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Sterling Construction, Cerner, Lululemon, Broadcom and Qualcomm highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – Dec 7, 2017 – Zacks Equity Research highlights Sterling Construction (STRL - Free Report) as the Bull of the Day and Cerner Corporation as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Lululemon (LULU - Free Report) , Broadcom (AVGO - Free Report) and Qualcomm (QCOM - Free Report) .
Sterling Construction is a Zacks Rank #2 (Buy) and has a "B" for the growth style score. Being the aggressive growth stock strategist I like to see "A" for growth but I don't always get what I want. Sometimes I get more than what I want which is why this stock is the Bull of the Day.
Description
Sterling Construction Company, Inc., together with its subsidiaries, operates as a heavy civil construction company in Texas, Utah, Nevada, Colorado, Arizona, California, Hawaii, and other states in theUS. The company builds, repairs, and reconstructs transportation infrastructure projects, including highways, roads, bridges, airfields. Sterling Construction Company, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.
Recent Earnings
On October 30, the company reported EPS of $0.26 when $0.22 was expected. It was the third consecutive beat of the Zacks Consensus estimate and good for an 18% positive earnings surprise.
Revenues were sharply higher than expected. The company posted sales of $304M when the Zacks Consensus Estimate was calling for $262M. That $42M difference translates to a 16% positive revenue surprise.
Importantly, the company guided higher as well in moving the revenue range from between $850M - $880M to $915M to $935M when the consensus was calling for $875M.
Stocks that beat and then raise guidance have the best chance of seeing a post earnings drift higher.
Estimate Revisions
Over the last several months, the Zacks Consensus Estimate has been moving higher. Back in July, the Zacks Consensus Estimate for 2017 was sitting at $0.36 but bumped up to $0.39 in August. By October the number was up to $0.44 and we are currently at $0.45. Those are all positive moves in the right direction.
The 2018 number hasn't seen as much movement. It was $0.96 back in May and moved to $0.98 in October and that has been the only movement. Still, that number implies some very strong earnings growth for next year.
Valuation
As noted above, the earnings growth for next year is more than 100% -- well 119% to be exact, so you are going to have to pay for that kind of earnings growth. The forward PE for STRL is 38x and that is more than double the industry average of 16x. The price to book multiple of 3.2x is only slightly higher than the 2.8x industry average. Finally, the price to sales multiple of 0.5x is well below the industry average of 0.9x.
Cerner Corporation recently missed the Zacks Consensus Estimate and that led to analysts lowering future earnings estimates. When that happens, the Zacks Rank falls, and now as a Zacks Rank #5 (Strong Sell) CERN is the Bear of the Day.
Description
Cerner Corporation is contributing to the systemic change of health and care delivery. For more than 30 years Cerner has been executing its vision to make health care safer and more efficient. Leveraging the experience of more than three decades in clinical information systems, Cerner is building on the knowledge that is in the system to support evidence-based clinical decisions, prevent medical errors and empower patients in their care.
The company offers Cerner Millennium architecture, which includes clinical, financial, and management information systems that allow providers to access an individual's electronic health record at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers.
Earnings History
The most recent report was a miss, but it was only 1 cent. Prior to that, there were two meets and one beat out of the last four reports. To me, that looks OK, and is not enough to become a Zacks Rank #5 (Strong Sell).
Estimates Revisions
The detailed estimates page shows me that there have been a ton of negative revisions over the last 60 days. This is the reason the stock is now a Zacks Rank #5 (Strong Sell).
Additional Content:
Fresh Earnings Beats from AVGO, LULU
Just when you thought earnings season was over… shares of both Lululemon and Broadcom are up in late trading today following their respective Q3-18 and Q4-17 earnings reports. Even beneath their headline beats, both companies raised guidance and supplied investors with plenty of goodies heading into holiday season.
Broadcom, noteworthy lately for its move to buy out like-sized competitor Qualcomm, outperformed analyst expectations on both top and bottom lines. Earnings of $4.59 per share outpaced the Zacks consensus of $4.52 on quarterly revenues of $4.85 billion, better than the $4.83 billion analysts were looking for. Guidance for fiscal Q1 2018 on the top line was raised to around $5.3 billion, well beyond the Q4 actual and the Q1 estimate of around $4.8 billion.
A full $2.2 billion in revenues came from the company’s Wired business, with $1.8 billion coming from Wireless. Further, Broadcom has considerably upped its interim quarterly dividend by 72%. Shares are up more than a point and a half in after-hours trading, but have been trading down since Thanksgiving.
lululemon, for its part, brought forth a 4-cent beat on its bottom line to 56 cents per share. Quarterly revenues easily surpassed the $610 million expected to $619 million in the quarter. This marks the third-straight positive earnings surprise, with a trailing 4-quarter average positive surprise of 8.5%. Comps rose 7% in the quarter, but with limited brick-and-mortar options (388 stores overall) it’s clear much of this growth for lululemon has come on-line. The company also raised Q4 guidance. For more on LULU’s earnings report, click here.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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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Sterling Construction, Cerner, Lululemon, Broadcom and Qualcomm highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – Dec 7, 2017 – Zacks Equity Research highlights Sterling Construction (STRL - Free Report) as the Bull of the Day and Cerner Corporation as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Lululemon (LULU - Free Report) , Broadcom (AVGO - Free Report) and Qualcomm (QCOM - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Sterling Construction is a Zacks Rank #2 (Buy) and has a "B" for the growth style score. Being the aggressive growth stock strategist I like to see "A" for growth but I don't always get what I want. Sometimes I get more than what I want which is why this stock is the Bull of the Day.
