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Tradeweb Markets, Booking, Anaplan, CrowdStrike and Microsoft highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 13, 2020 – Zacks Equity Research Shares of Tradeweb Markets (TW - Free Report) as the Bull of the Day, Booking Holding (BKNG - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Anaplan, Inc. , CrowdStrike Holdings Inc. (CRWD - Free Report) and Microsoft (MSFT - Free Report) .
Organized financial markets provide several beneficial functions to the economy. Reliable trading data affords price transparency to all market participants. Fair and orderly transaction practices allow efficient risk transfer. Participants with natural exposure to price movement can hedge their risk – usually with a wide variety of instruments that they can tailor to their own needs. Speculators often take the other side of those trades, providing liquidity by acting as the buyer to every seller (and vice versa) in the hopes of generating trading profits.
The transfer of securitized equities, debt and derivatives has become essential for the normal functioning of the US and World economies.
Prices for most securities have been extremely volatile during the past two months as the effects of the Coronavirus force businesses in virtually every industry change or outright shut down. Despite extreme price movements, the financial markets have continued to function well despite heavy volumes - with no disruptions in normal trading activity or the dissemination of data.
In the US, equities and equity derivatives were the first securities to trade in a fully electronic format, while bonds continued to trade primarily in dealer markets that required significant human involvement until well into the 2000s.
In terms of notional value of traded securities, the bond markets dwarf the size of the equity markets, with 50-100% greater volume of transactions in an average year.
Tradeweb Markets was launched in 1998 as an electronic marketplace for debt securities. Their first offering was US Government Securities, but virtual venues for other Government debt, Agency Securities, Repurchase Agreements, Municipal and Corporate Bonds and a wide range of derivatives like forwards, options, Interest Rate Swaps and Credit Default Swaps were all added later in response to market demand.
Large brokerage and trading firms were drawn to Tradeweb’s efficiency, transparency and liquidity and migrated to the platform in big numbers. So did other organizations active in the bond markets, like banks, hedge funds, pension funds, insurance companies, and even central bank open market committees.
That migration was accelerated by the financial crisis in 2007-09 where the convenience and speed of trading on Tradeweb’s platforms suited market participants' needs during busy trading sessions.
By the final month of 2018, the notional value of all instruments traded on Tradeweb was just shy of $8 billion – with Tradeweb taking a tiny cut of every transaction.
Tradeweb became a publicly traded company in April of 2019 at $27/share and was one of the most successful IPOs of that period, coming just a hair shy of doubling in price inside a year - hitting a 52-week high of $53.55 in early March of 2020.
Those shares were punished along with the rest of the market as the extent of the outbreak became clear and investors scrambled for the exits in anticipation of a significant economic slowdown. Tradeweb traded as low at $33.23/share during the double bottom period of March 18-23rd.
It turns out that that was a tremendous opportunity and Tradeweb has been climbing ever since, gaining more than 45% off of recent lows - yet still has yet to recover all of its lost value.
A number of recent positive earnings estimate revisions have Tradeweb growing revenues by double digits in each of the remaining quarters of 2020 and earning $1.24/share for the year – a 60% increase over 2019.
It’s also worth noting that because of the straightforward and transparent nature of Tradeweb’s core business model, analyst predictions tend to fall in a fairly tight range and be very accurate. Their last four quarterly earnings numbers were either exactly on the Zacks Consensus Estimate or one cent away.
Tradeweb is currently a Zacks Rank #1 (Strong Buy).
The popularity of indexed investing means stocks tend to all move in the same direction, especially during big moves. When an external event takes all stocks broadly lower, it makes sense to pick up shares of the firms that will not only easily survive the turmoil, but actually stand to benefit from it.
The US economy – and much of the world - has been largely shut down for the past month. Some businesses are fortunate enough to retain demand for their goods and services as well as continuing to have the ability to connect with customers and fulfill their needs. Others are in a much tougher situation.
While Consumer Staples, Utilities, Technology and Health Care have all suffered as investors reassess valuations in a completely new environment, their losses have been fairly modest - and most observers expect those industries to rebound quickly once we get back to business as usual. Trillions of dollars’ worth of fiscal and monetary stimulus promise to provide a big boost to businesses when people go back to work and consumers start buying again.
Other industries might not fare so well. Restaurants, Airlines and Cruise Ship Operators have seen their business fall to near zero or disappear entirely. So have the companies that manage the reservations for the travel and restaurant industry. With airlines operating at 10% or less of capacity and most hotels across the country and most of the world completely closed to new check-ins, it’s not clear when – or if – the travel industry will be back on its feet.
