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.
ePlus and Five Below have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 26, 2022 – Zacks Equity Research shares ePlus Inc (PLUS - Free Report) as the Bull of the Day and Five Below (FIVE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) .
ePlus Inc is a Zacks Rank #1 (Strong Buy) and sports an A for Value and for Growth. This software name has held up of late and that piqued my interest in the name. Lately, investors have shunned the software space in favor of names that are more commodity based. Let's explore more about this company in this Bull of The Day article.
Description
ePlus inc. is a leading provider of technology solutions. ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, professional services, flexible lease financing, proprietary software, and patented business methods. With the highest certifications from top technology partners and expertise in key technologies from data center to security, cloud and collaboration, ePlus transforms IT from a cost center to a business enabler.
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 PLUS, I see four straight beats of the Zacks Consensus Estimate. That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
The average positive earnings surprise over the course of the last year works out to be 28%.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For PLUS, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
The full fiscal year 2023 has moved from $4.12 to $4.39.
Next fiscal year has also increased from $4.11 to $4.61.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
The valuation for PLUS looks good with the forward earnings multiple coming in at 12x. Revenue growth of 28% in the most recent quarter keeps the Zacks Style Score for Growth as an A. I see the price to book multiple at 2.1x and that will keep the value investors interested in the stock. I see a 17 basis-point increase in margins and more of that will lead to a higher stock price.
Five Below is a Zacks Rank #5 (Strong Sell) despite beating the bottom line estimate when the company last reported earnings back in early June. Since then, the stock has been lower as worries in the retail sector persist. Let's look at why this stock is a Zacks Rank #5 (Strong Sell) in this Bear of the Day article.
Description
Five Below, Inc. operates as a specialty value retailer in the United States. It offers accessories, including socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polishes, lip glosses, fragrances, and branded cosmetics; and items used to complete and personalize living space, such as glitter lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty decor, accent furniture, and related items, as well as provides storage options for the customers room. As of January 29, 2022, the company operated approximately 1,190 stores in 40 states. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.
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 FIVE, I see four straight beats of the Zacks Consensus Estimate. 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 DHII see annual estimates moving lower.
The current fiscal year 2023 consensus number has dropped from $5.50 to $4.97 over the last 60 days.
The next year has dropped from $6.76 to $6.20 over the same time period.
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 negative 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:
What to Expect from Apple's (AAPL - Free Report) Earnings Report This Week
Apple expects COVID-induced supply chain disruptions and industry-wide silicon shortages to hurt the top line by $4-$8 billion, much higher than what it witnessed in second-quarter fiscal 2022. Unfavorable forex is also expected to hurt revenues by 300 basis points (bps). The absence of Russian revenues will hurt the top line by 150 bps.
The Zacks Consensus Estimate for revenues is currently pegged at $81.86 billion, indicating growth of 0.53% from the year-ago quarter's reported figure.
The consensus mark for earnings is currently pegged at $1.13 per share, unchanged over the past 30 days and indicating 13.08% decline from the figure reported in the year-ago quarter.
Apple's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and were in line with the remaining one, the earnings surprise being 11.85%, on average.
Let's see how things are shaping up for the upcoming announcement.
Strong iPhone 13 Demand to Drive Y/Y Sales Growth
Apple's fortunes are heavily reliant on the iPhone, which is by far its biggest revenue contributor. The device accounted for 52% of net sales in the last reported quarter, wherein sales increased 5.5% year over year to $50.57 billion.
Apple is expected to have benefited from steady demand for the 5G-enabled iPhone 13, despite lockdown disruptions in China and silicon shortages.
Per the latest Canalys report on worldwide smartphone shipments, Apple grabbed the #2 spot with 17% of market share in second-quarter 2022.
The Zacks Consensus Estimate for iPhone sales currently stands at $48.68 billion, indicating 1.2% growth from the year-ago quarter's reported figure.
Services Momentum to Aid Q3 Top-Line Growth
The Services segment is riding on the increasing popularity of the App Store. Apple currently has more than 825 million paid subscribers across its Services portfolio. App Store continues to grab the attention of prominent developers from around the world, helping the company to offer exciting new apps that drive traffic.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One bundle are expected to have contributed to overall growth.
