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Mon, 04 Nov 2024 17:10:39 +0000

Take-Two Gears Up to Report Q2 Earnings: What's in Store?

Mon, 04 Nov 2024 16:44:00 +0000

Take-Two Interactive TTWO is set to report second-quarter fiscal 2025 results on Nov. 6.

For the second quarter of fiscal 2025, Take-Two expects GAAP net revenues between $1.29 billion and $1.34 billion. It anticipates a loss per share between $2.15 and $2.3.

The Zacks Consensus Estimate for revenues is currently pegged at $1.45 billion, suggesting an increase of 0.21% from the figure reported in the year-ago quarter.

The consensus mark for fiscal second-quarter earnings per share has remained unchanged at 42 cents over the past 30 days, indicating a decline of 65.85% from the year-ago quarter’s reported figure.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Take-Two’s earnings beat the Zacks Consensus Estimate thrice in the last four quarters and missed once, delivering an average surprise of 190.52%.

Take-Two Interactive Software, Inc. Price and EPS Surprise

Take-Two Interactive Software, Inc. price-eps-surprise | Take-Two Interactive Software, Inc. Quote

Let’s see how things have shaped up for this announcement.

Factors to Consider

Take-Two’s fiscal second-quarter performance is expected to have reflected steady demand for its popular franchises, including Grand Theft Auto, Red Dead Redemption 2, Read Dead Online, NBA 2K25 and WWE 2K. Sales for Grand Theft Auto V are expected to have benefited the fiscal second-quarter top line.

Take-Two’s innovation to develop mobile experiences for its offerings to enhance user experience is expected to have driven customer engagement in the to-be-reported quarter. NBA 2K24 Arcade Edition is expected to have driven downloads in the second quarter of fiscal 2025.

Moreover, the acquisition of Gearbox Entertainment has been highly accretive to the company’s prospects as it has expanded its development teams. The acquisition is expected to have aided mobile revenues in the to-be-reported quarter.

The growing popularity of Toon Blast and Zynga’s in-app purchases is likely to have aided TTWO’s top-line growth. Zynga’s Game of Thrones: Legends and Match Factory! and added features and updates are expected to have aided user acquisition in the second quarter of fiscal 2025.

Take-Two’s TopSpin 2K25, the revival of the beloved tennis simulation video game, is expected to have driven customer momentum by delivering personalization and unique venues, courts and tournaments.

Take-Two’s publishing label, Zynga, announced the availability of Star Wars: Hunters for the Nintendo Switch, iOS and Android devices.

Take-Two’s blended monetization strategy in hyper-casual bodes well for investors. Screw Jam and Twisted Tangle’s popularity is expected to benefit the top line in the second quarter of fiscal 2025.

However, dullness in recurrent consumer spending growth, which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and advertising, is likely to have been reflected in the company’s top-line growth.

In first-quarter fiscal 2025, recurrent consumer spending remained flat year over year and accounted for 83% of total net revenues.

Moreover, continued softness in the hyper-casual mobile portfolio, Empires, Puzzles, Grand Theft Auto Online and NBA 2K, is expected to have adversely impacted the top line.

The company has been witnessing increased operating expenses for mobile and immersive core launches and marketing. Gearbox acquisition and higher personnel expenses are likely to have kept margins under pressure in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

TTWO has an Earnings ESP of -9.16% and sports a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Flutter Entertainment PLC FLUT has an Earnings ESP of +172.73% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flutter Entertainment’s shares have gained 20.7% year to date. FLUT is set to report its third-quarter 2024 results on Nov. 12.

DraftKings DKNG has an Earnings ESP of +13.83% and carries a Zacks Rank of 3 at present.

DraftKings’ shares have gained 1.6% year to date. DKNG is set to report its third-quarter 2024 results on Nov. 7.

Airbnb ABNB has an Earnings ESP of +0.12% and carries a Zacks Rank #3 at present.

ABNB’s shares have gained 15.4% year to date. ABNB is set to report third-quarter 2024 results on Nov. 7.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

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Zacks Investment Research

Should Investors Buy MercadoLibre Stock Ahead of Q3 Earnings?

Mon, 04 Nov 2024 16:42:00 +0000

MercadoLibre MELI is scheduled to release its third-quarter 2024 results on Nov. 6.

For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $5.25 billion, suggesting a rise of 39.73% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $11.27 per share, suggesting a jump of 57.4% from the year-ago reported figure. The estimate has been unchanged over the past 30 days.

Image Source: Zacks Investment Research

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Earnings Surprise History

MercadoLibre has a mixed earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 20.18%. The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average negative surprise being 1.63%.

MercadoLibre, Inc. Price and EPS Surprise

MercadoLibre, Inc. price-eps-surprise | MercadoLibre, Inc. Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for MercadoLibre this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

MercadoLibre has an Earnings ESP of -24.24% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors to Influence MercadoLibre’s Q3 Results

MercadoLibre’s core e-commerce operations are expected to have shown robust growth in the third quarter, driven by several strategic initiatives. The company's focus on brand strengthening and loyalty programs is expected to have contributed to an expanded unique buyer base in the quarter under review. The integration of online-to-offline offerings, particularly strong in Brazil, combined with enhanced first-party services and increased fulfillment penetration, is likely to have strengthened the core marketplace performance.

Product diversification efforts appear promising, with notable growth expected across fashion, consumer electronics, apparel and sports categories. The logistics infrastructure has seen significant investment, with an expanded managed network, potentially improving delivery efficiency and customer experience. These operational enhancements are expected to have supported shipment growth and contributed to the company’s commerce revenues in the to-be-reported quarter. The Zacks Consensus Estimate for commerce revenues is pegged at $3.15 billion, indicating a year-over-year rise of 48.2%.

The advertising segment shows promise bolstered by several technical improvements, including an automated display ad buying platform with enhanced analytics, improved bidding algorithms and strategic placement optimization for sponsored products. These advancements are likely to have boosted advertising revenue streams in the third quarter.

In the fintech sector, Mercado Pago continues to be a growth driver, benefiting from expanded product offerings and strong payment volume trends. The division's performance is expected to be further strengthened by growing assets under management and increased credit card adoption. The Zacks Consensus Estimate for fintech revenues is pegged at $2.22 billion, suggesting year-over-year growth of 36.6%.

Overall, the combination of e-commerce enhancements, logistics improvements, advertising innovations and fintech expansion suggests a potential for strong third-quarter performance, though actual results will depend on successful execution across these various initiatives.

Upswing in Q3 Estimates for Key Metrics

The Zacks Consensus Estimate for gross merchandise volume is pegged at $12.79 billion, indicating growth of 12.6% from the year-ago reported figure.

The consensus mark for total payments volume is pegged at $49.23 billion, implying year-over-year growth of 4.2%

The consensus mark for the number of successful items sold is pegged at 430 million, suggesting a year-over-year rise of 20.4%. The same for the number of successful items shipped is pegged at 426 million, indicating year-over-year growth of 21.7%.

Price Performance & Valuation

MercadoLibre’s shares have gained 30.8% on a year-to-date basis, outperforming the Zacks Retail-Wholesale sector and the S&P 500 index’s return of 20.8% and 20.5%, respectively.

MercadoLibre has underperformed the major players in the industry like Amazon AMZN and Walmart WMT. Shares of AMZN and WMT have rallied 30.9% and 56.4% in the year-to-date period.

Year-to-Date Price Performance

Image Source: Zacks Investment Research

Now, let us look at the value that MercadoLibre offers investors at current levels.

Currently, MELI is trading at a premium with a trailing 12-month P/S of 4.26X compared with the Zacks Internet - Commerce industry’s 1.7X, reflecting a stretched valuation at present.

MELI’s P/S F12M Ratio Depicts Stretched Valuation

Image Source: Zacks Investment Research

Investment Thesis

MercadoLibre's investment profile presents a mixed outlook, with strong long-term growth potential in Latin American e-commerce balanced against near-term challenges. The company's dominant market position across Brazil, Mexico and Argentina, coupled with its expanding fintech platform Mercado Pago and integrated advertising solutions, provides robust growth drivers. However, significant headwinds exist, including Argentina's economic instability, rising operational costs and intensifying competition from global retail giants like Amazon and Walmart, particularly in Mexico. While high inflation and operating expenses pressure margins, the company's established regional presence and diversified revenue streams in both e-commerce and fintech sectors suggest resilience against market uncertainties, though careful monitoring of competitive dynamics remains crucial.

Conclusion

Despite near-term macroeconomic headwinds, particularly in Argentina, MercadoLibre presents a compelling investment opportunity ahead of its third-quarter 2024 earnings, supported by its dominant market position in Latin American e-commerce and robust growth across multiple business segments. The estimated 48.2% year-over-year growth in commerce revenues and 36.6% growth in fintech revenues indicate optimism toward the company's strong execution capability and market penetration. The successful integration of e-commerce, logistics, advertising and fintech operations, combined with strategic investments in fulfillment infrastructure and technological advancements, positions MELI favorably for sustained growth. While competitive pressures from global retailers warrant attention, MercadoLibre's deep regional expertise, expanding service offerings and proven ability to innovate make it an attractive investment target at current levels.

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Zacks Investment Research

Fox's Q1 Earnings Surpass Estimates, Revenues Improve Y/Y

Mon, 04 Nov 2024 16:41:00 +0000

Fox Corporation FOXA reported first-quarter fiscal 2025 adjusted earnings per share of $1.45, which beat the Zacks Consensus Estimate by 29.5%. The figure increased 33.02% year over year.

Revenues increased 11.13% year over year to $3.5 billion, beating the consensus mark by 5.6%.

Affiliate fees (51.71% of total revenues) rose 5.92% to $1.84 billion, driven primarily by 10% growth in the Television segment and 3% growth in the Cable Network Programming segment.

Advertising revenues (37.29% of total revenues) increased 10.75% year over year to $1.33 billion, primarily due to higher political advertising revenues at the FOX Television Stations, strong performance of Tubi, higher ratings as well as pricing in the direct response marketplace at FOX News Media, along with the impact of the Summer of Soccer at FOX Sports, including the broadcasts of the UEFA European Championship and CONMEBOL Copa América but partially offset by absence of FIFA Women's World Cup broadcast.

Other revenues (11% of total revenues) increased 47% year over year to $392 million.

Fox Corporation Price, Consensus and EPS Surprise

Fox Corporation price-consensus-eps-surprise-chart | Fox Corporation Quote

Top-Line Details

Cable Network Programming revenues (44.81% of total revenues) increased 15.14% year over year to $1.59 billion. Advertising revenues increased 10.69%, whereas revenues from Affiliate fees rose 3.18% year over year. Other revenues increased 159.78% on a year-over-year basis, primarily due to the timing of sports sublicensing revenues at the national sports networks.

Television revenues (54.8% of total revenues) increased 9.72% from the year-ago quarter’s figure to $1.95 billion. Advertising revenues increased 10.77% year over year. Affiliate fees increased 9.66% year over year, led by higher rates at both the company's owned and operated stations, as well as third-party FOX affiliates. Other revenues increased 3% year over year, driven by higher third-party content revenues at FOX Entertainment studios.

Operating Details

In the first quarter of fiscal 2025, operating expenses increased 8.38% year over year to $2.02 billion. As a percentage of revenues, operating expenses contracted 1295 basis points (bps) to 58.54%. The increase in expenses was primarily due to higher programming rights amortization at FOX Sports and higher costs at Tubi.

Selling, general & administrative (SG&A) expenses increased 4.58% year over year to $502 million. As a percentage of revenues, SG&A expenses contracted 88 bps to 14.09%.

Total adjusted EBITDA increased 20.60% year over year to $1.05 billion. Adjusted EBITDA margin expanded 231 bps to 29.41%.

Cable Network Programming EBITDA rose 23.23% year over year to $748 million. Television reported an adjusted EBITDA of $372 million, up 5.98% year over year.

Balance Sheet

As of Sept. 30, 2024, Fox had $4.05 billion in cash and cash equivalents compared with $4.31 billion as of June 30, 2024. Long-term debt, as of Sept. 30, 2024, was $600 million.

Zacks Rank & Stocks to Consider

Fox currently carries a Zacks Rank #4 (Sell).

Shares of FOXA have gained 41.2% year to date against the Zacks Consumer Discretionary sector’s increase of 5.3%.

Some better-ranked stocks from the broader sector that investors can consider are Flutter Entertainment PLC FLUT, Funko FNKO and Liberty Media Corporation - Liberty Formula One Series A FWONA, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of FLUT have increased 20.7% year to date. FLUT is slated to report its third-quarter 2024 results on Nov. 12.

