Friday, September 5, 2025

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 Corp. (MSFT), Amazon.com, Inc. (AMZN) and Philip Morris International Inc. (PM), as well as two micro-cap stocks Preformed Line Products Co. (PLPC) and Security Federal Corp. (SFDL). 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 >>>

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You can read today's AWS here >>> BLS Jobs for August: +22K, Unemployment +4.3%

Today's Featured Research Reports

Microsoft’s shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+21.2% vs. +16.1%). The company capitalizes on AI business momentum and Copilot adoption alongside accelerating Azure cloud infrastructure expansion. Recently, MSFT introduced its first proprietary AI models, MAI-Voice-1 and MAI-1-preview. 

Microsoft projects Azure growth of 37% for fiscal first-quarter 2026. Strong Office 365 Commercial demand has been propeling Productivity and Business Processes revenue growth. ARPU is increasing through E5 and M365 Copilot uptake across key segments. Strategic execution through expanding scale and enterprise customer growth is driving non-AI services. 

Xbox revenues are benefiting from strength across third-party and first-party content offerings. The Zacks analyst expect fiscal 2026 net sales to grow 12.9% from fiscal 2025. However, elevated operating expenses and Azure investments amid intensifying cloud competition remain headwinds.

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

Shares of Amazon.com have gained +36.7% over the past year against the Zacks Internet - Commerce industry’s gain of +42.8%. The company’s top-line is driven by steady momentum in Prime and AWS. Strengthening AWS services portfolio and its growing adoption rate is contributing well to AWS performance. 

Ultrafast delivery services and expanding content portfolio are beneficial. Strengthening relationship with third-party sellers is a positive. Robust advertising business is also contributing well. Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are other positives. Deepening focus on GenAI is a major plus. The Zacks analyst expect 2025 net sales to grow 10.6% from 2024. 

However, weak third-quarter operating income guidance of $15.5-20.5 billion and concerns about margin pressure from heavy AI investments totaling $100+ billion in capital expenditure plans are overhangs. Elevated operating expenses amid intensifying cloud competition remain headwinds.

(You can read the full research report on Amazon.com here >>>)

Philip Morris’ shares have gained +33.3% over the past year against the Zacks Tobacco industry’s gain of +39.6%. The company has been benefiting from strong pricing power and an expanding smoke-free portfolio. In the second quarter of 2025, Philip Morris' net revenues increased 7.1% year over year, driven by higher combustible tobacco pricing and increased smoke-free product volumes. 

Philip Morris has been making significant progress with its smoke-free transition, with products like IQOS and ZYN contributing to strong performance. Philip Morris has implemented significant cost-saving measures and strategic initiatives to achieve its long-term financial goals. 

For 2025, adjusted earnings per share (EPS) are likely to be $7.43-$7.56, indicating a 13-15% year-over-year increase. However, Philip Morris faces premium valuation, currency volatility pressures and stringent global tobacco regulations impacting traditional product demand.

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

Shares of Preformed Line Products have outperformed the Zacks Electronics - Miscellaneous Products industry over the past year (+69.6% vs. +2.7%). This microcap company with a market capitalization of $942.32 million offers compelling upside driven by robust Energy segment growth (69% of Q1'25 revenue), fueled by transmission investments and strong Americas demand. 

Communications sales rose 15%, led by fiber closure demand amid North American broadband buildouts. Operating leverage and disciplined cost control drove 20% net income growth and 150 bps margin expansion. The company maintains solid liquidity ($54.8 million cash, low debt) and invests in long-term capacity, including a recent South American telecom acquisition. 

However, risks include margin compression in PLP-USA from tariffs and input costs, persistent weakness in Special Industries, inventory buildup straining working capital, and FX-driven geographic profit variability. Structural exposure to commodity inflation and tariff policy adds further downside risk.

(You can read the full research report on Preformed Line Products here >>>)

Shares of Security Federal have gained +14.1% over the past year against the Zacks Banks - Southeast industry’s gain of +16.1%. This microcap company with a market capitalization of $95.74 million demonstrates resilient fundamentals, with sustained earnings momentum, rising net income and EPS on disciplined balance sheet management and revenue diversification. 

Net interest income advanced in the double digits on expanding loan yields and lower funding costs, while improved credit quality, with no provisions and declining NPAs, underscores conservative risk management. Substantial capital and book value growth enhance flexibility for dividends and expansion, supported by deposit inflows and reduced borrowings. Non-interest income diversification and geographic breadth add earnings stability. 

However, rising expenses, higher preferred dividends and sluggish loan growth may constrain profitability. Heavy reliance on securities, elevated tax/regulatory costs and macro risks in concentrated markets add caution.

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

Other noteworthy reports we are featuring today include Seagate Technology Holdings plc (STX), Ingersoll Rand Inc. (IR) and Insmed Inc. (INSM).

Mark Vickery
Senior Editor

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>>>