Booking Holding is a juggernaut in the travel planning and restaurant reservations business. What began as Priceline.com more than 20 years ago has grown organically and through strategic acquisitions has grown into a company with $58 billion in market capitalization, responsible for more than 700 million hotel nights, 75 million rental car days and 7 million airline tickets a year.
Booking’s OpenTable restaurant app matches diners with 60,000 restaurants, providing one-stop shopping for dining at your favorite restaurants.
After a spectacularly successful IPO, the share price dipped into the single digits and stayed there for most of the early 2000’s, before beginning an enormous rally as the company became the preeminent provider of travel and dining services and established a steady stream of revenues and profits from millions of small commissions and advertising revenues.
Booking hit a high of $2,094/share in December of 2019, and it wasn’t an out-of-control speculative run-up. The company earned $102/share in 2019 on just over $15 billion in revenues. Even with a $2,000 share price, it was valued at a trailing P/E Ratio of just 20X – barely higher than the S&P 500 as a whole.
That was before the outbreak and subsequent shutdown.
The Zacks Consensus Estimate for 2020 has earnings reduced from $113.80/share – which would have been a 10% increase over the previous year – to just $68.20, a drop of 33% instead. Gross revenues are expected to be lower by a similar percentage.
Also, keep in mind that while in normal times, Booking’s business tends to be fairly predictable and actual results tend to be fairly close to the estimates, the new numbers represent significantly more uncertainty. The high estimate for the current quarter is $9.62/share and the low estimate is just $3.28/share.
All the recent downward revisions earn Booking a Zacks rank #5 (Strong Sell).
As a company, Booking largely redefined what a reservations service and fare aggregator looked like – and made huge profits doing so. There’s a very good chance they’ll be back to full strength someday, but the timing is very uncertain.
In the meantime, the lack of solid information about financial results in the near future means that this is a stock the average investor should probably stay away from.
Additional content:
3 Cloud-Focused Tech Stocks to Buy as Market Looks to Rally
The Dow, the S&P 500, and Nasdaq all jumped again through early afternoon trading Thursday, as part of a larger two week-plus market rally. The recent positivity comes on the back of signs that social distancing is working in the U.S. and elsewhere to help latten the coronavirus curve.
Plus, the Fed on Thursday unveiled yet another set of programs in its efforts to provide support to the U.S. economy amid the coronavirus economic downturn, which was highlighted by another 6.6 million people who applied for unemployment benefits last week.
The S&P 500 is now technically in a new bull market, up over 20% from its March 23 lows, officially joining the Dow, which broke through that range in only a matter of days. These ultra-quick climbs highlight why pulling out of the market completely during downturns and volatility often prevents investors from grabbing some big bounces.
However, volatility could remain because no one really knows when the economy will start to return anywhere close to normal. That said, investors might want to start buying stocks or at least adding to their watchlists.
With this in mind, let’s dive into three cloud-focused tech stocks that look like solid longer-term buys…
Anaplan, Inc.
Anaplan develops cloud-based, enterprise-level SaaS platforms for everything from finance to supply chains. The goal is to help its more than 1,400 customers worldwide improve their planning and decision-making in real time. The San Francisco-based firm topped our Q4 earnings and revenue estimates at the end of February, with its full-year fiscal 2020 sales up 45% to $348 million.
Looking ahead, our current Zacks estimates call for Anaplan’s revenue to jump over 30% in fiscal 2021 and another 27.5% the next year to reach $577.3 million. The company is projected to post a slightly larger adjusted loss this year. But its adjusted FY22 loss is projected to be cut nearly in half. PLAN has also crushed our bottom-line estimates by an average of 31% in the trailing four quarters.
Anaplan stock has jumped nearly 30% since March 23 and is up roughly 50% since it went public in October 2018. Despite the recent run and the overall strength, Anaplan shares sat over 40% below their 52-week highs of around $63 at roughly $36 a share on Thursday, which could give the stock plenty more room to climb.
Anaplan is currently a Zacks Rank #2 (Buy) that is part of any industry that rests in the top 35% of more than 250 Zacks industries that growth-minded investors might want to consider.
CrowdStrike Holdings Inc.
CrowdStrike is a cybersecurity company that was founded in 2011 for the cloud computing age. CRWD’s multi-tenant, cloud native, artificial intelligence-based security solutions for endpoints and more have attracted thousands of customers to its various SaaS subscription-based cybersecurity offerings. CRWD on March 19 reported a much smaller-than-expected adjusted Q4 loss and saw its total fiscal 2020 revenue skyrocketed 93%.
