10 Media and Internet Stocks to Watch After Latest Earnings

Published on August 12, 2022 at 9:49 am by Fahad Ali Khan in News

In this article, we will take a look at the 10 media and internet stocks to watch after latest earnings.

Notable companies from the communication services sector, including The Walt Disney Company (NYSE:DIS), Roblox Corporation (NYSE:RBLX) and Take-Two Interactive Software, Inc. (NASDAQ:TTWO), are trending after their recent earnings.

Shares of The Walt Disney Company (NYSE:DIS) rose in the pre-market trading session on Thursday, August 11, following its upbeat financial performance. On the other hand, Roblox Corporation (NYSE:RBLX) and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) also traded on heavy volume after posting their quarterly results earlier this week.

In the remaining article, we will review the latest financial performance of these companies, along with some other communication services stocks.

Photo by Chris Liverani on Unsplash

10. Dolby Laboratories, Inc. (NYSE:DLB)

Number of Hedge Fund Holders: 22

Dolby Laboratories, Inc. (NYSE:DLB) beat profit expectations for its fiscal third quarter, sending its shares up nearly five percent on Wednesday, August 10, 2022. The company, which creates audio and visual technologies for notable streaming platforms, reported adjusted earnings of 68 cents per share, above the consensus of 58 cents.

Revenue for the quarter came in at $289.6 million, while analysts were looking for revenue of $294.04 million. Dolby Laboratories, Inc. (NYSE:DLB) also updated its financial outlook for the current quarter.

Dolby Laboratories, Inc. (NYSE:DLB) now expects adjusted earnings in the range of 68 – 83 cents per share and revenue between $295 – $325 million for its fiscal fourth quarter.

9. Nextdoor Holdings, Inc. (NYSE:KIND)

Number of Hedge Fund Holders: 23

Nextdoor Holdings, Inc. (NYSE:KIND) posted a wider-than-expected loss for the second quarter and lowered its sales outlook for the full year. As a result, its shares lost nearly 25 percent of their value on Wednesday, August 10, 2022.

The provider of hyperlocal social networking service for neighborhoods reported a loss of 10 cents per share, wider than analysts’ average estimate for a loss of 5 cents per share. In addition, Nextdoor Holdings, Inc. (NYSE:KIND) posted revenue of $54.54 million for the quarter, up 19 percent over the year-ago period, but slightly below the consensus of $55.22 million.

For the full year, Nextdoor Holdings, Inc. (NYSE:KIND) now anticipates revenue in the range of $220 – $225 million, compared to its previous guidance between $252 – $256 million.

In a letter to shareholders, Nextdoor Holdings, Inc. (NYSE:KIND) said in a statement:

“In Q2, the global economy experienced increasingly complex macroeconomic conditions   that affected our customers and markets alike. The continuing war in Ukraine, supply chain bottlenecks, rising interest rates, record levels of inflation, and increased risk of a recession have led to heightened levels of caution across industries as neighbors and businesses plan for an uncertain future.”

8. Angi Inc. (NASDAQ:ANGI)

Number of Hedge Fund Holders: 27

Shares of Angi Inc. (NASDAQ:ANGI) plummeted over 15 percent on Wednesday, August 15, 2022, despite posting better-than-expected financial results for the second quarter. The internet services company reported a loss of 5 cents per share, compared to a loss of 6 cents per share in the same period last year.

Revenue for the quarter jumped 23 percent on a year-over-year basis to $515.8 million. Analysts expected Angi Inc. (NASDAQ:ANGI) to lose 6 cents per share on revenue of $492.76 million.

Among other updates, Angi Inc. (NASDAQ:ANGI) reported that its free cash flow in the quarter fell to a negative $55.1 million, from a positive $23.5 million in the year-ago period. Angi Inc. (NASDAQ:ANGI) blamed higher capital expenditures and weak adjusted EBITDA for the drop.