Shares of FNKO have jumped 46.2% year to date. FNKO is set to report its third-quarter 2024 results on Nov. 7.

Shares of FWONA have climbed 29% year to date. Liberty Media Corporation is slated to report its third-quarter 2024 results on Nov. 7.

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Zacks Investment Research

SMGZY or TRI: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:19 +0000

Investors interested in stocks from the Technology Services sector have probably already heard of Smiths Group PLC (SMGZY) and Thomson Reuters (TRI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Smiths Group PLC and Thomson Reuters are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SMGZY has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

SMGZY currently has a forward P/E ratio of 12.89, while TRI has a forward P/E of 44.35. We also note that SMGZY has a PEG ratio of 1.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TRI currently has a PEG ratio of 5.54.

Another notable valuation metric for SMGZY is its P/B ratio of 2.42. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TRI has a P/B of 6.38.

These metrics, and several others, help SMGZY earn a Value grade of A, while TRI has been given a Value grade of D.

SMGZY stands above TRI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SMGZY is the superior value option right now.

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Zacks Investment Research

HMY vs. FNV: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:19 +0000

Investors with an interest in Mining - Gold stocks have likely encountered both Harmony Gold (HMY) and Franco-Nevada (FNV). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Harmony Gold and Franco-Nevada are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that HMY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

HMY currently has a forward P/E ratio of 8.16, while FNV has a forward P/E of 40.54. We also note that HMY has a PEG ratio of 0.50. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FNV currently has a PEG ratio of 22.03.

Another notable valuation metric for HMY is its P/B ratio of 3.05. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FNV has a P/B of 4.34.

These metrics, and several others, help HMY earn a Value grade of A, while FNV has been given a Value grade of F.

HMY stands above FNV thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HMY is the superior value option right now.

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Zacks Investment Research

AMED or CHE: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:19 +0000

Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Amedisys (AMED) and Chemed (CHE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Amedisys has a Zacks Rank of #2 (Buy), while Chemed has a Zacks Rank of #3 (Hold) right now. This means that AMED's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

AMED currently has a forward P/E ratio of 20.53, while CHE has a forward P/E of 22.81. We also note that AMED has a PEG ratio of 1.87. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CHE currently has a PEG ratio of 2.07.

Another notable valuation metric for AMED is its P/B ratio of 2.65. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CHE has a P/B of 6.48.

These are just a few of the metrics contributing to AMED's Value grade of B and CHE's Value grade of C.

AMED stands above CHE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMED is the superior value option right now.

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Zacks Investment Research

AXS vs. CINF: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:18 +0000

Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Axis Capital (AXS) and Cincinnati Financial (CINF). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Axis Capital and Cincinnati Financial are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that AXS likely has seen a stronger improvement to its earnings outlook than CINF has recently. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

AXS currently has a forward P/E ratio of 7.20, while CINF has a forward P/E of 21.98. We also note that AXS has a PEG ratio of 0.26. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CINF currently has a PEG ratio of 2.65.

Another notable valuation metric for AXS is its P/B ratio of 1.20. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CINF has a P/B of 1.59.

These metrics, and several others, help AXS earn a Value grade of A, while CINF has been given a Value grade of C.

AXS has seen stronger estimate revision activity and sports more attractive valuation metrics than CINF, so it seems like value investors will conclude that AXS is the superior option right now.

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Zacks Investment Research

BMRN vs. INCY: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:18 +0000

Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of BioMarin Pharmaceutical (BMRN) and Incyte (INCY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, BioMarin Pharmaceutical has a Zacks Rank of #2 (Buy), while Incyte has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BMRN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BMRN currently has a forward P/E ratio of 20.37, while INCY has a forward P/E of 54.33. We also note that BMRN has a PEG ratio of 0.50. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INCY currently has a PEG ratio of 2.48.

Another notable valuation metric for BMRN is its P/B ratio of 2.34. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, INCY has a P/B of 4.62.

These metrics, and several others, help BMRN earn a Value grade of B, while INCY has been given a Value grade of C.

BMRN stands above INCY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BMRN is the superior value option right now.

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Zacks Investment Research

CRAI vs. IT: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:18 +0000

Investors with an interest in Consulting Services stocks have likely encountered both CRA International (CRAI) and Gartner (IT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both CRA International and Gartner have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

CRAI currently has a forward P/E ratio of 26.80, while IT has a forward P/E of 43.25. We also note that CRAI has a PEG ratio of 1.67. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IT currently has a PEG ratio of 3.13.

Another notable valuation metric for CRAI is its P/B ratio of 6.17. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, IT has a P/B of 60.02.

These metrics, and several others, help CRAI earn a Value grade of B, while IT has been given a Value grade of D.

Both CRAI and IT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CRAI is the superior value option right now.

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Zacks Investment Research

PEB or OHI: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:18 +0000

Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Pebblebrook Hotel (PEB) and Omega Healthcare Investors (OHI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Pebblebrook Hotel and Omega Healthcare Investors have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

PEB currently has a forward P/E ratio of 7.22, while OHI has a forward P/E of 14.57. We also note that PEB has a PEG ratio of 0.52. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. OHI currently has a PEG ratio of 1.26.

Another notable valuation metric for PEB is its P/B ratio of 0.50. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, OHI has a P/B of 2.53.

These metrics, and several others, help PEB earn a Value grade of A, while OHI has been given a Value grade of D.

Both PEB and OHI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PEB is the superior value option right now.

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Zacks Investment Research

HPE or IBM: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:18 +0000

Investors with an interest in Computer - Integrated Systems stocks have likely encountered both Hewlett Packard Enterprise (HPE) and IBM (IBM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Hewlett Packard Enterprise has a Zacks Rank of #2 (Buy), while IBM has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HPE is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

HPE currently has a forward P/E ratio of 9.53, while IBM has a forward P/E of 20.59. We also note that HPE has a PEG ratio of 3.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IBM currently has a PEG ratio of 4.68.

Another notable valuation metric for HPE is its P/B ratio of 1.18. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IBM has a P/B of 7.85.

These are just a few of the metrics contributing to HPE's Value grade of A and IBM's Value grade of C.

HPE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that HPE is likely the superior value option right now.

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Zacks Investment Research

NOC vs. HWM: Which Stock Should Value Investors Buy Now?

Mon, 04 Nov 2024 16:40:17 +0000

Investors interested in Aerospace - Defense stocks are likely familiar with Northrop Grumman (NOC) and Howmet (HWM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Northrop Grumman is sporting a Zacks Rank of #2 (Buy), while Howmet has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NOC likely has seen a stronger improvement to its earnings outlook than HWM has recently. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

NOC currently has a forward P/E ratio of 19.71, while HWM has a forward P/E of 38.57. We also note that NOC has a PEG ratio of 1.03. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HWM currently has a PEG ratio of 1.45.

Another notable valuation metric for NOC is its P/B ratio of 5.01. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HWM has a P/B of 9.67.

These are just a few of the metrics contributing to NOC's Value grade of B and HWM's Value grade of D.

NOC sticks out from HWM in both our Zacks Rank and Style Scores models, so value investors will likely feel that NOC is the better option right now.

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Zacks Investment Research

ASX or NVMI: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:17 +0000

Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of ASE Technology Hldg (ASX) and Nova Ltd. (NVMI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Right now, ASE Technology Hldg is sporting a Zacks Rank of #2 (Buy), while Nova Ltd. has a Zacks Rank of #4 (Sell). This means that ASX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

ASX currently has a forward P/E ratio of 18.64, while NVMI has a forward P/E of 28.97. We also note that ASX has a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NVMI currently has a PEG ratio of 1.69.

Another notable valuation metric for ASX is its P/B ratio of 2.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NVMI has a P/B of 6.38.

These metrics, and several others, help ASX earn a Value grade of A, while NVMI has been given a Value grade of F.

ASX has seen stronger estimate revision activity and sports more attractive valuation metrics than NVMI, so it seems like value investors will conclude that ASX is the superior option right now.

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Zacks Investment Research

AXTA vs. NVZMY: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:17 +0000

Investors looking for stocks in the Chemical - Specialty sector might want to consider either Axalta Coating Systems (AXTA) or Novozymes A/S (NVZMY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Axalta Coating Systems has a Zacks Rank of #2 (Buy), while Novozymes A/S has a Zacks Rank of #3 (Hold) right now. This means that AXTA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

AXTA currently has a forward P/E ratio of 17.81, while NVZMY has a forward P/E of 34.48. We also note that AXTA has a PEG ratio of 0.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NVZMY currently has a PEG ratio of 3.54.

Another notable valuation metric for AXTA is its P/B ratio of 4.24. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NVZMY has a P/B of 14.10.

These metrics, and several others, help AXTA earn a Value grade of B, while NVZMY has been given a Value grade of F.

AXTA has seen stronger estimate revision activity and sports more attractive valuation metrics than NVZMY, so it seems like value investors will conclude that AXTA is the superior option right now.

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Zacks Investment Research

BNS or RY: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:17 +0000

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Bank of Nova Scotia (BNS) and Royal Bank (RY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Bank of Nova Scotia is sporting a Zacks Rank of #2 (Buy), while Royal Bank has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BNS is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

BNS currently has a forward P/E ratio of 10.13, while RY has a forward P/E of 12.76. We also note that BNS has a PEG ratio of 1.54. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RY currently has a PEG ratio of 1.86.

Another notable valuation metric for BNS is its P/B ratio of 1.18. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RY has a P/B of 2.05.

These are just a few of the metrics contributing to BNS's Value grade of B and RY's Value grade of D.

BNS stands above RY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BNS is the superior value option right now.

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Zacks Investment Research

STRT vs. RACE: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:17 +0000

Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Strattec Security (STRT) and Ferrari (RACE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Strattec Security is sporting a Zacks Rank of #2 (Buy), while Ferrari has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that STRT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

STRT currently has a forward P/E ratio of 18.44, while RACE has a forward P/E of 55.12. We also note that STRT has a PEG ratio of 1.84. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RACE currently has a PEG ratio of 5.06.

Another notable valuation metric for STRT is its P/B ratio of 0.66. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RACE has a P/B of 32.12.

These are just a few of the metrics contributing to STRT's Value grade of A and RACE's Value grade of C.

STRT stands above RACE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STRT is the superior value option right now.

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Zacks Investment Research

IDEXY vs. DECK: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:16 +0000

Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Industria de Diseno Textil SA (IDEXY) and Deckers (DECK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Industria de Diseno Textil SA and Deckers are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

IDEXY currently has a forward P/E ratio of 26.49, while DECK has a forward P/E of 29. We also note that IDEXY has a PEG ratio of 2.10. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DECK currently has a PEG ratio of 2.23.

Another notable valuation metric for IDEXY is its P/B ratio of 10.08. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, DECK has a P/B of 10.81.

These are just a few of the metrics contributing to IDEXY's Value grade of B and DECK's Value grade of D.

Both IDEXY and DECK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IDEXY is the superior value option right now.

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Zacks Investment Research

IDCC or MSI: Which Is the Better Value Stock Right Now?

Mon, 04 Nov 2024 16:40:16 +0000

Investors interested in stocks from the Wireless Equipment sector have probably already heard of InterDigital (IDCC) and Motorola (MSI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, InterDigital is sporting a Zacks Rank of #1 (Strong Buy), while Motorola has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that IDCC likely has seen a stronger improvement to its earnings outlook than MSI has recently. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

IDCC currently has a forward P/E ratio of 15.99, while MSI has a forward P/E of 34.14. We also note that IDCC has a PEG ratio of 0.92. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MSI currently has a PEG ratio of 3.51.

Another notable valuation metric for IDCC is its P/B ratio of 5.76. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MSI has a P/B of 92.69.

Based on these metrics and many more, IDCC holds a Value grade of B, while MSI has a Value grade of D.

IDCC has seen stronger estimate revision activity and sports more attractive valuation metrics than MSI, so it seems like value investors will conclude that IDCC is the superior option right now.

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Zacks Investment Research

BABA vs. CART: Which Stock Is the Better Value Option?

Mon, 04 Nov 2024 16:40:16 +0000

Investors looking for stocks in the Internet - Commerce sector might want to consider either Alibaba (BABA) or Maplebear (CART). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Right now, Alibaba is sporting a Zacks Rank of #1 (Strong Buy), while Maplebear has a Zacks Rank of #3 (Hold). This means that BABA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

BABA currently has a forward P/E ratio of 10.91, while CART has a forward P/E of 38.39. We also note that BABA has a PEG ratio of 0.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CART currently has a PEG ratio of 1.39.

Another notable valuation metric for BABA is its P/B ratio of 1.73. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CART has a P/B of 3.90.