The company also added 870 net new subscription customers in Q4, to end fiscal 2020 with roughly 5,400 customers. CRWD’s CEO said on its earnings call that it was landing more large customers and detailed why it is well positioned both long-term and for the coronavirus economy. The basic reason is that cyber threats don’t sleep and they might actually increase with more people working remotely.
CRWD’s fiscal 2021 sales are projected to surge over 51% to $730 million, with its adjusted fiscal year loss expected to shrink from -$0.42 to -$0.12 per share. It is then expected to post adjusted positive EPS of +$0.16 a share in FY22. CrowdStrike’s positive earnings revisions activity helps it hold a Zacks Rank #2 (Buy), alongside its “A” grades for Growth and Momentum in our Style Scores system.
Plus, CRWD shares have skyrocketed over 80% since mid-March. Yet, at around $60 per share, CrowdStrike stock still rests 40% below its 52-week highs.
Microsoft
Microsoft hasn’t needed an introduction in decades, but its expansion into cloud computing turned the historic tech giant into a growth company and stock once again. MSFT shares have jumped 22% since mid-March, but they still sit about 14% off their February highs, despite being up over 35% in the last 12 months. The company did join the likes of Apple and many others when it warned Wall Street in late February that it is likely to fall short of its quarterly sales guidance for its More Personal Computing segment.
Luckily, MSFT said that its Q3 guidance “remain unchanged” for its other units. This is a good sign since Microsoft’s cloud computing segment has driven its growth recently, with Intelligent Cloud revenue up 27% last quarter. Microsoft’s expanding cloud segment, which competes alongside Amazon for industry supremacy, is poised to carry the firm going forward.
Microsoft’s adjusted earnings are projected to surge over 17% and 11.5%, respectively in fiscal 2020 and 2021, with revenue set to jump 11.6% and 11%. MSFT is currently a Zacks Rank #3 (Hold) that seems like one of the safer investments during the current market. Microsoft also provides investors with some much-needed income at the moment, with a dividend yield of 1.24% that easily tops the 10-year U.S. treasury’s 0.72%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
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/performancefor information about the performance numbers displayed in this press release.
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Tradeweb Markets, Booking, Anaplan, CrowdStrike and Microsoft highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 13, 2020 – Zacks Equity Research Shares of Tradeweb Markets (TW - Free Report) as the Bull of the Day, Booking Holding (BKNG - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Anaplan, Inc. , CrowdStrike Holdings Inc. (CRWD - Free Report) and Microsoft (MSFT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Organized financial markets provide several beneficial functions to the economy. Reliable trading data affords price transparency to all market participants. Fair and orderly transaction practices allow efficient risk transfer. Participants with natural exposure to price movement can hedge their risk – usually with a wide variety of instruments that they can tailor to their own needs. Speculators often take the other side of those trades, providing liquidity by acting as the buyer to every seller (and vice versa) in the hopes of generating trading profits.
The transfer of securitized equities, debt and derivatives has become essential for the normal functioning of the US and World economies.
Prices for most securities have been extremely volatile during the past two months as the effects of the Coronavirus force businesses in virtually every industry change or outright shut down. Despite extreme price movements, the financial markets have continued to function well despite heavy volumes - with no disruptions in normal trading activity or the dissemination of data.
In the US, equities and equity derivatives were the first securities to trade in a fully electronic format, while bonds continued to trade primarily in dealer markets that required significant human involvement until well into the 2000s.
In terms of notional value of traded securities, the bond markets dwarf the size of the equity markets, with 50-100% greater volume of transactions in an average year.
Tradeweb Markets was launched in 1998 as an electronic marketplace for debt securities. Their first offering was US Government Securities, but virtual venues for other Government debt, Agency Securities, Repurchase Agreements, Municipal and Corporate Bonds and a wide range of derivatives like forwards, options, Interest Rate Swaps and Credit Default Swaps were all added later in response to market demand.
Large brokerage and trading firms were drawn to Tradeweb’s efficiency, transparency and liquidity and migrated to the platform in big numbers. So did other organizations active in the bond markets, like banks, hedge funds, pension funds, insurance companies, and even central bank open market committees.
That migration was accelerated by the financial crisis in 2007-09 where the convenience and speed of trading on Tradeweb’s platforms suited market participants' needs during busy trading sessions.
By the final month of 2018, the notional value of all instruments traded on Tradeweb was just shy of $8 billion – with Tradeweb taking a tiny cut of every transaction.