Like Angi Inc. (NASDAQ:ANGI), other communication services stocks, including The Walt Disney Company (NYSE:DIS), Roblox Corporation (NYSE:RBLX) and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) also came into the spotlight after their recent earnings.

7. CarGurus, Inc. (NASDAQ:CARG)

Number of Hedge Fund Holders: 29

CarGurus, Inc. (NASDAQ:CARG) announced better-than-expected financial results for Q2. However, the automotive research and shopping website issued a weak sales outlook for the current quarter, sending its shares to a new 52-week low on Tuesday, August 9, 2022.

For the second quarter, CarGurus, Inc. (NASDAQ:CARG) reported adjusted earnings of 32 cents per share on revenue of $511.2 million. This compares to the consensus of 31 cents per share for earnings and $505.85 million for revenue.

Looking forward, CarGurus, Inc. (NASDAQ:CARG) expects to generate revenue in the range of $460 – $490 million in the third quarter. That’s well below analysts’ average estimate of $555.6 million.

A number of research firms cut their price targets for CarGurus, Inc. (NASDAQ:CARG), citing weak Q3 guidance. Raymond James trimmed its price target from $34 to $28, Oppenheimer reduced its price target from $38 to $32 and RBC Capital slashed its price target from $45 to $35.

6. Warner Music Group Corp. (NASDAQ:WMG)

Number of Hedge Fund Holders: 34

Shares of Warner Music Group Corp. (NASDAQ:WMG) initially fell but later rebounded following its fiscal third quarter results on Tuesday, August 9, 2022. The music company reported earnings of 24 cents per share, representing a two-fold surge over 12 cents per share in the year-ago period.

In addition, Warner Music Group Corp. (NASDAQ:WMG) posted revenue of $1.43 billion, up 6.9 percent on a year-over-year basis. The results easily surpassed the consensus of 19 cents per share for earnings and $1.41 billion for revenue.

Warner Music Group Corp. (NASDAQ:WMG) also disclosed its segment-wise sales performance. Its recorded music revenue increased 3.2 percent to $1.19 billion, while music publishing revenue climbed nearly 30 percent to $245 million in the quarter.

Separately, investment management firm Cooper Investors mentioned Warner Music Group Corp. (NASDAQ:WMG) in its first-quarter 2022 investor letter, stating:

“Warner Music was also sold to fund new investments. The business is entering a period of significant capital deployment that is more extensive than we expected, representing a change to our original value propositions. While these investment phases make sense for longer-term strategic positioning, they also raise execution risk and push free cash flow growth further to the right at a time when other Watchlist stocks have been on sale.”

5. Fox Corporation (NASDAQ:FOXA)

Number of Hedge Fund Holders: 38

Shares of Fox Corporation (NASDAQ:FOXA) closed higher on Wednesday, August 10, 2022, despite missing profit and sales expectations for its fiscal fourth quarter. The mass media company reported adjusted earnings of 74 cents per share, up from 65 cents per share in the year-ago period.

In addition, Fox Corporation (NASDAQ:FOXA) posted revenue of $3.03 billion, up 5 percent on a year-over-year basis. The results were slightly below the consensus of 76 cents per share for earnings and $3.05 billion for revenue.

Fox Corporation (NASDAQ:FOXA) also released its segment-wise sales results. Its affiliate revenue inched up 2 percent to $1.73 billion, advertising revenue rose 7 percent to $1.06 billion and other revenues advanced 4 percent to $252 million in the quarter.

4. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 40

Roblox Corporation (NYSE:RBLX) announced weak financial results for the second quarter. Its shares initially fell nearly 12 percent on Wednesday morning. However, the stock managed to recover its lost value by the end of the trading session on August 10.

The video game developer reported a loss of 30 cents per share, wider than analysts’ average estimate for a loss of 21 cents per share. Total bookings for the quarter decreased 4 percent versus last year to $639.9 million, while analysts were expecting Roblox Corporation (NYSE:RBLX) to report bookings of $644.4 million.

