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LeMatire Vascular, 3D Systems, Tesla and Apple highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – April 27, 2021 – Zacks Equity Research Shares of LeMatire Vascular, Inc. (LMAT - Free Report) as the Bull of the Day, 3D Systems Corporation (DDD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla, Inc. (TSLA - Free Report) and Apple Inc. (AAPL - Free Report) .

Here is a synopsis of all four stocks:

Bull of the Day:

LeMatire Vascular is a Zacks  Rank #1 (Strong Buy) that has an F for the Value Style Score and a B for the Growth Style Score.  As the aggressive growth stock strategist here at Zacks, I always lean to the growth side of things and when I see a weak value score and strong growth score I know I am already on the right path.  Let's take a deep look at this stock in this Bull of the Day article.

Description

LeMaitre Vascular, makes medical devices and implants for the treatment of peripheral vascular disease worldwide. It offers angioscopes, a range of catheters, and several other devices for blood and vein treatments.  The company was formerly known as Vascutech, Inc. and changed its name to LeMaitre Vascular, Inc. in April 2001. LeMaitre Vascular, Inc. was incorporated in 1983 and is headquartered in Burlington, Massachusetts.

Earnings History

The first thing I do when I look at stock is look to see if the company is beating the number. This tells me right away where the market's expectations have been for the company and how management has been able to communicate to the market.  A stock that consistently beats is one that has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For LMAT, I see a good history of beating the Zacks Consensus Estimate.  There are three beats on the last four quarters and the one time that wasn't a beat was an earnings meet. 

The average positive earnings surprise over the last fours quarters works out to be 131%, which suggests that they are posting results that are more than double what is expected.  That isn't the case as there was one quarter than had a 440% positive earnings surprise so that skews the average.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher.  For LMAT, I see estimates moving higher across the board.

This quarter has moved from 27 cents to 28 cents.

Next quarter has seen a similar increase from 27 cents to 29 cents.

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is even better for those numbers.

I see 2021 moving from $1.19 to $1.27 over the last 60 days.

The 2022 number has moved from $1.34 to $1.44 over the same time horizon.

Positive movement in earnings estimates like that are the reason that this stock is a Zacks Rank #1 (Strong Buy).

Valuation

Good growth is hard to find these days, but LMAT has it.  I see 24% topline growth in the most recent quarter and analysts are calling for more of the same.  That growth means investors are paying up for shares of LMAT.  I see a 42x forward earnings multiple and that is well ahead of the 31x industry average.  The price to book at 6.4x is also ahead of the 4.1x industry average.

So why is the valuation so high for this name?  Well the industry average is showing a contraction in growth rates for 2021 whereas this name is seeing an expansion.  When something like that happens, portfolio managers are more likely to overweight the name that is seeing growth and that is keeping some pretty good support on the stock.

Bear of the Day:

3D Systems missed earnings back at the start of March and the stock has moved lower ever since.  The question becomes if this stock has bottomed out here in the low $20 range or is it primed for a rebound? Let's take a deeper look in this Bear of the Day article.

Description

3D Systems Corporation, through its subsidiaries, provides 3D printing and digital manufacturing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1986 and is headquartered in Rock Hill, South Carolina.

Earnings History

The first thing I do when I look at stock is look to see if the company is beating the number. This tells me right away where the market's expectations have been for the company and how management has been able to communicate to the market.  A stock that consistently beats is one that has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

In the case of DDD, I see two beats and two misses in the last year.  Both misses were two cents below the estimate and both translated into a -18% earnings surprise.  The beats were for 5 and 1 cent respectively, and the help smooth the average to a more palatable 11.5%.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower.  For DDD, I see estimates moving lower across the board.

This quarter has moved from 5 cents to 3 cents.

Next quarter has seen a similar decrease from 7 cents to 4 cents.

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is also negative for those numbers.

I see 2021 moving from $0.34 to $0.25 over the last 60 days.

The 2022 number has moved from $0.44 to $0.36 over the same time horizon.

Negative movement in earnings estimates like that are the reason that this stock is a Zacks Rank #5 (Strong Sell).

Valuation

I am partial to growth, so when I see this stock posting 5% topline growth in the more recent quarter I want to think that most of the bad news is baked into the stock. Next I see no topline growth expected for this quarter and I get a little worried. 

For the full year 2021, I see only 2.1% topline growth and that is really low.  Then I see an 88x forward PE and that is hard to stomach for such a low growth rate.  The price to book is much more reasonable at 6.4x compared to a 22x industry average.  Finally a price to sales multiple of 4.8x compared to a 5.5x industry average is good, but still a little high.

At the end of the day, I would want to see the growth prospects return for DDD before I take a deeper look at this stock again.

Additional content:

Tesla (TSLA - Free Report) Beats on Top Bottom Lines; Apple (AAPL - Free Report) to Invest $430B Domestically

Markets finished their first trading session of a new week mixed; in fact, reverting back to previous sentiment prior to the latest quest of rotating back into cyclicals out of high-growth tech. Ahead of Q1 Big Tech earnings this week — including Facebook, Apple, Amazon and Google of FAANG fame — the Nasdaq has set itself a fresh all-time high close Monday afternoon, +0.87% to 14,138.78.

The Dow was down 0.18%, while the S&P was the mirror opposite: +0.18%. The Russell 2000 gained the most: +1.15% on the day.

After the closing bell, Tesla started the festivities with impressive beats on both top and bottom lines for Q1: 93 cents per share on $10.39 billion in sales easily surmounted the 79 cents per share (and mere 25 cents reported in the year-ago quarter) and $9.92 billion expected, for earnings growth of 372% year over year. Vehicle delivery gross margins of 26.5% grew nearly a full percentage point year over year. The company has only missed once on its bottom line in the past seven quarters.

This gross margin figure may prove key in Tesla's future. Previously, 799K vehicle deliveries were expected from the company in 2021. Should a hotter-than-expected pace carry forth, especially in higher-growth regions like China (which has reported some consumer experience issues of late), we expect this guidance to increase.

Tesla shares are already trading at beyond-peak valuation, with a price-to-earnings ratio of 170x. Tesla shares are flat year-to-date, though +360% from a year ago. CEO Elon Musk usually relishes presenting his company's performance during quarters like this, and often can massage extra support from investors based on his longer-term plans.

During the regular trading session Monday, Apple announced a new direct-spending program of $430 billion over the next five years, including a new billion-dollar engineering campus breaking ground in North Carolina. As tech stocks with deep production ties to China and elsewhere in the Far East continue to receive political flak from not providing opportunities here at home, Apple's solution appears to be making new investments in its home country through 2026.

The company says it will have "10's of billions of dollars" for next-generation silicon development, 5G, etc. Apple will engage in direct spending programs with more than 9000 suppliers in the U.S. alone, providing 3000+ new jobs in machine learning, A.I. and software engineering. Shares of the world's largest gadget maker are flat on the news; fiscal Q2 earnings results are expected this Wednesday afternoon, after the closing bell.

Questions or comments about this article and/or its author? Click here>>

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3D Systems Corporation (DDD) - free report >>

LeMaitre Vascular, Inc. (LMAT) - free report >>