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Accel Entertainment, Comtech Telecom, Mondelez, Coca-Cola and Estee Lauder highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – October 29, 2021 – Zacks Equity Research Shares of Accel Entertainment, Inc. (ACEL - Free Report) as the Bull of the Day, Comtech Telecommunications Corp. (CMTL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Mondelez International, Inc. (MDLZ - Free Report) , The Coca-Cola Company (KO - Free Report) and The Estee Lauder Companies (EL - Free Report) .
Accel Entertainment is a Zacks Rank #2 (Buy) that sports a B for Value and an A for Growth. ACEL is the business of making slot machines and other gaming terminals. The company is reporting earnings next week, so let’s take a deeper look at this stock in this Bull of the Day article.
Description
Accel Entertainment Inc. is a distributed gaming operator primarily in the United States. The company's business consists of the installation, maintenance and operation of VGTs, redemption devices which disburse winnings and contain ATM functionality, other amusement devices in authorized non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops and grocery stores. Accel Entertainment Inc., formerly known as TPG Pace Holdings and is based in Fort Worth, Texas.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For ACEL, I see a good history of beating the Zacks Consensus Estimate. There are three beats and one miss over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be -32%, and that is due to the lone miss skewing the average with a -300% reading. If we back that quarter out, we have an average that is closer to 55%.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For ACEL, I see estimates moving higher.
Over the last 90 days, I see a few increases.
This quarter has moved from 15 cents to 18 cents.
Next quarter is at 17 cents and that is up from 14 cents.
The full year 2021 is up from 63 cents to 74 cents.
Next year has seen an increase of 3 cents.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #2 (Buy).
Valuation
The forward earnings multiple of 16x is pretty low considering the solid 37% sequential growth that was posted in the most recent quarter. It should be noted that sales are expected to growth 125% this year and 23% next year. A 7.5x price to book multiple is a little high, but on the low side we see a 2x price to sales multiple. I see margins moving in the right direction and when that is coupled with solid revenue growth you will get higher earnings. The higher the earnings go, the bigger the multiple.
Comtech Telecommunications is a Zacks Rank #5 (Strong Sell) despite beating the Zacks Consensus Estimate in the most recent quarter. Stocks that miss the number don’t always fall to a Zacks Rank #5 (Strong Sell) so let’s take a look at why that is the case in this Bear of the Day article.
Description
Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The Company sells products to a diverse customer base in the global commercial and government communications markets. The Company believes many of its solutions play a vital role in providing or enhancing communication capabilities when terrestrial communications infrastructure is unavailable, inefficient or too expensive. The Company conducts business through three complementary segments: telecommunications transmission, RF microwave amplifiers and mobile data communications.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of CMTL, I see two beats, a meet and a miss of the Zacks Consensus Estimate over the last year. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For CMTL I see estimates dropping.
This quarter has increased from $0.16 to -$0.09.
Next quarter has moved from $0.33 to $0.09 over the last 60 days.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.
The 2021 consensus number has increased from $0.75 to $0.70.
The 2022 number has decreased from $1.10 to $0.90 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Factors to Consider Before Mondelez's (MDLZ - Free Report) Q3 Earnings
Mondelez International is likely to display year-over-year growth in the top and bottom lines, when it reports third-quarter 2021 earnings on Nov 2. The Zacks Consensus Estimate for revenues is pegged at $7,031 million, suggesting a rise of 5.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings has moved south by a cent over the past seven days to 70 cents per share, which indicates an increase of 11.1% from the figure reported in the prior-year period. In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate. The company has a trailing four-quarter earnings surprise of 2.9%, on average.
Key Factors to Note
Apart from witnessing continued demand spike for the categories that have been benefiting amid the pandemic, Mondelez is gaining on recovery in World Travel Retail, and in the gum and candy categories. Apart from this, the company has been gaining on buyouts and alliances.
Recently, the company teamed up with MissFresh to introduce Oreo Zero on the latter’s popular online retail platform. Earlier, it announced a deal to buy Chipita S.A., which is a major producer of sweet and salty snacks in Central and Eastern Europe. Prior to this, in 2021, Mondelez took over a renowned sports performance and active nutrition brand — Grenade.
Further, the company acquired Australia-based food company — Gourmet Food Holdings — which operates in the premium biscuit and cracker category. Mondelez completed the acquisition of Hu Master Holdings, the parent company of Hu Products on Jan 4, 2021. Contributions from these buyouts are likely to have aided its performance during the quarter under review.
That said, management on its last earnings call stated that it envisions commodity, logistics and labor costs to further flare up in the second half of 2021. While Mondelez is focused on managing these costs through pricing and saving initiatives, it does anticipate some pressure points during the second half.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Mondelez 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Mondelez currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -2.08%.
Stocks with Favorable Combinations
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.
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.