Based on these metrics and many more, BABA holds a Value grade of A, while CART has a Value grade of C.

BABA sticks out from CART in both our Zacks Rank and Style Scores models, so value investors will likely feel that BABA is the better option right now.

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Here's What You Should Know Ahead of Latham's Q3 Earnings Release

Mon, 04 Nov 2024 16:36:00 +0000

Latham Group, Inc. SWIM is slated to release third-quarter 2024 results on Nov. 5, 2024, after market close.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

In the last quarter, the company’s adjusted earnings and net sales topped the Zacks Consensus Estimate by 275% and 2.6%, respectively. The bottom line grew 200% but the top line declined 9.6% year over year.

SWIM surpassed the consensus mark for earnings in two of the trailing four quarters, missed on one occasion and reported break-even earnings on the remaining occasion, with an average surprise of 90%.

SWIM’s Trend in Estimate Revision

The Zacks Consensus Estimate for adjusted earnings has remained unchanged at 7 cents per share over the past 60 days. The estimated figure indicates year-over-year growth of 40%.

Latham Group, Inc. Price and EPS Surprise

Latham Group, Inc. price-eps-surprise | Latham Group, Inc. Quote

The consensus mark for net sales is pegged at $153.7 million, indicating a year-over-year decline of 4.4%.

Factors to Note Ahead of Latham’s Quarterly Results

Latham’s top line is expected to have been hurt by the ongoing macroeconomic risks and soft industry conditions resulting in a decline in sales volume. Product lines, including in-ground swimming pools, liners and covers are expected to have witnessed the primary sales decline. Moreover, headwinds from lower sales price are also likely to have added to the downtrend.

Although benefits from strategic growth initiatives and the acquisition of Coverstar Central are likely to have been encouraging for the prospects, the headwinds mentioned above are expected to have overshadowed the positives to a great extent.

On the other hand, the bottom line of SWIM is expected to have gained year over year on the back of its previously announced restructuring programs, the impact of production efficiencies resulting from lean manufacturing and value engineering programs, cost control initiatives and lower raw material costs.

The company has been tackling the challenging industry conditions with the help of strategic efforts meant to improve its cost structure, driving productivity gains and reducing working capital needs.

What the Zacks Model Unveils for SWIM

Our proven model does not conclusively predict an earnings beat for Latham this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: SWIM has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some companies in the Zacks Construction sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

Toll Brothers, Inc. TOL currently has an Earnings ESP of +2.35% and a Zacks Rank of 2 at present.

TOL reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining one occasion, the average surprise being 7.8%. Earnings for the fiscal third quarter of 2024 are expected to increase 4.9% year over year.

Louisiana-Pacific Corporation LPX has an Earnings ESP of +2.29% and a Zacks Rank of 3.

LPX reported better-than-expected earnings in each of the last four quarters, the average surprise being 25.2%. The company’s earnings for the third quarter are expected to decline 45.7% from the prior year.

VSE Corporation VSEC currently has an Earnings ESP of +1.46% and a Zacks Rank of 3.

VSEC’s earnings for the third quarter are expected to decrease 31.5% year over year. The company reported better-than-expected earnings in two of the last four quarters and missed on the other two occasions, the average surprise being 11.8%.

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Zacks Investment Research

AMC Entertainment Gears Up for Q3 Earnings: What's in Store?

Mon, 04 Nov 2024 16:26:00 +0000

AMC Entertainment Holdings, Inc. AMC is scheduled to report third-quarter 2024 results on Nov. 6, after market close. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 330%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

AMC’s Q3 Estimates

The Zacks Consensus Estimate has narrowed to a loss of 7 cents per share from a loss of 9 cents in the past 30 days. In the prior-year quarter, the company incurred a loss of 9 cents.

The consensus mark for revenues is pegged at $1.33 billion, indicating a decline of 5.7% from the year-ago reported figure of $1.41 billion.

Key Factors to Consider for AMC’s Q3 Earnings Release

AMC’s third-quarter 2024 performance is likely to have been hurt by fewer high-demand releases. The company faces a challenging environment in the U.K. due to aggressive pricing from competitors, which might have limited its ability to increase ticket prices and capture market share. Continued closures of underperforming theaters might have reduced total ticket sales, affecting overall revenues.

The Zacks Consensus Estimate for revenues from admissions, food and beverage, and other theater is pegged at $750 million, $457 million and $119 million, indicating a decline of 6%, 5.4% and 5.6% from the prior-year levels, respectively.

However, AMC's focus on enhancing the guest experience and operational efficiency has been pivotal in its success. The company continues to innovate and diversify its offerings. These efforts are likely to have aided the company’s performance in the quarter to be reported.

Meanwhile, inflationary wage and cost pressures are anticipated to have exerted additional strain on AMC's operational expenses, potentially squeezing profit margins.

AMC Entertainment Holdings, Inc. Price and EPS Surprise

AMC Entertainment Holdings, Inc. price-eps-surprise | AMC Entertainment Holdings, Inc. Quote

What the Zacks Model Unveils for AMC

Our proven model does not conclusively predict an earnings beat for AMC Entertainment this time around. It does not have the right combination of two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), to increase the odds of an earnings beat.

Earnings ESP of AMC: AMC has an Earnings ESP of -9.52% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AMC’s Zacks Rank: AMC currently carries a Zacks Rank of 3.

Stocks With Favorable Combinations

Carnival Corporation & plc CCL currently has an Earnings ESP of +16.48% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CCL reported better-than-expected earnings in each of the trailing four quarters, with the average surprise being 318.1%.

Choice Hotels International, Inc. CHH currently has an Earnings ESP of +5.84% and a Zacks Rank of 3.

CHH’s earnings for the to-be-reported quarter are expected to have increased 5%. It reported better-than-expected earnings in two of the trailing four quarters and missed twice, with the average surprise being 3.4%.

DraftKings Inc. DKNG currently has an Earnings ESP of +13.83% and a Zacks Rank of 3.

DKNG’s earnings for the to-be-reported quarter are expected to have increased 31.2%. It reported better-than-expected earnings in two of the trailing four quarters and missed twice, with the average surprise being 59.5%.

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Is the Options Market Predicting a Spike in Hawkins (HWKN) Stock?

Mon, 04 Nov 2024 16:23:00 +0000

Investors in Hawkins, Inc. HWKN need to pay close attention to the stock based on moves in the options market lately. That is because the Dec. 20, 2024 $70 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Hawkins shares, but what is the fundamental picture for the company? Currently, Hawkins is a Zacks Rank #1 (Strong Buy) in the Chemical – Specialty industry that ranks in the Bottom 43% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while none dropped the estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 77 cents per share to 83 cents in that period.

Given the way analysts feel about Hawkins right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Great Lakes to Report Q3 Earnings: Here's What You Should Know

Mon, 04 Nov 2024 16:21:00 +0000

Great Lakes Dredge & Dock Corporation GLDD is scheduled to report results for the third quarter of 2024 on Nov. 5, before market open.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

In the last quarter, earnings and revenues topped the Zacks Consensus Estimate by 266.7% and 3.1%, respectively. Moreover, on a year-over-year basis, both bottom and top lines grew.

Notably, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 215.3%.

Trend in Estimate Revision of GLDD

The Zacks Consensus Estimate for third-quarter earnings per share has remained unchanged at 18 cents in the past 60 days, implying a significant 300% increase compared with the prior-year period.

Great Lakes Dredge & Dock Corporation Price and EPS Surprise

Great Lakes Dredge & Dock Corporation price-eps-surprise | Great Lakes Dredge & Dock Corporation Quote

The consensus mark for revenues is pegged at $180.8 million, indicating 54.3% growth from the year-ago quarter’s level.

Factors to Shape Great Lakes’ Quarterly Results

Great Lakes’ third quarter top line is expected to have gained year over year on the back of solid contributions from the company’s Capital (the United States) and Coastal Protection work types, reflecting its focus on the new build program and the ongoing demand strength for dredging services. Also, continuous strength in support from the Biden Administration and Congress for the dredging industry is likely to have aided its third-quarter performance.

The company anticipates a robust third-quarter performance, with utilization and revenues expected to have surpassed second-quarter levels. This growth outlook is supported by the commencement of both LNG projects and an increase in workload projected for the second half of the year, particularly in the third quarter.

The Capital work type’s (contributed 41.6% to second-quarter 2024 revenues) performance is likely to have been driven by increased project activity in Texas. The Coastal Protection work type’s (contributed 41.3% to second-quarter revenues) performance is likely to have been attributable to increased project activity in Alabama and Florida.

Furthermore, the company is optimistic about the growth trends within its Maintenance (contributed 16.7% to second-quarter revenues) work type as well. This uptrend is likely to have been backed by GLDD’s year-over-year dredging backlog growth, enhanced fleet position and focus on strategic initiatives.

The Zacks Consensus Estimate for the revenues of the Capital (the United States), Coastal Protection and Maintenance work types is pegged at $93 million, $43.6 million and $36.2 million, indicating year-over-year growth of 70.3%, 84.7% and 7.1%, respectively.

However, the Rivers & Lakes segment (contributed 0.4% to second-quarter revenues) is likely to have been impacted by dismal project activity in Tennessee and Arkansas. The consensus mark for the Rivers & Lakes work type’s revenues is pegged at $4 million, down 23.1% year over year.

Despite increased general and administrative expenses, the company is expected to have achieved year-over-year growth in margin and earnings. Improved utilization and project performance, a well-executed dry-dock program and disciplined cost control are likely to have aided its third-quarter’s bottom-line performance.

What the Zacks Model Unveils for GLDD

Our proven model does not conclusively predict an earnings beat for Great Lakes this time around. The company does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), to increase the odds of an earnings beat.

Earnings ESP: GLDD has an Earnings ESP of 0.00% at present. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

GLDD’s Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Construction Releases

Quanta Services Inc. PWR reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.

Quanta reported double-digit growth across key financial metrics, a record backlog of $34 billion and $539.5 million in free cash flow. CEO Duke Austin attributed this growth to Quanta’s diverse portfolio, high demand, effective execution and an expanding market.

Masco Corporation MAS reported third-quarter 2024 results, wherein earnings met the Zacks Consensus Estimate and net sales marginally beat the same. Strong operational efficiency helped it deliver strong earnings amid challenging market conditions.

Masco lowered the upper limit of its 2024 adjusted EPS guidance due to challenged market demand.

Armstrong World Industries, Inc. AWI reported solid results for the third quarter of 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.

Given the solid third-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for adjusted EBITDA, adjusted EPS and adjusted free cash flow.

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Oil rises nearly 2% after OPEC+ delays output hike, US election in focus

Mon, 04 Nov 2024 16:20:58 +0000

Implied Volatility Surging for Penumbra (PEN) Stock Options

Mon, 04 Nov 2024 16:19:00 +0000

Investors in Penumbra, Inc. PEN need to pay close attention to the stock based on moves in the options market lately. That is because the Dec 20, 2024 $310 Put had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Penumbra shares, but what is the fundamental picture for the company? Currently, Penumbra is a Zacks Rank #3 (Hold) in the Medical – Instruments industry that ranks in the Top 32% of our Zacks Industry Rank. Over the last 30 days, three analysts have increased their earnings estimates for the current quarter, while two have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 85 cents per share to 84 cents in that period.

Given the way analysts feel about Penumbra right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Trump unlikely to undo Biden's IRA climate legislation, TotalEnergies executive says

Mon, 04 Nov 2024 16:17:39 +0000

2 Stocks to Watch From the Challenging Computer Industry

Mon, 04 Nov 2024 16:08:00 +0000

The Zacks Computer – Micro Computers industry participants are suffering from waning demand for consumer PCs. Geopolitical challenges, including persistent inflation and high interest, are major headwinds. Weak demand in China has been a headwind. However, industry participants are benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. Industry participants like Apple AAPL and Dell Technologies DELL are benefiting from these trends. The improving availability of 5G-enabled smartphones has been a key catalyst for industry participants. The launch of foldable and AI and ML-infused smartphones, tablets, wearables and hearables is another major growth driver for the industry participants. Robust demand for production printers, materials and software bodes well for 3-D printing solution providers.

Industry Description

The Zacks Computer – Micro Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based either on iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display, and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.

3 Micro Computer Industry Trends to Watch

Enterprise Adoption Remains Healthy: Strong enterprise demand has been benefiting the industry participants. The growing adoption of a hybrid working environment bodes well for the players, as demand for laptops and tablets is expected to increase. Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security.

Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from Qualcomm, NVIDIA, Apple and Samsung. Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers. Improved graphics quality is making smartphones suitable for playing sophisticated games. This is driving the demand for high-end smartphones and opening up significant opportunities for device makers.

