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Dick’s Sporting Goods is a popular, well-known retailer where customers can find a wide range of sporting goods products: athletic shoes; fitness apparel and accessories; and a broad selection of outdoor and athletic equipment for team sports, camping, fishing, tennis, golf, and water sports.
Q3 Earnings Recap
Back in November, DKS reported better-than-expected third quarter results, impressing Wall Street across the board.
Adjusted EPS hit $2.01 per share on revenue of $2.41 billion, both figures easily beating the Zacks Consensus Estimate.
Overall, Dick’s saw strength online and in its brick-and-mortar stores. Same-store sales increased 23.2% year-over-year, a record for the retailer and an improvement over the already strong 20.7% in the second quarter.
CEO Edward Stack explained on the company’s earnings call that “Our stores were the key to this unprecedented growth, and serve as the hub of our industry-leading omnichannel experience. Brick-and-mortar stores comps grew [by] double digits, and our stores fulfilled 70% of our online sales, which increased nearly 100% for the quarter."
Digital sales soared 95% as well, and online revenue made up 21% of Dick’s total business in the third quarter compared to 13% last year. Mobile is also expanding, and the retailer saw mobile sales penetration above 50%.
DKS Is Surging
Since March 23, shares of Dick’s have climbed over 230%. Estimates have been rising too, and DKS is a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, 11 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $3.97 per share to $5.83 per share. Earnings are expected to see double-digit growth for the current fiscal year, up 58%.
Like fellow sports and outdoor recreational retailers, DKS has seen a sales boom during the pandemic as people stuck at home looked to spend more and more time outside. The company benefited from social distancing as well, as outdoor activities allowed people to safely spend time with their loved ones.
Looking ahead, Dick’s Sporting Goods has plans to invest in technology that will make its shopping experience even better for customers, and the record revenue generated this year shows investors and Wall Street analysts that it has the ability to sustain business growth during periods of economic uncertainty.
If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep DKS on your shortlist.
Based in Seattle, WA, Alaska Air Group is an airline carrier that covers the western United States, Canada, and Mexico; it also offers passenger and cargo services to and within Alaska, as well as some Hawaii routes.
Q3 Earnings Recap
ALK posted another big loss for the third quarter.
Adjusted net loss came to $399 million, or a loss of $3.23 per share, lagging behind the consensus estimate of a loss of $3.01 per share.
Capacity remained significantly lower over the year-ago period, down 55.1%.
Total revenue fell 70.7% to $701 million.
While Alaska’s Q3 performance looks weak on paper, it’s important to note that each major metric is an improvement over Q2.
Management noted on the company’s earnings call that demand is gradually improving on a month-by-month basis as well.
Bottom Line
ALK is now a Zacks Rank #5 (Strong Sell).
Four analysts cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 33 cents to a loss of $10.24 per share; earnings are expected to experience a triple-digit decline for 2020.
Shares have fallen about 22% year-to-date, significantly lagging the S&P 500’s 15.7% rebound during the same time frame.
2021 will likely still be challenging for Alaska Airlines. The outlook for airline travel is very dependent on the efficacy of a coronavirus vaccine, and as we’ve learned from this year, nothing is for certain.
Additionally, the airline will continue to have grounded planes this winter, and there’s a good chance that it may never get back some of its business travel and the revenue that was generated.
ALK does, however, have a few things working in its favor. It boasts a very solid balance sheet, with $5.5 billion in liquidity, and once the company unblocks middle seats, it should be able to reach cash breakeven. Plus, ALK has announced many new service routes that appeal to travelers looking for “sun and snow” activities during the pandemic.
But until the travel market looks brighter, it may be best to stay on the sidelines
Additional content:
3 Machine Learning Stocks for a Profitable 2021 Portfolio
Machine Learning (“ML”) is being integrated into everything, starting from business needs to consumer needs in the Artificial Intelligence (AI)-driven world.