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Accel Entertainment, Comtech Telecom, Mondelez, Coca-Cola and Estee Lauder highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 29, 2021 – Zacks Equity Research Shares of Accel Entertainment, Inc. (ACEL - Free Report) as the Bull of the Day, Comtech Telecommunications Corp. (CMTL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Mondelez International, Inc. (MDLZ - Free Report) , The Coca-Cola Company (KO - Free Report) and The Estee Lauder Companies (EL - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Accel Entertainment is a Zacks Rank #2 (Buy) that sports a B for Value and an A for Growth. ACEL is the business of making slot machines and other gaming terminals. The company is reporting earnings next week, so let’s take a deeper look at this stock in this Bull of the Day article.
Description
Accel Entertainment Inc. is a distributed gaming operator primarily in the United States. The company's business consists of the installation, maintenance and operation of VGTs, redemption devices which disburse winnings and contain ATM functionality, other amusement devices in authorized non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops and grocery stores. Accel Entertainment Inc., formerly known as TPG Pace Holdings and is based in Fort Worth, Texas.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For ACEL, I see a good history of beating the Zacks Consensus Estimate. There are three beats and one miss over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be -32%, and that is due to the lone miss skewing the average with a -300% reading. If we back that quarter out, we have an average that is closer to 55%.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For ACEL, I see estimates moving higher.
Over the last 90 days, I see a few increases.
This quarter has moved from 15 cents to 18 cents.
Next quarter is at 17 cents and that is up from 14 cents.
The full year 2021 is up from 63 cents to 74 cents.
Next year has seen an increase of 3 cents.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #2 (Buy).
Valuation
The forward earnings multiple of 16x is pretty low considering the solid 37% sequential growth that was posted in the most recent quarter. It should be noted that sales are expected to growth 125% this year and 23% next year. A 7.5x price to book multiple is a little high, but on the low side we see a 2x price to sales multiple. I see margins moving in the right direction and when that is coupled with solid revenue growth you will get higher earnings. The higher the earnings go, the bigger the multiple.
Bear of the Day:
Comtech Telecommunications is a Zacks Rank #5 (Strong Sell) despite beating the Zacks Consensus Estimate in the most recent quarter. Stocks that miss the number don’t always fall to a Zacks Rank #5 (Strong Sell) so let’s take a look at why that is the case in this Bear of the Day article.
Description
Comtech Telecommunications Corp. designs, develops, produces and markets innovative products, systems and services for advanced communications solutions. The Company sells products to a diverse customer base in the global commercial and government communications markets. The Company believes many of its solutions play a vital role in providing or enhancing communication capabilities when terrestrial communications infrastructure is unavailable, inefficient or too expensive. The Company conducts business through three complementary segments: telecommunications transmission, RF microwave amplifiers and mobile data communications.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of CMTL, I see two beats, a meet and a miss of the Zacks Consensus Estimate over the last year. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For CMTL I see estimates dropping.
This quarter has increased from $0.16 to -$0.09.
Next quarter has moved from $0.33 to $0.09 over the last 60 days.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.
The 2021 consensus number has increased from $0.75 to $0.70.
The 2022 number has decreased from $1.10 to $0.90 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Factors to Consider Before Mondelez's (MDLZ - Free Report) Q3 Earnings
Mondelez International is likely to display year-over-year growth in the top and bottom lines, when it reports third-quarter 2021 earnings on Nov 2. The Zacks Consensus Estimate for revenues is pegged at $7,031 million, suggesting a rise of 5.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for earnings has moved south by a cent over the past seven days to 70 cents per share, which indicates an increase of 11.1% from the figure reported in the prior-year period. In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate. The company has a trailing four-quarter earnings surprise of 2.9%, on average.
Key Factors to Note
Apart from witnessing continued demand spike for the categories that have been benefiting amid the pandemic, Mondelez is gaining on recovery in World Travel Retail, and in the gum and candy categories. Apart from this, the company has been gaining on buyouts and alliances.
Recently, the company teamed up with MissFresh to introduce Oreo Zero on the latter’s popular online retail platform. Earlier, it announced a deal to buy Chipita S.A., which is a major producer of sweet and salty snacks in Central and Eastern Europe. Prior to this, in 2021, Mondelez took over a renowned sports performance and active nutrition brand — Grenade.
Further, the company acquired Australia-based food company — Gourmet Food Holdings — which operates in the premium biscuit and cracker category. Mondelez completed the acquisition of Hu Master Holdings, the parent company of Hu Products on Jan 4, 2021. Contributions from these buyouts are likely to have aided its performance during the quarter under review.
That said, management on its last earnings call stated that it envisions commodity, logistics and labor costs to further flare up in the second half of 2021. While Mondelez is focused on managing these costs through pricing and saving initiatives, it does anticipate some pressure points during the second half.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Mondelez 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Mondelez currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -2.08%.
Stocks with Favorable Combinations
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.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Coca-Cola has an Earnings ESP of +0.75% and carries a Zacks Rank of 3, currently.
Estee Lauder has an Earnings ESP of +0.24% and currently holds a Zacks Rank #3.
Media Contact
Zacks Investment Research
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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.