AI-enabled PCs to Boost Demand: Personal computers (desktops and laptops), be they Windows or Apple’s MacOS-based ones, are expected to benefit from AI infusion. Canalys expects AI-enabled PC shipments to reach 48 million in 2024, representing 18% of total PC shipments. AI-capable PC shipments are projected to surpass 100 million in 2025, which will represent 40% of all PC shipments. This offers significant growth opportunities for industry participants.

Zacks Industry Rank Indicates Dull Prospect

The Zacks Computer – Micro Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #210, which places it in the bottom 16% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Given the dim outlook, there are only a few stocks worth watching in the sector. But before we present those stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Lags Sector and S&P 500

The Zacks Computer – Micro Computers industry has underperformed the broader Zacks Computer and Technology sector, as well as the S&P 500 index over the past year.

The industry has gained 16.8% over this period compared with the S&P 500’s return of 20.5% and the broader sector’s growth of 20.5%.

One-Year Price Performance

Industry's Current Valuation

On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 26.32X compared with the S&P 500’s 21.71X and the sector’s 26.13X.

Over the last five years, the industry has traded as high as 32.27X and as low as 16.9X, with the median being 24.9X, as the chart below shows.

Forward 12-Month Price-to-Earnings (P/E) Ratio

Computer Stocks to Watch Right Now

Apple: This Zacks Rank #3 (Hold) company is benefiting from increasing customer engagement in the services segment.

The expanding content portfolio of Apple TV+ and Apple Arcade helped drive subscriber growth. Apple currently has more than 1 billion paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers worldwide, helping it offer appealing new apps that drive the App Store’s traffic. A growing number of AI-infused apps will attract subscribers to the App Store.

The Zacks Consensus Estimate for fiscal 2025 earnings has decreased by 1.19% to $7.45 per share over the past 30 days. The stock has gained 15.8% in the year-to-date period.

Price and Consensus: AAPL

Dell Technologies: This Zacks Rank #2 (Buy) company is benefiting from strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications.

Its PowerEdge XE9680L AI-optimized server is very much in demand. Strong enterprise demand for AI-optimized servers is aiding Dell. It is witnessing demand from a diversified customer base that includes higher education institutions, financial services, health care and life services and manufacturing.

The Zacks Consensus Estimate for fiscal 2024 earnings has been steady at $7.85 per share over the past 30 days. DELL shares have gained 71.1% year to date.

Price and Consensus: DELL

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Brazil prepares to remove illegal Amazon gold miners from Munduruku land

Mon, 04 Nov 2024 16:05:27 +0000

What Awaits Warner Bros. Discovery This Earnings Season?

Mon, 04 Nov 2024 16:03:00 +0000

Warner Bros. Discovery WBD is slated to report third-quarter 2024 results on Nov. 7.

The Zacks Consensus Estimate for loss has widened by a penny to 5 cents per share in the past 30 days. The consensus mark for revenues is pegged at $9.98 billion, indicating no change year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Let’s see how things have shaped up for this announcement.

Warner Bros. Discovery, Inc. Price and EPS Surprise

Warner Bros. Discovery, Inc. price-eps-surprise | Warner Bros. Discovery, Inc. Quote

Factors to Consider

Several fundamental challenges are expected to have influenced Warner Bros. Discovery's third-quarter performance. A primary concern centers on advertising revenues, which constitutes over 50% of the company's income stream.

The advertising environment faces headwinds from decreased audience engagement across domestic general entertainment and news networks, compounded by the company's strategic exit from the AT&T SportsNet business. This trend is likely to have continued in the third quarter. Advertising revenues declined 3.5% year over year to $2.43 billion in the second quarter. Both domestic and international advertising markets show signs of softness.

Financial pressures may manifest in margin compression, attributed to losses from high-budget film productions and substantial debt obligations stemming from the WarnerMedia-Discovery merger.

However, the Direct-to-Consumer (DTC) segment presents more positive indicators for the quarter under review. The company reported 103.3 million global DTC subscribers in second-quarter 2024, reflecting a sequential increase of 3.6 million. Global DTC Average Revenue Per User (ARPU) showed 4% growth (excluding currency effects) to $8.00, driven by domestic ad tier expansion and shifts in distribution channels, though partially offset by growth in lower-ARPU international markets.

Content distribution strategy may provide some counterbalance to these challenges. The company's multi-platform approach, leveraging both linear and digital over-the-top platforms like Hulu and Sling TV, could support traffic growth.

A significant development in the third quarter is the strategic partnership with Charter Communications (CHTR), integrating Max (Ad Lite) and Discovery+ content into Spectrum TV Select packages. Steady viewership growth across the company's channel portfolio, including major networks like Discovery Channel, Food Network and HGTV, might have impacted overall revenue performance.

For the third quarter, the Zacks Consensus Estimate for total DTC subscribers is currently pegged at 107.663 million, indicating an increase of 13.2% year over year.

What Our Model Indicates

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

WBD has an Earnings ESP of -20.37% and a Zacks Rank #5 (Strong Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Flutter Entertainment PLC FLUT has an Earnings ESP of +172.73% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify’s shares have risen 20.7% year to date. FLUT is set to report its third-quarter 2024 results on Nov. 12.

DraftKings DKNG has an Earnings ESP of +13.83% and a Zacks Rank of 3 at present.

DraftKings’s shares have gained 1.6% year to date. DOCN is slated to report its third-quarter 2024 results on Nov. 7.

Airbnb ABNB has an Earnings ESP of +0.12% and a Zacks Rank #3 at present.

ABNB’s shares have gained 15.4% year to date. ABNB is set to report third-quarter 2024 results on Nov. 7.

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2 Laser Systems Stocks to Watch From a Challenging Industry

Mon, 04 Nov 2024 16:03:00 +0000

The Zacks Laser Systems and Components industry is suffering from challenging macroeconomic conditions globally, weak economic conditions in Europe and a sluggish economic environment in China. Continued economic uncertainty with low PMI numbers in Europe, North America and Japan is impacting industrial demand and capital investments. However, industry participants like IPG Photonics IPGP and MicroVision MVIS benefit from upbeat demand from electric vehicles, electronics, semiconductors and healthcare end-markets. Robust demand for high-power continuous wave and pulsed laser for cutting and battery-processing applications, growing demand for high-performance optical devices, and the ongoing proliferation of Generative AI, cloud computing, autonomous driving, IoT and 5G are the key catalysts.

Industry Description

The Zacks Laser Systems and Components industry comprises companies offering high-performance fiber lasers, fiber amplifiers and diode lasers, optical and photonic products, and scanning technology solutions. The key end markets are semiconductors, metrology, advanced communication and medical devices. Industry participants also provide high-precision 3D sensors and system products for inspection and metrology. Moreover, in the medical devices space, laser and other energy-based aesthetic treatments can achieve therapeutic results by affecting structures within the skin. Developing safe and effective aesthetic treatments has resulted in a well-established market for these procedures. The industry also operates in the cyclical surface mount technology and semiconductor capital equipment markets.

3 Laser Systems & Components Industry Trends to Watch

Emerging Applications Driving Demand for Lasers: The industry is benefiting from increasing demand for emerging applications like additive manufacturing, facial recognition, gesture recognition, LiDAR applications and IoT. Advanced lasers, especially those with 3D sensing (3DS) capabilities, are enhancing interactions using technology. Notably, 3DS — the technology that allows users to create 3D printable objects, control games with body gestures and measure objects — is in high demand.

Laser-IoT Combination Supports Efficiency: As industries are increasingly adopting automation techniques, combining lasers with IoT improves operating efficiency. IoT-supported manufacturing equipment is far easier to update with firmware. The combination reduces costs and increases flexibility and reliability manifold by enabling material-handling capabilities through remote sources. Strong demand from semiconductor and allied markets, which are seeing a rapid shift toward the production of micro and nano devices, is another positive for industry participants.

Challenging Macroeconomic Condition Hurts Prospect: Industry participants suffer from sluggish capital spending by original equipment manufacturers. Moreover, persistent inflation, energy headwinds in Europe and weakness in China are expected to hurt industry participants in the near term.

Zacks Industry Rank Indicates Dim Prospects

The Zacks Laser Systems and Components industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #175, which places it in the bottom 30% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the bottom 50% of the Zacks-ranked industries results from the negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, analysts are pessimistic about this group’s earnings growth potential. Since Nov. 30, 2023, the Zacks Consensus Estimate for the industry’s earnings estimate for 2024 has declined 93 cents to a loss of 43 cents per share.

Despite the lackluster outlook, there are a few stocks worth watching in the industry. But before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first.

Industry Underperforms Broader Sector and S&P 500

The Zacks Laser Systems and Components industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 composite over the past year.

The industry has declined 15.2% over this period against the S&P 500’s rise of 20.6% and the broader sector’s growth of 23.9%.

One-Year Price Performance

Industry's Current Valuation

On the basis of the trailing 12-month P/S, which is a commonly used multiple for valuing Laser Systems and Components stocks, we see that the industry is currently trading at 7.67X compared with the S&P 500’s 5.62X. It is also trading above the sector’s trailing 12-month P/S of 7.57X.

Over the last five years, the industry has traded as high as 7.81X and as low as 5.04X, with a median of 6.15X, as the charts below show:

Trailing 12-Month Price-to-Sales (P/S) Ratio

2 Laser Stocks to Watch

IPG Photonics: This Oxford, MA-based company is suffering from lower materials processing sales due to weakness in cutting and welding applications. Declining demand in key markets like e-mobility, particularly in China, and intense competition are negatively impacting top-line growth.

Emerging products like LightWELD are expected to drive future sales. IPG Photonics’ success in the EV battery manufacturing sector, supported by advanced laser welding solutions and strategic partnerships with companies like Miller Electric for handheld welding solutions, is expected to drive top-line growth.

IPGP shares have lost 24.2% year to date. The Zacks Consensus Estimate for this Zacks Rank #3 (Hold) company’s fiscal 2024 earnings has increased 15% to $1.53 per share over the past 30 days.

Price & Consensus: IPGP

MicroVision: Redmond, WA-based MicroVision is a well-known provider of MEMS-based solid-state automotive lidar technology and ADAS solutions. The stock has declined 65% in the year-to-date period.

MicroVision benefits from a diversified portfolio. It offers multiple technology nodes with the highest resolutions and the smallest form factor LiDAR with its MEMS-based long-range MAVIN and small form factor short-range sequential flash-based MOVIA LiDAR product lines.

The Zacks Consensus Estimate for MVIS’ 2024 loss has been unchanged at 49 cents per share in the past 30 days. MicroVision currently has a Zacks Rank #3.

Price & Consensus: MVIS

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Berkshire Hathaway's Q3 Earnings and Revenues Decline Y/Y

Mon, 04 Nov 2024 16:01:00 +0000

Berkshire Hathaway (BRK.B) delivered third-quarter 2024 operating earnings of $10.1 billion, which decreased 6.2% year over year. The decrease was attributable to lower revenues coupled with higher costs.

Behind the Headlines

Revenues slipped 0.2% year over year to $93 billion, attributable to lower revenues at Insurance and Other as well as Railroad, Utilities and Energy.

Costs and expenses increased 0.7% year over year to $81.2 billion, largely due to an increase in Insurance and Other expenses. Higher losses and loss adjustment expenses, insurance underwriting expenses, cost of leasing and selling, general and administrative expenses fueled the increase. The figure was lower than our estimate of $85.9 billion.

Berkshire Hathaway Inc. Price, Consensus and EPS Surprise

Berkshire Hathaway Inc. price-consensus-eps-surprise-chart | Berkshire Hathaway Inc. Quote

Segment Performance

Berkshire Hathaway’s Insurance and Other segment revenues increased 9.9% year over year to $26.7 billion in the reported quarter on the back of higher insurance premiums earned, leasing revenues and interest, dividend and other investment income.

Insurance underwriting earnings increased 5.1% year over year to $5.6 billion.

Railroad, Utilities and Energy operating revenues decreased 9.1% year over year to $23.9 billion, primarily due to lower utility and energy operating revenues. The figure was lower than our estimate of $28.6 billion. Pre-tax earnings of Railroad increased 83.6% year over year to $3.2 billion.

Total revenues at Manufacturing, Service and Retailing decreased 0.8% year over year to $42.2 billion. Pre-tax earnings decreased 5.6% year over year to $4.2 billion.

Earnings from Manufacturing, Service and Retailing businesses decreased 5.1% year over year to $4.2 billion.

