For Immediate Release
Chicago, IL – June 14, 2021 – Zacks Equity Research Shares of Tyler Technologies, Inc. (
TYL Quick Quote TYL - Free Report) as the Bull of the Day, Autohome Inc. ( ATHM Quick Quote ATHM - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Lowe's Companies, Inc. ( LOW Quick Quote LOW - Free Report) , LKQ Corporation ( LKQ Quick Quote LKQ - Free Report) and CNH Industrial N.V. ( CNHI Quick Quote CNHI - Free Report) .
Here is a synopsis of all five stocks:
Tyler Technologies was a pandemic winner as public agencies pushed community business online. This Zacks Rank #1 (Strong Buy) just closed on its largest acquisition ever, which will push those earnings even higher in 2021.
Tyler Technologies provides integrated software and technology services to the public sector. It has more than 27,000 installations across more than 11,000 sites, with clients in all 50 states, Canada, the Caribbean, Australia and other international locations.
Tyler Updates 2021 Guidance
Tyler acquired NIC Inc. on Apr 21, 2021. On June 7, it updated its full year guidance, including the results of NIC from the date of the acquisition.
Revenue is now expected in the range of $1.51 billion to $1.54 billion.
That's a gain of 36.6% over last year where revenue came in at $1.12 billion.
Analysts are bullish on 2022 as well, with revenue expected to rise another 20.5% to $1.84 billion.
Earnings are expected to be in the range of $6.65 and $6.77.
"Our guidance reflects the strong year-to-date performance and improving market activity for Tyler, including NIC," said Lynn Moore, Tyler's president and chief executive officer.
"As we noted previously, the NIC acquisition is expected to be significantly accretive to non-GAAP earnings per share and EBITDA."
"As we continue to work together with the NIC leadership team to identify and prioritize opportunities, we are emboldened by the potential to accelerate long-term growth in both of our businesses and expand our platform for connected communities."
"With the addition of NIC's highly complementary, industry-leading digital government solutions and payment services to Tyler's broad portfolio of essential public sector software solutions and extensive client base, the combined company is well equipped to address the tremendous demand at the federal, state, and local levels for innovative platform solutions," Moore added.
Analysts Raise 2021 and 2022 Estimates
The guidance was above analyst consensus so the analysts have moved to raise their estimates.
2 estimates were revised in the last week, pushing the Zacks Consensus Estimate up to $6.69 from $5.71. That's earnings growth of 21.2% as the company made $5.52 last year.
This is within the company's guidance range of $6.65 to $6.77.
2 estimates were also revised higher for 2022 at the same time, pushing up 2022's Zacks Consensus Estimate to $7.82 from $6.27.
That's another 16.8% growth.
The Acquisitions Continue
On June 3, Tyler announced it was acquiring VendEngine, a privately-held cloud-based software provider focused on financial technology for the corrections market for $84 million in cash.
VendEngine operates in 230 counties in 32 states in the corrections market.
The company provides essential tools and services for incarcerated people and their families such as trust accounting and digital messaging services. Key services include free inbound emails and texts, onsite video visitation, medical requests, access to education, certificates and legal research resources as well as trust management and grievance management for incarcerated people.
The deal is expected to close in the third quarter.
VendEngine will remain headquartered in Nashville.
Record Revenue in the First Quarter
On Apr 28, Tyler Technologies reported its first quarter results and beat the Zacks Consensus by $0.12. Earnings were $1.43 versus the consensus of $1.31.
Revenue rose 6.6% to an all-time quarterly record of $294.8 million from $276.5 million a year ago. Subscription revenue jumped 25.4%.
"We're pleased to see signs of growing activity in our public sector markets, and expect that the $350 billion of direct federal fiscal relief for state and local government under the American Rescue Plan Act will have a positive impact on government technology spending," said Lynn Moore, Tyler's CEO.
"Bookings in the first quarter were solid at approximately $247 million, but were down 22.8% against a challenging comparison with the first quarter of 2020, which included several large contracts, including two SaaS contracts with the North Carolina Administrative Office of the Courts that totaled approximately $38 million," he said.
Shares Cool in 2021
Tyler Technologies shares have been on a tear the last 2 years, gaining 95.4% compared to the S&P 500 ETF at just 52%.
