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Medifast, Signet Jewelers and NVIDIA highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – April 4, 2018 – Zacks Equity Research highlights Medifast Inc (MED - Free Report) as the Bull of the Day, Signet Jewelers Limited (SIG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA (NVDA - Free Report) .
Medifast Inc., a Zacks Rank #1 (Strong Buy), is a leading manufacturer and distributor of clinically proven healthy living products and programs. It is the brand recommended by more than 20,000 Doctors. Medifast produces, distributes, and sells weight loss and other health-related products through websites, multi-level marketing, telemarketing, franchised weight loss clinics, and medical professionals.
Recent Earnings Data
The company reported Q4 17 results on March 6th, where it beat the Zacks consensus earnings and revenue estimates for the third consecutive quarter. On a year over year basis, earnings grew by +76.5%, and revenues improved by +24.8%. Further, gross profits rose by +25.5% while net income grew by +78.1%. Also, due to the new tax law, the company’s effective tax rate fell from 38.2% to 25.4%.
Looking Forward
The big long-term growth driver for the company is OPTAVIA, and the Coaches. OPTAVIA has four components that help the customer achieve a “lifelong transformation.” There is the OPTAVIA Coach, who gives support and guidance, the Habits of Health which help the customer learn and adopt new healthy habits, the OPTAIVA Community who helps with support alongside the Coach, and its Fuelings and Plans which are the daily meals. In the most recently reported quarter, OPTAVIA revenues grew by +32.4%, the ninth consecutive quarter of growth, and the amount of Coaches increased to 15,000 from 12,500 YoY. Further, the average revenue per active earning OPTAVIA Coach improved by +9.7%. Management’s long term goal is to have 30,000 Health Coaches by the end of 2019 which would be a growth level of 50% over the next two years.
Due to the strong customer response, management increased Q1 18 revenues and EPS estimates above consensus. Operating profits are now expected to improve by +27% YoY (previous was +19% growth), and sales to gain between +25%-30. Management also increased FY 18 EPS and sales guidance; EPS is now expected to be between $3.15-3.25 (above consensus estimate of $2.73), and sales are pegged to grow between 16-19% (above consensus of 11%).
Signet Jewelers Limited, a Zacks Ranked #5 (Strong Sell), is engaged in retailing of jewelry, watches and associated services. The company operates primarily in the United States, the United Kingdom, the Republic of Ireland and the Channel Islands. Signet Jewelers Ltd., formerly known as Signet Group PLC, is based in Hamilton, Bermuda.
Recent Earnings Performance
In mid-March the company reported Q4 18 results where they beat both top and bottom line expectations. But for the coming fiscal year (2019, during current year of 2018) management noted some issues with the outsourcing of its credit portfolio. This credit issue caused management to reduce Q1 EPS between a range of -$0.05 to -$0.15, well below the previous expectation of $0.62. Further, the company’s Q1 19 comparable store sales are trending towards the low end of the anticipated range. To add to the problems, SG&A spending is now expected to be elevated in the first three quarters of FY 19. These combined issues are adding to significant pressures on the company as a whole.
While management is taking steps to alleviate these issues, the turnaround is not expected to benefit the top and bottom lines till the fourth quarter of the year at the earliest. Management conceded that they will not see improvements till FY 2020; “Looking ahead, Fiscal 2019 will be an important transition year as we implement our transformation plan, and we expect to see improved operational and financial performance beginning in Fiscal 2020.”
Management’s Take
According to Virginia Drosos, CEO, “Fiscal 2018 was a challenging year for Signet. We gained sales momentum in our Zales banner in the fourth quarter as our strategic initiatives began to take hold, but we experienced challenges at our Kay and Jared banners, including execution issues related to the first phase of our credit outsourcing transaction.”
Additional content:
Can Nvidia (NVDA - Free Report) Stock Rebound on Gaming Growth?
Shares of Nvidia opened more than 3% higher on Tuesday after one key analyst said that a recent decline in the previously-red-hot stock presents a great buying opportunity, especially considering the company’s strength in artificial intelligence, autonomous cars, gaming, and more.
“[Nvidia is] one of the more unique investments in semis/technology, levered to multiple 10x growth markets in artificial intelligence (AI), gaming, virtual reality and autonomous cars (AV),” wrote Bank of America Merrill Lynch analyst Vivek Arya.
