We are in the heart of earnings season once again and now that big tech has hosted their calls, it is time for some growth stocks and FinTwit favorites to have their spotlights this week. So far this year, we have had a trend of companies exceeding expectations, yet still managing to see their stock plunge the next day. Only the very best reports from companies like Facebook (NASDAQ:FB), Square ($255.79|0.27%), and PayPal (NASDAQ:PYPL) saw their shares rise, while companies like Fastly (NYSE:FSLY), Pinterest (NASDAQ:PINS), Etsy (NASDAQ:ETSY), and Redfin (NASDAQ:RDFN) all saw their stocks plummet. Let’s take a look ahead at a couple stocks to keep an eye on heading into earnings this week.
Palantir (NYSE:PLTR): There may be no stock as divisive as Palantir for retail investors, but lately, the stock has been beaten up as it trends below both its 50-day and 200-day moving averages. These are key support points for stocks and the downward trajectory heading into earnings is never a good sign, especially in the current climate. Palantir held its Double Click demo day of its Foundry platform earlier in the quarter, and it will be interesting to hear from management about any new contracts that have been signed. Much has been made about the amount of shares sold by the executives following the lock up expiry back in February, but a little too much focus is being placed on the moves of management, rather than the performance of the company. Long-term this company appears to be positioned as one of the leaders in big data analytics, but considering every support level has been broken on its chart will lead technical analysts to have a bearish outlook for the stock over the near-term.
Lemonade (NYSE:LMND): Another popular FinTwit stock, this insurance industry disruptor has had a tumultuous year to say the least. In January, the stock hit $188 per share, before crashing back down to its current price levels of $79 at the time of this writing. Lemonade recently made the announcement that it would be adding car insurance to its portfolio, an industry it says is worth over $300 billion annually in the U.S. alone. The machine learning based insurance company also noted that its existing users will spend over $1 billion in car insurance each year, which could presumably find its way into Lemonade’s pockets sooner rather than later. As of now, Lemonade still trades at a gaudy 51 price to sales ratio, with negative profit margin and adjusted EBITDA. Translation: the company is far from profitable. Any investment means you are in it for the long haul. With that being said, Lemonade is a serious disruptor that has a relatively small market cap of just under $5 billion. This could easily be a ten-bagger stock if things go as planned, and car insurance is an excellent way to start. Watch how the stock reacts to earnings and if it dips, now may be as good a time as ever to start a position in what may be the leader in the insurance industry for years to come.
Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.