3 Stocks That Can Break Your Heart This Week

There's no rest during earnings season. Hundreds of companies will be reporting this week, including many of the names that you either already own or are considering for your next purchase.

Figma (NYSE: FIG), The Trade Desk (NASDAQ: TTD), and Airbnb (NASDAQ: ABNB) are three of the many stocks that I'm looking forward to hear from this week. Will they come through with market-appeasing results or prove mortal this week? Let's take a closer look at these three growth stocks checking in with fresh financials in the next couple of days.

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1. Figma

It's been a wild few months for Figma since hitting the market at $33 this summer. The shares traded north of $140 by its second day of trading, but it's been largely downhill ever since. Figma stock is moving lower for the fourth month in a row, but it's still not a broken IPO. Figma closed at $48.17 on Monday, 46% higher than what underwriters priced the deal at on the final trading day of July.

If Figma wants to break through with a winning month in November, it's probably going to need to deliver impressive third-quarter results after the market close on Wednesday. Unfortunately for Figma investors, things didn't go well for them when the company offered its first quarterly report as a public company two months ago.

Revenue rose 41% in the second quarter, decelerating from the 46% increase it posted in the first quarter and the 48% top-line jump it delivered for all of 2024, but in line with expectations. Its adjusted profit of $0.09 a share was also just above where the market pros were perched. The dagger was guidance, with Figma forecasting $263 million to $265 million in revenue.

The midpoint of that range -- the same $264 million where analysts are today -- represents just a 33% increase from the $198.6 million that it delivered a year earlier. The market's response was to send Figma stock plunging 20% on its busiest trading volume since its second day on the market. It will have to deliver a more complete performance this time around.

Figma is attracting small and large website and app developers to its intuitive and AI-fueled design platform. Anyone can sign up to kick the tires for free, but it costs between $3 to $90 a month per person to unlock the platform's rich features.

It works. Figma's net dollar retention rate for customers generating annual recurring revenue of at least $10,000 was 129% at the end of the second quarter. The good news is that this means that its largest customers are spending 29% more over the past year than they did during the previous four quarters. The bad news is that the net dollar retention rate has decelerated in back-to-back quarters. This is Figma's weakest rate in more than a year. Beyond a "beat and raise" performance, coming through with an accelerating retention rate would go a long way toward bringing the bulls back into the dynamic stock.

2. The Trade Desk

The Trade Desk isn't a recent market debutante. It's been trading for nine years, and the first eight years were great for investors in the advertising tech leader. However, it finally missed its guidance after 33 consecutive quarters of meeting or exceeding its forecasts earlier this year. It went on to stumble again two quarters later.

Like Figma, The Trade Desk offered uninspiring guidance this summer for the quarter that it will discuss later this week. The Trade Desk didn't impress investors with a 19% year-over-year increase in revenue in the second quarter, its weakest growth since the initial pandemic lull from five years ago. Its outlook calls for just 14% in revenue growth when it reports its third-quarter results on Thursday afternoon. Margins should also contract, as it sees adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising by an even softer 8% for the quarter.

The good news is that you can now buy The Trade Desk for 23 times next year's earnings. The bad news is that those projections will continue to move lower -- and the multiple higher -- if the programmatic advertising pioneer stumbles again.

3. Airbnb

Figma and The Trade Desk shares have fallen 61% and 43% respectively over the past three months. Airbnb is essentially flat in that time. It doesn't mean that it's in better shape than the other two investments.

The top app for booking vacation properties faces several headwinds. Companies are calling employees back to in-office work, eating away at the initial post-pandemic spike in digital nomads spending weeks if not months at a time in a single Airbnb booking. Some consumer-facing businesses are showing signs of a slowdown, and paying for a getaway is a more challenging value proposition in this climate. Finally, trade tensions are cooling near-term travel plans for fans of international vacations.

You're already seeing the gradual deceleration at Airbnb. Revenue growth is slowing for the fourth consecutive year. The 9% in top-line growth that Wall Street firms are modeling for Thursday afternoon's financial update is a sequential step down from 13% three months ago.

If you want to take a flight here, you won't be investing in Airbnb alone. Airbnb announced a $6 billion share buyback authorization this summer. The shares trading at 27 times next year's profit target may not seem like a bargain at current levels, but it's a historically low multiple that will work out once bookings growth start accelerating again. For now, keep your travel itineraries close, and this week's earnings reports even closer.

Rick Munarriz has positions in The Trade Desk. The Motley Fool has positions in and recommends Airbnb and The Trade Desk. The Motley Fool has a disclosure policy.