Among other updates, Roblox Corporation (NYSE:RBLX) said that average daily active users rose 21 percent to 52.2 million in the quarter, while hours engaged jumped 16 percent to 11.3 billion.

3. IAC/InterActiveCorp (NASDAQ:IAC)

Number of Hedge Fund Holders: 48

Shares of IAC/InterActiveCorp (NASDAQ:IAC) fell nearly six percent on Wednesday, August 10, 2022, after the media and Internet company swung to a loss in the second quarter.

IAC/InterActiveCorp (NASDAQ:IAC) reported a loss of $10.02 per share, compared to earnings of $2.02 per share in the same period of 2021. Revenue for the quarter jumped 64 percent versus last year to $1.36 billion but missed the consensus of $1.38 billion.

Earlier this year, IAC/InterActiveCorp (NASDAQ:IAC) also appeared in the first-quarter 2022 investor letter of Memphis-based Longleaf Partners Fund. Here’s what the fund said:

“IAC – The conglomerate discount on this digital holding company grew wider in the quarter amidst a period of broad uncertainty and continued technology stock declines. Unlike most of its tech peers, IAC began the year already uniquely discounted and today trades at less than half of our appraisal value and less than 10x estimated free FCF per share power. Underlying holding Angi (previously Angie’s List) reported a disappointing quarter. Angi represents only 25% of value but swings the market perception and stock price since it is also publicly traded. The market is not yet giving credit to the Dotdash Meredith deal creating a digital publishing leader, given the lack of near-term reporting clarity since the deal just closed and 2022 is a transition year. Additionally, IAC’s underlying holdings in carsharing company Turo and casino and online gaming company MGM remain not properly recognized by the market. CEO Joey Levin and Chairman Barry Diller have a history of creating value-accretive catalysts to close the price to value gap.”

2. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)

Number of Hedge Fund Holders: 58

Shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) fell nearly four percent on Tuesday, August 9, 2022. The drop came after the video game holding company posted disappointing results for its fiscal first quarter.

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) earned 71 cents per share on an adjusted basis, below the consensus of 87 cents per share. Net booking for the quarter jumped 41 percent on a year-over-year basis to $1 billion but missed the expectations of $1.11 billion.

Looking forward, Take-Two Interactive Software, Inc. (NASDAQ:TTWO) expects booking in the range of $5.8 – $5.9 billion for its fiscal year 2023. That’s below analysts’ average estimate of $6.22 billion.

Commenting on the quarter, CEO Strauss Zelnick said in a statement:

“We remain exceedingly optimistic about the long-term growth potential for the mobile industry, as well as our ability to create greater shareholder value as a combined entity with Zynga. Our creative teams are actively discussing potential new projects and we remain committed to delivering over $500 million of annual Net Bookings opportunities over time.”

1. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 113

Shares of The Walt Disney Company (NYSE:DIS) jumped nearly nine percent in the pre-market trading session on Thursday, August 11, 2022. The surge came after the entertainment giant crushed profit and sales expectations for its fiscal third quarter.

The Walt Disney Company (NYSE:DIS) reported adjusted earnings of $1.09 per share, up from 80 cents per share in the same period of 2021. Analysts were looking for earnings of $1 per share.

Revenue for the quarter increased 26 percent versus last year to $21.5 billion, while analysts expected The Walt Disney Company (NYSE:DIS) to generate revenue of $20.5 billion. If we look at the performance of its flagship units, revenue from the media and entertainment segment rose 11 percent to $14.1 billion, while revenue from the parks, experiences and products segment skyrocketed 70 percent to $7.4 billion in the quarter.

Among other updates, The Walt Disney Company (NYSE:DIS) reported that Disney+ subscriptions increased to 152.1 million in the quarter, beating analysts’ average estimate of 147 million.

You can also take a peek at 10 Cheap ETFs to Invest In For Beginners and Jim Cramer Recommends These 10 Stocks For Recession.

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