We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NVIDIA, Splunk, Disney, Netflix and Comcast highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 10, 2020 – Zacks Equity Research Shares of NVIDIA Corporation (NVDA - Free Report) as the Bull of the Day, Splunk Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Walt Disney Company (DIS - Free Report) , Netflix, Inc. (NFLX - Free Report) and Comcast Corporation (CMCSA - Free Report) .
Nvidia slipped 1.5% during regular trading Monday, after the stock hit new highs last week. The fall was part of the Nasdaq’s broader dip, after the tech-heavy index jumped to new records in morning trading. Despite the small decline, NVDA appears solid heading into the release of its third quarter fiscal 2021 financial results on November 18.
Way Beyond Gaming…
Nvidia rose to prominence as a GPU firm that mostly served the booming global video gaming space. This market alone is massive, with reports projecting that it will climb over 9% to reach $159 billion in 2020 and surpass $200 Billion by 2023. NVDA is set to benefit from this continued growth, but Wall Street in recent years has gravitated toward its expansion beyond the gaming world.
The company, under the leadership of founder and CEO Jensen Huang, has grown into a company that the supports data centers, cloud computing, artificial intelligence, and other tech areas of the future. Last quarter, Nvidia’s revenue soared 50%, with its data center unit up 167% to account for 45% of total sales. “Growth in GeForce gaming accelerated as gamers increasingly immerse themselves in realistic virtual worlds created by NVIDIA RTX ray tracing and AI,” Huang said in prepared remarks.
“Our new Ampere GPU architecture is sprinting out of the blocks, with the world’s top cloud service providers and server makers moving quickly to offer NVIDIA accelerated computing.”
Nvidia has set itself up for greater success in a world dominated by big data, where giants like Microsoft and Amazon have transformed their companies through cloud leadership. The company has also expanded through acquisitions. This includes its April purchase of Mellanox Technologies for roughly $7 billion.
The deal was NVDA’s largest at the time. But the company made an even bigger splash when it announced in September that it would acquire Arm Limited from Softbank for $40 billion—mostly in stock.
Arm is one of the most important behind-the-scenes companies in the market. It designs and licenses the basic blueprints of chips that consume the least amount of energy, which are used in roughly 90% of the world's smartphones. However, the biggest chip deal in history, which Nvidia hopes will create a global chip titan for the AI age, faces a tough road ahead, as it must get through regulatory approval in the U.S., China, and the U.K.
Outlook
Even if the deal doesn’t go through, NVDA’s outlook appears solid. Zacks estimates call for the company’s adjusted Q3 earnings to climb over 44% to reach $2.57 a share, on 47% stronger revenue that would see it hit $4.42 billion.
Peeking further ahead, its Q4 sales are projected to climb 44%, with its adjusted EPS figure expected to jump 36%. Meanwhile, Nvidia’s FY21 revenue is projected to surge 45%, with FY22 expected to come in another 18% higher. At the same time, its adjusted earnings are expected to climb 58% and 21%, respectively.
The company has topped our bottom-line estimates by an average of 12% in the trailing four periods.
Bottom Line
Nvidia’s strong earnings revisions help it land a Zacks Rank #1 (Strong Buy) at the moment. The stock has soared 160% in the last year, against its industry’s 40% climb. This includes a 70% climb in the past six months. NVDA closed regular hours Monday at $545 a share, or roughly 7% off its recent records.
The stock’s valuation is a tad stretched, but investors have been willing to pay a premium for years. In the end, Nvidia appears to be worth considering as a longer-term bet on secular growth trends within tech.
Splunk stock has underperformed its industry over the last six months and SPLK is down about 10% in the past month. So let’s take a look at the data analytics software company that’s set to report its Q3 earnings results at the start of December.
What’s Splunk?
Splunk is a data analytics software firm that went public in 2012. The company boasts that it “turns data into doing with the Data-to-Everything Platform.” SPLK gets its name from the word spelunking and it explores big data instead of actual caves. The company aims to help firms “investigate, monitor, analyze, and act on data at any scale, from any source over any time period.”
SPLK has thrived in the big data age, with its sales up from $451 million in 2015 to $2.36 billion last year (fiscal 2020). That said, the company reported back to back adjusted losses, and its second quarter results came in below Zacks estimates.