Financial Position

As of Sept. 30, 2024, consolidated shareholders’ equity was $629.1 billion, up 12.1% from the level as of Dec. 31, 2023. At quarter-end, cash and cash equivalents were $32.3 billion, down 4.1% from the level at 2023-end.

BRK.B exited the third quarter of 2024 with a float of about $174 billion, which increased $5 billion from the figure at the end of 2023.

Cash flow from operating activities totaled $26 billion in the reported quarter, down 25.4% from the year-ago period.

Berkshire Hathaway bought back shares worth $2.9 billion in the first nine months of 2024.

Zacks Rank

BRK.B currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

The Travelers Companies TRV reported third-quarter 2024 core income of $5.24 per share, which beat the Zacks Consensus Estimate by 38.2%. Total revenues increased 10.7% from the year-ago quarter to $11.84 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 1.4%.

Travelers’ net written premiums increased 8% year over year to a record $11.31 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.5 billion. Travelers witnessed an underwriting gain of $685 million against a loss of $136 million incurred in the year-ago quarter. The consolidated underlying combined ratio of 85.6 improved 500 bps year over year. The combined ratio improved 780 bps year over year to 93.2 due to an improvement in the underlying combined ratio and net favorable prior-year reserve development.

The Progressive Corporation’s PGR third-quarter 2024 earnings per share of $3.97 beat the Zacks Consensus Estimate of $3.40. The bottom line more than doubled year over year. Operating revenues of $19.5 billion improved 24.9% year over year and beat the consensus estimate by 2.6%.

Net premiums written were $19.5 billion in the quarter, up 25% from $15.6 billion a year ago. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 340 bps from the prior-year quarter’s level to 89.

RLI Corp. RLI reported third-quarter 2024 operating earnings of $1.31 per share, beating the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues for the reported quarter were $426 million, up 1.4% year over year. The top line beat the Zacks Consensus Estimate of $420 million.

Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Our estimate was $572.3 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 bps year over year to 89.6. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 103.1.

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Erie Indemnity Q3 Earnings Top on Higher Management Fee Revenues

Mon, 04 Nov 2024 15:56:00 +0000

Erie Indemnity Company's ERIE third-quarter 2024 adjusted earnings of $3.06 per share beat the Zacks Consensus Estimate by 2.3%. The bottom line increased 21.9% year over year.

The quarterly results reflected higher management fees and increased net investment income, offset by higher expenses.

Erie Indemnity Company Price, Consensus and EPS Surprise

Erie Indemnity Company price-consensus-eps-surprise-chart | Erie Indemnity Company Quote

ERIE’s Q3 Details

Total revenues of $1 billion beat the Zacks Consensus Estimate by 1.5%. The top line improved 16.4% year over year.

Management fee revenue - policy issuance and renewal services increased 18.5% year over year to $769.2 million. The Zacks Consensus Estimate was pegged at $773 million.

Management fee revenue - administrative services increased 6.2% year over year to $17.2 million. The Zacks Consensus Estimate was pegged at $16.5 million.

Investment income increased 58.9% year over year to $19.5 million.

Commissions increased $66.3 million year over year in the third quarter, primarily attributable to growth in direct and affiliated assumed written premium and, to a lesser extent, an increase in agent incentive compensation related to the profitability component.

Cost of operations - policy issuance and renewal services increased 17.1% year over year to $613 million. Cost of operations - administrative services increased 10.5% year over year to $206.8 million.

Total operating expenses increased 15.4% year over year to $819.8 million.

Financial Update of ERIE

ERIE exited the third quarter with cash and cash equivalents of $221.2 million, which increased 53.5% from the 2023-end level.

Long-term debt was $23.5 million as of Sept. 30, 2024, up 8.9% from the 2023-end level.

Shareholders' equity increased 17.1% from December 2023 end to $1.9 billion at third-quarter 2024 end.

Zacks Rank

ERIE carries a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Industry Releases

Marsh & McLennan Companies, Inc. MMC reported third-quarter 2024 adjusted earnings per share of $1.63, which beat the Zacks Consensus Estimate by 1.2%. The bottom line advanced 3.8% year over year. Consolidated revenues rose 6% year over year to $5.7 billion. The figure also improved 5% on an underlying basis. The top line, however, fell short of the consensus mark by 0.2%.

Marsh & McLennan’s adjusted operating income was $1.19 billion in the third quarter, which grew 12% year over year but missed our estimate of $1.21 billion.

Arthur J. Gallagher & Co. AJG reported third-quarter 2024 adjusted net earnings of $2.26 per share, which matched the Zacks Consensus Estimate. The bottom line increased 13% on a year-over-year basis. Total adjusted revenues of $2.7 billion missed the Zacks Consensus Estimate by 0.1%. However, the top line improved 11.1% year over year.

EBITDAC grew 14.3% from the prior-year quarter to $808.8 million.

Aon plc AON reported third-quarter 2024 adjusted earnings of $2.72 per share, which beat the Zacks Consensus Estimate by 11%. The bottom line advanced 17% year over year. Total revenues of $3.72 billion improved 26% year over year. The top line beat the consensus mark by 0.5%. It consisted of organic revenue growth of 7% and growth from acquisitions of 19%.

Revenues are expected to register mid-single-digit or higher organic growth for 2024 and beyond. The company expects the adjusted operating margin to expand in 2024.

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Wall Street Awaits U.S. Presidential Election, FOMC Meeting

Mon, 04 Nov 2024 15:55:00 +0000

Welcome to the most important week of trading in 2024! If you think this is an overstatement, I challenge you to find a better one. The General Election is on Tuesday, and whether we see the results of who will occupy the White House by Wednesday morning or not, we will have chosen a route at the fork in the road.

Pre-market futures are flat currently: the Dow is -17 points while the S&P 500 is +6 and the Nasdaq +3 points. Bond yields are now a lukewarm +4.28% on the 10-year and +4.135% on the 2-year. When returns begin coming in Tuesday evening, we may then start to see the stock market wrangle a new direction.

Election Tuesday; Election Results…?

There are far too many variables currently to fashion a market response, and we should be OK with this, near-term. The S&P in 2024 so far is up +20% — not too shabby for an economy that was supposed to be mired in a deep recession at this time.

Fed Rate Decision Thursday

We’ve had a month and a half’s worth of economic data between that last cut and Thursday’s pending decision, and based on a mere 12K new jobs filled in October alone, it looks like a 25 bps trim is baked into the cake. The market’s already there, although not in a mood to bid higher until after these heavy shoes drop.

Q3 Earnings Season Heats Up, Post-Marquee Names Reporting

Far too many companies are reporting to properly shake a stick at, so here’s a few choice results which caught our eye this morning:

Marriott (MAR) posted slight misses on both top and bottom lines this morning, with Q3 earnings of $2.26 per share missing the Zacks consensus by 5 cents. Revenues of $6.26 billion were -0.45% below analysts’ expectations. Shares are down -2% on the news.

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MSI Set to Report Q3 Results: Will Top-Line Expansion Drive Earnings?

Mon, 04 Nov 2024 15:50:00 +0000

Motorola Solutions, Inc. MSI is scheduled to report third-quarter 2024 results on Nov. 7, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.64%. It pulled off a trailing four-quarter earnings surprise of 8.06%, on average.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Chicago-based company is expected to have recorded higher revenues year over year on the back of growth in both segments, Products and Systems Integration and Services and Software. Management’s strong focus on innovation to bolster its portfolio offerings is a positive. MSI benefits from the increasing demand for its mission-critical technologies in North America and globally.

Factors at Play for MSI Q3 Earnings Release

In the quarter, Tyne and Wear Fire and Rescue Service has opted to deploy Motorola Control Room Solution to bolster its emergency response capabilities. The city of Oakland, CA has selected Motorola’s PremierOne computer-aided dispatch software to improve its police, fire and other emergency response services. The German Federal State of Thuringia has opted to install the advanced MSI VB400 body cameras for its police forces.

Per the agreement inked with the Thuringian Ministry of the Interior, Motorola will supply more than 1,200 VB400 body cameras to the state police. Milwaukee and Waukesha counties have collaborated with Motorola to enhance their public safety and emergency communication infrastructure by transitioning to the Wisconsin Public Safety Network. These are likely to have generated incremental revenues in the quarter.

In the quarter to be reported, Motorola has acquired Noggin, a global provider of cloud-based business continuity planning, operational resilience and critical event management software. The buyout aligns with Motorola's ongoing efforts to boost its emergency coordination solutions, reinforcing the company’s position in the public safety and enterprise security sectors.

MSI also announced the inauguration of a new research and development center in Cork, Ireland. The new facility will primarily focus on designing software for Motorola Solutions' LMR portfolio. Plans to expand into other technologies are also in the cards. These initiatives are expected to have strengthened Motorola’s portfolio and improved its commercial prospects.

The Zacks Consensus Estimate for the Products and Systems Integration segment’s revenues is pegged at $1.76 billion. The figure indicates a rise from $1.61 billion recorded in the year-ago quarter. Our estimate for revenues from this segment is pinned at $1.67 billion, implying 3.5% year-over-year growth. The Zacks Consensus Estimate for the Services and Software segment’s revenues is pegged at $1.61 billion, up from $1.49 billion recorded in the year-earlier quarter. Our estimate for revenues from this segment is pinned at $1.07 billion, indicating 14.3% year-over-year growth.

For the September quarter, the Zacks Consensus Estimate for revenues is pegged at $2.76 billion, which indicates growth from the year-ago quarter’s reported figure of $2.56 billion. The consensus estimate for adjusted earnings per share stands at $3.36, which implies an increase from $3.19, driven by top-line growth.

Earnings Whispers for MSI

Our proven model does not conclusively predict an earnings beat for Motorola in the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

MSI’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank of MSI: Motorola carries a Zacks Rank #4 (Sell) at present.

Motorola Solutions, Inc. Price and EPS Surprise

Motorola Solutions, Inc. price-eps-surprise | Motorola Solutions, Inc. Quote

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

The Earnings ESP for Fortinet FTNT is +1.25%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report quarterly numbers on Nov. 7.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Qualcomm Technologies, Inc. QCOM is +0.48% and it currently carries a Zacks Rank of 2. The company is scheduled to report its quarterly numbers on Nov. 6.

The Earnings ESP for Arista Networks, Inc. ANET is +0.72%, and it sports a Zacks Rank of 1 at present. The company is scheduled to report its quarterly numbers on Nov. 7.

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Pinterest to Report Q3 Results: Will Revenue Growth Boost Earnings?

Mon, 04 Nov 2024 15:45:00 +0000

Pinterest, Inc. PINS is scheduled to report third-quarter 2024 results on Nov. 7, after the closing bell. The company pulled off a trailing four-quarter earnings surprise of 20.92%, on average. In the last reported quarter, it reported an earnings surprise of 3.57%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The company is expected to witness a top-line expansion year over year, driven by increasing user engagement in the United States, Canada and Europe. Initiative to introduce AI powered tools on the platform, focus on content personalization and efforts to boost operational efficiency are tailwinds.

Factors at Play

During the quarter, Pinterest introduced two new features, collage remixing and collage sharing, to its popular collage toolsets. The new features empower users to create and present their content in a more dynamic and engaging way.

Pinterest is also taking various initiatives to bring more actionable content on the platform from a wide range of other sources such as publishers and retailers. This has resulted in a solid improvement in engagement metrics like sessions, impressions and saves across all regions. These initiatives are expected to have supported top-line growth.

The company’s focus on improving operational rigor and incorporating sophisticated AI models to enhance relevancy and personalization is positive. Through third-party ad integration, PINS is aiming to improve monetization opportunities in several unmonetized international markets. These factors are expected to have a positive impact on the third quarter result.

Our estimate for average revenues per user (ARPU) from the United States and Canada is pegged at $7.21. Our estimate for Europe’s ARPU is pegged at $1.10. Per our estimate, monthly active users (MAUs) from the United States and Canada are expected to reach 98.2 million in the third quarter. MAUs from Europe are approximated to be 136.3 million. MAUs from the rest of the world are estimated at 289.3 million.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $897.07 million, suggesting an increase from the year-ago quarter’s reported figure of $763.2 million. The consensus estimate for adjusted earnings per share is pegged at 34 cents, up from 28 cents reported in the prior year.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Pinterest this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 34 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Pinterest, Inc. Price and EPS Surprise

Pinterest, Inc. price-eps-surprise | Pinterest, Inc. Quote

Zacks Rank: Pinterest currently carries a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post a beat this season:

The Earnings ESP for Fortinet FTNT is +1.25%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report quarterly numbers on Nov. 7.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Qualcomm Technologies, Inc. QCOM is +0.48%, and it currently carries a Zacks Rank of 2. The company is scheduled to report its quarterly numbers on Nov. 6.

