We’re approaching the end of first quarter earnings season with 92% of companies listed in the benchmark S&P 500 index reporting results. By and large, it has been a strong period. In all, 78% of companies announced better-than-expected profits, and according to FactSet, 59% beat expectations with their sales. Many analysts are crediting the strong corporate earnings with reversing the stock market decline seen in April.
While many companies came in ahead of Wall Street forecasts, a few delivered truly exceptional Q1 prints. Surging profits and record sales led some stocks to rise 10% or more in a single trading session. A few companies surprised analysts with results that were not as bad as feared. Others delivered their first financials as a publicly traded company. The positive surprises have helped to improve sentiment and the outlook among investors.
Here are three Q1 superstars to buy after stellar earnings.
Honda Motor (HMC)
Japanese automaker Honda Motor (NYSE:HMC) had a great print, announcing that its net profit increased 70% from a year earlier. The company is benefitting from a surge in gas-electric hybrid vehicle sales. Honda’s annual profit totaled $7 billion as sales rose nearly 21% during the fiscal year, which ended March 31. The company said weak sales in China were offset by strong sales in the U.S.
Honda sold 2.8 million vehicles globally over the last year, up from 2.3 million in the previous fiscal year. Sales also rose in Honda’s home market of Japan and in Europe. Honda and other automakers have had success with hybrid vehicles, which are gaining popularity with consumers who have grown weary of fully-electric cars.
Despite the strong results, Honda provided a downbeat outlook for the current fiscal year, saying it expects its profit to decline nearly 10%. Management said the decline in profit will not be due to slower vehicle sales but increased research and development (R&D) spending that should total $7.7 billion. Honda said it is reinvesting profits to secure its future competitiveness.
HMC stock has gained 22% over the last 12 months.
Robinhood Markets (HOOD)
A boom in the trading of cryptocurrencies pushed Robinhood Markets (NASDAQ:HOOD) to record Q1 financial results. The online brokerage announced earnings per share (EPS) of 18 cents on record revenue of $618 million. The results crushed Wall Street forecasts that called for earnings of 6 cents a share and revenue of $553 million. A year ago, Robinhood reported a loss of 57 cents per share on revenue of $441 million.
The company attributed the strong results to a rise in crypto trading on its platform. Crypto boomed to start the year, with the price of Bitcoin (BTC-USD) hitting an all-time high of just under $74,000 on March 14. Consequently, crypto transaction revenue at Robinhood more than tripled from a year earlier. Assets under custody increased 65% year-over-year to $129.6 billion due to higher stock and crypto valuations.
More subscribers joined the Robinhood Gold service that provides investors with advanced tools and market data. The company reported 1.7 million Gold subscribers at the end of Q1, up 42% from a year ago. Robinhood’s share price has risen 86% in the past 12 months, making it a stock to buy on earnings results.
Reddit (RDDT)
Social media platform Reddit (NYSE:RDDT) just reported its first financial results as a public company. The print was so good, it sent RDDT stock up more than 10%. Reddit held its initial public offering (IPO) in March of this year. Now, the company behind online message boards, has reported a loss per share of $8.19, which was not as bad as a loss of $8.71 which was expected among analysts.
Reddit’s revenue totaled $243 million versus the $212.8 million that was expected on Wall Street. The still unprofitable company said its sales rose 48% from a year earlier. Reddit also reported $222.7 million in advertising revenue, up nearly 40% YOY. The company had 82.7 million daily active users at the end of Q1, almost a million more than the 76.6 million that had been forecast. Average revenue per user rose 8% to $2.94.
Looking ahead, Reddit’s management team said they expect revenue of $240 million to $255 million for Q2, topping expectations of $224 million. RDDT stock is now 16% higher than where it closed during its first day of trading on March 21.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.