This Week's Earnings Outlook

After last week's jobless claims data that was somewhat overlooked due to fears of rising inflation, optimism is in the air with retailers powering through a Delta slowdown. There are positive expectations for the following two quarters with tons of upside to come with society getting back to normal. Moreover, sectors that stand to benefit from the re-opening of the economy, such as cyclical energy and financial stocks, have finally begun to move higher, driven by their better-than-expected earnings results.

Palo Alto Networks Inc PANW, Salesforce.com Inc CRM, Splunk Inc SPLK, and Peloton Interactive Inc PTON are the stocks to watch this week.

Palo Alto Networks

Software will open the week after the close on Monday with the cybersecurity specialist expected to report earnings per share of $1.43 on revenue of $1.17 billion. There is no doubt that cybersecurity market that is now worth $200 billion will be among the most popular sectors over the upcoming years to help corporations combat rising hacker sophistication, support their digital expansion, and prevent major public embarrassment that comes as a result of breaches and ransom payment demands.

With the market estimated to grow at 10% compound annual growth rate within a decade,  the company that provides best-of-breed products and services is poised to be a major beneficiary of that growth.

Salesforce

On Wednesday after close, the CRM expert is expected to report earnings per share of 92 cents on revenue of $6.24 billion. Despite recently rising recently to their new highest since the end of November last year, JMP Securities analyst Patrick Walravens believes its stock has even more room to run. Over the past half of a decade, this amazing growth story has been written by its SaaS business model and its customer relationship management services, and now, along with improving demand, the company is poised to improve its profit margins. It just needs to show how it plans to execute this strategy.

Splunk

Wall Street expects the machine data analytics company to report a loss per share of 69 cents on revenue of $562.82 million. Contradictory to S&P's 13% gain over the past six months, Splunk's shares plummeted nearly 20%. However, it is coming off a quarter during which revenue grew 16% YoY, so Splunk needs to deliver proof it can reaccelerate its growth rate and capture market share.

Peloton

On Thursday after close, Wall Street expects the fitness player to report earnings per share of 44 cents along with revenue of $921.66 million. Despite near-term headwinds such as safety concerns and supply chain difficulties, the market still believes in Peloton's long-term potential. Demand for its fitness products is still going strong and subscriptions interest continues to accelerate, but Peloton needs to deliver in the eyes of Consumer Product Safety Commission (CPSC).

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