Traders: These two high-velocity stocks reporting earnings next week justify their high valuations
- TradingAnalysis.com founder Todd Gordon wants to gamble on Roblox stock.
- Vios managing director Michael Bapis expresses confidence in Disney's stock.
- Roblox and Disney are scheduled to report their quarterly results next week.
Dow Jones Industrial Average hit a record high of 34,800 on Friday. With more earnings on the horizon, a further push next week is quite conceivable.
Todd Gordon wants to gamble on Roblox
TradingAnalysis.com founder, Todd Gordon, said on CNBC’s “Trading Nation” on Friday that it’ll be worth seeing how results playout for the high-velocity stock, Roblox Corp (NYSE: RBLX). The video gaming platform is currently exchanging hands at a price-to-earnings multiple of 145. Gordon said:
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“My kids are asking to convert all of their saved money and their tooth fairy money into Robux – platform’s in-site currency.”
Roblox is scheduled to report its first ever quarterly results since going public on Monday, May 10th. The San Mateo-based firm debuted on the New York Stock Exchange in March at a per-share price of £49.63. It is currently trading at £48.49 per share after hitting a high of £58.59 per share in mid-April.
Roblox is expected to report £407.05 million of revenue that translates to an annualised growth of about 100% and roughly 9.28 pence of earnings per share. According to Gordon:
“Technically, we need to hold support into $62.00 per share. If we can break through $72.50 per share on the upside, it looks good. I want to do some out-of-the-money calls as sort of a gamble on this.”
Michael Bapis is positive on Disney
Michael Bapis of Vios, on the other hand, identified another kid-oriented stock that he deemed worth its high valuation, Walt Disney Co (NYSE: DIS). Bapis said:
“When the pandemic started, we were saying which companies are going to be able to pivot from their core business to something that will be more online, be more technology-focused? And Disney was one of those companies.”
According to Bapis, a continuous increase in Disney Plus subscriptions and returning demand for theme parks is likely to sustain the stock’s momentum. He lauded the company’s management and also pointed out that Disney’s earnings in 2022 are likely to return to the levels seen in 2019.
Disney started the year 2021 at a per-share price of £126.88 and is currently trading at £132.11 after hitting a high of £144.10 in early March. At the time of writing, the American diversified multinational mass media and entertainment conglomerate is valued at £239.61 billion.