Monday, August 10, 2020
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 Facebook, Inc. (FB), Cisco Systems, Inc. (CSCO) and T-Mobile US, Inc. (TMUS). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Facebook shares have outperformed the Zacks Internet - Services industry year to date (+30.7% vs. +18.8%), with the momentum expected to continue on the back of strong user engagement as reflected in the company's blowout June-quarter results. The Zacks analyst points out that the company has benefitted from increased engagement with its products in the reported quarter as more people were compelled to stay at home due to the coronavirus outbreak.
However, Facebook expects user-base growth to be flat or slightly down in most of its regions in the third quarter of 2020, sequentially. The company expects ad-revenue growth on a year-over-year basis to be roughly 10%. Further, a number of companies have announced plans to freeze ad spending on Facebook due to its failure to eradicate hate speech and misinformation. This is expected to hurt top-line growth, at least in the near term.
Shares of Cisco have gained +9.5% over the past three months compared with the Zacks Computer - Networking industry’s increase of +9.6%. The Zacks analyst believes that Cisco is well poised to benefit from robust demand for identity and access, advanced threat as well as unified threat management security solutions fuelled by coronavirus crisis-induced high growth in Internet traffic. Moreover, solid uptake of Webex video conferencing and business productivity offerings on account of COVID-19 induced work-from-home demand environment is noteworthy.
However, weak demand for servers and HyperFlex solutions is a woe. Moreover, sluggishness in the commercial, service provider and enterprise end markets and coronavirus crisis-induced supply chain constraints are likely to put pressure on the top line.
Shares of T-Mobile US have gained +46.8% year to date against the Zacks Wireless National industry’s fall of -1.9%. The Zacks analyst is confident about the company’s ability to unlock massive synergies and build the world’s best 5G network. It has the country’s largest 5G network, covering more than 250 million people across 1.3 million square miles. It has a mid-band 5G service using 2.5 GHz spectrum live in eight major markets.
However, the company operates in a fiercely competitive and almost saturated U.S. telecom market that undermines its growth potential. Low-priced service plans for individual consumers as well as small business entities have not significantly improved its bottom-line numbers. In addition, several promotional activities to lure customers from rivals have eroded the profitability.
Other noteworthy reports we are featuring today include Canadian Natural Resources Limited (CNQ), Uber Technologies, Inc. (UBER) and CVS Health Corporation (CVS).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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.
Director of Research
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>>>