Friday, March 7, 2025

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Walmart Inc. (WMT), HSBC Holdings plc (HSBC) and Adobe Inc. (ADBE), as well as two micro-cap stocks Friedman Industries, Inc. (FRD) and NetSol Technologies, Inc. (NTWK). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

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You can read today's AWS here >>> BLS Jobs Numbers: +151K, Unemployment +4.1%

Today's Featured Research Reports

Walmart’s shares have outperformed the Zacks Retail - Supermarkets industry over the past year (+59.3% vs. +55.6%). The company is benefiting from its diverse business model that spans multiple segments, channels and formats. The company's strong omnichannel strategy has boosted traffic across physical stores and digital platforms.

Walmart’s emphasis on improving delivery services has been successful, contributing to steady grocery market share gains. Upsides like these, along with growth in the advertising business, fueled third-quarter fiscal 2025 results, wherein the top and bottom lines grew year over year, and e-commerce sales surged.

However, Walmart is experiencing adverse currency movements and margin pressures from shifts in product mix. While raising its fiscal 2025 guidance, the company’s implied fourth-quarter view for revenues and operating income reflects a slowdown from the reported third-quarter figures.

(You can read the full research report on Walmart here >>>)

Shares of HSBC have outperformed the Zacks Banks - Foreign industry over the past year (+68.4% vs. +25.6%). The company’s fourth-quarter results reflected lower expenses. A strong capital position, relatively high rates, global network and business simplification efforts will keep aiding its financials.

As part of its Asia pivot strategy, it is moving away from less profitable markets and announced the sale of businesses in Germany and South Africa. It has exited retail operations in the United States, Canada, France, New Zealand, Greece, Russia, Argentina and Armenia.

While efforts to strengthen its market share in the Asia region will support financials, they will likely lead to an increase in expenses. For 2025, the company expects operating expenses to increase 3%. The company’s subdued revenue performance in light of weaker loan demand amid a challenging macroeconomic backdrop is a woe.

(You can read the full research report on HSBC here >>>)

Adobe’s shares have underperformed the Zacks Computer - Software industry over the past year (-19.4% vs. +1.4%). The company is facing intensifying competition from the likes of Microsoft-backed OpenAI, which is concerning. Lack of monetization is a headwind for Adobe amid challenging macroeconomic conditions.

Nevertheless, Adobe’s prospects are expected to benefit from strong demand for its creative products. Its Creative Cloud, Document Cloud and Adobe Experience Cloud products have been driving top-line growth. New AI releases, including Express, Acrobat AI Assistant, Firefly Services, DX premium tiers and GenStudio for Performance Marketing, have expanded the portfolio of products.

These are expected to drive Adobe’s market share and monetization in the near future. Adobe’s deepening generative artificial intelligence (GenAI) focus and innovative GenAI-powered portfolio are key catalysts.

(You can read the full research report on Adobe here >>>)

Shares of Friedman Industries have underperformed the Zacks Metal Products - Procurement and Fabrication industry over the past year (-12.4% vs. +24.7%). This microcap company with market capitalization of $110.07 million is facing fiscal third-quarter sales declined 18.9% year over year. The tubular segment remains weak and high inventory levels pose risks amid steel price volatility. Rising costs and debt burdens could pressure profitability despite hedging strategies and operational efficiencies.

Nevertheless, Friedman Industries' sales backlog grew 11% year over year in third-quarter fiscal 2025, signaling stronger demand and potential revenue recovery. Post-election stability has driven increased order activity, with fiscal fourth-quarter sales and margin expansion expected as hot-rolled coil (HRC) prices rebound.

Debt fell 9% to $32.5 million, with $99.2 million in available credit supporting operations. Industry tailwinds include a projected increase in HRC prices and rising infrastructure and manufacturing investments.

(You can read the full research report on Friedman Industries here >>>)

NetSol Technologies’ shares have underperformed the Zacks Computer - Software industry over the past year (-14.2% vs. +1.4%). This microcap company with market capitalization of $28.48 million have seen license fee revenues plummeted 97.6% year over year, and rising operating expenses ($7.41 million, +20.5%) pressured profitability. Net loss reached $1.15 million due to FX volatility, and revenue from key client Daimler fell 23%.

Trade risks, competitive pressures, and uncertain ROI on growth investments remain concerns. As such, the stock warrants a cautious stance. Nevertheless, NetSol is transitioning to a subscription-based model, enhancing revenue stability. In the second quarter of fiscal 2025, subscription and support revenues grew 27% year over year to $8.6 million (55.6% of total revenues).

Strong customer relationships with BMW and Kubota drive long-term revenue visibility, while North American expansion diversifies income streams. AI-driven product enhancements improve efficiency, and a solid cash position ($21.3 million) supports growth.

(You can read the full research report on NetSol Technologies here >>>)

Other noteworthy reports we are featuring today include Sony Group Corp. (SONY), Constellation Energy Corp. (CEG) and Aflac Inc. (AFL).

Mark Vickery
Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>