Tradeweb became a publicly traded company in April of 2019 at $27/share and was one of the most successful IPOs of that period, coming just a hair shy of doubling in price inside a year - hitting a 52-week high of $53.55 in early March of 2020.
Those shares were punished along with the rest of the market as the extent of the outbreak became clear and investors scrambled for the exits in anticipation of a significant economic slowdown. Tradeweb traded as low at $33.23/share during the double bottom period of March 18-23rd.
It turns out that that was a tremendous opportunity and Tradeweb has been climbing ever since, gaining more than 45% off of recent lows - yet still has yet to recover all of its lost value.
A number of recent positive earnings estimate revisions have Tradeweb growing revenues by double digits in each of the remaining quarters of 2020 and earning $1.24/share for the year – a 60% increase over 2019.
It’s also worth noting that because of the straightforward and transparent nature of Tradeweb’s core business model, analyst predictions tend to fall in a fairly tight range and be very accurate. Their last four quarterly earnings numbers were either exactly on the Zacks Consensus Estimate or one cent away.
Tradeweb is currently a Zacks Rank #1 (Strong Buy).
The popularity of indexed investing means stocks tend to all move in the same direction, especially during big moves. When an external event takes all stocks broadly lower, it makes sense to pick up shares of the firms that will not only easily survive the turmoil, but actually stand to benefit from it.
Tradeweb is one of those firms.
Bear of the Day:
The US economy – and much of the world - has been largely shut down for the past month. Some businesses are fortunate enough to retain demand for their goods and services as well as continuing to have the ability to connect with customers and fulfill their needs. Others are in a much tougher situation.
While Consumer Staples, Utilities, Technology and Health Care have all suffered as investors reassess valuations in a completely new environment, their losses have been fairly modest - and most observers expect those industries to rebound quickly once we get back to business as usual. Trillions of dollars’ worth of fiscal and monetary stimulus promise to provide a big boost to businesses when people go back to work and consumers start buying again.
Other industries might not fare so well. Restaurants, Airlines and Cruise Ship Operators have seen their business fall to near zero or disappear entirely. So have the companies that manage the reservations for the travel and restaurant industry. With airlines operating at 10% or less of capacity and most hotels across the country and most of the world completely closed to new check-ins, it’s not clear when – or if – the travel industry will be back on its feet.
Booking Holding is a juggernaut in the travel planning and restaurant reservations business. What began as Priceline.com more than 20 years ago has grown organically and through strategic acquisitions has grown into a company with $58 billion in market capitalization, responsible for more than 700 million hotel nights, 75 million rental car days and 7 million airline tickets a year.
Booking’s OpenTable restaurant app matches diners with 60,000 restaurants, providing one-stop shopping for dining at your favorite restaurants.
After a spectacularly successful IPO, the share price dipped into the single digits and stayed there for most of the early 2000’s, before beginning an enormous rally as the company became the preeminent provider of travel and dining services and established a steady stream of revenues and profits from millions of small commissions and advertising revenues.
Booking hit a high of $2,094/share in December of 2019, and it wasn’t an out-of-control speculative run-up. The company earned $102/share in 2019 on just over $15 billion in revenues. Even with a $2,000 share price, it was valued at a trailing P/E Ratio of just 20X – barely higher than the S&P 500 as a whole.
That was before the outbreak and subsequent shutdown.
The Zacks Consensus Estimate for 2020 has earnings reduced from $113.80/share – which would have been a 10% increase over the previous year – to just $68.20, a drop of 33% instead. Gross revenues are expected to be lower by a similar percentage.
Also, keep in mind that while in normal times, Booking’s business tends to be fairly predictable and actual results tend to be fairly close to the estimates, the new numbers represent significantly more uncertainty. The high estimate for the current quarter is $9.62/share and the low estimate is just $3.28/share.
All the recent downward revisions earn Booking a Zacks rank #5 (Strong Sell).
As a company, Booking largely redefined what a reservations service and fare aggregator looked like – and made huge profits doing so. There’s a very good chance they’ll be back to full strength someday, but the timing is very uncertain.
In the meantime, the lack of solid information about financial results in the near future means that this is a stock the average investor should probably stay away from.
Additional content:
3 Cloud-Focused Tech Stocks to Buy as Market Looks to Rally
The Dow, the S&P 500, and Nasdaq all jumped again through early afternoon trading Thursday, as part of a larger two week-plus market rally. The recent positivity comes on the back of signs that social distancing is working in the U.S. and elsewhere to help latten the coronavirus curve.
