Today's Must Read
Netflix (NFLX) Rides on Subscriber Growth, Original Content
NVIDIA (NVDA) Rides on Multiple AI projects and Partnerships
Tuesday, January 23, 2018
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 Mastercard (MA), Netflix (NFLX) and NVIDIA (NVDA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Mastercard’s shares have gained +51.7% over the past year, outperforming the Zacks Financial Transaction Services industry which has gained +41.8% over the same period. The Zacks analyst likes its solid market position, ongoing expansion and digital initiatives.
Significant opportunities have arisen from the secular shift toward electronic payments. The acquisitions of VocaLink and NuData Security complement the company’s efforts to participate in new payment flows and enhance its safety and security offerings.
The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 1.3% upward over the last 60 days. However, it continues to face increasing costs, a volatile forex environment and legal issues. Also, higher incentives and rewards will put pressure on the bottom line.
Shares of Netflix have vastly outperformed the Zacks Broadcasting industry, gaining +79.4% vs. +22.9% in the past one year. Netflix fourth-quarter results benefited from content strength that helped in expanding international subscriber base. The company’s efforts to attract viewers through investing in more regional programming resulted in better-than-expected net addition of subscribers.
The company remains confident of adding more subscribers as the trend of binge viewing is catching up fast. The Zacks analyst thinks continuing subscriber additions and expanding content portfolio are the key catalysts that will help Netflix to sustain growth going forward.
However, increasing market spends and higher investments on original/acquired content will continue to hurt profitability, at least in the near term. Rising competition is also a major concern.
Buy-rated NVIDIA’s shares have surged over the last year, gaining in excess of +121% versus the Zacks General Semiconductor industry’s +53.3% gain, thanks to the company’s positive record of earnings surprises in the recent quarters. The Zacks analyst thinks NVIDIA’s sustained efforts toward attaining a robust position in several emerging industries such as Artificial Intelligence (AI), deep learning and driverless cars industry have improved its growth prospects.
NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs remain the positives. The company’s focus on GRID platforms can increase GPU adoption in data centers, giving it an advantage against its competitors.
Other noteworthy reports we are featuring today include M&T Bank (MTB), Public Storage (PSA) and Valero Energy (VLO).
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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>>>