Bank of America Merrill Lynch reiterated its buy rating for the chipmaker and added Nvidia to its US1 top ideas list. The firm also reiterated its $300 price target for the stock, which represents a 36% upside to its Monday close.
A key factor behind Bank of America’s bullish stance is Nvidia’s continued dominance of the PC gaming market. The note mentioned that the company’s gaming cards are routinely selling for 50% more than their suggested list prices, indicating that demand from gamers is still quite high.
“The proliferation of e-sports which has become a global phenomenon and is attracting a growing base of gamers and viewers. The next catalyst for PC gaming could be launch of new Volta based gaming GPUs (1100 series) in 2H18,” Arya said.
Arya’s note helped Nvidia rebound slightly after a brutal start to the week for the entire technology sector. Tech’s recent volatility has actually taken the wind out of Nvidia’s sails for the past two weeks, and the stock is now about 10.3% off its latest highs.
Still, with trade fears and political turmoil looming, it is unclear whether NVDA will hold on to its early morning gains. The tech-heavy Nasdaq opened higher but quickly fell into the red on the day, while the broader S&P 500 was fighting to remain in the green in morning trading. The 30-stock Dow Jones index looks ready to lead the day, with consumer staples remaining poised.
Interestingly, Nvidia’s recent selloff—combined with its improving earnings outlook—has helped the company’s valuation become significantly less stretched. The stock is now trading at about 34.2x forward 12-month earnings, its lowest earnings multiple in roughly a year. Over that timeframe, the stock has traded as high as 57.4x and holds a median Forward P/E of 45.6.
Analyst sentiment for the chipmaker has remained strong recently, suggesting that the fundamental picture here is not slipping. Within the past 60 days, Nvidia has witnessed 12 positive revisions to its full-year earnings estimates, lifting our consensus projection for this period $1.53 higher. That positive revision activity has also earned NVDA a Zacks Rank #1 (Strong Buy).
Meanwhile, the company is also sporting a “B” grade for Growth in our Style Scores system. Full-year estimates are now calling for the company to witness annual earnings and revenue growth of about 28.5%, and investors have grown accustom to Nvidia blowing its expansion projections out of the water.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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 nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% 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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Medifast, Signet Jewelers and NVIDIA highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 4, 2018 – Zacks Equity Research highlights Medifast Inc (MED - Free Report) as the Bull of the Day, Signet Jewelers Limited (SIG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA (NVDA - Free Report) .
Here is a synopsis of all three stocks:
Bull of the Day:
Medifast Inc., a Zacks Rank #1 (Strong Buy), is a leading manufacturer and distributor of clinically proven healthy living products and programs. It is the brand recommended by more than 20,000 Doctors. Medifast produces, distributes, and sells weight loss and other health-related products through websites, multi-level marketing, telemarketing, franchised weight loss clinics, and medical professionals.
Recent Earnings Data
The company reported Q4 17 results on March 6th, where it beat the Zacks consensus earnings and revenue estimates for the third consecutive quarter. On a year over year basis, earnings grew by +76.5%, and revenues improved by +24.8%. Further, gross profits rose by +25.5% while net income grew by +78.1%. Also, due to the new tax law, the company’s effective tax rate fell from 38.2% to 25.4%.
Looking Forward
The big long-term growth driver for the company is OPTAVIA, and the Coaches. OPTAVIA has four components that help the customer achieve a “lifelong transformation.” There is the OPTAVIA Coach, who gives support and guidance, the Habits of Health which help the customer learn and adopt new healthy habits, the OPTAIVA Community who helps with support alongside the Coach, and its Fuelings and Plans which are the daily meals. In the most recently reported quarter, OPTAVIA revenues grew by +32.4%, the ninth consecutive quarter of growth, and the amount of Coaches increased to 15,000 from 12,500 YoY. Further, the average revenue per active earning OPTAVIA Coach improved by +9.7%. Management’s long term goal is to have 30,000 Health Coaches by the end of 2019 which would be a growth level of 50% over the next two years.
Due to the strong customer response, management increased Q1 18 revenues and EPS estimates above consensus. Operating profits are now expected to improve by +27% YoY (previous was +19% growth), and sales to gain between +25%-30. Management also increased FY 18 EPS and sales guidance; EPS is now expected to be between $3.15-3.25 (above consensus estimate of $2.73), and sales are pegged to grow between 16-19% (above consensus of 11%).
