3 Popular Stocks to Consider as Earnings Approach: DIS, FTNT, SHOP

Disney (DIS), Fortinet (FTNT), and Shopify (SHOP) are highlighted as key stocks to monitor ahead of their upcoming earnings reports, each holding strong Zacks Ranks and demonstrating robust growth trajectories. Disney anticipates Q3 top and bottom-line growth driven by cost-cutting, streaming monetization, and box office success. Cybersecurity firm Fortinet, with a history of 29 consecutive earnings beats, projects significant Q2 revenue and EPS growth, while e-commerce giant Shopify expects substantial Q2 sales and Gross Merchandise Volume increases, fueled by AI tools and strategic partnerships. These companies are positioned for potential upside, though post-earnings volatility could present compelling long-term opportunities.

Analysis

Three companies, Disney (DIS), Fortinet (FTNT), and Shopify (SHOP), are positioned favorably ahead of their upcoming quarterly earnings reports, supported by strong Zacks Ranks and positive fundamental catalysts. Shopify, with a Zacks Rank #1 (Strong Buy), exhibits the most aggressive growth profile, with its stock gaining 140% over the last year. Projections for its second quarter include a 24% spike in sales to $2.54 billion and an expected Gross Merchandise Volume (GMV) of $81 billion, which would mark its seventh consecutive quarter of over 20% GMV growth, fueled by AI tool adoption and strategic partnerships. Fortinet, a Zacks Rank #2 (Buy), demonstrates consistent execution with a remarkable 29 consecutive quarters of exceeding EPS expectations. The cybersecurity firm is expected to report a 13% year-over-year revenue increase to a record $1.62 billion for Q2, driven by demand for its AI-powered security and post-quantum cryptography solutions. Disney, also a Zacks Rank #2, is presented as a turnaround story, with its stock up over 30% in the past year. The company's Q3 is expected to see 2% top-line and 6% bottom-line growth, resulting from cost-cutting initiatives, a resurgence at the box office, and improved monetization of its streaming platforms. At a 20.1X forward earnings multiple, its valuation is presented as reasonable.

Key Decisions for Investors

• Given the strong bullish sentiment and #1 or #2 Zacks Ranks, investors may consider these stocks for potential upside leading into their earnings announcements on August 6.
• Be prepared for potential post-earnings price volatility; any sell-off on strong results could offer a more attractive entry point for long-term positions as noted in the report.
• For Shopify, closely monitor the reported Gross Merchandise Volume to confirm it meets the $81 billion expectation, as this is a primary driver of its high-growth valuation.
• For Fortinet, an earnings beat would mark its 30th consecutive quarter of outperformance, reinforcing its reputation for consistent execution and potentially fueling further investor confidence.
• For Disney, focus on the profitability metrics of the streaming division and commentary on cost-cutting progress, as these are the key pillars of its current investment thesis.