Splunk’s Q2 revenue also dipped 5%. Luckily, it was not all bad for the firm. “Splunk’s rapid transformation to the cloud has enabled us to reach key milestones ahead of schedule. Cloud ARR growth accelerated to 89%, or $568 Million, far exceeding our expectations,” CFO Jason Child said in prepared remarks. “We also now have nearly 400 customers with ARR in excess of $1 million as more and more businesses embrace our cloud platform.”
Outlook
Moving on, Zacks estimates call for Splunk’s adjusted Q3 earnings to tumble 87% from $0.58 per share in the year-ago period to $0.10. Meanwhile, its third quarter revenue is projected to slip 2.3%. Similar trends are projected in the fourth quarter.
Overall, the company is projected to swing from adjusted earnings of +$1.88 to a loss of -$0.34 in fiscal 2021, with its revenue expected to dip roughly 2%. The company is projected to bounce back in a big way in FY22. Nonetheless, SPLK’s longer-term earnings outlook has trended heavily in the wrong direction.
Bottom Line
The nearby chart shows that Splunk’s adjusted FY22 EPS estimate fell from $0.82 a share 90 days ago to its current $0.52, with a big drop coming in the last 30 days. This negative earnings revision activity helps Splunk earn a Zacks Rank #5 (Strong Sell) right now SPLK also holds “F” grades for both Value and Growth in our Style Scores system to help it land an overall “F” VGM score.
Splunk might be a stock that is best to avoid for now, especially with it trending in the opposite direction from its industry, down 10% in the last month vs. the Computer Software Services Market’s 4% climb.
Additional content:
What's in the Cards for Disney's (DIS - Free Report) Earnings This Week?
The Walt Disney is set to report fourth-quarter fiscal 2020 results on Nov 12.
The Zacks Consensus Estimate for loss has widened by a couple of cents to 62 cents per share over the past 30 days. Disney had reported earnings of $1.07 per share in the year-ago quarter.
The consensus mark for revenues is pegged at $14.34 billion, suggesting a decline of 25% from the year-ago quarter’s reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed the same in one, the average surprise being 27.6%.
Let’s see how things are shaping up for this announcement.
Coronavirus Dents Disney’s Q4 Growth
Disney’s top line for fiscal fourth quarter is expected to have been negatively impacted by the outbreak of the coronavirus pandemic.
The Zacks Rank #4 (Sell) company is expected to have suffered losses from the closure of its theme parks and cruise ships, and postponement of movie releases.
Disney kept the California and Florida parks closed in the to-be-reported quarter, while the Shanghai and Hong Kong parks operated on reduced capacity due to strict social-distancing norms. This is expected to have hurt occupancy, thereby negatively impacting top-line growth.
The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $2.26 billion, significantly down from $6.67 billion reported in the year-ago quarter.
Disney+’s Solid Content Portfolio Aid User Growth
Solid content portfolio of Disney+ is expected to have helped the company gain users during lockdowns amid the pandemic-related physical distancing in the to-be-reported quarter.
Notably, as of Aug 3, Disney+’s subscriber base had surpassed 60.5 million, triggered by higher media consumption during lockdowns and on the following of pandemic-related physical-distancing norms despite stiff competition from Netflix and the entrance of Comcast’s Peacock.
Markedly, Disney+’s closest competitor Netflix added 2.2 million paid subscribers globally in its recently reported third-quarter 2020 results. Moreover, since its nationwide release on Jul 15, Comcast’s Peacock witnessed 22 million sign-ups. HBO Max also surpassed AT&T’s estimate and had 38 million subscribers at the end of third-quarter 2020.
The streaming service has been benefiting from Disney’s bundle offering that comprises ESPN and Hulu. Moreover, a solid content portfolio has been a game changer.
Additionally, apart from a compelling content portfolio, introduction of features like GroupWatch that connects friends and families to watch movies and shows from the entire Disney+ library, even when apart, has been a key catalyst.