Description
Sterling Construction Company, Inc., together with its subsidiaries, operates as a heavy civil construction company in Texas, Utah, Nevada, Colorado, Arizona, California, Hawaii, and other states in theUS. The company builds, repairs, and reconstructs transportation infrastructure projects, including highways, roads, bridges, airfields. Sterling Construction Company, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.
Recent Earnings
On October 30, the company reported EPS of $0.26 when $0.22 was expected. It was the third consecutive beat of the Zacks Consensus estimate and good for an 18% positive earnings surprise.
Revenues were sharply higher than expected. The company posted sales of $304M when the Zacks Consensus Estimate was calling for $262M. That $42M difference translates to a 16% positive revenue surprise.
Importantly, the company guided higher as well in moving the revenue range from between $850M - $880M to $915M to $935M when the consensus was calling for $875M.
Stocks that beat and then raise guidance have the best chance of seeing a post earnings drift higher.
Estimate Revisions
Over the last several months, the Zacks Consensus Estimate has been moving higher. Back in July, the Zacks Consensus Estimate for 2017 was sitting at $0.36 but bumped up to $0.39 in August. By October the number was up to $0.44 and we are currently at $0.45. Those are all positive moves in the right direction.
The 2018 number hasn't seen as much movement. It was $0.96 back in May and moved to $0.98 in October and that has been the only movement. Still, that number implies some very strong earnings growth for next year.
Valuation
As noted above, the earnings growth for next year is more than 100% -- well 119% to be exact, so you are going to have to pay for that kind of earnings growth. The forward PE for STRL is 38x and that is more than double the industry average of 16x. The price to book multiple of 3.2x is only slightly higher than the 2.8x industry average. Finally, the price to sales multiple of 0.5x is well below the industry average of 0.9x.
Bear of the Day:
Cerner Corporation recently missed the Zacks Consensus Estimate and that led to analysts lowering future earnings estimates. When that happens, the Zacks Rank falls, and now as a Zacks Rank #5 (Strong Sell) CERN is the Bear of the Day.
Description
Cerner Corporation is contributing to the systemic change of health and care delivery. For more than 30 years Cerner has been executing its vision to make health care safer and more efficient. Leveraging the experience of more than three decades in clinical information systems, Cerner is building on the knowledge that is in the system to support evidence-based clinical decisions, prevent medical errors and empower patients in their care.
The company offers Cerner Millennium architecture, which includes clinical, financial, and management information systems that allow providers to access an individual's electronic health record at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers.
Earnings History
The most recent report was a miss, but it was only 1 cent. Prior to that, there were two meets and one beat out of the last four reports. To me, that looks OK, and is not enough to become a Zacks Rank #5 (Strong Sell).
Estimates Revisions
The detailed estimates page shows me that there have been a ton of negative revisions over the last 60 days. This is the reason the stock is now a Zacks Rank #5 (Strong Sell).
Additional Content:
Fresh Earnings Beats from AVGO, LULU
Just when you thought earnings season was over… shares of both Lululemon and Broadcom are up in late trading today following their respective Q3-18 and Q4-17 earnings reports. Even beneath their headline beats, both companies raised guidance and supplied investors with plenty of goodies heading into holiday season.
Broadcom, noteworthy lately for its move to buy out like-sized competitor Qualcomm, outperformed analyst expectations on both top and bottom lines. Earnings of $4.59 per share outpaced the Zacks consensus of $4.52 on quarterly revenues of $4.85 billion, better than the $4.83 billion analysts were looking for. Guidance for fiscal Q1 2018 on the top line was raised to around $5.3 billion, well beyond the Q4 actual and the Q1 estimate of around $4.8 billion.
A full $2.2 billion in revenues came from the company’s Wired business, with $1.8 billion coming from Wireless. Further, Broadcom has considerably upped its interim quarterly dividend by 72%. Shares are up more than a point and a half in after-hours trading, but have been trading down since Thanksgiving.
lululemon, for its part, brought forth a 4-cent beat on its bottom line to 56 cents per share. Quarterly revenues easily surpassed the $610 million expected to $619 million in the quarter. This marks the third-straight positive earnings surprise, with a trailing 4-quarter average positive surprise of 8.5%. Comps rose 7% in the quarter, but with limited brick-and-mortar options (388 stores overall) it’s clear much of this growth for lululemon has come on-line. The company also raised Q4 guidance. For more on LULU’s earnings report, click here.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>
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.