Today's Must Read
Strength in NIKE's (NKE) Digital Business Aids Top Line
Zoom (ZM) Rides on Work-From-Home & Online Learning Wave
Friday, February 26, 2021
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), Nike, Inc. (NKE) and Zoom Video Communications, Inc. (ZM). 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 >>>
Facebook shares have gained +34.2% over the past year against the Zacks Internet – Services industry’s gain of +49.6%. The Zacks analyst believes that Facebook is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp and Messenger is a major growth driver.
Facebook expects year-over-year growth rates in total revenues to remain stable or modestly accelerate on a sequential basis in the first and second quarters of 2021. However, the company expects changes made by Apple in its iOS 14 platform to limit the latter’s ability to track user-activity trends. The company also believes that Apple has become its biggest competitor. Moreover, increasing regulatory headwinds in the EU and other countries is a concern.
Nike shares have outperformed the Zacks Shoes and Retail Apparel industry over the past year (+53.1% vs. +50.5%). The company received a boost following the solid second-quarter fiscal 2021 results, with both top and earnings improving year over year. The Zacks analyst believes that results gained from strength in the digital business across all regions. Digital sales for the Nike brand improved double digits across EMEA, Greater China and APLA along with triple-digit growth in North America.
Moreover, it started the holiday season on a strong note with record online sales during the Black Friday week. Management expects sequential growth during the fiscal third quarter. However, it is witnessing lower revenues at the wholesale business and Nike-owned stores. Higher restructuring costs and continued investments in digital capabilities also acted as headwinds.
Zoom Video shares have outperformed the Zacks Internet - Software industry in the year to date period (+8.2% vs. +2.6%). The Zacks analyst believes that demand for the company’s cloud-native video-first platform is expected to remain solid owing to the work-from-home and online-learning wave. Easy to deploy, use, manage and scalability makes Zoom’s software popular among its customers. Expanding clientele is expected to drive top-line growth momentum in the near term.
Moreover, the company’s expanding international presence is a key catalyst. Its efforts to eliminate the security and privacy loopholes, as well as new hardware and Zoom From Home solution’s launch, are expected to help in expanding clientele. The company’s strong free cash-flow generating ability is noteworthy.
Other noteworthy reports we are featuring today include Micron Technology, Inc. (MU), The Travelers Companies, Inc. (TRV) and McKesson Corporation (MCK).
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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>>>