Apple TV+ is gaining recognition, with CODA winning three Academy Awards and the continued popularity of Ted Lasso.
Apple TV+ is benefiting from quality content with its strong portfolio of shows. The company has been expanding its genre base to attract viewers and win market share against Netflix, which enjoys the leading position in the streaming industry, as well as established players like Amazon.
Netflix continues to dominate the streaming market. In second-quarter 2022, the streaming giant lost 0.97 million paid subscribers globally, lower than its estimate of losing two million users. Netflix had added 1.54 million paid subscribers in the year-ago quarter.
Apple TV+ has been signing deals with the likes of Maya Rudolph's production company, Animal Pictures, Scott Free Productions, Appian Way, Sikelia Productions and Green Door Pictures, to name a few, to build its content portfolio.
During the to-be-reported quarter, Apple TV+ also won exclusive rights to broadcast Major League Soccer worldwide for 10 years, starting from 2023.
Apple TV+ has also reportedly submitted its bid for National Football League's new Sunday Ticket partner. Disney and Amazon are the other contenders.
Apple expects Services' growth rate to decline compared with the third-quarter fiscal 2022. Markedly, in the previous quarter, Services revenues grew 17.3% from the year-ago quarter to $19.82 billion and accounted for 20.4% of sales.
The company's Fitness+ subscription service, built on Apple Watch, is a game changer. Fitness+ tracks health- and workout-related data from Apple Watch that users can view on their iPhones, iPads or Apple TVs.
The addition of healthcare features has been a game-changer for Apple Watch. The Series 7 model offers a Blood Oxygen app, ECG app, high and low heart rate notifications, irregular heart rhythm notifications and fall detection.
Apple Watch's adoption rate continues to grow rapidly. More than two-thirds of the customers who purchased it during the second-quarter fiscal 2022 were first-time customers.
The consensus mark for Wearables, Home and Accessories revenues is pegged at $8.28 billion for third-quarter fiscal 2022.
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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: Shutterstock
ePlus and Five Below have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 26, 2022 – Zacks Equity Research shares ePlus Inc (PLUS - Free Report) as the Bull of the Day and Five Below (FIVE - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
ePlus Inc is a Zacks Rank #1 (Strong Buy) and sports an A for Value and for Growth. This software name has held up of late and that piqued my interest in the name. Lately, investors have shunned the software space in favor of names that are more commodity based. Let's explore more about this company in this Bull of The Day article.
Description
ePlus inc. is a leading provider of technology solutions. ePlus enables organizations to optimize their IT infrastructure and supply chain processes by delivering world-class IT products from top manufacturers, professional services, flexible lease financing, proprietary software, and patented business methods. With the highest certifications from top technology partners and expertise in key technologies from data center to security, cloud and collaboration, ePlus transforms IT from a cost center to a business enabler.
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 PLUS, I see four straight beats of the Zacks Consensus Estimate. That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
The average positive earnings surprise over the course of the last year works out to be 28%.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For PLUS, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
The full fiscal year 2023 has moved from $4.12 to $4.39.
Next fiscal year has also increased from $4.11 to $4.61.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
The valuation for PLUS looks good with the forward earnings multiple coming in at 12x. Revenue growth of 28% in the most recent quarter keeps the Zacks Style Score for Growth as an A. I see the price to book multiple at 2.1x and that will keep the value investors interested in the stock. I see a 17 basis-point increase in margins and more of that will lead to a higher stock price.
Bear of the Day:
Five Below is a Zacks Rank #5 (Strong Sell) despite beating the bottom line estimate when the company last reported earnings back in early June. Since then, the stock has been lower as worries in the retail sector persist. Let's look at why this stock is a Zacks Rank #5 (Strong Sell) in this Bear of the Day article.
Description
Five Below, Inc. operates as a specialty value retailer in the United States. It offers accessories, including socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polishes, lip glosses, fragrances, and branded cosmetics; and items used to complete and personalize living space, such as glitter lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty decor, accent furniture, and related items, as well as provides storage options for the customers room. As of January 29, 2022, the company operated approximately 1,190 stores in 40 states. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.
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 FIVE, I see four straight beats of the Zacks Consensus Estimate. 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 DHII see annual estimates moving lower.
The current fiscal year 2023 consensus number has dropped from $5.50 to $4.97 over the last 60 days.
