Today's Must Read
Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)
Solid Gaming Portfolio Aids Activision's (ATVI) Prospects
Wednesday, April 1, 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 Stryker (SYK), Shopify (SHOP) and Activision Blizzard (ATVI). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Stryker’s shares have underperformed the Zacks Medical Products industry over the past six months (-26.8% vs. -13). The Zacks analyst believes that Stryker continues to gain from its core MedSurg unit, which put up a strong show in the fourth quarter.
Additionally, strength in flagship Mako platform continues to favor the company. Moreover, solid performance by the neurotech product lines drove the core Neurotechnology & Spine unit in the quarter under review. Robust international growth also instills investor optimism in the stock.
Expansion in operating margin is a positive while a strong outlook for 2020 is indicative of bright prospects. Stryker exited fourth-quarter 2019 on a strong note, wherein both earnings and revenues beat their respective consensus marks. However, pricing pressure continues to plague Stryker. Stiff competition in the MedTech space remains a headwind.
Shares of Shopify have gained 98.5% over the past year against the Zacks Internet Services industry’s fall of 18.6%. The Zacks analyst believes that Shopify is expected to benefit from a diversified expanding merchant base. Robust performance of Shopify Shipping, Shopify Payments and Shopify Capital is a key catalyst.
The company continues to launch merchant-friendly applications to cater to the demands of a dynamic retail environment, consequently bolstering merchant base. Moreover, initiatives aimed at international expansion and innovative expansion of services remains noteworthy. The acquisition of 6 River Systems is anticipated to boost growth of the company’s fulfillment network.
However, increasing investments on product development, infrastructure and platform are likely to limit margin expansion in the near term. Further, lack of significant presence in the Asia-Pacific market remains a headwind.
Activision Blizzard’s shares have lost -1% over the past three months against the Zacks Toys, Games and Hobbies industry’s fall of -7.1%. The Zacks analyst believes that Activision’s top line is expected to benefit from an expanding user base of Call of Duty: Modern Warfare, Hearthstone, World of Warcraft and King’s Candy Crush Saga, particularly owing to the coronavirus-led lockdowns globally.
The availability of the much-awaited World of Warcraft Classic and Call of Duty: Warzone is expected to expand the company’s user base in the near term. Further, growing popularity of Call of Duty Mobile and e-sports initiatives is expected to drive the top line in the near term. Activision's enviable IP and strength in popular gaming franchises bode well for the long haul. However, lack of major releases, particularly from the Blizzard division, is an overhang.
Other noteworthy reports we are featuring today include Danaher (DHR), TC Energy (TRP) and Dollar General (DG).
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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>>>