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The Zacks Analyst Blog Highlights: GameStop and Adobe
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For Immediate Release
Chicago, IL – March 24, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: GameStop Corp. (GME - Free Report) and Adobe Inc. (ADBE - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
GameStop (GME - Free Report) Misses on Q4, Stock Trades Up Anyway
The wavering mixed bullishness lost steam during regular trading today, on a day without much new by way of economic metrics or big finance news items. The Dow closed down more than 300 points, or -0.94%, while the S&P 500 closed 0.76% down from Monday, and the Nasdaq dropped nearly 150 points, -1.12%.
The biggest skid, however, came from the small-cap Russell 2000, which dropped a massive 3.77% on the day. That said, the Russell remains up 12% year to date and +99% from year-ago lows.
In a joint meeting before a House finance committee on Capitol Hill, Fed Chair Jay Powell and his predecessor Janet Yellen, now Treasury Secretary, gave testimony on the current U.S. economy and what to look for going forward. Powell told House reps that the U.S. economic recovery is ahead of schedule, but there is still a ways to go until we are back to pre-pandemic levels. Also discussed was an extension of a Covid-outbreak-led lockdown in Germany, now for an extra month in Europe's largest economy.
Much-ballyhooed GameStop released its long-awaited fiscal Q4 earnings numbers, with results applauded Tuesday after-hours, +8%. However, the company missed estimates on both top and bottom lines for the second time in the last three quarters. Earnings of $1.34 per share was light of the $1.46 in the Zacks consensus, with quarterly sales of $2.12 billion softer than the $2.24 billion expected. Changes in the front office continue as well, with incoming COO Jenna Owens announced in the release.
Global commerce sales were up big and Digital Sales overall grew 175%, but a 6.5% read on overall comps is somewhat soft for a company trading up more than 950% year to date. Of course, GameStop is not your every-day specialty retailer; it was ground-zero for historic retail investment short-squeezes in the hedge fund market by use of social media site Reddit and mobile trading platform Robinhood. (Robinhood announced Tuesday afternoon it has confidentially filed for an IPO on the Nasdaq.)
So it would appear that, near the cusp of calendar Q2, normal valuation rules continue to be non-applicable for GameStop. (Much as in the world of physics, the company continues to defy gravity.) The largest video game retailer, headquartered in the Dallas-Fort Worth suburbs, has come down a bit since the big pop on its Q4 release, now up just 2.5%. Over the past five trading sessions, GME shares are down 16.5%.
Zacks Rank #3 (Hold)-rated Adobe reported beats on both top and bottom lines to its fiscal Q1 earnings report after Tuesday's closing bell. Earnings of $3.14 per share easily surpassed the $2.79 per share expected and the $2.27 posted in the year-ago quarter. Revenues of $3.91 billion rose 26% year over year and past the $3.77 billion in the Zacks consensus. Earnings per share for next quarter and full-fiscal year were also raised ahead of estimates, to $2.81 and $11.85 per share, respectively.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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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The Zacks Analyst Blog Highlights: GameStop and Adobe
For Immediate Release
Chicago, IL – March 24, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: GameStop Corp. (GME - Free Report) and Adobe Inc. (ADBE - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
GameStop (GME - Free Report) Misses on Q4, Stock Trades Up Anyway
The wavering mixed bullishness lost steam during regular trading today, on a day without much new by way of economic metrics or big finance news items. The Dow closed down more than 300 points, or -0.94%, while the S&P 500 closed 0.76% down from Monday, and the Nasdaq dropped nearly 150 points, -1.12%.
The biggest skid, however, came from the small-cap Russell 2000, which dropped a massive 3.77% on the day. That said, the Russell remains up 12% year to date and +99% from year-ago lows.
In a joint meeting before a House finance committee on Capitol Hill, Fed Chair Jay Powell and his predecessor Janet Yellen, now Treasury Secretary, gave testimony on the current U.S. economy and what to look for going forward. Powell told House reps that the U.S. economic recovery is ahead of schedule, but there is still a ways to go until we are back to pre-pandemic levels. Also discussed was an extension of a Covid-outbreak-led lockdown in Germany, now for an extra month in Europe's largest economy.
Much-ballyhooed GameStop released its long-awaited fiscal Q4 earnings numbers, with results applauded Tuesday after-hours, +8%. However, the company missed estimates on both top and bottom lines for the second time in the last three quarters. Earnings of $1.34 per share was light of the $1.46 in the Zacks consensus, with quarterly sales of $2.12 billion softer than the $2.24 billion expected. Changes in the front office continue as well, with incoming COO Jenna Owens announced in the release.
Global commerce sales were up big and Digital Sales overall grew 175%, but a 6.5% read on overall comps is somewhat soft for a company trading up more than 950% year to date. Of course, GameStop is not your every-day specialty retailer; it was ground-zero for historic retail investment short-squeezes in the hedge fund market by use of social media site Reddit and mobile trading platform Robinhood. (Robinhood announced Tuesday afternoon it has confidentially filed for an IPO on the Nasdaq.)
So it would appear that, near the cusp of calendar Q2, normal valuation rules continue to be non-applicable for GameStop. (Much as in the world of physics, the company continues to defy gravity.) The largest video game retailer, headquartered in the Dallas-Fort Worth suburbs, has come down a bit since the big pop on its Q4 release, now up just 2.5%. Over the past five trading sessions, GME shares are down 16.5%.
Zacks Rank #3 (Hold)-rated Adobe reported beats on both top and bottom lines to its fiscal Q1 earnings report after Tuesday's closing bell. Earnings of $3.14 per share easily surpassed the $2.79 per share expected and the $2.27 posted in the year-ago quarter. Revenues of $3.91 billion rose 26% year over year and past the $3.77 billion in the Zacks consensus. Earnings per share for next quarter and full-fiscal year were also raised ahead of estimates, to $2.81 and $11.85 per share, respectively.
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The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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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.