The growing proliferation of ML in cloud computing solutions, quantum computing systems, automation, robotics, leading-edge medical diagnostic systems, autonomous vehicles and smart consumer electronic appliances, to name a few, has created a unique niche for the technology.
Notably, the futuristic technology is being leveraged by companies across various sectors to make enterprise functions leaner and more efficient.
Effective algorithms, frameworks and techniques of ML, which solve complex problems quickly, are expected to continue bolstering its adoption rate in the near term as well as the long run.
Looking at this, technology behemoths such as Alphabet’s Google are undertaking strong efforts to achieve breakthroughs in the ML arena.
ML to Remain Promising in 2021 & Beyond
We note that the Coronavirus pandemic-induced automation in businesses has triggered the use of ML.
Moreover, the emerging megatrend in the IT industry namely hyperautomation, which states that almost everything in a business can be automated, is likely to gain popularity. This, in turn, is expected to accelerate the deployment rate of ML models in IT firms.
Additionally, boosting customer experience and personalization in the retail industry is likely to be the key rationales behind the adoption of ML in 2021.
Further, the growing proliferation of Internet of Things (IoT) devices, the increasing adoption of Machine Learning as a Service (MLaaS), the rising demand for faster computing power and the emergence of reinforcement learning are paving the way for an ML boom in 2021 and beyond.
Per the data provided by Grand View Research, the ML market is expected to hit $96.7 billion by 2025, witnessing a CAGR of 43.8% between 2019 and 2025.
Per a report from Mordor Intelligence, the global MLaaS market is expected to see a CAGR of 43% between 2020 and 2025.
3 ML Stocks for a Profitable 2021 Portfolio
Here we picked three companies, which are well-poised to capitalize on the ML prospects. Notably, each of the following stocks has outperformed the S&P 500 index on a year-to-date basis.
Baidu is one of the most advanced China-based AI companies. It also holds a number of patents in autonomous driving. The company’s Apollo technology is gaining strong traction in the self-driving car space.
Its other ML projects like virtual assistants and voice replication are making notable progress. The company’s ML algorithms, voice and image recognition software, and natural language processing are offering more personalized results to users.
Additionally, this Zacks Rank #1 (Strong Buy) company’s initiative to integrate ML with its ongoing innovation in augmented reality remains a major positive. Further, Baidu’s home robot— Little Fish, based on advanced ML capabilities —is noteworthy.
Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 3% to $10 over the past 60 days.
Alphabet’s division Google remains one of the notable tech giants on the heels of its strengthening ML solutions portfolio.
The company’s cloud computing arm, Google Cloud, is continuously gaining solid momentum with the support of its robust ML solutions. Its Document AI solution, which is backed by ML, helps in analyzing documents efficiently. Further, its advanced and reliable cloud infrastructure, which supports the deployment of ML models and smooth functioning of ML workflows, is a major positive.
Apart from cloud computing, the company has been exploring ways to infuse ML techniques in the process of drug discovery. Recently, it demonstrated a virtual screening method, based on graph convolutional networks, which is expected to be a breakthrough in the pharma industry.
Further, Alphabet, which currently carries a Zacks Rank #2 (Buy), has been a frontrunner in the autonomous driving space on the back of its Waymo vehicles, which are highly powered by the ML technology.
Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 1.2% to $62.30 over the past 60 days.
Tencent Holdings is integrating ML and AI expertise, including data protection and anti-fraud identity authentication capabilities, in streaming, security software and other services. This is enabling the company, currently carrying a Zacks Rank #2, to expand clientele across finance, media, education and e-commerce verticals.
Additionally, Tencent’s open-sourced project on distributed ML platform, Angel, based on a parameter server framework, holds promise.
Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 4.8% to $2.39 over the past 60 days.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
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.