In 2021, shares have cooled, but are still up 18.1% year-to-date.
They're not cheap, with a forward P/E of 63.4 and a P/S ratio of 15.
But if you're interested in the investing opportunities as government and other public agencies go digital, Tyler is one to keep on your short list.
Autohome is benefiting from the consumer rush to buy and research cars online in China. However, this Zacks #5 (Strong Sell) has had its full-year earnings estimates cut in the last month.
Autohome operates a website for auto consumers in China with over 40 million daily active users. It provides original content, a comprehensive auto library and extensive auto listing information to automobile consumers, covering the entire car purchase and ownership cycle.
The company has a dealer subscription and advertising service which allows dealers to market their inventory and services through Autohome's platform. Autohome offers sales leads, data analysis, and marketing services to assist automakers and dealers with improving their efficiency and facilitating transactions.
Autohome operates "Autohome Mall" its full-service online transaction platform, to facilitate transactions for automakers and dealers.
It also provides auto financing, auto insurance, used car transactions and aftermarket services through its websites and mobile applications.
A First Quarter Miss
On May 27, Autohome reported its first quarter results and missed on the Zacks Consensus by a penny.
Earnings were $0.92 versus the Zacks Consensus of $0.93.
Revenue rose 19.1% year-over-year to $281.1 million as Online Marketplace and Other Revenues rose 74% to $82.3 million.
Data Products revenue jumped 64.4% over last year's quarter.
"During the quarter, we deepened our cooperation with new energy vehicle ("NEV") automakers in order to capture more growth opportunities. We also upgraded our main App with a more streamlined interface and cleaner functionality, further enhancing our user experience and with younger demographics in mind," said Mr. Quan Long, CEO and Chairman of the Board.
Why Is Autohome a Zacks Strong Sell?
The Zacks Rank is based on changes to analyst earnings estimates.
2 estimates were lowered on Autohome for 2021 and 2022 in the last 30 days, and none were raised.
The 2021 Zacks Consensus fell to $4.79 from $5.16 during that time. That's earnings growth of just 3.5% over 2020 when the company made $4.63.
The 2022 Zacks Consensus Estimate has also fallen in the last month, as 2 estimates were also cut for next year.
It has dipped to $5.40 from $5.90.
A Bargain Stock?
Shares have cooled this year, falling 30.5% year-to-date and 25% in the last month.
They now trade with a forward P/E of just 14.9.
With solid earnings, the company has a PEG ratio of just 0.9. A PEG under 1.0 usually indicates a company has both growth and value, a rare combination.
Additional content: 3 Stocks with High Zacks Ranks AND Top Style Scores
The Zacks Rank is one of the best stock rating systems out there, but at any given time there are hundreds of names with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy).
You can't buy them all.
That's where the Zacks Style Scores come in. These indicators help to narrow down that long list of stocks to increase your odds of success. They're split into Value, Growth and Momentum scores, depending on what kind of investor you are.
But if you want everything in one place, then there's the VGM, which combines all three styles into one score.
That's the focus of the
screen. Top VGM Buys
In addition to the Zacks Rank and VGM, the screen also looks for stocks in the top 50% of the Zacks Industry Rank as well as several other criteria.
Below are three names that passed this rigorous test.
There's more than enough demand for lumber, power tools and grills out there to support two home improvement giants. We knew Lowe's was going to release a strong first-quarter report in mid-May, because its biggest rival Home Depot (HD) unleashed one of the more impressive reports of the season just a day earlier. There's certainly enough room in this town for both of these behemoths.
The companies are capitalizing on an unprecedented one-two punch. They're benefitting from a healthy home construction market brought on by the most dovish Fed in history. And at the same time, they're getting a boost from an historic focus on the home brought on by social distancing. As a result, the Building Products – retail space is in the top 31% of the Zacks Industry Rank.
Lowe's may be the second biggest home improvement retailer out there, but it still operates nearly 2000 stores across the U.S. and Canada. Shares are up more than 47% over the past 12 months and about 19% so far this year. And its ability to beat the Zacks Consensus Estimate is second to none. It has topped expectations for eight straight quarters now.
Most recently, LOW reported fiscal first quarter earnings per share of $3.21, which surged 81% from the previous year and easily eclipsed our expectations by more than 24%. Net sales of $24.4 billion jumped more than 24% year over year and was better than the Zacks Consensus Estimate at $23.7 billion.
