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Research Daily

Monday, June 24, 2024

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 Salesforce, Inc. (CRM), Accenture plc (ACN) and Equinix, Inc. (EQIX), as well as a micro-cap stock Seneca Foods Corporation (SENEA).  The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

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 Salesforce have struggled since the January-quarter release on February 28th, with the weakness getting magnified in the wake of the latest earnings report on May 29th. Worries about IT spending trends and the impact that will have Salesforce appear to be primary headwind here.

These worries notwithstanding, the company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line.

Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help it tap the growing opportunities in the space.

However, stiff competition and unfavorable currency fluctuations are concerns. Also, softening IT spending amid ongoing macroeconomic uncertainties could hurt its growth prospects.

(You can read the full research report on Salesforce here >>>)

Accenture shares have gained +3.9% over the past year against the Zacks Consulting Services industry’s gain of +8.6%. The company’s shares are attractive due to technological prowess, contribution from acquisitions, strong growth prospects and dividend payouts.

Accenture continues to witness strong demand for application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. These trends are boosting its managed services business across the world.  A disciplined acquisition strategy helps Accenture to channelize business in high-growth areas.

On the flip side, pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern. Accenture continues to acquire a large number of companies which adds to integration risk.

(You can read the full research report on Accenture here >>>)

Shares of Equinix have gained +0.7% over the past year against the Zacks REIT and Equity Trust - Retail industry’s gain of +3.5%. The company’s global data center portfolio is well-poised to benefit from the solid demand for interconnected data center infrastructure.

Enterprises and service providers’ continued efforts to integrate artificial intelligence (AI) into their strategies and offerings and advance their digital transformation agendas are likely to keep demand up in the near term. The company’s recurring revenue model assures steady revenues.

Strategic expansion to capitalize on favorable industry trends, backed by a healthy balance sheet, is encouraging. However, a competitive landscape from carrier-neutral data centers and a debt burden raise concerns. High interest rates add to its woes.

(You can read the full research report on Equinix here >>>)

Seneca Foods’ shares have outperformed the Zacks Food - Miscellaneous industry over the past year (+48.3% vs. -10.7%). This microcap company with market capitalization of $395.86 million showcased robust fiscal 2024 performance, increasing gross margin to 12.9% despite a drop in net sales. Its product suite mitigates risk and enhances stability.

Strategic market positioning in North America and international markets supports sustained growth. Effective cost management, operational efficiency and investments in technology bolster profitability. Seneca's earnings and EBITDA improvements reflect financial health, but declining sales and fluctuating gross margins indicate potential instability.

Dependence on seasonal workforce, rising costs, competitive pressures and regulatory compliance pose risks. High leverage and debt servicing remain concerns. Seneca is supported by its strong domestic sales, brand strength, sustainability commitment and strategic buyouts. Yet, adverse weather, seasonality and market volatility persist.

(You can read the full research report on Seneca Foods here >>>)

Other noteworthy reports we are featuring today include Costco Wholesale Corporation (COST), Marathon Petroleum Corporation (MPC) and Simon Property Group, Inc. (SPG).

Director of Research

Sheraz Mian

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>>>

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