Plus, the Fed on Thursday unveiled yet another set of programs in its efforts to provide support to the U.S. economy amid the coronavirus economic downturn, which was highlighted by another 6.6 million people who applied for unemployment benefits last week.
The S&P 500 is now technically in a new bull market, up over 20% from its March 23 lows, officially joining the Dow, which broke through that range in only a matter of days. These ultra-quick climbs highlight why pulling out of the market completely during downturns and volatility often prevents investors from grabbing some big bounces.
However, volatility could remain because no one really knows when the economy will start to return anywhere close to normal. That said, investors might want to start buying stocks or at least adding to their watchlists.
With this in mind, let’s dive into three cloud-focused tech stocks that look like solid longer-term buys…
Anaplan, Inc.
Anaplan develops cloud-based, enterprise-level SaaS platforms for everything from finance to supply chains. The goal is to help its more than 1,400 customers worldwide improve their planning and decision-making in real time. The San Francisco-based firm topped our Q4 earnings and revenue estimates at the end of February, with its full-year fiscal 2020 sales up 45% to $348 million.
Looking ahead, our current Zacks estimates call for Anaplan’s revenue to jump over 30% in fiscal 2021 and another 27.5% the next year to reach $577.3 million. The company is projected to post a slightly larger adjusted loss this year. But its adjusted FY22 loss is projected to be cut nearly in half. PLAN has also crushed our bottom-line estimates by an average of 31% in the trailing four quarters.
Anaplan stock has jumped nearly 30% since March 23 and is up roughly 50% since it went public in October 2018. Despite the recent run and the overall strength, Anaplan shares sat over 40% below their 52-week highs of around $63 at roughly $36 a share on Thursday, which could give the stock plenty more room to climb.
Anaplan is currently a Zacks Rank #2 (Buy) that is part of any industry that rests in the top 35% of more than 250 Zacks industries that growth-minded investors might want to consider.
CrowdStrike Holdings Inc.
CrowdStrike is a cybersecurity company that was founded in 2011 for the cloud computing age. CRWD’s multi-tenant, cloud native, artificial intelligence-based security solutions for endpoints and more have attracted thousands of customers to its various SaaS subscription-based cybersecurity offerings. CRWD on March 19 reported a much smaller-than-expected adjusted Q4 loss and saw its total fiscal 2020 revenue skyrocketed 93%.
The company also added 870 net new subscription customers in Q4, to end fiscal 2020 with roughly 5,400 customers. CRWD’s CEO said on its earnings call that it was landing more large customers and detailed why it is well positioned both long-term and for the coronavirus economy. The basic reason is that cyber threats don’t sleep and they might actually increase with more people working remotely.
CRWD’s fiscal 2021 sales are projected to surge over 51% to $730 million, with its adjusted fiscal year loss expected to shrink from -$0.42 to -$0.12 per share. It is then expected to post adjusted positive EPS of +$0.16 a share in FY22. CrowdStrike’s positive earnings revisions activity helps it hold a Zacks Rank #2 (Buy), alongside its “A” grades for Growth and Momentum in our Style Scores system.
Plus, CRWD shares have skyrocketed over 80% since mid-March. Yet, at around $60 per share, CrowdStrike stock still rests 40% below its 52-week highs.
Microsoft
Microsoft hasn’t needed an introduction in decades, but its expansion into cloud computing turned the historic tech giant into a growth company and stock once again. MSFT shares have jumped 22% since mid-March, but they still sit about 14% off their February highs, despite being up over 35% in the last 12 months. The company did join the likes of Apple and many others when it warned Wall Street in late February that it is likely to fall short of its quarterly sales guidance for its More Personal Computing segment.
Luckily, MSFT said that its Q3 guidance “remain unchanged” for its other units. This is a good sign since Microsoft’s cloud computing segment has driven its growth recently, with Intelligent Cloud revenue up 27% last quarter. Microsoft’s expanding cloud segment, which competes alongside Amazon for industry supremacy, is poised to carry the firm going forward.
Microsoft’s adjusted earnings are projected to surge over 17% and 11.5%, respectively in fiscal 2020 and 2021, with revenue set to jump 11.6% and 11%. MSFT is currently a Zacks Rank #3 (Hold) that seems like one of the safer investments during the current market. Microsoft also provides investors with some much-needed income at the moment, with a dividend yield of 1.24% that easily tops the 10-year U.S. treasury’s 0.72%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
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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/performancefor information about the performance numbers displayed in this press release.