We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Salesforce, Virgin Galactic, Gramin, Apple and Google highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 28, 2021 – Zacks Equity Research Shares of salesforce.com, inc. (CRM - Free Report) as the Bull of the Day, Virgin Galactic Holdings, Inc. (SPCE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Garmin Ltd. (GRMN - Free Report) , Apple Inc. (AAPL - Free Report) and Alphabet Inc. (GOOGL - Free Report) .
Salesforce is unmatched in the enterprise cloud space. This innovation-fueled business continues to grow its total addressable market (TAM) through a combination of synergy driving acquisitions and organic developments that power its unprecedented profitable growth. CRM is the type of secular growth equity that you want to hold in your portfolio as rational investment decisions begin to drive the stock market.
We are starting to see momentum come back into the cloud sector as business spending ramps up. Salesforce is positioned to ride this enterprise digitalization wave through the commencing 4th Industrial Revolution.
Analysts are getting increasingly optimistic about the future of CRM, driving up price targets and EPS estimates alike and propelling the stock into a Zacks Rank #1 (Strong Buy).
The Business
Salesforce dominates the customer relationship management (CRM, not to be confused with its corresponding ticker) market. It offers an abundance of auxiliary enterprise cloud functionalities, from automated marketing to business analytics. The company provides the #1 CRM platform globally and is the second-largest software as a service (SaaS) cloud enterprise by market cap, closely trailing Adobe.
Salesforce has become an all-encompassing enterprise cloud powerhouse. No competitors can match the firm's broad capabilities and flexibility. Salesforce has demonstrated consistent profitable growth, with its topline surging over the past 5 years at a compounded annual growth rate (CAGR) of 26%.
Salesforce is well capitalized with $15 billion in cash & equivalents, which is more than enough to cover its next 5 years in obligations. With a debt-to-total capital ratio of less than 6%, there is zero concern about its solvency. The firm has also produced annually appreciating free-cash-flows ($5.6 billion in the past 4 quarters), giving the company an immense amount of financial flexibility for acquisitions and internal investments.
Salesforce is an acquisition machine with 66 total acquisitions made since its inception 21 years ago. It made 4 significant acquisitions in the past 1.5 years, taking advantage of the pandemic discounts, including the roughly $27.7 billion Slack acquisition that pushed the business one step closer to a complete cloud enterprise suite. Investors saw the Slack purchase as richly priced, which has weighed on CRM's valuation since last fall.
The company has a very comprehensive set of enterprise solutions and has successfully harnessed the synergies of each acquisition. The additional innovative verticals connect every part of a business's operations with best-in-class integrated applications that make choosing Salesforce a no-brainer (not to mention very sticky customer retention).
Take Away
This enterprise is an essential part of enterprises' work-from-home initiative, and it will continue to benefit from the hybrid work environment of the new normal. Salesforce is here to stay. 19 of 24 sell-side analysts are calling this stock a strong buy today with 0 sell ratings.
The consolidation that CRM has experienced over the past 11 months has put this stock on sale. After yesterday's tech-powered sell-off, I see no reason to wait on starting a position in this revolutionary cloud suite. Watch for Salesforce's Q2 earnings report next month (8/24) for more color on the recently closed Slack deal (& its synergies) and how the company views its growth potential in the post-pandemic world.
The euphoric corners of the market are getting deflated as this bull market matures and stocks pickers start taking over the show with logical fundamentally back investment decisions. Virgin Galactic is one of those highly speculative names that has received a ton of overzealous euphoria from this new, market-moving wave of retail traders, who are driving excess into the equity markets.
Virgin Galactic is Richard Branson's space tourism company that I would describe as the roller coaster ride for the 1% of the 1%. This business will continue to lose money for years to come and won't even recognize revenue until its first commercial flights next year. Analysts are dropping their long-term EPS estimates on SPCE as the timeline to profitability gets pushed back, which lowered the stock to a Zacks Rank #5 (Strong Sell).
The Retail Trading Revolution
Millennials and Gen Z's have entered the market in masses over the past year, and they have been a huge reason for this stock's over 200% return from its initial SPAC pricing of $10 a share. This cohort of freshman traders has been coming together on a Reddit message board called r/wallstreetbets (WSB) to target heavily shorted stocks with nostalgic or thought-provoking operations. These WSB traders have initiated short-squeezes that provide early shareholders with rapid returns as short-sellers are forced to cover their positions (repurchase the stock at a higher price) which catalyzes a leveraged price action.