The Earnings ESP for Arista Networks, Inc. ANET is +0.72%, and it sports a Zacks Rank of 1 at present. The company is scheduled to report its quarterly numbers on Nov. 7.

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Devon's Pre-Q3 Earnings Analysis: Should You Buy or Hold the Stock?

Mon, 04 Nov 2024 15:41:00 +0000

Devon Energy Corporation DVN is expected to report a year-over-year decline in its top and bottom lines when it reports third-quarter 2024 results on Nov. 5, after the market close.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Zacks Consensus Estimate for DVN’s third-quarter revenues is pegged at $3.86 billion, indicating a 2% decline from the year-ago reported figure.

The consensus estimate for earnings is pegged at $1.06 per share. The Zacks Consensus Estimate for DVN’s third-quarter earnings has declined 18.46% in the past 60 days. The estimate suggests a year-over-year decline of 35.8%.

Image Source: Zacks Investment Research

Solid Earnings Surprise History

Devon’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.49%.

Image Source: Zacks Investment Research

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Devon Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Devon has an Earnings ESP of -0.70%.

Zacks Rank: Devon Energy currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Have Shaped DVN’s Q2 Earnings

Devon continues to benefit from its multi-basin portfolio and high-margin assets. Increased productivity from the wells placed online during the first nine months of 2024 is likely to have been a primary contributor to strong production volumes. The acquisition of Grayson Mill Energy during the quarter is going to boost the company’s production volumes.

Third-quarter earnings are expected to have benefited from effective cost management, which is likely to keep operating expenses within the guidance level and boost margins. Devon also achieved prominent operational efficiencies in Delaware in the first half of 2024, which is expected to have continued in the third quarter as well, boosting the performance of the company.

Stable free cash flow generation is expected to have continued in the third quarter as well, which assisted in increasing shareholders’ value. The ongoing share repurchases have lowered the shares outstanding level of the company, which is likely to have had a positive impact on third-quarter earnings.

DVN’s Price Performance and Valuation

DVN’s shares have declined 23.2% in the past six months compared with the industry’s drop of 5.1%.

Image Source: Zacks Investment Research

Devon shares are somewhat inexpensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 3.89X compared with its industry average of 5.88X.

Image Source: Zacks Investment Research

Some of the other operators in the same space, like APA Corporation APA and EOG Resources Inc. EOG, are trading at a higher value compared with Devon. The shares of APA and EOG are trading at current trailing 12-months EV/EBITDA multiple of 5.42 and 5.13, respectively.

Investment Thesis

The highly productive multi-basin domestic assets of Devon are the primary contributor to its strong performance. The company’s acquisition of Grayson Mill Energy will enable it to maintain high-margin production and strong free cash flow for years. Devon has significant financial flexibility and has been reducing its debt and lowering its annual interest expenses.

The company’s current ratio stands at 1.11, indicating its financial strength to meet near-term debt obligations. In addition, the drop in interest rates is going to have a positive impact, as it will lower the borrowing costs for long-term projects.

A highly competitive oil and gas industry may limit the company’s capacity to apply for new drilling rights or acquire properties due to competitors who are financially stronger than Devon with more resources at their disposal.

To Sum Up

Devon’s high-quality domestic assets with a balanced exposure to oil, natural gas and NGL production and its low-cost production structure boost margins. The company is presently trading at a discount.

Those who already own this stock would do well to retain it in their portfolio.

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MarketAxess Stock Before Q3 Earnings: Buy Now or Wait for Results?

Mon, 04 Nov 2024 15:39:00 +0000

MarketAxess Holdings Inc. MKTX is set to report third-quarter 2024 results on Nov. 6, 2024, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.82 per share on revenues of $205.48 million.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The third-quarter earnings estimate has witnessed upward revisions over the past 60 days. The bottom-line projection indicates a year-over-year increase of 24.7%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 19.3%.

Image Source: Zacks Investment Research

For the current year, the Zacks Consensus Estimate for MarketAxess’ revenues is pegged at $824.89 billion, implying a growth of 9.6% year over year. Also, the consensus mark for current year EPS is pegged at $7.26, implying a jump of around 6% on a year-over-year basis.

MarketAxessbeat the consensus estimate for earnings in three of the last four quarters and missed once, with the average surprise being 2.6%.

MarketAxess Holdings Inc. Price and EPS Surprise

MarketAxess Holdings Inc. price-eps-surprise | MarketAxess Holdings Inc. Quote

Q3 Earnings Whispers for MKTX

Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That’s precisely the case here.

MarketAxess has an Earnings ESP of +1.62% and a Zacks Rank #2.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping MKTX’s Q3 Results?

Higher trading volumes and strong estimated market share gains across most of its credit product lines are likely to have boosted credit commission revenues in the third quarter. The Zacks Consensus Estimate for the total trading volume indicates a 29.8% year-over-year increase.

Solid trading volumes in the international business of MarketAxess are expected to have driven the company’s overall commissions in the third quarter. The consensus mark for Eurobonds trading volumes indicates 26.8% growth from a year ago, while our model estimate suggests a 21.4% increase. The Zacks Consensus Estimate for commissions is pegged at $178.7 million, indicating 18.8% growth from the prior-year quarter’s reported number.

Increased utilization of its data product suite and new contracts are likely to have provided an impetus to MarketAxess’ information services revenues in the to-be-reported quarter. The consensus mark for third-quarter information services revenues is pinned at $12.8 million, which implies an 8.7% rise from the year-ago quarter’s reported figure.

The company earlier stated impressive growth in its trading volumes for the third quarter, with total credit ADV reaching nearly $14.1 billion, marking a more than 26.5% year-over-year increase. A 35.7% rise in U.S. high-grade ADV, a 19.1% boost in emerging markets ADV and 27.4% growth in Eurobonds ADV aided the figure.

These are likely to have positioned the company for not only a year-over-year increase but also an earnings beat. However, the upside is likely to have been partly offset by continued decline in the high-yield market. The U.S. high-yield trading saw a 1.1% decline on the platform for the third quarter. Its estimated market share decreased 310 basis points compared with the previous year. Also, we forecast total expenses to be around $120 million in the third quarter, indicating an increase of 13.7% year over year.

MKTX’s Price Performance & Valuation

MarketAxess' stock has rallied 39.6% in the past six months, outperforming the industry’s growth of 15.2% and the S&P 500 Index’s 10.5% gain. Among its peers, Intercontinental Exchange, Inc. ICE has increased 17.7%, while Cboe Global Markets, Inc. CBOE has gained 14.8% during the same period.

MKTX’s Six-Month Price Performance

Image Source: Zacks Investment Research

Now, let’s look at the value MarketAxess offers investors at current levels.

Currently, MKTX is trading at 35.85X forward 12-month earnings, above the industry’s average of 23.17X, indicating investor confidence. Also, the stock is trading below its five-year median of 44.95X, signaling further growth potential.

Image Source: Zacks Investment Research

How Should You Play MKTX Pre-Q3 Earnings?

Enhanced trading velocity, facilitated by increased trading automation and the All-to-All Open Trading platform, is expected to contribute to its sustained revenue growth. The Open Trading platform generates substantial transaction cost savings.

Acquisitions and alliances are enhancing its market presence and offering. Some partnerships with major entities, including BlackRock, S&P Dow Jones Indices, China Foreign Exchange Trade System, Tradeweb Markets, Bloomberg and S&P Global Market Intelligence, will continue to expand its technology solutions and product portfolio.

Thanks to these initiatives, the company is expected to witness sustained growth in its trading volumes. With this momentum, shareholder value-enhancing activities, strong liquidity and potential for another earnings beat, current shareholders might consider holding. Prospective investors could see a buying opportunity and watch upcoming earnings for further insights.

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Pre-Markets Holding Breath Ahead of Biggest Week of 2024

Mon, 04 Nov 2024 15:34:00 +0000

Monday, November 4, 2024

Welcome to the most important week of trading in 2024! If you think this is an overstatement, I challenge you to find a better one. The General Election is on Tuesday, and whether we see the results of who will occupy the White House by Wednesday morning or not, we will have chosen a route at the fork in the road.

Pre-market futures are flat currently: the Dow is -17 points while the S&P 500 is +6 and the Nasdaq +3 points. Bond yields are now a lukewarm +4.28% on the 10-year and +4.135% on the 2-year. When returns begin coming in Tuesday evening, we may then start to see the stock market wrangle a new direction.

Election Tuesday; Election Results…?

Whether Donald Trump returns to office as only the second non-consecutive two-term President (Grover Cleveland, 1884 and 1892) or Vice President Kamala Harris steps to the fore as the 47th president, based on how close polling data remains, we may not know the answer until sometime after Wednesday morning. Recall that in 2020, Joe Biden wasn’t officially declared the winner until Saturday morning of Election Week.

There are far too many variables currently to fashion a market response, and we should be OK with this, near-term. The S&P in 2024 so far is up +20% — not too shabby for an economy that was supposed to be mired in a deep recession at this time.

Fed Rate Decision Thursday

The last time the Federal Open Market Committee (FOMC) got together, back in mid-September, it cut interest rates for the first time since March 2020, when they were pulled to 0-0.25% ahead of the Covid pandemic. Coming down 50 (basis points) bps instead of the widely expected 25 bps, the Fed funds rate was brought down to 4.75-5.00%. Thursday’s move lower will be the first time we’ve had sub-5% interested rates since February 2023.

We’ve had a month and a half’s worth of economic data between that last cut and Thursday’s pending decision, and based on a mere 12K new jobs filled in October alone, it looks like a 25 bps trim is baked into the cake. The market’s already there, although not in a mood to bid higher until after these heavy shoes drop.

Q3 Earnings Season Heats Up, Post-Marquee Names Reporting

Far too many companies are reporting to properly shake a stick at, so here’s a few choice results which caught our eye this morning:

Marriott MAR posted slight misses on both top and bottom lines this morning, with Q3 earnings of $2.26 per share missing the Zacks consensus by 5 cents. Revenues of $6.26 billion were -0.45% below analysts’ expectations. Shares are down -2% on the news. For more on MAR’s earnings, click here.

Check out the updated Zacks Earnings Calendar here.

Zacks Rank #2 (Buy)-rated Yum China YUMC released mixed results in its Q3 report this morning, beating earnings estimates by +13.24% — 77 cents per share versus 68 expected — while missing on its top line by -0.31% to $3.07 billion. YUMC has now beaten earnings estimates in four-straight quarters. For more on YUMC’s earnings, click here.

Zacks Rank #1 (Strong Buy)-rated FreshPet FRPT reported a big earnings beat this morning: earnings per share of 24 cents outpaced the Zacks consensus by a solid dime for a positive surprise of +71.4%. Revenues of $253.4 million surpassed expectations by +2.34% in the quarter. Shares are up another +3%, adding to the stock’s +54% performance year to date. For more on FRPT’s earnings, click here.

Questions or comments about this article and/or author? Click here>>

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Implied Volatility Surging for Las Vegas Sands (LVS) Stock Options

Mon, 04 Nov 2024 15:22:00 +0000

Investors in Las Vegas Sands Corp. LVS need to pay close attention to the stock based on moves in the options market lately. That is because the Jan. 17, 2025 $85.00 Put had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Las Vegas Sands shares, but what is the fundamental picture for the company? Currently, Las Vegas Sands is a Zacks Rank #3 (Hold) in the Gaming industry that ranks in the Bottom 38% of our Zacks Industry Rank. Over the last 30 days, two analysts have increased their earnings estimates for the current quarter, while three have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 60 cents per share to 59 cents in that period.

Given the way analysts feel about Las Vegas Sands right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Qualcomm Stock Before Q4 Earnings: To Buy or Not to Buy?

Mon, 04 Nov 2024 15:14:00 +0000

Qualcomm Incorporated QCOM is scheduled to report fourth-quarter fiscal 2024 earnings on Nov. 6, 2024. The Zacks Consensus Estimate for revenues and earnings is pegged at $9.9 billion and $2.56 per share, respectively. Earnings estimates for QCOM have improved from $10.05 per share to $10.08 for 2024 and from $10.92 per share to $10.93 for 2025 over the past 90 days.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

QCOM Estimate Trend

Image Source: Zacks Investment Research

Earnings Surprise History

The chip manufacturer delivered a four-quarter earnings surprise of 7.6%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 3.6%.

