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Zacks.com featured highlights Netflix, Meta Platforms, Deckers Outdoor and GigaCloud Technology
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For Immediate Release
Chicago, IL – February 23, 2024 – Stocks in this week’s article are Netflix, Inc (NFLX - Free Report) , Meta Platforms, Inc (META - Free Report) , Deckers Outdoor Corp. (DECK - Free Report) and GigaCloud Technology (GCT - Free Report) .
Snap Up These 4 Top-Ranked Liquid Stocks to Enhance Your Portfolio
Investors looking for high returns are likely to benefit from adding stocks with robust liquidity levels, as it promotes business growth.
Liquidity primarily determines a company’s capability to meet debt obligations by converting assets into liquid cash and equivalents. These stocks have always been on investors’ radar owing to their potential to provide strong returns.
One should be alert before investing in such stocks. While a high liquidity level might imply that the company is clearing its dues at a faster rate compared with peers, it may also suggest that it is unable to utilize its assets competently.
Hence, one may consider a company’s efficiency level in addition to its liquidity to identify potential winners.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company’s potential to meet short- and long-term debt obligations. A current ratio — the working capital ratio — below 1 indicates that the company has more liabilities than assets. However, a high current ratio does not always suggest that the company is in good financial shape. It may also indicate that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.
Quick Ratio: Unlike the current ratio, the quick ratio — the ‘acid-test ratio’ or ‘quick assets ratio’ — indicates a company’s ability to pay short-term obligations. It considers inventory, excluding the current assets relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.
Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company’s ability to meet existing debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.
A ratio greater than 1 is always desirable but may not always represent a company’s financial condition.
Here are four stocks out of the 16 that qualified for the screen:
Netflix, Inc is considered a pioneer in the streaming space. At the end of the fourth quarter of 2023, the company had 260.28 million paid subscribers globally. The company added 13.12 million paid subscribers globally in fourth-quarter 2023, with a rise of 1% in average revenue per subscription. NFLX attributed the robust top-line growth to its paid subscription-sharing offering (part of its password-sharing crackdown), recent price changes and the strength of its business in general.
Netflix is expected to continue dominating the streaming space, courtesy of its diverse content portfolio and heavy investments in the production and distribution of localized and foreign-language content. Stiff competition in the streaming space from the likes of Amazon Prime Video, Disney+, Apple, Peacock and Paramount+ is a headwind. The Zacks Consensus Estimate for NFLX’s 2024 bottom line is pegged at earnings of $16.93 per share, up 6% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 5.4%, on average.
Meta Platforms, Inc is the world’s biggest social media platform. The company is gaining from steady user growth across all regions, particularly Asia Pacific. Increasing engagement in its other platforms like Instagram, WhatsApp, Messenger and Facebook has been a major growth catalyst. META is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels, Llama 2, Ray-Ban Meta smart glass and mixed reality device Quest 3, is likely to aid prospects.
However, challenging macroeconomic conditions remain a concern for Meta’s advertising revenues. The Zacks Consensus Estimate for 2024 earnings is pegged at $19.62 per share, up 11.2% in the past 60 days. META has a Growth Score of A and a trailing four-quarter earnings surprise of 19.7%, on average.
Deckers Outdoor Corp. is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. The company sells products primarily under five proprietary brands — UGG, HOKA, Teva, Sanuk and Other brands (mainly comprising Koolaburra). Strength in the UGG and HOKA brands is driving top-line performance.
Robust gains from the direct-to-consumer (“DTC”) channels, brand growth, a strong balance sheet and a stable operating model are positives. Continued momentum in its global wholesale business, driven by consumer demand in both domestic and international markets, appears encouraging as well. The Zacks Consensus Estimate for its fiscal 2024 bottom line is pegged at $26.85 per share, up 13.7% in the past 60 days. DECK has a Growth Score of A and a trailing four-quarter earnings surprise of 32.1%, on average.
GigaCloud Technology provides end-to-end B2B e-commerce solutions for ample parcel merchandise worldwide. The company's marketplace brings together manufacturers (mainly in Asia) and resellers (in the United States, Asia and Europe) to implement cross-border transactions. The Zacks Consensus Estimate for its 2023 bottom line is pegged at $1.77 per share, unchanged in the past 60 days. GCT has a Growth Score of A.
