August is the height of the second quarter earnings season. This year is particularly suspenseful as businesses grapple with the second quarter of 2020, where some of them received a huge pandemic boost, and others suffered a huge pandemic blow. Many companies have rebounded, beating 2019 numbers, and others posted lackluster growth in the face of tough comparisons.
Investors rewarded the stocks accordingly. They sent Home deposit stock down this week after posting weak compositions after a huge increase last year, and they rewarded Coca Cola in July after posting a 42% increase in turnover.
But things are not that simple, and investors should focus on the long-term outlook when valuing a stock. That’s why i go with Airbnb (NASDAQ: ABNB), Walt disney (NYSE: DIS), and Holdings reached (NASDAQ: UPST) like hot stocks to buy this month. All three showed incredible growth in the second quarter, and they all have tremendous potential.
Travel is back and Airbnb is leading the way
Airbnb has already shown signs of a return in the first quarter of 2021, with a 5% increase in revenue after staggering declines in 2020. But the second quarter has been nothing short of monstrous, with revenue increasing 299% and the gross value of bookings increasing by 320% year over year.
It’s much better than a simple pandemic comparison. And all of the reasons he’s made such a fierce recovery are the same why he has so much potential to stay ahead of traditional travel and expand his lead. Most of these reasons stem from the same source: its adaptive and flexible model. This means that as journeys change, Airbnb grows with it.
As signs of recovery appear, this has become visible in several ways. One was an increase in stays of a month or more. More and more people are using Airbnb rentals as a home rather than a vacation, which is not as achievable in traditional travel accommodation. Another is that customers are diversifying to destinations off the beaten track. It’s also more difficult with standard hotels, which you can’t always find in remote locations.
One way to see the strength of Airbnb is how it turns its booked nights into income. Booked nights increased 197% in the second quarter year over year and were down 1% from 2019. But Airbnb revenue has skyrocketed beyond that number. This means that he earns more money with his bookings and is resilient. It also turns more of that revenue into profit, as the net loss fell from over $ 576 million in the second quarter of 2020 and over $ 1 billion in the first quarter of 2021, to $ 68 million. in the second quarter of 2021.
Despite what appeared to be a breakout quarter, investors snubbed the travel company. Maybe that’s because it’s already a bit pricey, trading at almost 20 times the sales. But that’s typical of a growing business, and it shouldn’t stop you from taking a stand.
Disney is back in action
Disney, on the other hand, is a perpetual delight for the crowds, both in its parks and in the markets. And it turned out to be significant in the third quarter, with revenue growth of 45%. This reversed the 42% drop in Q3 2020, despite the limited capacity fleets running and other experiments still not working at all. In total, third quarter sales were only 16% lower than the same period in 2019, before the start of the coronavirus pandemic
Fleet revenues rebounded with an increase of more than 300% in the third quarter, about two-thirds of the 2019 metric, and they accounted for about a quarter of the company’s total sales. Media and entertainment distribution, the newly structured content segment, grew 18%. Streaming remained the most aggressive revenue driver in the third quarter, reaching nearly 174 million accounts for Disney +, Hulu, and ESPN + and higher estimates.
The fascinating history of Disney actions comes from all of its activities combined. There is simply no other media company on the world stage that combines the best parks and resorts with an unrivaled film library. CEO Bob Chapek has promised plenty of new content, including Marvel and Star Wars series that are likely to be big winners and gain membership.
Disney shares are down 3% year-to-date so far, but there are so many perks to unlock for the best stocks in the entertainment industry.
Artificial intelligence for banking
Despite a slow IPO in December, Upstart has exploded to become one of the hottest stocks on the market, gaining 420% year-to-date. Investors have finally grasped the vast potential of the company offering an artificial intelligence platform for small bank customers.
Upstart’s platform assesses customer creditworthiness based on thousands of data points for accurate risk assessment. This translates into more approvals, putting more money in the client bank’s coffers with less risk involved, a real win-win.
“Our second quarter results continue to show why Upstart has the potential to be among the world’s largest and most influential fintechs,” said Upstart CEO Dave Girouard in the second quarter results release of the society. This confidence is justified when you see what kind of growth Upstart is experiencing.
In the second quarter, revenues increased by more than 1,000% and loans issued increased by more than 1,600%. He turned to a profit after a loss last year and expects equally spectacular results in the third quarter.
The only problem with the Upstart stock is the price that the stock has gone up to over the past few months. It is now trading at almost 300 times earnings over 12 months. It’s a big bonus. Keep in mind, however, that many of today’s biggest winners of all time have traded such a bonus at one point or another. So while it may take a while for stocks to catch up with that costly valuation, the way things are going and appear to be going on, you will still get your money’s worth.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.Source link