Bear of the Day:
Signet Jewelers Limited, a Zacks Ranked #5 (Strong Sell), is engaged in retailing of jewelry, watches and associated services. The company operates primarily in the United States, the United Kingdom, the Republic of Ireland and the Channel Islands. Signet Jewelers Ltd., formerly known as Signet Group PLC, is based in Hamilton, Bermuda.
Recent Earnings Performance
In mid-March the company reported Q4 18 results where they beat both top and bottom line expectations. But for the coming fiscal year (2019, during current year of 2018) management noted some issues with the outsourcing of its credit portfolio. This credit issue caused management to reduce Q1 EPS between a range of -$0.05 to -$0.15, well below the previous expectation of $0.62. Further, the company’s Q1 19 comparable store sales are trending towards the low end of the anticipated range. To add to the problems, SG&A spending is now expected to be elevated in the first three quarters of FY 19. These combined issues are adding to significant pressures on the company as a whole.
While management is taking steps to alleviate these issues, the turnaround is not expected to benefit the top and bottom lines till the fourth quarter of the year at the earliest. Management conceded that they will not see improvements till FY 2020; “Looking ahead, Fiscal 2019 will be an important transition year as we implement our transformation plan, and we expect to see improved operational and financial performance beginning in Fiscal 2020.”
Management’s Take
According to Virginia Drosos, CEO, “Fiscal 2018 was a challenging year for Signet. We gained sales momentum in our Zales banner in the fourth quarter as our strategic initiatives began to take hold, but we experienced challenges at our Kay and Jared banners, including execution issues related to the first phase of our credit outsourcing transaction.”
Additional content:
Can Nvidia (NVDA - Free Report) Stock Rebound on Gaming Growth?
Shares of Nvidia opened more than 3% higher on Tuesday after one key analyst said that a recent decline in the previously-red-hot stock presents a great buying opportunity, especially considering the company’s strength in artificial intelligence, autonomous cars, gaming, and more.
“[Nvidia is] one of the more unique investments in semis/technology, levered to multiple 10x growth markets in artificial intelligence (AI), gaming, virtual reality and autonomous cars (AV),” wrote Bank of America Merrill Lynch analyst Vivek Arya.
Bank of America Merrill Lynch reiterated its buy rating for the chipmaker and added Nvidia to its US1 top ideas list. The firm also reiterated its $300 price target for the stock, which represents a 36% upside to its Monday close.
A key factor behind Bank of America’s bullish stance is Nvidia’s continued dominance of the PC gaming market. The note mentioned that the company’s gaming cards are routinely selling for 50% more than their suggested list prices, indicating that demand from gamers is still quite high.
“The proliferation of e-sports which has become a global phenomenon and is attracting a growing base of gamers and viewers. The next catalyst for PC gaming could be launch of new Volta based gaming GPUs (1100 series) in 2H18,” Arya said.
Arya’s note helped Nvidia rebound slightly after a brutal start to the week for the entire technology sector. Tech’s recent volatility has actually taken the wind out of Nvidia’s sails for the past two weeks, and the stock is now about 10.3% off its latest highs.
Still, with trade fears and political turmoil looming, it is unclear whether NVDA will hold on to its early morning gains. The tech-heavy Nasdaq opened higher but quickly fell into the red on the day, while the broader S&P 500 was fighting to remain in the green in morning trading. The 30-stock Dow Jones index looks ready to lead the day, with consumer staples remaining poised.
Interestingly, Nvidia’s recent selloff—combined with its improving earnings outlook—has helped the company’s valuation become significantly less stretched. The stock is now trading at about 34.2x forward 12-month earnings, its lowest earnings multiple in roughly a year. Over that timeframe, the stock has traded as high as 57.4x and holds a median Forward P/E of 45.6.
Analyst sentiment for the chipmaker has remained strong recently, suggesting that the fundamental picture here is not slipping. Within the past 60 days, Nvidia has witnessed 12 positive revisions to its full-year earnings estimates, lifting our consensus projection for this period $1.53 higher. That positive revision activity has also earned NVDA a Zacks Rank #1 (Strong Buy).
Meanwhile, the company is also sporting a “B” grade for Growth in our Style Scores system. Full-year estimates are now calling for the company to witness annual earnings and revenue growth of about 28.5%, and investors have grown accustom to Nvidia blowing its expansion projections out of the water.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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 nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://twitter.com/zacksresearch
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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.
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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.