Today's Must Read
Subscriber Gains, Wireless Initiatives Benefit Charter (CHTR)
Rising Top-line Aid HCA Healthcare (HCA), High Costs Hurt
Thursday, June 20, 2019
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 Adobe (ADBE), Charter Communications (CHTR) and HCA Healthcare (HCA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Adobe’s shares have gained +17% over the past year, underperforming the Zacks Software industry which has increased +27.4% over the same period. Adobe reported strong fiscal second-quarter results. The Zacks analyst thinks increasing demand for its creative products are driving top-line growth.
Also, the company’s Adobe Document Cloud and Adobe Experience Cloud products, along with growing subscription for cloud application have aided results. It has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing.
Adobe’s market position, compelling product lines, continued innovation, solid adoption of Creative Cloud and Adobe marketing cloud are major positives. However, lower end-market demand and exposure to Europe remain overhangs. Additionally, high acquisition expenses do not bode well for its margin expansion.
Shares of Charter Communications have outperformed the Zacks Cable TV industry year to date (+39.5% vs. +28.5%).The Zacks analyst thinks the company’s residential and commercial Internet and voice customer growth continues to drive its top line. Increase in Internet speed at no extra cost is aiding subscriber growth.
Additionally, Charter is looking to attract video customers by providing a new OTT video service. Notably, the company launched Spectrum TV Essentials in Charter’s footprint for Spectrum Internet users who do not avail Spectrum video services. However, commercial revenues continue to suffer due to migration of customers to Spectrum pricing and packaging from Legacy TWC and Legacy Bright House.
Moreover, Charter continues to lose video subscribers primarily due to cord-cutting and intense competition from streaming service providers such as Netflix, HBO and Amazon.
HCA Healthcare’s shares have outperformed the Zacks Hospital industry in the past year, gaining +20.9% vs. +6.3%. Moreover, it has witnessed its 2019 and 2020 earnings estimates move north over the past 30 days.
The Zacks analyst thinks its top line has been growing over the last several quarters on the back of higher admissions, same facility emergency room growth and surgical growth, etc. Multiple acquisitions have helped the company gain a strong foothold in the industry, fueling its inorganic growth.
A strong balance sheet and free cash flow are other positives for the company. A bullish 2019 guidance should instill investor’s confidence in the stock. However, high operating expenses persistently weigh on its margins.
The company is expected to witness a rise in costs due to its constant growth-related investments. High leverage is another concern for the company.
Other noteworthy reports we are featuring today include Becton, Dickinson (BDX), Micron (MU) and Shopify (SHOP).
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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>>>