The considerable short-interest, which currently sits at 20% of float but was as high as 72% in January, combined with its mission to bring humanity to the cosmos, excites young traders who grew up with Star Wars, Interstellar, Apollo 13, and a slew of other stimulating films about the mystifying final frontier.
SPCE has seen massive price swings since it hit the exchanges back in 2019, with the past 2.5 months alone exhibiting a low of $14.27 and a high of $57.51 a share, making this an attractive gambling tool for the growing number of risk-seeking speculators. The high level of speculation alone would keep me from touching these shares, but when you combine that with 0 revenue and negative income for the foreseeable future, it's time to rethink your risk appetite.
The Product Offering
Virgin Galactic was one of the first major companies to utilize a special purpose acquisition company (SPAC) to go public, opposed to a traditional IPO. This unconventional public offering method was used because of its lack of financial visibility, which would turn many large institutions off if they went through the normal IPO process.
Virgin Galactic launched its first fully crewed flight earlier this month with its founder, Richard Branson, on board. The company announced that it would be launching its first commercial flight in 2022 for $250,000 a head, following some more test flights this year.
$250,000 seems like a hefty price for only a few minutes of weightlessness. Still, it's only a fraction of Jeff Bezos' June auction for a seat on Blue Origin's New Shepard, which went for $28 million a chair, and Musk's Crew Dragon SpaceX flight which 4 consumer passengers are paying $55 million a pop for.
Take Away
There is no way for me to value SPCE without vast assumptions (aka guesses) about its future operations. The fact that it will be competing with other space tourism businesses makes the stock even less attractive. It takes an immense risk appetite to be willing to buy a stock that can halve in a week. I would stay away from this stock until actual revenues can be quantified and a timeline to profitability can be reasonably estimated.
Additional content:
3 Stocks to Make the Most of Rising Demand for Smartwatches
The trend of staying fit is quickly catching on, thereby increasing the demand for smart wearable devices like smartwatches. The smartwatches allow users to keep a track of their fitness levels, be it monitoring the number of calories burnt in a day or the hours of sleep they are getting. Users can also quickly check their heart rate as many smartwatches are equipped with heart rate monitors. The demand for smartwatches grew further when the coronavirus broke out last year as consumers wanted to keep a track of their health statistics.
The emergence of technologies such as the Internet of Things (“IoT”) has also helped smartwatches in becoming beneficial. With the help of IoT, smartwatches collect data from the user and share them with a smartphone or any other connected device, making it even more convenient for users. Owing to the synchronization with smartphones, smartwatches are also allowing users to stay up to date with their notifications.
If a notification arrives when they are traveling, users can simply glance through it on their smartwatch, without having to take their smartphone out of their pockets. In fact, smartwatches are also capable of making calls and sending messages when they are paired with a smartphone. Some smartwatches can also make calls and perform other tasks over a cellular or Wi-Fi network, even when the smartphone is not nearby.
Reflective of the positive developments that smartwatches are witnessing, it is only expected that the market will grow going forward with more people adopting this emerging technology. Per a report by Mordor Intelligence, the smartwatch market is estimated to witness a CAGR of 14.5% from 2021 to 2026. 2021 has already started on a positive note for smartwatches as Counterpoint Research stated in a report that global smartwatch shipments in the first quarter of 2021 jumped 35% year over year.
3 Stocks to Watch Out For
The booming popularity of smartwatches should sustain owing to the many conveniences these offer. This seems then as an opportune moment to take a look at companies that stand to benefit from this growing trend. We have selected three such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Garmin’s Fitness segment offers smartwatch devices, among other products. The company’s Connect IQ App Store is also providing its smartwatch users with more options like watch faces, music streaming and others. Garmin also recently launched its latest Descent Mk2S, a diving-focused watch aimed especially at female customers.
Shares of Garmin have gained 28.1% year to date and it currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 1.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 4.3%.
Apple has been at the forefront of the booming demand for smartwatches with its Wearables segment offering products such as the latest Apple Watch Series 6. Apple also recently previewed its watchOS 8, which brings more conveniences to users, especially on its Home and Wallet apps.
Shares of Apple have gained 12.3% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 1.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 58.2%.
Alphabet’s Google is looking to make significant in-roads into the smart wearable market as it recently completed the acquisition of Fitbit, the fitness and smartwatch brand, for around $2.1 billion. Google also recently announced that it is combining its Wear OS with Samsung’s Tizen for creating a unified wearable platform.
