3 Buy-Rated Stocks to Consider After Earnings Release

Favorable quarterly results from several “buy” rated stocks arrived this week and now seems like an ideal time to invest in their growth.

These three top-rated stocks are particularly notable as earnings estimate revisions are expected to increase following their quarterly reports on Tuesday.

Interactive Brokers (IBKR – Free report)

Zacks Rank #1 (Strong Buy)

Rising trading volumes helped exchange operator Interactive Brokers achieve quarterly revenue and net interest income records of $1.23 billion and $792 million, respectively. Despite slightly missing estimates of $1.24 billion, Interactive Brokers’ revenue rose 23% from $1 billion in the year-ago quarter.

Additionally, second-quarter EPS of $1.76 beat expectations by 4% and rose 33% from $1.32 per share a year ago. Interactive Brokers attributed the record quarter to rising stock markets and expectations of lower rates, which made clients feel more comfortable taking risks. Of note, Interactive Brokers’ client credit balances hit a record $107.1 billion, even as trading volumes indicated its users were heavily invested in the markets.

Image Source: Zacks Investment Research

Omnicom Group (WTO – Free report)

Zacks Rank #2 (Buy)

Advertising giant Omnicom Group had a very strong second quarter, reflecting its cash flow, which the company said supported its primary use of cash for dividends, acquisitions and buybacks. Omnicom also highlighted progress and expansion of its end-to-end generative AI solution and growth in its e-commerce offerings.

Beating expectations on both revenue and net income, Omnicom posted second-quarter revenue of $3.85 billion, beating estimates by 1%, while EPS of $1.95 was 4% above expectations. Year-over-year, second-quarter sales increased 7%, with EPS jumping 8%, compared to $1.81 per share in the comparative quarter.

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Aehr Test Systems (AEHR – Free report)

Zacks Rank #2 (Buy)

Rounding out the list, Aehr Test Systems is a tech stock that is starting to turn heads after posting EPS of $0.84 for its fiscal fourth quarter, which crushed the Zacks Consensus Estimate of $0.11 per share. It’s worth noting that Aehr stock is up +22% today as the electronics testing and equipment provider ended fiscal 2024 with record revenue of $66.2 million.

Wafer-level testing and burn-in of silicon carbide power semiconductors used in electric vehicles has been a key driver of Aehr’s business and the company sees opportunities emerging in new target markets.

Aehr expects bookings and revenue across a much broader range of customers in FY25, with new markets including quality, reliability and production testing of artificial intelligence processors and flash memory devices as well as various semiconductor and solar energy products between chipsets and processors.

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Conclusion

Interactive Brokers, Omnicom Group, and Aehr Test Systems are three of the most interesting stocks to consider after their favorable quarterly results. More importantly, these companies are shaping up to be viable investments for 2024 and beyond.