As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the consumer electronics industry, including Apple (NASDAQ:AAPL) and its peers.
Consumer electronics companies aim to address the evolving leisure and entertainment needs of consumers, who are increasingly familiar with technology in everyday life. Whether it’s speakers for the home or specialized cameras to document everything from a surfing session to a wedding reception, these businesses are trying to provide innovative, high-quality products that are both useful and cool to own. Adding to the degree of difficulty for these companies is technological change, where the latest smartphone could disintermediate a whole category of consumer electronics. Companies that successfully serve customers and innovate can enjoy high customer loyalty and pricing power, while those that struggle with these may go the way of the VHS tape.
The 4 consumer electronics stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was 5.9% below.
Luckily, consumer electronics stocks have performed well with share prices up 25.4% on average since the latest earnings results.
Apple (NASDAQ:AAPL)
Creator of the iPhone and shepherd of the App Store, Apple (NASDAQ:AAPL) is a legendary developer of consumer electronics and software.
Apple reported revenues of $85.78 billion, up 4.9% year on year. This print exceeded analysts’ expectations by 1.7%. Apple beat across the board, with revenue, operating income, and EPS coming in ahead of Wall Street analysts’ estimates.
“Today Apple is reporting a new June quarter revenue record of $85.8 billion, up 5 percent from a year ago,” said Tim Cook, Apple’s CEO.
Interestingly, the stock is up 5.8% since reporting and currently trades at $230.98.
Is now the time to buy Apple? Access our full analysis of the earnings results here, it’s free.
Best Q2: Sonos (NASDAQ:SONO)
A pioneer in connected home audio systems, Sonos (NASDAQ:SONO) offers a range of premium wireless speakers and sound systems.
Sonos reported revenues of $397.1 million, up 6.4% year on year, outperforming analysts’ expectations by 1.5%. The business had an exceptional quarter with an impressive beat of analysts’ earnings and EBITDA estimates.
Sonos achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 6.5% since reporting. It currently trades at $12.75.
Is now the time to buy Sonos? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: Peloton (NASDAQ:PTON)
Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.
Peloton reported revenues of $643.5 million, flat year on year, exceeding analysts’ expectations by 2.6%. It was a a mixed quarter as it also posted optimistic EBITDA guidance for the next quarter.
Interestingly, the stock is up 88.4% since the results and currently trades at $6.33.
Read our full analysis of Peloton’s results here.
GoPro (NASDAQ:GPRO)
Known for sponsoring extreme athletes, GoPro (NASDAQ:GPRO) is a camera company known for its POV videos and editing software.
GoPro reported revenues of $186.2 million, down 22.7% year on year. This number beat analysts’ expectations by 9.5%. Overall, it was a very strong quarter as it also produced a decent beat of analysts’ cameras sold estimates.
GoPro pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $1.32.
Read our full, actionable report on GoPro here, it’s free.
Market Update
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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