Get the remaining stocks on the list and start testing this and other ideas. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin and easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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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Zacks.com featured highlights Netflix, Meta Platforms, Deckers Outdoor and GigaCloud Technology
For Immediate Release
Chicago, IL – February 23, 2024 – Stocks in this week’s article are Netflix, Inc (NFLX - Free Report) , Meta Platforms, Inc (META - Free Report) , Deckers Outdoor Corp. (DECK - Free Report) and GigaCloud Technology (GCT - Free Report) .
Snap Up These 4 Top-Ranked Liquid Stocks to Enhance Your Portfolio
Investors looking for high returns are likely to benefit from adding stocks with robust liquidity levels, as it promotes business growth.
Liquidity primarily determines a company’s capability to meet debt obligations by converting assets into liquid cash and equivalents. These stocks have always been on investors’ radar owing to their potential to provide strong returns.
One should be alert before investing in such stocks. While a high liquidity level might imply that the company is clearing its dues at a faster rate compared with peers, it may also suggest that it is unable to utilize its assets competently.
Hence, one may consider a company’s efficiency level in addition to its liquidity to identify potential winners.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company’s potential to meet short- and long-term debt obligations. A current ratio — the working capital ratio — below 1 indicates that the company has more liabilities than assets. However, a high current ratio does not always suggest that the company is in good financial shape. It may also indicate that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.
Quick Ratio: Unlike the current ratio, the quick ratio — the ‘acid-test ratio’ or ‘quick assets ratio’ — indicates a company’s ability to pay short-term obligations. It considers inventory, excluding the current assets relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.
Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company’s ability to meet existing debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.
A ratio greater than 1 is always desirable but may not always represent a company’s financial condition.
Here are four stocks out of the 16 that qualified for the screen:
Netflix, Inc is considered a pioneer in the streaming space. At the end of the fourth quarter of 2023, the company had 260.28 million paid subscribers globally. The company added 13.12 million paid subscribers globally in fourth-quarter 2023, with a rise of 1% in average revenue per subscription. NFLX attributed the robust top-line growth to its paid subscription-sharing offering (part of its password-sharing crackdown), recent price changes and the strength of its business in general.
Netflix is expected to continue dominating the streaming space, courtesy of its diverse content portfolio and heavy investments in the production and distribution of localized and foreign-language content. Stiff competition in the streaming space from the likes of Amazon Prime Video, Disney+, Apple, Peacock and Paramount+ is a headwind. The Zacks Consensus Estimate for NFLX’s 2024 bottom line is pegged at earnings of $16.93 per share, up 6% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 5.4%, on average.
Meta Platforms, Inc is the world’s biggest social media platform. The company is gaining from steady user growth across all regions, particularly Asia Pacific. Increasing engagement in its other platforms like Instagram, WhatsApp, Messenger and Facebook has been a major growth catalyst. META is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels, Llama 2, Ray-Ban Meta smart glass and mixed reality device Quest 3, is likely to aid prospects.
However, challenging macroeconomic conditions remain a concern for Meta’s advertising revenues. The Zacks Consensus Estimate for 2024 earnings is pegged at $19.62 per share, up 11.2% in the past 60 days. META has a Growth Score of A and a trailing four-quarter earnings surprise of 19.7%, on average.
Deckers Outdoor Corp. is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. The company sells products primarily under five proprietary brands — UGG, HOKA, Teva, Sanuk and Other brands (mainly comprising Koolaburra). Strength in the UGG and HOKA brands is driving top-line performance.
Robust gains from the direct-to-consumer (“DTC”) channels, brand growth, a strong balance sheet and a stable operating model are positives. Continued momentum in its global wholesale business, driven by consumer demand in both domestic and international markets, appears encouraging as well. The Zacks Consensus Estimate for its fiscal 2024 bottom line is pegged at $26.85 per share, up 13.7% in the past 60 days. DECK has a Growth Score of A and a trailing four-quarter earnings surprise of 32.1%, on average.
GigaCloud Technology provides end-to-end B2B e-commerce solutions for ample parcel merchandise worldwide. The company's marketplace brings together manufacturers (mainly in Asia) and resellers (in the United States, Asia and Europe) to implement cross-border transactions. The Zacks Consensus Estimate for its 2023 bottom line is pegged at $1.77 per share, unchanged in the past 60 days. GCT has a Growth Score of A.
Get the remaining stocks on the list and start testing this and other ideas. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin and easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Click here to sign up for a free trial of the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2229890/snap-these-4-top-ranked-liquid-stocks-to-enrich-your-portfolio
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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.