The Zacks Consensus Estimate for DTC & International/Consumer Products revenues is currently pegged at $4.47 billion, indicating 30.5% growth from the figure reported in the year-ago quarter.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NVIDIA, Splunk, Disney, Netflix and Comcast highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – November 10, 2020 – Zacks Equity Research Shares of NVIDIA Corporation (NVDA - Free Report) as the Bull of the Day, Splunk Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Walt Disney Company (DIS - Free Report) , Netflix, Inc. (NFLX - Free Report) and Comcast Corporation (CMCSA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Nvidia slipped 1.5% during regular trading Monday, after the stock hit new highs last week. The fall was part of the Nasdaq’s broader dip, after the tech-heavy index jumped to new records in morning trading. Despite the small decline, NVDA appears solid heading into the release of its third quarter fiscal 2021 financial results on November 18.
Way Beyond Gaming…
Nvidia rose to prominence as a GPU firm that mostly served the booming global video gaming space. This market alone is massive, with reports projecting that it will climb over 9% to reach $159 billion in 2020 and surpass $200 Billion by 2023. NVDA is set to benefit from this continued growth, but Wall Street in recent years has gravitated toward its expansion beyond the gaming world.
The company, under the leadership of founder and CEO Jensen Huang, has grown into a company that the supports data centers, cloud computing, artificial intelligence, and other tech areas of the future. Last quarter, Nvidia’s revenue soared 50%, with its data center unit up 167% to account for 45% of total sales. “Growth in GeForce gaming accelerated as gamers increasingly immerse themselves in realistic virtual worlds created by NVIDIA RTX ray tracing and AI,” Huang said in prepared remarks.
“Our new Ampere GPU architecture is sprinting out of the blocks, with the world’s top cloud service providers and server makers moving quickly to offer NVIDIA accelerated computing.”
Nvidia has set itself up for greater success in a world dominated by big data, where giants like Microsoft and Amazon have transformed their companies through cloud leadership. The company has also expanded through acquisitions. This includes its April purchase of Mellanox Technologies for roughly $7 billion.
The deal was NVDA’s largest at the time. But the company made an even bigger splash when it announced in September that it would acquire Arm Limited from Softbank for $40 billion—mostly in stock.
Arm is one of the most important behind-the-scenes companies in the market. It designs and licenses the basic blueprints of chips that consume the least amount of energy, which are used in roughly 90% of the world's smartphones. However, the biggest chip deal in history, which Nvidia hopes will create a global chip titan for the AI age, faces a tough road ahead, as it must get through regulatory approval in the U.S., China, and the U.K.
Outlook
Even if the deal doesn’t go through, NVDA’s outlook appears solid. Zacks estimates call for the company’s adjusted Q3 earnings to climb over 44% to reach $2.57 a share, on 47% stronger revenue that would see it hit $4.42 billion.
Peeking further ahead, its Q4 sales are projected to climb 44%, with its adjusted EPS figure expected to jump 36%. Meanwhile, Nvidia’s FY21 revenue is projected to surge 45%, with FY22 expected to come in another 18% higher. At the same time, its adjusted earnings are expected to climb 58% and 21%, respectively.
The company has topped our bottom-line estimates by an average of 12% in the trailing four periods.
Bottom Line
Nvidia’s strong earnings revisions help it land a Zacks Rank #1 (Strong Buy) at the moment. The stock has soared 160% in the last year, against its industry’s 40% climb. This includes a 70% climb in the past six months. NVDA closed regular hours Monday at $545 a share, or roughly 7% off its recent records.
The stock’s valuation is a tad stretched, but investors have been willing to pay a premium for years. In the end, Nvidia appears to be worth considering as a longer-term bet on secular growth trends within tech.
Bear of the Day:
Splunk stock has underperformed its industry over the last six months and SPLK is down about 10% in the past month. So let’s take a look at the data analytics software company that’s set to report its Q3 earnings results at the start of December.
What’s Splunk?
Splunk is a data analytics software firm that went public in 2012. The company boasts that it “turns data into doing with the Data-to-Everything Platform.” SPLK gets its name from the word spelunking and it explores big data instead of actual caves. The company aims to help firms “investigate, monitor, analyze, and act on data at any scale, from any source over any time period.”
SPLK has thrived in the big data age, with its sales up from $451 million in 2015 to $2.36 billion last year (fiscal 2020). That said, the company reported back to back adjusted losses, and its second quarter results came in below Zacks estimates.
