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TriNet Group, Esterline Technologies, Curtiss-Wright, Elbit Systems and Teledyne Technologies highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – Nov 24, 2017 – Zacks Equity Research highlights TriNet Group, Inc. (TNET - Free Report) as the Bull of the Day and Esterline Technologies Corporation as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Curtiss-Wright Corp (CW - Free Report) , Elbit Systems (ESLT - Free Report) and Teledyne Technologies (TDY - Free Report) .
TriNet Group, Inc., a Zacks Rank #1 (Strong Buy) is a provider of a comprehensive human resources solution for small to medium-sized businesses. It offers payroll, tax administration, risk protection, performance management, compensation consulting, and employee benefit plans. The Company serves banking and financial services, biotech and life sciences, technology, non-profits, professional services, venture capital, and advertising and marketing industries.
Recent Earnings Data
In early November, TriNet announced Q3 17 earnings where they beat the Zacks consensus earnings and revenue estimates for the 7th consecutive quarter. The company posted year over year (YoY) gains in GAAP total revenues +6%, GAAP net income +193%, and adjusted EBITDA +77%. Management was also able to lower operating expenses by +21%.
Driver Going Forward
Insurance revenue growth has become the big driver for the company as net insurance fees were up +85% YoY in Q3. And this was not a one-time quarterly jump, as Q2 was up +134%, Q1 was up +55%, and Q4 16 rose by +40%. This consistent growth is due to administrative cost savings, an increase in total enrollees, and better than expected claims activity.
Increased Q4 Guidance
Due to the impressive revenue growth in the insurance segment, and improved cost savings, management increased net revenue expectations to a range of $185-220 million, well ahead of the previous expectation of $175 million.
Management’s Take
According to Burton M. Goldfield, President and CEO, “We delivered strong financial results during the third quarter as we continued to execute our strategic operational plan. By pairing our technology platform with our deep industry-specific knowledge, we are developing tailored vertical products that provide our clients with an exceptional HR experience. We remain focused on leveraging our scale for the benefit of our clients, while maximizing our ability to deliver profitable growth for our shareholders.”
Detailed Earnings Estimates
Over the past 30 days, earnings estimates for Q4 17, Q1 18, FY 17 and FY 18 have all seen positive revisions; Q4 17 improved from $0.27 to $0.47, Q1 18 rose from $0.39 to $0.46, FY 17 jumped up from $1.49 to $1.99, and FY 18 was lifted from $1.61 to $2.01.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Esterline Technologies Corporation, a Zacks Rank #5 (Strong Sell) designs, manufactures, and markets engineered products and systems primarily for aerospace and defense customers in the United States and internationally. The Company designs, manufactures and markets engineered products and systems for application within the industries it serves. The Company operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials.
Recent Earnings Data
ESL reported Q4 17 earnings on November 10th, where they significantly missed both the Zacks consensus earnings and revenue estimates for the second consecutive quarter. Specifically, revenues were down -2.3% YoY, and EPS was down -35.2% YoY. The declines in both the top and bottom lines were attributed to the Advanced Materials segment, and the planned improvement of operational efficiencies at Kirkhill (plant that produces highly engineered, organic, and in-organic elastomer based products) stalling in Q4 17.
FY 2018 Expectations Reduced
Due to the issues facing the company, and the poor earnings report, management cut Fiscal Year 2018 estimates in several key areas; revenues are now expected to be in the range of $2.025-2.075 billion vs. the expected $2.06 billion, GAAP EPS has been cut to a range of $3.65-4.05 vs. the expected $4.98, Free Cash Flows (FCF) have been cut to a range of $105-130 million vs. the expected $191 million. Lastly, management commented that these numbers are assuming that the Advanced Materials segment is unchanged which given the past quarters performance is not guaranteed.
Management’s Take
According to Curtis Reusser, CEO, “We were disappointed with our fourth quarter results, as performance in our Advanced Materials segment was well below our expectations and has impacted our 2018 outlook. Underperformance was concentrated in our Kirkhill operations, where, despite continued focus and effort across the business, progress toward achieving operating efficiencies stalled in the fourth quarter. We are intensifying our remediation efforts, taking immediate and wide-ranging actions to improve operational performance while simultaneously evaluating all strategic options for this business.”
