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Don't Overlook These Highly Ranked Stocks After Earnings
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EnerSys (ENS - Free Report) ) and Silicon Motion Technology (SIMO - Free Report) ) are standing out this week after posting favorable quarterly results.
With both sporting a Zacks Rank #1 (Strong Buy) let’s review their quarterly reports and take a look at why now is a good time to invest in these highly ranked stocks.
Enersys Q3 Review
As a leading industrial battery manufacturer, EnerSys’ sound growth and value remain attractive to investors. Magnifying this perception EnerSys posted earnings of $2.56 per share for its fiscal third quarter on Wednesday which topped the Zacks Consensus of $2.55 a share and skyrocketed 102% year over year.
The drastic increase in probability was attributed to lower sales costs which resulted in a higher gross margin of 28.9% which was up 570 basis points from the comparative quarter. This was despite Q3 sales of $861.5 million missing estimates of $896.77 million and dipping -6% from $920.2 million in the comparative quarter. Still, EnerSys’ adjusted operating income came in at $130.3 million and soared 53% from $84.9 million a year ago. More impressive, EnerSys has now surpassed earnings expectations for six consecutive quarters.
Image Source: Zacks Investment Research
Silicon Motion Q4 Review
Silicon Motion is a very attractive semiconductor company at the moment with the leading provider of microcontroller integrated circuits (ICs) impressively topping its Q4 top and bottom line expectations on Tuesday.
Higher than expected demand for its flash storage compatible ICs led to earnings of $0.93 per share easily surpassing estimates of $0.76 a share by 22% despite falling from $1.22 per share in a very competitive prior-year quarter. Quarterly sales of $202.38 million came in 2% better than expected and were up from $200.76 million a year ago. Attributed to higher operating expenses Silicon Motion’s Q4 operating income fell from $46.6 million to $27.8 million but the company has now beaten earnings expectations for two straight quarters.
Image Source: Zacks Investment Research
EPS Growth & Outlook
Most compelling about EnerSys and Silicon Motion beating their quarterly earnings expectations is that it started to justify their lofty annual EPS projections.
According to Zacks estimates, EnerSys’ annual earnings are currently projected to soar 60% in fiscal 2024 to $8.56 per share versus $5.34 a share in 2023. Plus, FY25 EPS is forecasted to rise another 3%.
Image Source: Zacks Investment Research
Pivoting to Silicon Motion, FY24 earnings are expected to rebound and pop 47% to $3.34 per share compared to $2.27 a share last year. Even better, FY25 EPS is projected to climb another 55% to $5.18 per share.
Image Source: Zacks Investment Research
Bottom Line
After beating earnings expectations this week EnerSys and Silicon Motion are two of the more attractive growth stocks among the industrial products sector and technology sector respectively. This may certainly be the case for longer term investors as both are shaping up to be viable investments for 2024 and beyond.
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Don't Overlook These Highly Ranked Stocks After Earnings
EnerSys (ENS - Free Report) ) and Silicon Motion Technology (SIMO - Free Report) ) are standing out this week after posting favorable quarterly results.
With both sporting a Zacks Rank #1 (Strong Buy) let’s review their quarterly reports and take a look at why now is a good time to invest in these highly ranked stocks.
Enersys Q3 Review
As a leading industrial battery manufacturer, EnerSys’ sound growth and value remain attractive to investors. Magnifying this perception EnerSys posted earnings of $2.56 per share for its fiscal third quarter on Wednesday which topped the Zacks Consensus of $2.55 a share and skyrocketed 102% year over year.
The drastic increase in probability was attributed to lower sales costs which resulted in a higher gross margin of 28.9% which was up 570 basis points from the comparative quarter. This was despite Q3 sales of $861.5 million missing estimates of $896.77 million and dipping -6% from $920.2 million in the comparative quarter. Still, EnerSys’ adjusted operating income came in at $130.3 million and soared 53% from $84.9 million a year ago. More impressive, EnerSys has now surpassed earnings expectations for six consecutive quarters.
Image Source: Zacks Investment Research
Silicon Motion Q4 Review
Silicon Motion is a very attractive semiconductor company at the moment with the leading provider of microcontroller integrated circuits (ICs) impressively topping its Q4 top and bottom line expectations on Tuesday.
Higher than expected demand for its flash storage compatible ICs led to earnings of $0.93 per share easily surpassing estimates of $0.76 a share by 22% despite falling from $1.22 per share in a very competitive prior-year quarter. Quarterly sales of $202.38 million came in 2% better than expected and were up from $200.76 million a year ago. Attributed to higher operating expenses Silicon Motion’s Q4 operating income fell from $46.6 million to $27.8 million but the company has now beaten earnings expectations for two straight quarters.
Image Source: Zacks Investment Research
EPS Growth & Outlook
Most compelling about EnerSys and Silicon Motion beating their quarterly earnings expectations is that it started to justify their lofty annual EPS projections.
According to Zacks estimates, EnerSys’ annual earnings are currently projected to soar 60% in fiscal 2024 to $8.56 per share versus $5.34 a share in 2023. Plus, FY25 EPS is forecasted to rise another 3%.
Image Source: Zacks Investment Research
Pivoting to Silicon Motion, FY24 earnings are expected to rebound and pop 47% to $3.34 per share compared to $2.27 a share last year. Even better, FY25 EPS is projected to climb another 55% to $5.18 per share.
Image Source: Zacks Investment Research
Bottom Line
After beating earnings expectations this week EnerSys and Silicon Motion are two of the more attractive growth stocks among the industrial products sector and technology sector respectively. This may certainly be the case for longer term investors as both are shaping up to be viable investments for 2024 and beyond.