Wednesday, August 9, 2023

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Microsoft Corporation (MSFT), Mastercard Incorporated (MA) and ServiceNow, Inc. (NOW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Microsoft shares have gained +36.6% over the year-to-date period against the Zacks Computer - Software industry’s gain of +37.5%. The company is benefited from improvement in Intelligent Cloud and Productivity and Business Processes, offset in part by a decline in More Personal Computing. Strong adoption of Office 365 Commercial solutions drove Productivity and Business Processes revenues.

Continued momentum in the small and medium businesses and frontline worker offerings, as well as gain in revenue per user drove top-line growth. However, More Personal Computing revenues decreased due to weak Windows and Devices businesses. Steady performance in Talent Solutions aided LinkedIn revenues.

However, decline gaming revenues and sluggishness in Azure business have been headwinds. Increasing spend on Azure enhancements amid stiff competition in the cloud space remains a concern.

(You can read the full research report on Microsoft here >>>)

Shares of Mastercard have outperformed the Zacks Financial Transaction Services industry over the past year (+11.9% vs. +3.5%). Company’s numerous acquisitions are helping the company to grow addressable markets and drive new revenue streams.

The COVID-19 crisis accelerated the adoption of digital and contactless solutions, providing an opportunity for MA's business to expedite its shift to the digital mode. It is well-poised to gain from steady cash-generating abilities. A strong capital position allows it to pursue acquisitions and prudently deploy capital via buybacks and dividends.

However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues. Its dividend yield is still lower than the industry average. As such, the stock warrants a cautious stance.

(You can read the full research report on Mastercard here >>>)

ServiceNow shares have outperformed the Zacks Computers - IT Services industry over the past year (+7.1% vs. +2.8%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. It had 1724 total customers with more than $1 million in annual contract value at the end of the second quarter.

ServiceNow’s expanding global presence, solid partner base and strategic buyouts are positives. New solutions — Automated service suggestions, Service Request Playbook and Workplace Scenario Planning — is helping it win new customers.

Expanding portfolio with new generative AI solution is expected to drive top-line growth. Strategic alliances with the likes of Microsoft remain tailwinds. However, ServiceNow is suffering from high inflation, unfavorable forex, stiff competition, and challenging macro-economic environment.

(You can read the full research report on ServiceNow here >>>)

Other noteworthy reports we are featuring today include Lowe's Companies, Inc. (LOW), GSK plc (GSK) and Arthur J. Gallagher & Co. (AJG).

Director of Research

Sheraz Mian

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>