Declining Earnings Estimates
The issues facing the Advanced Materials segment, and lowered 2018 guidance caused analysts to decrease earnings estimates over the past 30 days for Q1 18, Q2 18, FY 18 and FY 19; Q1 18 fell from $0.79 to $0.52, Q2 18 dropped from $1.18 to $0.92, FY 18 was cut from $5.02 to $3.85, and FY 19 declined from $5.84 to $4.75
Alternative Investment Ideas
With ESL carrying a Zacks Rank #5 (Strong Sell), there are three companies within the Aerospace-Defense Equipment sector that currently carry a Zacks Rank #1 (Strong Buy). So if you are inclined to invest in this sector you would be best served by looking into Curtiss-Wright Corp, Elbit Systems and or Teledyne Technologies.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>
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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TriNet Group, Esterline Technologies, Curtiss-Wright, Elbit Systems and Teledyne Technologies highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – Nov 24, 2017 – Zacks Equity Research highlights TriNet Group, Inc. (TNET - Free Report) as the Bull of the Day and Esterline Technologies Corporation as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Curtiss-Wright Corp (CW - Free Report) , Elbit Systems (ESLT - Free Report) and Teledyne Technologies (TDY - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
TriNet Group, Inc., a Zacks Rank #1 (Strong Buy) is a provider of a comprehensive human resources solution for small to medium-sized businesses. It offers payroll, tax administration, risk protection, performance management, compensation consulting, and employee benefit plans. The Company serves banking and financial services, biotech and life sciences, technology, non-profits, professional services, venture capital, and advertising and marketing industries.
Recent Earnings Data
In early November, TriNet announced Q3 17 earnings where they beat the Zacks consensus earnings and revenue estimates for the 7th consecutive quarter. The company posted year over year (YoY) gains in GAAP total revenues +6%, GAAP net income +193%, and adjusted EBITDA +77%. Management was also able to lower operating expenses by +21%.
Driver Going Forward
Insurance revenue growth has become the big driver for the company as net insurance fees were up +85% YoY in Q3. And this was not a one-time quarterly jump, as Q2 was up +134%, Q1 was up +55%, and Q4 16 rose by +40%. This consistent growth is due to administrative cost savings, an increase in total enrollees, and better than expected claims activity.
Increased Q4 Guidance
Due to the impressive revenue growth in the insurance segment, and improved cost savings, management increased net revenue expectations to a range of $185-220 million, well ahead of the previous expectation of $175 million.
Management’s Take
According to Burton M. Goldfield, President and CEO, “We delivered strong financial results during the third quarter as we continued to execute our strategic operational plan. By pairing our technology platform with our deep industry-specific knowledge, we are developing tailored vertical products that provide our clients with an exceptional HR experience. We remain focused on leveraging our scale for the benefit of our clients, while maximizing our ability to deliver profitable growth for our shareholders.”
Detailed Earnings Estimates
Over the past 30 days, earnings estimates for Q4 17, Q1 18, FY 17 and FY 18 have all seen positive revisions; Q4 17 improved from $0.27 to $0.47, Q1 18 rose from $0.39 to $0.46, FY 17 jumped up from $1.49 to $1.99, and FY 18 was lifted from $1.61 to $2.01.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Bear of the Day:
Esterline Technologies Corporation, a Zacks Rank #5 (Strong Sell) designs, manufactures, and markets engineered products and systems primarily for aerospace and defense customers in the United States and internationally. The Company designs, manufactures and markets engineered products and systems for application within the industries it serves. The Company operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials.
Recent Earnings Data
ESL reported Q4 17 earnings on November 10th, where they significantly missed both the Zacks consensus earnings and revenue estimates for the second consecutive quarter. Specifically, revenues were down -2.3% YoY, and EPS was down -35.2% YoY. The declines in both the top and bottom lines were attributed to the Advanced Materials segment, and the planned improvement of operational efficiencies at Kirkhill (plant that produces highly engineered, organic, and in-organic elastomer based products) stalling in Q4 17.
FY 2018 Expectations Reduced
Due to the issues facing the company, and the poor earnings report, management cut Fiscal Year 2018 estimates in several key areas; revenues are now expected to be in the range of $2.025-2.075 billion vs. the expected $2.06 billion, GAAP EPS has been cut to a range of $3.65-4.05 vs. the expected $4.98, Free Cash Flows (FCF) have been cut to a range of $105-130 million vs. the expected $191 million. Lastly, management commented that these numbers are assuming that the Advanced Materials segment is unchanged which given the past quarters performance is not guaranteed.
Management’s Take
According to Curtis Reusser, CEO, “We were disappointed with our fourth quarter results, as performance in our Advanced Materials segment was well below our expectations and has impacted our 2018 outlook. Underperformance was concentrated in our Kirkhill operations, where, despite continued focus and effort across the business, progress toward achieving operating efficiencies stalled in the fourth quarter. We are intensifying our remediation efforts, taking immediate and wide-ranging actions to improve operational performance while simultaneously evaluating all strategic options for this business.”
Declining Earnings Estimates
The issues facing the Advanced Materials segment, and lowered 2018 guidance caused analysts to decrease earnings estimates over the past 30 days for Q1 18, Q2 18, FY 18 and FY 19; Q1 18 fell from $0.79 to $0.52, Q2 18 dropped from $1.18 to $0.92, FY 18 was cut from $5.02 to $3.85, and FY 19 declined from $5.84 to $4.75
Alternative Investment Ideas
With ESL carrying a Zacks Rank #5 (Strong Sell), there are three companies within the Aerospace-Defense Equipment sector that currently carry a Zacks Rank #1 (Strong Buy). So if you are inclined to invest in this sector you would be best served by looking into Curtiss-Wright Corp, Elbit Systems and or Teledyne Technologies.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>
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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.