Today's Must Read
Subscriber Addition, Content Strength Drives Netflix (NFLX)
Operating Prowess Aids Waste Management (WM) Amid High Debt
Thursday, September 2, 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 Microsoft Corporation (MSFT), Netflix, Inc. (NFLX), and Waste Management, Inc. (WM). 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 >>>
Shares of Microsoft have outperformed the S&P 500 in the year-to-date period (+36.3% vs. +23%), a trend that should remain in palce on the back of the ongoing enterprise refresh cycle, new subscription model, Azure and strength in Teams and Gaming segments.
The company is also witnessing growth in user base of its different applications including Microsoft 365 suite and Dynamics. Microsoft, however, expects Surface revenues to decline in the fiscal first quarter due to supply chain disruptions. Increased spending on Azure enhancements amid intensifying competition in the cloud space is likely to weigh on its margins.
Netflix shares have gained +14.3% over the last six months against the Zacks Broadcast Radio and Television industry’s gain of +0.3%. The Zacks analyst believes that a growing subscriber base, content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos have been the key growth drivers for Netflix.
The launch of low-priced mobile plans is likely to expand its subscriber base in Asia Pacific. A solid content slate and resumption of production is expected to aid the company’s growth in the third quarter of 2021. Rising competition from other major players in the streaming space remains a major headwind. Netflix’s leveraged balance sheet and higher streaming obligation are major concerns.
Shares of Waste Management have gained +10.7% in the past three months against the Zacks Waste Removal Services industry’s loss of -2.2%. The Zacks analyst believes that strength across traditional solid waste business have been boosting the company’s revenues and growth.
Successful cost-reduction initiatives have also helped it achieve better margins. The company operates in a highly competitive and consolidated industry and this limits its top line growth. High debt casts a doubt on company's future expansion and worsen its risk profile too.
Other noteworthy reports we are featuring today include Norfolk Southern Corporation (NSC), Align Technology, Inc. (ALGN) and Eni S.p.A. (E).
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>>>