Today's Must Read
Alphabet (GOOGL) Rides on Diversification; Legal Troubles Ail
High Speed Internet Subscriber Gain Benefits Comcast (CMCSA)
Friday, October 25, 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 Microsoft (MSFT), Alphabet (GOOGL) and Comcast (CMCSA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Microsoft’s shares have outperformed the S&P 500 year to date (37.8% vs. 10.5%). The Zacks analyst believes that robust execution and better-than-expected demand from customers for hybrid cloud offerings drove the quarterly results.
Moreover, strong Commercial business positively impacted the top and bottom lines. Microsoft is benefiting from a growing user base for its different applications like Office 365 commercial, Dynamics, Outlook mobile and Teams.
Further, acquisitions like PlayFab and GitHub expand Microsoft’s TAM and penetration. Also, Microsoft’s collaboration with AT&T bodes well. The company is consistently integrating cloud capabilities of Azure into its gaming segment which is yet another positive. However, competition is stiff and the company’s dominant position in the PC market continues to be challenged.
Shares of Alphabet have lost 1.4% in the past six months against the Zacks Internet Services industry’s decline of 15.1%. The Zacks analyst believes that Alphabet will continue to be driven by improving search & advertising revenues, hardware and AI.
Its strong focus on bolstering presence in the cloud market on the back of expanding data centers and robust cloud offerings continues to aid growth. The company’s initiatives toward elimination of bad ads and introducing useful major search updates are tailwinds.
Google’s robust mobile search is also a positive. Its strong focus on innovation of its AI techniques and the home automation space is aiding business growth. However, the company’s growing litigation issues, growing competition and increased spending on YouTube might hurt profitability.
Comcast’s shares have gained 0.4% over the past three months against the Zacks Cable Television industry’s rise of 0.3%. The Zacks analyst believes that Comcast’s third-quarter 2019 results were driven by Cable’s solid performance.
The segment benefited from an expanding residential high-speed Internet customer base and business services user base. The company’s results also reflected the growing popularity of Xfinity products. Moreover, expansion in the wireless user base, and the security and automation services customer base drove results. Further, Theme Parks revenues grew significantly in the reported quarter.
However, weakness in Broadcast television and Filmed Entertainment segments negatively impacted NBCUniversal revenues. Moreover, Comcast continued to lose video subscribers due to cord-cutting. Although debt level improved slightly in the reported quarter, the balance sheet is significantly leveraged.
Other noteworthy reports we are featuring today include SAP (SAP), BlackRock (BLK) and Northrop Grumman (NOC).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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>>>