Image Source: Zacks Investment Research

Earnings Whispers

Our proven model predicts an earnings beat for Qualcomm for the fiscal fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Qualcomm currently has an ESP of +0.48% with a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping the Upcoming Results

With the accelerated rollout of 5G technology, Qualcomm is benefiting from investments toward building a licensing program in mobile. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company intends to harness artificial intelligence (AI) to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy. Qualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio.

During the fiscal fourth quarter, Qualcomm announced that Samsung deployed its advanced Snapdragon 8 Gen 3 Mobile Platform across the new Galaxy Z series smartphones, Galaxy Z Fold6 and Galaxy Z Flip6 models. The Snapdragon 8s Gen 3 mobile platform boasts an immersive Snapdragon Elite Gaming feature and AI-enhanced photos to help users capture and edit photos with improved quality and creativity. It highlights Qualcomm's growing prowess in the AI chip market, demonstrating its commitment to bringing top-tier AI experiences to end users.

In the fiscal fourth quarter, Qualcomm collaborated with Aramco to deploy generative AI-powered Internet of Things (IoT) solutions to accelerate digital transformation initiatives in Saudi Arabia. The solution suite includes a Rapid Response Solution that bolsters situational awareness and minimizes operational disruptions with the help of on-device AI and computer vision. The system features autonomous AI drones with generative AI flight control that respond quickly and effectively to onsite incidents.

The Factory Monitoring Solution delivers real-time insights and predictive analytics to enhance operational efficiency and safety with advanced video surveillance. Utilizing multimodal inputs and hybrid AI in conjunction with on-device AI and edge cloud AI processing, the Equipment Maintenance Solution streamlines maintenance practices. Moreover, its AI native worker assist technology effectively predicts and prevents equipment failures, optimizing performance, lowering maintenance costs and reducing downtime. These initiatives are likely to be reflected in the upcoming results.

Price Performance

Over the past year, Qualcomm has gained 37.8% compared with the industry’s growth of 51.1%, outperforming peers like Hewlett Packard Enterprise Company HPE but lagging Broadcom Inc. AVGO.

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Key Valuation Metric

From a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company shares currently trade at 14.96 forward earnings, lower than 21.62 for the industry and the stock’s mean of 17.6.

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Investment Considerations

Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience a seamless transition to superfast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, offers the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.

The company is reportedly the only chipset vendor with 5G system-level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front-end suppliers with design wins across all premium-tier smartphone customers. Leveraging the technology roadmap for a focused approach to innovation, it aims to connect millions of devices to the ‘connected intelligent edge.’

In addition, solid growth opportunities within the mobile space led by innovations in the Snapdragon portfolio for premium-tier Android handsets and a firmer footing in the emerging market of driver-assistance technology with the Snapdragon Ride Advanced Driver Assistance Systems portfolio are tailwinds.

End Note

With solid fundamentals and healthy revenue-generating potential driven by robust demand trends, Qualcomm appears to be a solid investment proposition. It also looks cheaper relative to its valuation metrics. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With improving earnings estimates, the stock is witnessing a positive investor perception.

Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed to record solid quarterly results in the ensuing earnings. Hence, investors are likely to profit if they bet on this high-flying stock now.

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Expedia Group Gears Up to Report Q3 Earnings: What's in the Cards?

Mon, 04 Nov 2024 15:13:00 +0000

Expedia Group, Inc. EXPE is scheduled to report its third-quarter 2024 results on Nov. 7.

For the to-be-reported quarter, the Zacks Consensus Estimate for revenues is pegged at $4.11 billion, suggesting growth of 4.56% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at $6.10 per share, suggesting growth of 0.3% from the figure reported in the year-ago quarter.

We note that EXPE’s bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 48.33%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Expedia currently has an Earnings ESP of +0.20% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Let’s see how things have shaped up for the upcoming announcement.

Expedia Group, Inc. Price and EPS Surprise

Expedia Group, Inc. price-eps-surprise | Expedia Group, Inc. Quote

Factors to Note

Expedia’s third-quarter 2024 results are likely to have benefited from solid momentum in core business, primarily driven by growth in gross bookings and lodging revenues, with particular strength in the hotel segment through increased booked room nights.

The Zacks Consensus Estimate for gross bookings is pinned at $26.69 billion, suggesting growth of 3.9% year over year.

Increasing investments for B2B-specific innovations are expected to have contributed well to the B2B segment’s performance in the quarter under review. The consensus mark for B2B revenues is pegged at $1.61 billion, indicating growth of 16.7% from the year-ago reported figure.

Strategic initiatives might have influenced performance outcomes in the quarter under review. The launch of One Key, a comprehensive loyalty program in the U.K. market, represents a significant expansion of the company's customer retention strategy.

Additionally, Expedia's partnership with Wells Fargo WFC and Mastercard MA to introduce co-branded credit cards (One Key and One Key+) in the U.S. market is likely to have enhanced customer engagement through rewards like OneKeyCash, applicable across multiple platforms, including Expedia, Hotels.com and Vrbo.

The integration of generative AI technology into service offerings aims to enhance user experience and drive customer momentum. The B2C segment shows potential improvement through increased investments in global market presence, while Brand Expedia and advertising businesses demonstrate strong momentum. Non-U.S. regions exhibit growing demand patterns.

However, several challenges may impact results. The Vrbo business segment shows signs of softness, while the car rental business faces pressure on rates, potentially affecting profitability. Broader market conditions present additional complexities, including macroeconomic uncertainties and intensifying competition from established players like TripAdvisor TRIP, Airbnb and Booking Holdings in the online travel space. These competitive pressures could influence market position and overall performance metrics.

Expedia Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Marriott's Q3 Earnings & Revenues Miss Estimates, '24 View Cut

Mon, 04 Nov 2024 15:12:00 +0000

Marriott International, Inc. MAR reported third-quarter 2024 results, with adjusted earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

For the quarter, the company reported a solid increase in global travel demand, driving growth in international markets and steady performance in the United States and Canada. The company reported a rise in group bookings. Business transient demand increased and leisure transient revenue per available room (RevPAR) remained above pre-pandemic levels. Marriott’s portfolio expansion also gained traction, adding over 95,000 rooms this year through conversions and international deals. To support its expanding global footprint, MAR introduced an efficiency initiative to generate up to $90 million in annual cost savings by 2025.

Following the results, the stock fell 3% in the pre-market trading session on Nov. 4. Investors’ sentiments are likely to have been hurt by the reduced 2024 adjusted earnings per share (EPS) outlook.

MAR’s Q3 Earnings & Revenue Discussion

Marriott’s adjusted EPS of $2.26 missed the Zacks Consensus Estimate of $2.31. It reported adjusted earnings of $2.11 per share in the prior-year quarter.

Marriott International, Inc. Price, Consensus and EPS Surprise

Marriott International, Inc. price-consensus-eps-surprise-chart | Marriott International, Inc. Quote

Quarterly revenues of $6.26 billion missed the consensus mark of $6.28 billion. The top line moved up 5.5% on a year-over-year basis.

Revenues from Base management and Franchise fees were $312 million and $812 million, up 2% and 9% year over year, respectively. Increased RevPAR, residential and co-branded credit card fees and unit growth backed this uptick. We estimated the metrics to be $319.5 million and $815.4 million, respectively.

Incentive management fees were $159 million, reflecting a rise of 11.2% from $143 million reported in the prior-year quarter.

RevPAR & Margins

RevPAR for worldwide comparable system-wide properties rose 3% (in constant dollars) year over year. The upside was backed by a 2.5% increase in average daily rate (“ADR”) and a 0.3% increase in occupancy, year over year.

Comparable system-wide RevPAR in the Asia Pacific (excluding China) increased 9.2% (in constant dollars) year over year. Occupancy moved up 3.1% year over year, while ADR rose 4.6% from the 2023 level. Comparable system-wide RevPAR in Greater China declined 7.9% year over year.

On a constant-dollar basis, international comparable system-wide RevPAR increased 5.4% year over year. Occupancy and ADR gained 1.5% and 3.2% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America and Middle East & Africa rose 6.7% and 8%, respectively, from 2023 levels.

Total expenses increased 10% year over year to $5.31 billion, owing to a rise in reimbursed expenses. Our estimate was pegged at $5.1 billion.

Adjusted EBITDA amounted to $1.23 billion, compared with $1.14 billion reported in the prior-year quarter. We predicted the metric to be $1.25 billion.

Balance Sheet

At the third-quarter end, Marriott's total debt totaled $13.6 billion, compared with $13.1 reported in the prior quarter. Cash and cash equivalents, as of Sept. 30, 2024, were $0.4 billion compared with $0.3 billion as of 2023-end.

Year to date (through Oct. 31, 2024), the company repurchased 14.2 million shares worth $3.4 billion.

Unit Developments

At the end of the third quarter, Marriott's worldwide development pipeline totaled 3,802 hotels, with more than 585,000 rooms. As of the quarter's end, about 1,320 properties with more than 220,000 rooms were under construction.

Marriott’s Q4 & 2024 Outlook

For the fourth quarter, management anticipates gross fee revenues in the range of $1.29-$1.31 billion. Adjusted EBITDA is expected between $1.24 billion and $1.27 billion. MAR estimates fourth-quarter EPS to be between $2.31 and $2.39.

The company projects worldwide system-wide RevPAR to increase 3-4% year over year in 2024.

For 2024, Marriott reduced its gross fee revenue expectations to $5.13-$5.15 billion compared with the prior expected range of $5.13-$5.18 billion. General and administrative expenses are now projected in the range of $1.05-$1.06 billion (earlier expected between $1.02 billion and $1.03 billion).

Adjusted EBITDA is now expected between $4.93 billion and $4.96 billion compared with the previous expectation of $4.95-$5.2 billion. The company now envisions 2024 EPS in the band of $9.19-$9.27, down from the prior expectation of $9.23-$9.40.

MAR’s Zacks Rank

Marriott currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Recent Consumer Discretionary Releases

Royal Caribbean Cruises Ltd. RCL posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.

In the quarter, the company exceeded its guidance, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025.

Mattel, Inc. MAT reported impressive third-quarter 2024 results, wherein the adjusted earnings and net sales topped the Zacks Consensus Estimate. The top line surpassed the consensus estimate after missing it for three consecutive quarters. On a year-over-year basis, net sales declined while adjusted earnings grew.

The company’s quarterly results benefited notably from its Optimizing for Profitable Growth program along with the focus on its multi-year strategy to expand its IP-driven toy business and entertainment offering. Although the top line was adversely impacted by reduced sales from both the reportable segments, the bottom line showed resilience through operational efficiencies.

Hilton Worldwide Holdings Inc. HLT reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.

The company's performance was backed by notable improvements in RevPAR, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories — including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.

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Do Options Traders Know Something About iQIYI (IQ) Stock We Don't?

Mon, 04 Nov 2024 15:06:00 +0000

Investors in iQIYI, Inc. IQ need to pay close attention to the stock based on moves in the options market lately. That is because the Dec. 20, 2024 $4.50 Put had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

What do the Analysts Think?

Clearly, options traders are pricing in a big move for iQIYI shares, but what is the fundamental picture for the company? Currently, iQIYI is a Zacks Rank #4 (Sell) in the Film and Television Production and Distribution industry that ranks in the Bottom 26% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimate for the current quarter, while none have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 2 cents per share to 4 cents in that period.

Given the way analysts feel about iQIYI right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Arcturus Gears Up to Report Q3 Earnings: Here's What to Expect

Mon, 04 Nov 2024 15:05:00 +0000

We expect investors to focus on the launch plans of Arcturus Therapeutics Holdings Inc.’s ARCT self-amplifying mRNA (sa-mRNA) COVID-19 vaccine, Kostaive (ARCT-154), and updates on the pipeline when it reports third-quarter 2024 results on Nov. 7, after market close.

The Zacks Consensus Estimate for revenues is pegged at $49.2 million.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Let's see how things might have shaped up for the quarter to be reported.

Factors to Note Ahead of ARCT's Q3 Earnings

Arcturus has developed the first sa-mRNA COVID-19 vaccine, Kostaive, in the world. The company has a collaboration agreement with renowned vaccine company CSL Seqirus for making innovative mRNA vaccines.

Arcturus’ top line currently comprises collaboration revenues from partners and grant revenues. Revenues in the last reported quarter rose significantly year over year due to an increase in revenues recognized from CSL related to Kostaive manufacturing activities and clinical study expenses. We expect a similar trend to have continued in the to-be-reported quarter.

Kostaive first received approval in November 2023 as the first sa-mRNA COVID-19 vaccine for initial vaccination and booster for adults aged 18 years and older in Japan. The regulatory body in Japan also approved/authorized the updated formulation of Kostaive, targeting the variant JN.1 for active immunization to prevent COVID-19 in adults aged 18 years and above in September 2024. A regulatory filing for Kostaive to treat the same indication is also currently under review in the EU.

