Today's Must Read
Strategic Initiatives Aid Anthem (ANTM), Rising Costs Hurt
Delivery Business Aids Uber (UBER) Amid Mobility Weakness
Wednesday, September 30, 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 Microsoft (MSFT), Anthem (ANTM) and Uber Technologies (UBER). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Microsoft shares have outperformed the S&P 500 in the year to date period (+31.4% vs. +3.6%). The Zacks analyst believes that Microsoft is benefiting from momentum in Azure, impressive Teams user growth triggered by coronavirus crisis led work-from-home, online learning wave and tele healthcare trends.
Solid uptake of Surface devices and Xbox Game Pass aided growth. The company is also gaining from growing user base of its different applications including Office 365 commercial, and Dynamics. Moreover, Azure’s expanding customer base is a key catalyst. Furthermore, it is well poised to expand the total addressable market through acquisitions of GitHub and ZeniMax Media.
However, macroeconomic weakness in job market and lower spend on advertising due to coronavirus pandemic are likely to weigh on LinkedIn and Search revenues. Also, delays in consulting business are anticipated to limit growth.
Shares of Anthem have gained +9% over the past year against the Zacks Medical Insurance industry’s rise of +27.6%. The Zacks analyst believes that Anthem’s prudent acquisitions and collaborations complement its inorganic growth profile and help it boost Medicare Advantage growth.
The company is the fourth largest individual Medicare Advantage plan in the nation. Its increasing top line, driven by premium rate increase and higher membership, paves the way for long-term growth. Its solid guidance also impresses. It witnessed a rise of usage of its Telehealth and virtual care services.
Furthermore, its strong capital and cash position has enabled it to undertake shareholder-friendly moves via dividend payouts and share repurchases. However, it has been suffering from high benefit costs and selling, general and administrative expense, which continues to weigh on its bottom line.
Uber shares have gained +26.9% over the past six months against the Zacks Internet-Services industry’s rise of +36.8%. The Zacks analyst believes that Uber’s Delivery business is witnessing continued surge at a time when coronavirus is restricting people to their homes.
Gross bookings and revenues at the segment rose significantly in the first half of 2020. The company’s efforts to expand its Delivery business are laudable. In this regard, the deal to buy Postmates is a major positive. Additionally, we are optimistic about the court ruling granting Uber an 18-month license extension to continue operations in London, one of its key international markets.
However, significant downturn in the Mobility business is concerning. Although ride volumes have improved from April lows, it is way below year-ago levels. Notably, Uber now expects to reap profits in 2021, instead of 2020.
Other noteworthy reports we are featuring today include Advanced Micro Devices (AMD), Automatic Data Processing (ADP) and Ecolab (ECL).
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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>>>