The next year has dropped from $6.76 to $6.20 over the same time period.
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 negative 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:
What to Expect from Apple's (AAPL - Free Report) Earnings Report This Week
Apple is set to report third-quarter fiscal 2022 results on Jul 28.
Apple expects COVID-induced supply chain disruptions and industry-wide silicon shortages to hurt the top line by $4-$8 billion, much higher than what it witnessed in second-quarter fiscal 2022. Unfavorable forex is also expected to hurt revenues by 300 basis points (bps). The absence of Russian revenues will hurt the top line by 150 bps.
The Zacks Consensus Estimate for revenues is currently pegged at $81.86 billion, indicating growth of 0.53% from the year-ago quarter's reported figure.
The consensus mark for earnings is currently pegged at $1.13 per share, unchanged over the past 30 days and indicating 13.08% decline from the figure reported in the year-ago quarter.
Apple Inc. price-eps-surprise | Apple Inc. Quote
Apple's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and were in line with the remaining one, the earnings surprise being 11.85%, on average.
Let's see how things are shaping up for the upcoming announcement.
Strong iPhone 13 Demand to Drive Y/Y Sales Growth
Apple's fortunes are heavily reliant on the iPhone, which is by far its biggest revenue contributor. The device accounted for 52% of net sales in the last reported quarter, wherein sales increased 5.5% year over year to $50.57 billion.
Apple is expected to have benefited from steady demand for the 5G-enabled iPhone 13, despite lockdown disruptions in China and silicon shortages.
Per the latest Canalys report on worldwide smartphone shipments, Apple grabbed the #2 spot with 17% of market share in second-quarter 2022.
The Zacks Consensus Estimate for iPhone sales currently stands at $48.68 billion, indicating 1.2% growth from the year-ago quarter's reported figure.
Services Momentum to Aid Q3 Top-Line Growth
The Services segment is riding on the increasing popularity of the App Store. Apple currently has more than 825 million paid subscribers across its Services portfolio. App Store continues to grab the attention of prominent developers from around the world, helping the company to offer exciting new apps that drive traffic.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One bundle are expected to have contributed to overall growth.
Apple TV+ is gaining recognition, with CODA winning three Academy Awards and the continued popularity of Ted Lasso.
Apple TV+ is benefiting from quality content with its strong portfolio of shows. The company has been expanding its genre base to attract viewers and win market share against Netflix, which enjoys the leading position in the streaming industry, as well as established players like Amazon.
Netflix continues to dominate the streaming market. In second-quarter 2022, the streaming giant lost 0.97 million paid subscribers globally, lower than its estimate of losing two million users. Netflix had added 1.54 million paid subscribers in the year-ago quarter.
Apple TV+ has been signing deals with the likes of Maya Rudolph's production company, Animal Pictures, Scott Free Productions, Appian Way, Sikelia Productions and Green Door Pictures, to name a few, to build its content portfolio.
During the to-be-reported quarter, Apple TV+ also won exclusive rights to broadcast Major League Soccer worldwide for 10 years, starting from 2023.
Apple TV+ has also reportedly submitted its bid for National Football League's new Sunday Ticket partner. Disney and Amazon are the other contenders.
Apple expects Services' growth rate to decline compared with the third-quarter fiscal 2022. Markedly, in the previous quarter, Services revenues grew 17.3% from the year-ago quarter to $19.82 billion and accounted for 20.4% of sales.
Wearables' Growth to Remain Strong
This Zacks Rank #3 (Hold) company is dominating the wearables market, thanks to the strong adoption of the Apple Watch. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The company's Fitness+ subscription service, built on Apple Watch, is a game changer. Fitness+ tracks health- and workout-related data from Apple Watch that users can view on their iPhones, iPads or Apple TVs.
The addition of healthcare features has been a game-changer for Apple Watch. The Series 7 model offers a Blood Oxygen app, ECG app, high and low heart rate notifications, irregular heart rhythm notifications and fall detection.
Apple Watch's adoption rate continues to grow rapidly. More than two-thirds of the customers who purchased it during the second-quarter fiscal 2022 were first-time customers.
The consensus mark for Wearables, Home and Accessories revenues is pegged at $8.28 billion for third-quarter fiscal 2022.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
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.