Today's Must Read
Solid Security & Cloud Portfolio Aids Cisco's (CSCO) Growth
Robust Content Aids Netflix (NFLX) Amid Stiff Competition
Tuesday, March 17, 2020
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 Oracle (ORCL), Cisco Systems (CSCO) and Netflix (NFLX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Oracle’s shares have underperformed the Zacks Computer Software industry over the past six months (-18.7% vs. -9.4%). The Zacks analyst believes that strong demand for the latest autonomous database supported by ML is anticipated to drive the top line and provide the company a competitive edge against Amazon Web Services (AWS) in the Database-as-a-Service market.
Oracle's fiscal third-quarter performance benefited from strong adoption of cloud-based solutions, comprising NetSuite ERP, Fusion ERP and Fusion HCM among others. Further, momentum witnessed in cloud services is a key upside.
Going ahead, the company is expected to reap benefits from rising adoption of SaaS. However, stiff competition in the cloud market from dominant players is expected to put pressure on profitability. Further, lower hardware volumes are likely to hurt the top line.
Shares of Cisco have lost 37% over the past year against the S&P 500’s fall of 16.6%. The Zacks analyst believes that Cisco is benefiting from solid security business. Increasing demand for collaborative solutions, which includes WebEx Teams, post the coronavirus outbreak is positive.
Moreover, a strong uptake of Catalyst 9000 family of switches and Nexus 9K solutions is a key catalyst. Integration with Microsoft Azure, Office 365 and Amazon Web Services is expected to fortify footprint in the cloud space. Despite a grim third-quarter fiscal 2020 outlook, the company’s differentiated end-to-end approach across the network, cloud and endpoints is a major driver for the rest of fiscal 2020.
Lower customer spending, China-related weakness and a growing global economic uncertainty due to the unabated spread of coronavirus are major headwinds.
Netflix’s shares have lost 6.9% over the past three months against the Zacks Broadcast Radio and Television industry’s fall of 23.6%. The Zacks analyst believes that the launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expected to expand its subscriber base in the Asia Pacific.
Netflix is expected to benefit from an expanding content portfolio despite increasing competition from the likes of HBO, Amazon prime video, Disney+ and Apple TV+. Expanding bundle offerings through partnerships with Telefonica, KDDI, AT&T, Comcast, DISH, Verizon, Charter, Altice, T-Mobile and Sky are a key catalyst.
However, management expects net additions in the paid subscriber base to decline in first-quarter 2020. Moreover, high streaming content obligation and increased spending are expected to hurt free cash flow generation.
Other noteworthy reports we are featuring today include GlaxoSmithKline (GSK), Fidelity National Information Services (FIS) and Crown Castle International (CCI).
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>>>