Furthermore, consolidated comparable sales rose 25.9%, while U.S. comps increased 24.4%.
The company enjoyed solid growth across its merchandise segments and geographies. But we can't discount its improved omni-channel capabilities, which have been nothing short of essential during the pandemic. Sales at Lowes.com soared 36.5% in the quarter, which represents 9% sales penetration and a two-year-comp of 146%.
Over the past 60 days, the Zacks Consensus Estimate for this year (ending January 2022) is up 11.3% to $10.76. Expectations for next fiscal year (ending January 2023) have advanced by a more modest 5.7% to $11.47, but that's still 6.6% better than the previous year.
So despite the pandemic being a thing of the past next year, analysts still expect profit growth for LOW.
If people re-focused on the home during this pandemic, then it only makes sense that they would also put a new focus on their vehicles. Autos are major investments too, especially if you're one of those RVers who take home on the road with you.
As a result, the automotive – replacement parts space is in the top 37% of the Zacks Industry Rank. And one of this area's biggest names is LKQ Corp. The company is a leading provider of replacement parts, components and systems used to repair and maintain vehicles. It's three reportable segments are Europe (47.2% of revenues in 2020), North America (39.8%) and Specialty (13%).
Shares of LKQ are up more than 75% over the past 12 months, including over 40% so far in 2021. It has beaten the Zacks Consensus Estimate for nine straight quarters now and amassed an average surprise of more than 97% over the past four.
The first quarter included adjusted earnings per share of 94 cents, which was 65% better than the previous year and more than 49% atop the Zacks Consensus Estimate. Revenues of nearly $3.2 billion were up 5.7% from last year and eclipsed our expectations of around $2.95 billion.
LKQ is all about strategic buyouts, which it has done very successfully over the years. Most recently, the company acquired Green Bean Battery LLC, which specializes in hybrid batteries. Financial terms have not been released yet, but the company stated that "battery reconditioning represents a natural extension of our current powertrain remanufacturing operations". Other recent buyouts include Elite Electronics and Greenlight Automotive.
LKQ now expects adjusted earnings per share of $3 to $3.20 for 2021, which is up from the previous forecast of $2.65 to $2.85. Raised outlooks are still rare as we emerge from the pandemic, so analysts really appreciated the news.
The Zacks Consensus Estimate for this year is now at $3.10, which marks an 11.9% improvement over the past 60 days. Expectations for next year are up to $3.33, which has improved 8.5% over that time while also suggesting year-over-year improvement of 7.4%.
Vehicles are pretty hot across the pond now too with the Automotive-Foreign space in the top 40% of the Zacks Industry Rank. A big player out that way is London-based CNH Industrial, which makes vehicles for agricultural and industrial purposes.
The company really runs the gamut in those areas by producing tractors, trucks, buses, and powertrain solutions for off-road, on-road and marine vehicles. It's four operating segments are Agricultural Equipment (41.7% of net industrial sales in 2020), Commercial & Specialty Vehicles (36%), Powertrain (14%) and Construction Equipment (8.3%).
Shares of CNHI soared nearly 140% over the past 12 months, including a gain of about 39% this year alone. It has put together four straight quarters of positive surprises that have amassed an average surprise of 176% in that time.
The most recent beat was 113%, as earnings per share of 32 cents easily trounced the Zacks Consensus Estimate of 15 cents in its first quarter. The result compared to a loss of 6 cents in the previous year. Revenue of $7.47 billion jumped nearly 37% year over year and, more impressively, beat our expectations by a full 10.2%.
Net sales for industrial activities came to $7.04 billion, which was up 41% on higher volumes thanks to strong industry demand. Most importantly though, CNHI now expects net sales for industrial activities to rise 14% to 18% in 2021 amid a strong backlog.
Meanwhile, CNHI is in the middle of a five-year business plan called Transform 2 Win, which is aimed at operational efficiency through targeted restructuring efforts in order to boost profits and streamline the business.
The Zacks Consensus Estimate for this year is now $1.13, which has jumped 45% over the past 60 days. Likewise, next year's expectation of $1.36 has gained 40% in that time and suggests year-over-year improvement of more than 20%.
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