Shares of Alphabet have gained nearly 53% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased nearly 1% over the past 60 days. The company’s expected earnings growth rate for the current year is 53.8%.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Salesforce, Virgin Galactic, Gramin, Apple and Google highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 28, 2021 – Zacks Equity Research Shares of salesforce.com, inc. (CRM - Free Report) as the Bull of the Day, Virgin Galactic Holdings, Inc. (SPCE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Garmin Ltd. (GRMN - Free Report) , Apple Inc. (AAPL - Free Report) and Alphabet Inc. (GOOGL - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Salesforce is unmatched in the enterprise cloud space. This innovation-fueled business continues to grow its total addressable market (TAM) through a combination of synergy driving acquisitions and organic developments that power its unprecedented profitable growth. CRM is the type of secular growth equity that you want to hold in your portfolio as rational investment decisions begin to drive the stock market.
We are starting to see momentum come back into the cloud sector as business spending ramps up. Salesforce is positioned to ride this enterprise digitalization wave through the commencing 4th Industrial Revolution.
Analysts are getting increasingly optimistic about the future of CRM, driving up price targets and EPS estimates alike and propelling the stock into a Zacks Rank #1 (Strong Buy).
The Business
Salesforce dominates the customer relationship management (CRM, not to be confused with its corresponding ticker) market. It offers an abundance of auxiliary enterprise cloud functionalities, from automated marketing to business analytics. The company provides the #1 CRM platform globally and is the second-largest software as a service (SaaS) cloud enterprise by market cap, closely trailing Adobe.
Salesforce has become an all-encompassing enterprise cloud powerhouse. No competitors can match the firm's broad capabilities and flexibility. Salesforce has demonstrated consistent profitable growth, with its topline surging over the past 5 years at a compounded annual growth rate (CAGR) of 26%.
Salesforce is well capitalized with $15 billion in cash & equivalents, which is more than enough to cover its next 5 years in obligations. With a debt-to-total capital ratio of less than 6%, there is zero concern about its solvency. The firm has also produced annually appreciating free-cash-flows ($5.6 billion in the past 4 quarters), giving the company an immense amount of financial flexibility for acquisitions and internal investments.
Salesforce is an acquisition machine with 66 total acquisitions made since its inception 21 years ago. It made 4 significant acquisitions in the past 1.5 years, taking advantage of the pandemic discounts, including the roughly $27.7 billion Slack acquisition that pushed the business one step closer to a complete cloud enterprise suite. Investors saw the Slack purchase as richly priced, which has weighed on CRM's valuation since last fall.
The company has a very comprehensive set of enterprise solutions and has successfully harnessed the synergies of each acquisition. The additional innovative verticals connect every part of a business's operations with best-in-class integrated applications that make choosing Salesforce a no-brainer (not to mention very sticky customer retention).
Take Away
This enterprise is an essential part of enterprises' work-from-home initiative, and it will continue to benefit from the hybrid work environment of the new normal. Salesforce is here to stay. 19 of 24 sell-side analysts are calling this stock a strong buy today with 0 sell ratings.
The consolidation that CRM has experienced over the past 11 months has put this stock on sale. After yesterday's tech-powered sell-off, I see no reason to wait on starting a position in this revolutionary cloud suite. Watch for Salesforce's Q2 earnings report next month (8/24) for more color on the recently closed Slack deal (& its synergies) and how the company views its growth potential in the post-pandemic world.
Bear of the Day:
The euphoric corners of the market are getting deflated as this bull market matures and stocks pickers start taking over the show with logical fundamentally back investment decisions. Virgin Galactic is one of those highly speculative names that has received a ton of overzealous euphoria from this new, market-moving wave of retail traders, who are driving excess into the equity markets.
Virgin Galactic is Richard Branson's space tourism company that I would describe as the roller coaster ride for the 1% of the 1%. This business will continue to lose money for years to come and won't even recognize revenue until its first commercial flights next year. Analysts are dropping their long-term EPS estimates on SPCE as the timeline to profitability gets pushed back, which lowered the stock to a Zacks Rank #5 (Strong Sell).
The Retail Trading Revolution
Millennials and Gen Z's have entered the market in masses over the past year, and they have been a huge reason for this stock's over 200% return from its initial SPAC pricing of $10 a share. This cohort of freshman traders has been coming together on a Reddit message board called r/wallstreetbets (WSB) to target heavily shorted stocks with nostalgic or thought-provoking operations. These WSB traders have initiated short-squeezes that provide early shareholders with rapid returns as short-sellers are forced to cover their positions (repurchase the stock at a higher price) which catalyzes a leveraged price action.
