17 S&P 500 Companies Surge with Record Revenue and Margin Gains, Some Stocks Still Cheap

Seventeen S&P 500 firms are outpacing expectations, boosting quarterly earnings per share by at least 40% while widening profit margins.

Record-Setting Sales Growth

■Earnings per share surged >40%, outpacing industry averages

■2023 total revenue jumped from $1.2 trillion to $1.68 trillion

■Key contributors: Apple, Microsoft, Amazon

Margin Expansion: Gross and Operating

■Gross profit margin rose from 12% to 15%

■Operating margin increased from 18% to 22%

■This translates to a >3% absolute margin improvement

Valuation Multiples and Market Sentiment

■Average P/E dropped from 28 to 23

■Lower multiples reflected a 15% price dip across the sector

■The most undervalued stock, Netflix, fell from $200 to $170

Sectoral Distribution: Tech, Healthcare, Finance

■Technology: 5 firms, 35% revenue growth

■Healthcare: 4 firms, 30% margin lift

■Finance: 3 firms, 28% operating margin rise

Risks and Outlook

■Trade delays and tariff changes

■Rising interest rates may dampen consumer spending

■Environmental regulations could raise production costs

Sinan Kılıç: These firms’ robust growth trajectories offer a compelling case for long‑term investors. Yet, global supply‑chain pressures and interest‑rate volatility may spur short‑term volatility. Markets are re‑pricing these stocks, with cheaper valuations attracting buyers, potentially setting the stage for substantial mid‑term upside.