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Dick's Sporting Goods, Alaska Air, Google, Baidu and Tencent highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 31, 2020 – Zacks Equity Research Shares of Dick’s Sporting Goods Inc. (DKS - Free Report) as the Bull of the Day, Alaska Air Group Inc. (ALK - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet Inc. (GOOGL - Free Report) , Baidu, Inc. (BIDU - Free Report) and Tencent Holdings Limited (TCEHY - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Dick’s Sporting Goods is a popular, well-known retailer where customers can find a wide range of sporting goods products: athletic shoes; fitness apparel and accessories; and a broad selection of outdoor and athletic equipment for team sports, camping, fishing, tennis, golf, and water sports.
Q3 Earnings Recap
Back in November, DKS reported better-than-expected third quarter results, impressing Wall Street across the board.
Adjusted EPS hit $2.01 per share on revenue of $2.41 billion, both figures easily beating the Zacks Consensus Estimate.
Overall, Dick’s saw strength online and in its brick-and-mortar stores. Same-store sales increased 23.2% year-over-year, a record for the retailer and an improvement over the already strong 20.7% in the second quarter.
CEO Edward Stack explained on the company’s earnings call that “Our stores were the key to this unprecedented growth, and serve as the hub of our industry-leading omnichannel experience. Brick-and-mortar stores comps grew [by] double digits, and our stores fulfilled 70% of our online sales, which increased nearly 100% for the quarter."
Digital sales soared 95% as well, and online revenue made up 21% of Dick’s total business in the third quarter compared to 13% last year. Mobile is also expanding, and the retailer saw mobile sales penetration above 50%.
DKS Is Surging
Since March 23, shares of Dick’s have climbed over 230%. Estimates have been rising too, and DKS is a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, 11 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $3.97 per share to $5.83 per share. Earnings are expected to see double-digit growth for the current fiscal year, up 58%.
Like fellow sports and outdoor recreational retailers, DKS has seen a sales boom during the pandemic as people stuck at home looked to spend more and more time outside. The company benefited from social distancing as well, as outdoor activities allowed people to safely spend time with their loved ones.
Looking ahead, Dick’s Sporting Goods has plans to invest in technology that will make its shopping experience even better for customers, and the record revenue generated this year shows investors and Wall Street analysts that it has the ability to sustain business growth during periods of economic uncertainty.
If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep DKS on your shortlist.
Bear of the Day:
Based in Seattle, WA, Alaska Air Group is an airline carrier that covers the western United States, Canada, and Mexico; it also offers passenger and cargo services to and within Alaska, as well as some Hawaii routes.
Q3 Earnings Recap
ALK posted another big loss for the third quarter.
Adjusted net loss came to $399 million, or a loss of $3.23 per share, lagging behind the consensus estimate of a loss of $3.01 per share.
Capacity remained significantly lower over the year-ago period, down 55.1%.
Total revenue fell 70.7% to $701 million.
While Alaska’s Q3 performance looks weak on paper, it’s important to note that each major metric is an improvement over Q2.
Management noted on the company’s earnings call that demand is gradually improving on a month-by-month basis as well.
Bottom Line
ALK is now a Zacks Rank #5 (Strong Sell).
Four analysts cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 33 cents to a loss of $10.24 per share; earnings are expected to experience a triple-digit decline for 2020.
Shares have fallen about 22% year-to-date, significantly lagging the S&P 500’s 15.7% rebound during the same time frame.
2021 will likely still be challenging for Alaska Airlines. The outlook for airline travel is very dependent on the efficacy of a coronavirus vaccine, and as we’ve learned from this year, nothing is for certain.
Additionally, the airline will continue to have grounded planes this winter, and there’s a good chance that it may never get back some of its business travel and the revenue that was generated.
ALK does, however, have a few things working in its favor. It boasts a very solid balance sheet, with $5.5 billion in liquidity, and once the company unblocks middle seats, it should be able to reach cash breakeven. Plus, ALK has announced many new service routes that appeal to travelers looking for “sun and snow” activities during the pandemic.
But until the travel market looks brighter, it may be best to stay on the sidelines
Additional content:
3 Machine Learning Stocks for a Profitable 2021 Portfolio
Machine Learning (“ML”) is being integrated into everything, starting from business needs to consumer needs in the Artificial Intelligence (AI)-driven world.