Splunk’s Q2 revenue also dipped 5%. Luckily, it was not all bad for the firm. “Splunk’s rapid transformation to the cloud has enabled us to reach key milestones ahead of schedule. Cloud ARR growth accelerated to 89%, or $568 Million, far exceeding our expectations,” CFO Jason Child said in prepared remarks. “We also now have nearly 400 customers with ARR in excess of $1 million as more and more businesses embrace our cloud platform.”
Outlook
Moving on, Zacks estimates call for Splunk’s adjusted Q3 earnings to tumble 87% from $0.58 per share in the year-ago period to $0.10. Meanwhile, its third quarter revenue is projected to slip 2.3%. Similar trends are projected in the fourth quarter.
Overall, the company is projected to swing from adjusted earnings of +$1.88 to a loss of -$0.34 in fiscal 2021, with its revenue expected to dip roughly 2%. The company is projected to bounce back in a big way in FY22. Nonetheless, SPLK’s longer-term earnings outlook has trended heavily in the wrong direction.
Bottom Line
The nearby chart shows that Splunk’s adjusted FY22 EPS estimate fell from $0.82 a share 90 days ago to its current $0.52, with a big drop coming in the last 30 days. This negative earnings revision activity helps Splunk earn a Zacks Rank #5 (Strong Sell) right now SPLK also holds “F” grades for both Value and Growth in our Style Scores system to help it land an overall “F” VGM score.
Splunk might be a stock that is best to avoid for now, especially with it trending in the opposite direction from its industry, down 10% in the last month vs. the Computer Software Services Market’s 4% climb.
Additional content:
What's in the Cards for Disney's (DIS - Free Report) Earnings This Week?
The Walt Disney is set to report fourth-quarter fiscal 2020 results on Nov 12.
The Zacks Consensus Estimate for loss has widened by a couple of cents to 62 cents per share over the past 30 days. Disney had reported earnings of $1.07 per share in the year-ago quarter.
The consensus mark for revenues is pegged at $14.34 billion, suggesting a decline of 25% from the year-ago quarter’s reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed the same in one, the average surprise being 27.6%.
Let’s see how things are shaping up for this announcement.
Coronavirus Dents Disney’s Q4 Growth
Disney’s top line for fiscal fourth quarter is expected to have been negatively impacted by the outbreak of the coronavirus pandemic.
The Zacks Rank #4 (Sell) company is expected to have suffered losses from the closure of its theme parks and cruise ships, and postponement of movie releases.
Disney kept the California and Florida parks closed in the to-be-reported quarter, while the Shanghai and Hong Kong parks operated on reduced capacity due to strict social-distancing norms. This is expected to have hurt occupancy, thereby negatively impacting top-line growth.
The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $2.26 billion, significantly down from $6.67 billion reported in the year-ago quarter.
Disney+’s Solid Content Portfolio Aid User Growth
Solid content portfolio of Disney+ is expected to have helped the company gain users during lockdowns amid the pandemic-related physical distancing in the to-be-reported quarter.
Notably, as of Aug 3, Disney+’s subscriber base had surpassed 60.5 million, triggered by higher media consumption during lockdowns and on the following of pandemic-related physical-distancing norms despite stiff competition from Netflix and the entrance of Comcast’s Peacock.
Markedly, Disney+’s closest competitor Netflix added 2.2 million paid subscribers globally in its recently reported third-quarter 2020 results. Moreover, since its nationwide release on Jul 15, Comcast’s Peacock witnessed 22 million sign-ups. HBO Max also surpassed AT&T’s estimate and had 38 million subscribers at the end of third-quarter 2020.
The streaming service has been benefiting from Disney’s bundle offering that comprises ESPN and Hulu. Moreover, a solid content portfolio has been a game changer.
Markedly, according to Sensor Tower, downloads of the Disney+ app spiked 68% from Sep 4 through Sep 6 from the prior-weekend levels, with the launch of Mulan. Moreover, consumer spending on Disney+ also spiked 193% over the same period.
Additionally, apart from a compelling content portfolio, introduction of features like GroupWatch that connects friends and families to watch movies and shows from the entire Disney+ library, even when apart, has been a key catalyst.
The Zacks Consensus Estimate for DTC & International/Consumer Products revenues is currently pegged at $4.47 billion, indicating 30.5% growth from the figure reported in the year-ago quarter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.