ARCT remains on track to commercially launch Kostaive in Japan later in the fourth quarter of 2024. We expect management to provide a thorough update on the same on the third-quarter earnings call.

Shares of Arcturus have plunged 42.9% so far this year compared with the industry’s decrease of 3.7%.

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The company is developing its pipeline candidate, ARCT-810, in a phase II study for the treatment of ornithine transcarbamylase (OTC) deficiency. ARCT has started patient screening in the mid-stage study on ARCT-810 for OTC deficiency patients in the United States. Investors will be keen to get more updates on the upcoming earnings call.

The FDA cleared ARCT’s investigational new drug (IND) application for its product candidate, ARCT-032, being developed for the treatment of cystic fibrosis (CF) this September.

The IND clearance allows the initiation of a phase II study on ARCT-032 in CF and updates on the same are expected on the upcoming earnings call.

Operating expenses are likely to have increased in the third quarter.

ARCT's Earnings Surprise History

Arcturus has an excellent earnings surprise history. The company’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 56.73%. In the last reported quarter, ARCT’s earnings beat estimates by 65.41%.

Arcturus Therapeutics Holdings Inc. Price, Consensus and EPS Surprise

Arcturus Therapeutics Holdings Inc. price-consensus-eps-surprise-chart | Arcturus Therapeutics Holdings Inc. Quote

Earnings Whispers for ARCT Stock

Our proven model does not conclusively predict an earnings beat for Arcturus this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Arcturus has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at a loss of 70 cents per share.

Zacks Rank: Arcturus currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

CRISPR Therapeutics AG CRSP has an Earnings ESP of +100.00% and a Zacks Rank #2 at present.

Shares of CRISPR Therapeutics have lost 18.9% in the year-to-date period. Earnings of CRSP beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 101.83%.

Acadia Pharmaceuticals Inc. ACAD has an Earnings ESP of +38.39% and a Zacks Rank #3 at present.

Shares of Acadia have plunged 52.9% in the year-to-date period. Earnings of ACAD beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 42.37%. ACAD will report third-quarter results on Nov 6.

Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +0.24% and a Zacks Rank #3 at present.

Shares of Vertex have gained 15.8% in the year-to-date period. Earnings of VRTX beat estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 2.76%. VRTX will report third-quarter results on Nov. 4.

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Insulet Stock Gains From Expansion Strategies, Innovation

Mon, 04 Nov 2024 15:04:00 +0000

Insulet’s PODD robust execution to expand the Omnipod 5 platform globally is a tailwind. The company is also capitalizing on the significant growth opportunities in the Type 2 diabetes space. PODD carries a Zacks Rank #2 (Buy) currently.

Factors Driving PODD Stock

Insulet is making significant strides in its key strategic imperatives to help patients manage diabetes efficiently. The company’s first strategy revolves around increasing access and awareness of Omnipod products. In the second quarter of 2024, Omnipod 5 integrated with Dexcom’s G6 CGM significantly, contributing to the 27% growth in the United States.

On the last earnings call, Insulet hinted at launching Omnipod 5 with Abbott’s Freestyle Libre 2 Plus sensor in the United States by the end of this year. The expansion is expected to attract U.S. customers who use Libre sensors and could drive further demand for Omnipod 5, similar to the early success observed with Libre 2 plus internationally. Further, Omnipod DASH is driving strong new customer starts in the U.S. type 2 diabetes market. The company continues to drive increased awareness for Omnipod through its direct-to-consumer advertising campaign.

Insulet’s second strategy focuses on delivering consumer-focused innovation. The company is making promising progress toward achieving FDA clearance for Omnipod 5 for type 2 diabetes patients. This year, the company will expand on the Omnipod 5 platform by bringing new sensor integrations, launching the system in new geographies, and extending the phone control offering. The initial U.S. launch of the Omnipod 5 iOS app with G6 was a key milestone in the second quarter of 2024 and has been garnering positive feedback. The broad innovation agenda laid out for 2024 is poised to reinforce Insulet’s position as a market leader.

A report by Grand View Research forecasts the global diabetes device market to witness a CAGR of 7.5% through 2023-2030. The expansion will be driven by factors like the growing prevalence of diabetes, rising obesity rates and the increasing usage of insulin-delivery devices. Major manufacturers are banking on technological advancements and product innovations to secure a significant portion of the market. Insulet, too, is well-positioned for substantial gains, capitalizing on these trends. Through strategic acquisitions such as Automated Glucose Control LLC (AGC) assets and Bigfoot’s pump-based AID technologies in 2023, the company has meaningfully advanced its diabetes business.

Insulet Corporation Price

Insulet Corporation price | Insulet Corporation Quote

Notably, Insulet stated that approximately 40% of the Type 1 diabetes population in the United States and even less of the international type 1 diabetes population use insulin pump therapy. Furthermore, an even smaller portion of the U.S. and international insulin-intensive type 2 diabetes population use insulin pump therapy. The combined patient population using either intensive insulin therapy or basal insulin is roughly three times the size of the type 1 population. These factors, therefore, present a significant available market for its Omnipod platform globally. Overall, Insulet sees massive market opportunities, both in furthering type 1 MDI penetration as well as the type 2 market.

Over the past three months, shares of PODD have gained 23.6% compared with the industry’s 11.8% growth. The company’s consistent efforts to expand in niche markets and consumer-focused innovation are expected to help the stock continue its uptrend in the coming days.

Downside Risks for PODD

Insulet is incurring higher costs associated with Omnipod 5 production. Added to this, supply-chain disruptions and labor shortages continue to put pressure on margins. In the second quarter of 2024, selling, general & administrative expenses rose 24.4% year over year, mainly from higher headcount additions to manage routine costs and support commercial and international growth, as well as the new organizational structure. Meanwhile, the risks of inflation negatively impacting gross margins and net income in 2024 also continue to persist.

The continuing worldwide macroeconomic and geopolitical uncertainty may reduce demand for Insulet’s products, intensify competition, exert pressure on prices, dent supply, and lengthen the sales cycle. Unfavorable product mix, U.S. manufacturing ramp, inflation and supply chain headwinds affected the company’s business performance throughout 2023.

Insulet continues to experience challenges stemming from disruption in the global supply chain. The company’s reliance on third-party suppliers, especially in China, could face potential risks from political or financial instability and labor unrest, among others. We are particularly cautious as growth could moderate further if the economic scenario worsens. While the company continues to expand into new markets with Omnipod 5, it also faces the challenge of adverse currency fluctuations hurting its revenues and profitability.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Boston Scientific BSX, Globus Medical GMED and ResMed RMD, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific shares have surged 58.3% in the past year. Estimates for the company’s earnings per share (EPS) have jumped 2.5% to $2.46 for 2024 and 0.4% to $2.72 for 2025 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, delivering an average beat of 8.3%. In the last reported quarter, it posted an earnings surprise of 8.6%.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 61% in the past year compared with the industry’s growth of 24.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, with the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.2% to $9.22 in the past 30 days. Shares of the company have surged 58.8% in the past year compared with the industry’s 29.2% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, with the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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Earnings Preview: Monday.com (MNDY) Q3 Earnings Expected to Decline

Mon, 04 Nov 2024 15:00:14 +0000

Wall Street expects a year-over-year decline in earnings on higher revenues when Monday.com (MNDY) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on November 11. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus Estimate

This project management software developer is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of -4.7%.

Revenues are expected to be $245.67 million, up 29.9% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Monday.com?

For Monday.com, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -2.46%.

On the other hand, the stock currently carries a Zacks Rank of #1.

So, this combination makes it difficult to conclusively predict that Monday.com will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Monday.com would post earnings of $0.54 per share when it actually produced earnings of $0.94, delivering a surprise of +74.07%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Monday.com doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected Results

Another stock from the Zacks Internet - Software industry, Flyware (FLYW), is soon expected to post earnings of $0.11 per share for the quarter ended September 2024. This estimate indicates a year-over-year change of +37.5%. Revenues for the quarter are expected to be $146.2 million, up 25.2% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for Flyware has remained unchanged. Nevertheless, the company now has an Earnings ESP of 54.55%, reflecting a higher Most Accurate Estimate.

When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Flyware will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed EPS estimates just once.

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RadNet (RDNT) Earnings Expected to Grow: What to Know Ahead of Next Week's Release

Mon, 04 Nov 2024 15:00:14 +0000

Wall Street expects a year-over-year increase in earnings on higher revenues when RadNet (RDNT) reports results for the quarter ended September 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This operator of medical diagnostic imaging centers is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents a year-over-year change of +7.1%.

Revenues are expected to be $437.29 million, up 8.8% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 1.67% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

How Have the Numbers Shaped Up for RadNet?

For RadNet, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.

On the other hand, the stock currently carries a Zacks Rank of #2.

So, this combination makes it difficult to conclusively predict that RadNet will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

For the last reported quarter, it was expected that RadNet would post earnings of $0.16 per share when it actually produced earnings of $0.16, delivering no surprise.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom Line

RadNet doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected Results

Among the stocks in the Zacks Medical - Outpatient and Home Healthcare industry, Astrana Health, Inc. (ASTH) is soon expected to post earnings of $0.33 per share for the quarter ended September 2024. This estimate indicates a year-over-year change of -29.8%. This quarter's revenue is expected to be $462.01 million, up 32.7% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for Astrana Health, Inc. has been revised 4% down to the current level. Nevertheless, the company now has an Earnings ESP of -5.10%, reflecting a lower Most Accurate Estimate.

When combined with a Zacks Rank of #4 (Sell), this Earnings ESP makes it difficult to conclusively predict that Astrana Health, Inc. will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times.

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Earnings Preview: Capital Clean Energy Carriers Corp. (CCEC) Q3 Earnings Expected to Decline

Mon, 04 Nov 2024 15:00:13 +0000

The market expects Capital Clean Energy Carriers Corp. (CCEC) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may move lower.

Zacks Consensus Estimate

This company is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of -42.9%.

Revenues are expected to be $120.71 million, up 32.1% from the year-ago quarter.

Estimate Revisions Trend

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Earnings Whisper

How Have the Numbers Shaped Up for Capital Clean Energy Carriers Corp.

For Capital Clean Energy Carriers Corp.The Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.89%.

On the other hand, the stock currently carries a Zacks Rank of #4.

So, this combination makes it difficult to conclusively predict that Capital Clean Energy Carriers Corp. Will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

For the last reported quarter, it was expected that Capital Clean Energy Carriers Corp. Would post earnings of $0.17 per share when it actually produced earnings of $0.40, delivering a surprise of +135.29%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom Line

Capital Clean Energy Carriers Corp. Doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Expected Results of an Industry Player

Another stock from the Zacks Transportation - Shipping industry, TORM PLC (TRMD), is soon expected to post earnings of $1.29 per share for the quarter ended September 2024. This estimate indicates a year-over-year change of -5.2%. Revenues for the quarter are expected to be $273.89 million, down 23.5% from the year-ago quarter.

The consensus EPS estimate for TORM has been revised 4% lower over the last 30 days to the current level. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%.

When combined with a Zacks Rank of #2 (Buy), this Earnings ESP makes it difficult to conclusively predict that TORM will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.

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Analysts Estimate Kolibri Global Energy Inc. (KGEI) to Report a Decline in Earnings: What to Look Out for

Mon, 04 Nov 2024 15:00:13 +0000

Kolibri Global Energy Inc. (KGEI) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

Zacks Consensus Estimate

This company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of -25%.

Revenues are expected to be $13.61 million, up 6.8% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 31.25% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Earnings Whisper

How Have the Numbers Shaped Up for Kolibri Global Energy Inc.

For Kolibri Global Energy Inc.The Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.

On the other hand, the stock currently carries a Zacks Rank of #4.

So, this combination makes it difficult to conclusively predict that Kolibri Global Energy Inc. Will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Kolibri Global Energy Inc. Would post earnings of $0.11 per share when it actually produced earnings of $0.11, delivering no surprise.

Over the last four quarters, the company has beaten consensus EPS estimates just once.

Bottom Line

Kolibri Global Energy Inc. Doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Expected Results of an Industry Player

Ameresco (AMRC), another stock in the Zacks Alternative Energy - Other industry, is expected to report earnings per share of $0.50 for the quarter ended September 2024. This estimate points to a year-over-year change of +25%. Revenues for the quarter are expected to be $485.86 million, up 45% from the year-ago quarter.

The consensus EPS estimate for Ameresco has been revised 1.4% lower over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of 13.32%.

When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Ameresco will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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