dealers and prospective buyers though its lead generation and marketing services. Its website also gives consumers data and other content to support their car-buying decisions.

Formerly Autobytel, AutoWeb is actually a dinosaur by online auto brand standards having been around for 25 years. But even with the car buying marketplace increasingly moving online, there may still be a place for it. There remains a portion of the population that prefers the old-fashioned car buying experience. And as the economic recovery unfolds and further stimulus kicks in, people may soon be buzzing around dealership lots again.

Following a reverse-split and subsequent downtrend, AutoWeb is now a shell of its former self. However, it may still have some gas in the tank. This past summer the company flashed some better-than-expected results that showed an expanding gross margin and narrower loss. This offered hope that demand and financials may have turned the corner—and prompted an August 2020 surge in strong volume. Although earnings are expected to be negative again this quarter, they may not be by that much. More importantly, signs of improved demand, better dealer inventory, and a positive outlook hold the potential to ignite a rally in this stalled out stock.

Will Kirkland's Stock Go Up After Earnings?

After an astounding 1,342% gain last year discount retailer Kirkland's (NASDAQ:KIRK) stock is at it again this year. Up another 35% in 2021, the company is firing on all cylinders these days as its remarkable turnaround story continues to play out.

Last quarter Kirkland's bottom-line result was more than twice what the Street had expected thanks to some strong margins that appear to have staying power. What also appears to have staying power is consumer demand for Kirkland's expanding assortment of home décor and gifts at affordable prices.

Based on the market's reactions to the last few earnings reports, another run may follow Kirkland's May 12^th pre-market report. Last month the company provided preliminary fourth-quarter results that were highlighted by strong e-commerce growth and post-holiday sales. This caused the stock to rally to an all-time high of $32.69.

Since then it has been dragged down by general market weakness while the Kirkland's comeback story hasn't changed. When the market is reminded of this growing, debt-free retailer, look for Kirkland's stock to head back to where it was after the preliminary report.