The growing proliferation of ML in cloud computing solutions, quantum computing systems, automation, robotics, leading-edge medical diagnostic systems, autonomous vehicles and smart consumer electronic appliances, to name a few, has created a unique niche for the technology.
Notably, the futuristic technology is being leveraged by companies across various sectors to make enterprise functions leaner and more efficient.
Effective algorithms, frameworks and techniques of ML, which solve complex problems quickly, are expected to continue bolstering its adoption rate in the near term as well as the long run.
Looking at this, technology behemoths such as Alphabet’s Google are undertaking strong efforts to achieve breakthroughs in the ML arena.
ML to Remain Promising in 2021 & Beyond
We note that the Coronavirus pandemic-induced automation in businesses has triggered the use of ML.
Moreover, the emerging megatrend in the IT industry namely hyperautomation, which states that almost everything in a business can be automated, is likely to gain popularity. This, in turn, is expected to accelerate the deployment rate of ML models in IT firms.
Additionally, boosting customer experience and personalization in the retail industry is likely to be the key rationales behind the adoption of ML in 2021.
Further, the growing proliferation of Internet of Things (IoT) devices, the increasing adoption of Machine Learning as a Service (MLaaS), the rising demand for faster computing power and the emergence of reinforcement learning are paving the way for an ML boom in 2021 and beyond.
Per the data provided by Grand View Research, the ML market is expected to hit $96.7 billion by 2025, witnessing a CAGR of 43.8% between 2019 and 2025.
Per a report from Mordor Intelligence, the global MLaaS market is expected to see a CAGR of 43% between 2020 and 2025.
3 ML Stocks for a Profitable 2021 Portfolio
Here we picked three companies, which are well-poised to capitalize on the ML prospects. Notably, each of the following stocks has outperformed the S&P 500 index on a year-to-date basis.
Baidu is one of the most advanced China-based AI companies. It also holds a number of patents in autonomous driving. The company’s Apollo technology is gaining strong traction in the self-driving car space.
Its other ML projects like virtual assistants and voice replication are making notable progress. The company’s ML algorithms, voice and image recognition software, and natural language processing are offering more personalized results to users.
Additionally, this Zacks Rank #1 (Strong Buy) company’s initiative to integrate ML with its ongoing innovation in augmented reality remains a major positive. Further, Baidu’s home robot— Little Fish, based on advanced ML capabilities —is noteworthy.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 3% to $10 over the past 60 days.
Alphabet’s division Google remains one of the notable tech giants on the heels of its strengthening ML solutions portfolio.
The company’s cloud computing arm, Google Cloud, is continuously gaining solid momentum with the support of its robust ML solutions. Its Document AI solution, which is backed by ML, helps in analyzing documents efficiently. Further, its advanced and reliable cloud infrastructure, which supports the deployment of ML models and smooth functioning of ML workflows, is a major positive.
Apart from cloud computing, the company has been exploring ways to infuse ML techniques in the process of drug discovery. Recently, it demonstrated a virtual screening method, based on graph convolutional networks, which is expected to be a breakthrough in the pharma industry.
Further, Alphabet, which currently carries a Zacks Rank #2 (Buy), has been a frontrunner in the autonomous driving space on the back of its Waymo vehicles, which are highly powered by the ML technology.
Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 1.2% to $62.30 over the past 60 days.
Tencent Holdings is integrating ML and AI expertise, including data protection and anti-fraud identity authentication capabilities, in streaming, security software and other services. This is enabling the company, currently carrying a Zacks Rank #2, to expand clientele across finance, media, education and e-commerce verticals.
Additionally, Tencent’s open-sourced project on distributed ML platform, Angel, based on a parameter server framework, holds promise.
Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 4.8% to $2.39 over the past 60 days.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
Start Your Access to the New Zacks Top 10 Stocks>>
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Zacks Investment Research
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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.