Earnings: 2 Hot Stocks to Watch Next Week

MarketsMotley Fool

Companies are gearing up to report their latest quarterly results. April is jam-packed with earnings reports from a range of companies. But two, in particular, will be worth watching next week.

Streaming-TV giant Netflix (NASDAQ: NFLX) is scheduled to report its first-quarter results after market close on Tuesday, April 16. On the following day, collaboration and productivity software company Atlassian (NASDAQ: TEAM) will post its fiscal third-quarter results. With shares of Netflix and Atlassian up 36% and 27% year to date, respectively, expectations are high.

Continue Reading Below

Here's a look at some key items to watch when each of these companies reports its results.

Netflix

As is usually the case with Netflix, subscriber growth will likely be the main item of concern for most investors when the company reports its first-quarter results.

The company's member growth has been on a roll recently, as Netflix added 29 million paying members in 2018 -- higher than its 22 million subscribers additions in the prior year. Momentum was driven primarily by growth internationally, but domestic growth was meaningful given how established the company is in the U.S. About 23 million new subscribers came from international markets, with the rest in the U.S.

Netflix is particularly pleased with its momentum abroad, explained Netflix's vice president of corporate development and investor relations in the company's fourth-quarter earnings call.

For Netflix's first quarter, management said it expects to add 8.9 million paying members, consisting of 1.6 million in the U.S. and 7.3 million internationally.

Since management said in the fourth-quarter earnings call that its global growth was spread across many geographies, more strong growth internationally is likely. Management forecasts are internal estimates and the company strives for accuracy. But investors should keep in mind that the company could easily fall short of its forecast.

Atlassian

Productivity software provider Atlassian has a high bar to live up to in its third quarter of fiscal 2019. The company saw accelerated top-line growth in its fiscal second quarter and adjusted earnings per share soared.

Going into Atlassian's fiscal second-quarter update, investors should look for more strong revenue growth and thousands of new customers.

Atlassian's revenue increased 39% year over year in Q2 -- an acceleration from 37% growth in the prior quarter. Was Atlassian able to keep up such impressive growth in Q3? Management guided for third-quarter revenue between $303 million and $305 million. The high end of this guidance range represents 36% year-over-year revenue growth.

Customers in Q2 increased by 6,551. Excluding 1,396 customers gained through the company's acquisition of incident management platform Opsgenie, the company added 51,155 net new customers during the quarter. Investors should look for similar customer growth in the upcoming earnings report.

Netflix will report its results after market close on Tuesday and Atlassian will share its latest quarterly numbers after market close on Wednesday.

Find out why Netflix is one of the 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

Tom and David just revealed their ten top stock picks for investors to buy right now. Netflix is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!

*Stock Advisor returns as of March 1, 2019

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Atlassian and Netflix. The Motley Fool has a disclosure policy.