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Stock Market Analysis

The Three Biggest Earnings Reports This Week

Earnings season is far from over and this week sees some big retailers show their books, along with Asian stocks and a red-hot chip maker. 

Yes, earnings season is still around and the cries of “well yes it was bad, but it wasn’t that bad” from CFOs can still be heard reverberating across the hallowed halls of Wall Street’s investment banks. This week sees a wide range of businesses report to the public, from traditional retailers like Walmart, Kohls, Target, and Home Depot, to Asian stocks like Sea Limited, Alibaba, JD.com, and Baozun, as well as one of the hottest tech stocks in the Nasdaq 100 right now: Nvidia. Here’s what to expect from this week’s earnings reports. 

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Walmart

Some of America’s biggest retailers will report this week, with the head honcho coming out of the blocks early Tuesday morning. Walmart (NYSE: WMT) has been a public company for 50 years now, meaning it’s had to do almost 200 of these reports. You can imagine that as time goes on, the more perfunctory they become. However, this time around we’ve got a few curveballs that make this one a bit more interesting than usual. 

The first of which is the launch of Walmart+, a subscription service that will look to give Amazon Prime a run for its money. Any and all information on the new project will be pounced upon by investors. There is also the deal it made with Shopify to expand the reach of its online marketplace. However, it’s not all e-commerce that will get people to tune in to the call. As the country’s largest retailer, as well as its largest employer, Walmart’s performance can be viewed as a litmus test for the recovery of the country as a whole. Is the American public spending more? In-store sales also show us whether people are leaving their houses more to shop compared to the height of the pandemic. 

When does it report?

Tuesday, August 18th, before the markets open. 

Sea Limited

Sea Limited (NYSE: SE) is a gaming and e-commerce company that operates primarily in South East Asia. It’s been one of the true darlings of Wall Street during this pandemic, capitalizing on people forced to stay indoors on two fronts. Its gaming arm, Garena, and in particular its flagship game, Free Fire, has seen a huge increase in popularity. It was the third-most downloaded mobile game in the world in June according to app tracking platform Sensor Tower. As well as this, its e-commerce platform, Shopee, is seeing a massive surge in revenues. The company saw a 111% year-over-year increase in orders on the platform in Q1. 

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This report really has to blow investors out of the water to justify the stock’s 216% rise year-to-date, building on the incredible growth from Q1 across its gaming, e-commerce, and payments branches. The run-up in share price means that anything less than the lofty analysts’ expectations of revenue growing 72.5% to $1.06 billion and its loss per share narrowing from $0.52 to $0.42 will likely see the stock plummet. The fact that one of it’s biggest backers, Tencent, is in the crosshairs of the U.S. government at the minute is also a worrying factor that may shadow Tuesday’s report. This being said, the momentum behind the business is undeniable. The opportunities arising from Sea Ltd’s ecosystem and its market-leading position in one of the most exciting regions in the world mean that any pullback should be seen as a buying opportunity for investors. 

When does it report?

Tuesday, August 18th, before the markets open. 

Nvidia

Nvidia (NASDAQ: NVDA) has been on a tear recently. The forward-looking chip-maker is up 30% since it last reported back in May and a whopping 93% since the start of the year. Like Sea Ltd, it will have to walk the walk. One figure investors will be watching closely is the company’s data center revenues, which are expected to surpass its gaming revenues for the first time this quarter. Gaming has always been the company’s main breadwinner, so to see it introduce a new revenue stream so successfully is a very exciting prospect. The shift is powered by the launch of a new line of graphic processing units brought out by Nvidia this quarter for data centers known as ‘Ampere’. 

With exciting products catering for industries like gaming, data centers, and autonomous cars, it’s clear to see why there is such hype behind Nvidia, with it recently surpassing Intel as the largest chipmaker in the U.S. despite significantly lower revenues. While the potential for growth is one of the most enticing aspects of a company like this for investors, it means that it is held to a much higher standard when it comes to earnings season. Any sign of slowing down, either in revenue or through its guidance will see a significant drop off in its stock price. Whether it lives up to analysts’ high expectations or not, expect to see a lot of after-hours action on this stock Wednesday evening. 

When does it report?

Wednesday, August 19th, after the bell. 


MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Michael O'Mahony
Michael O'Mahony
Michael is a writer here at MyWallSt. His first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.