2 Stocks Set to Hit Fresh Highs After Earnings

Garmin could benefit from bull notes and/or short covering

Feb 20, 2019 at 9:09 AM
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Garmin Ltd. (NASDAQ:GRMN) just reported another strong quarter, topping both earnings-per-share and revenue estimates, while also giving a better-than-expected outlook for 2019. The company's CEO Cliff Pemble cited the aviation, marine, outdoor, and fitness businesses as drivers for the upbeat results. Revenue from the outdoor segment grew the most, increasing by 25% during the period. However, revenue in Garmin's auto business fell by 28% during the three-month period.

GRMN shares are set to rise 7.8% at the open, which would extend their red-hot start to 2019 and send them into 11-year-high territory. The equity was already up 12.1% year-to-date coming into today, and one has to wonder when more analysts are going to get behind the outperformer. For now, just two of the 10 analysts in coverage have "buy" ratings, and three others actually have "sell" recommendations on Garmin.

Short interest is also relatively high on the stock. There are almost 7 million shares sold short, which is 6.8 times the average daily trading volume, so we'd suggest there's room for short-covering tailwinds help GRMN sustain its upward momentum.

Turning to contact center software specialist Five9 Inc (NASDAQ:FIVN), the shares are pacing for a 5.7% gain at the open. This comes after they hit an all-time high of $54.92 yesterday, and just continues what's been an impressive two-year stretch for the security in which it's steadily ascended charts. In fact, the security had already roughly doubled year-over-year.

Digging into the firm's quarterly results, earnings per share of 23 cents topped analyst estimates of 14 cents, and revenue grew 31% for the period. At least four brokerage firms have come through with price-target hikes, led by Craig-Hallum's $64 target. The majority of analysts in coverage still have "hold" or "sell" ratings on FIVN stock, so there's room for more bull notes going forward.

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