The considerable short-interest, which currently sits at 20% of float but was as high as 72% in January, combined with its mission to bring humanity to the cosmos, excites young traders who grew up with Star Wars, Interstellar, Apollo 13, and a slew of other stimulating films about the mystifying final frontier.
SPCE has seen massive price swings since it hit the exchanges back in 2019, with the past 2.5 months alone exhibiting a low of $14.27 and a high of $57.51 a share, making this an attractive gambling tool for the growing number of risk-seeking speculators. The high level of speculation alone would keep me from touching these shares, but when you combine that with 0 revenue and negative income for the foreseeable future, it's time to rethink your risk appetite.
The Product Offering
Virgin Galactic was one of the first major companies to utilize a special purpose acquisition company (SPAC) to go public, opposed to a traditional IPO. This unconventional public offering method was used because of its lack of financial visibility, which would turn many large institutions off if they went through the normal IPO process.
Virgin Galactic launched its first fully crewed flight earlier this month with its founder, Richard Branson, on board. The company announced that it would be launching its first commercial flight in 2022 for $250,000 a head, following some more test flights this year.
$250,000 seems like a hefty price for only a few minutes of weightlessness. Still, it's only a fraction of Jeff Bezos' June auction for a seat on Blue Origin's New Shepard, which went for $28 million a chair, and Musk's Crew Dragon SpaceX flight which 4 consumer passengers are paying $55 million a pop for.
Take Away
There is no way for me to value SPCE without vast assumptions (aka guesses) about its future operations. The fact that it will be competing with other space tourism businesses makes the stock even less attractive. It takes an immense risk appetite to be willing to buy a stock that can halve in a week. I would stay away from this stock until actual revenues can be quantified and a timeline to profitability can be reasonably estimated.
Additional content:
3 Stocks to Make the Most of Rising Demand for Smartwatches
The trend of staying fit is quickly catching on, thereby increasing the demand for smart wearable devices like smartwatches. The smartwatches allow users to keep a track of their fitness levels, be it monitoring the number of calories burnt in a day or the hours of sleep they are getting. Users can also quickly check their heart rate as many smartwatches are equipped with heart rate monitors. The demand for smartwatches grew further when the coronavirus broke out last year as consumers wanted to keep a track of their health statistics.
The emergence of technologies such as the Internet of Things (“IoT”) has also helped smartwatches in becoming beneficial. With the help of IoT, smartwatches collect data from the user and share them with a smartphone or any other connected device, making it even more convenient for users. Owing to the synchronization with smartphones, smartwatches are also allowing users to stay up to date with their notifications.
If a notification arrives when they are traveling, users can simply glance through it on their smartwatch, without having to take their smartphone out of their pockets. In fact, smartwatches are also capable of making calls and sending messages when they are paired with a smartphone. Some smartwatches can also make calls and perform other tasks over a cellular or Wi-Fi network, even when the smartphone is not nearby.
Reflective of the positive developments that smartwatches are witnessing, it is only expected that the market will grow going forward with more people adopting this emerging technology. Per a report by Mordor Intelligence, the smartwatch market is estimated to witness a CAGR of 14.5% from 2021 to 2026. 2021 has already started on a positive note for smartwatches as Counterpoint Research stated in a report that global smartwatch shipments in the first quarter of 2021 jumped 35% year over year.
3 Stocks to Watch Out For
The booming popularity of smartwatches should sustain owing to the many conveniences these offer. This seems then as an opportune moment to take a look at companies that stand to benefit from this growing trend. We have selected three such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Garmin’s Fitness segment offers smartwatch devices, among other products. The company’s Connect IQ App Store is also providing its smartwatch users with more options like watch faces, music streaming and others. Garmin also recently launched its latest Descent Mk2S, a diving-focused watch aimed especially at female customers.
Shares of Garmin have gained 28.1% year to date and it currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 1.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 4.3%.
Apple has been at the forefront of the booming demand for smartwatches with its Wearables segment offering products such as the latest Apple Watch Series 6. Apple also recently previewed its watchOS 8, which brings more conveniences to users, especially on its Home and Wallet apps.
Shares of Apple have gained 12.3% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 1.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 58.2%.
Alphabet’s Google is looking to make significant in-roads into the smart wearable market as it recently completed the acquisition of Fitbit, the fitness and smartwatch brand, for around $2.1 billion. Google also recently announced that it is combining its Wear OS with Samsung’s Tizen for creating a unified wearable platform.
Shares of Alphabet have gained nearly 53% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased nearly 1% over the past 60 days. The company’s expected earnings growth rate for the current year is 53.8%.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.