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MarineMax and Atlassian highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – February 3, 2022 – Zacks Equity Research Shares MarineMax (HZO - Free Report) as the Bull of the Day and Atlassian (TEAM - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Meta , Spotify (SPOT - Free Report) and TMUS (TMUS - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

MarineMax is a Zacks Rank #1 (Strong Buy) that is the nation's largest recreational boat and yacht retailer. The company sells new and used recreational boats, including pleasure boats, boats, and sport cruisers; mega-yachts, sport yachts, and other yachts; fishing boats; motor and convertible yachts; pontoon boats; fishing boats; ski boats; and jet boats.

MarineMax offers premium brands like Sea Ray, Meridian, Hatteras, Boston Whaler, Azimut Yachts, Nautique and more.

The stock fell apart in the January sell off. However, a recent earnings report has brought investors back into the surf.

More About HZO

The company was founded in 1998 and is headquartered in Clearwater, FL. MarineMax employs about over 2,600 people and sells its through offsite locations and print catalogues. The company has 79 retail locations, typically by water, that are scattered throughout the U.S.

The company is valued at $1 billion and offers no dividend. HZO has Zacks Style Scores of “A” in Value and Growth, but “D” in Momentum. The Forward PE is under 6, which makes the stock attractive to value investors.

Failed Breakout

Back in December the stock was on verge of breaking out after a strong earnings report in late October. The stock rallied from the $48 level all the way to $60. Investors were hoping that a break there would help take it all the way back to the May highs when it hit $70.

But the January bears had different ideas. The market was sold aggressively and HZO fell to levels not seen since early 2021.

Earnings Beat

The stock struggled to rally off the January lows until earnings came along last week. MarineMax reported a Q1 beat of 43%, seeing $1.59 v the $1.13 expected. Revenues came in at $472.7M v the $448M expected. The company also raised FY22 guidance to $7.60-8.00 v the $7.43 expected.  Same-store sales were up 9% year over year, while margins dropped a tad quarter over quarter.

On the call, management cited accretive acquisitions, competitive advantage and consumer demand as reasons for the strong quarter. They added that they remain confident that their growth strategy will continue to enhance long-term shareholder value.

MarineMax, Inc. price-eps-surprise | MarineMax, Inc. Quote

Estimates Looking Good

The strong earnings helped analysts take numbers higher for the year, but it looks like shorter-term estimates are falling. There have been some supply chain issues and analysts might be factoring that in. But looking over the next 12-24 months, the numbers look solid.

For the current year, estimates have gone from $7.43 to $7.88 over the last 7 days, a hike of 6%. For next year, we also see a 6% jump in estimates for that same time frame.

After earnings, Raymond James reiterated their Outperform rating and lifted their price target to $70.  The firm cited a strong start to 2022, supply chain constraints easing, improving margins as reasoning. They added MarineMax's ability to gain market share in a healthy boat market as a basis for their Outperform rating.

The Technical Take

Like most stocks of late, HZO has broken a lot of technical support levels. After failing to break that $60 level, the bulls were chased out and there was no support at the 200-day MA at $52.

It then dropped to $40, where the stock found support. After the earnings beat, the stock popped almost 15%, moving from $42 to the $48 area. Since then, the stock has chopped around the $47 level.

Investors could enter at current levels and use those recent lows as a stop. If the stock breaks the 21-day at 49.75, some might look to add to the stock. The next resistance point will be $52, where the 200-day resides.

In Summary

MarineMax is doing fairly well despite the supply chain fears that are surrounding many industries. Demand is strong and the company is gaining market share.  

Investors might look to build positions, while the market tries to stabilize. While the stock might be choppy at current levels, look for a green light over $50.

Bear of the Day:

Atlassian is a Zacks Rank #5 (Strong Sell) that is a global leader in the enterprise collaboration and workflow software space. The company designs, develops, licenses, and maintains various software products for teams to plan, track, collaborate and manage work or projects.

The stock was one of the best performers during the pandemic, but it has seen aggressive selling since Q4 of last year. Investors are now wondering what to do with the stock in a market that is pursuing value over growth.

Earnings were out last week and Atlassian had a great quarter. But looking forward, investors will have to decide if the valuation is fair.

About the Company

Atlassian is headquartered in Sydney, Australia and employs over 7,000 people. The company was founded in 2002 and IPO’d in late 2015.

Atlassian’s is valued at $44.5 billion and has a Forward PE of 204. The company holds a Zacks Style Score of “B” in Growth, but “F” in Momentum and in Value. That valuation is really something of concern as investors have sold growth stocks hard over the last few months.

While earnings continue to exceed expectations, the valuation issue will likely hold the stock down.  

Q2 Earnings

In late January, TEAM reported a 32% EPS beat and beat on revenues. This was the second straight beat and almost doubled the beat they saw from the previous quarter.

Atlassian guided Q3 lower, seeing $0.29-31 v the $0.39 expected. However, they did guide revenues higher.

Investors applauded the quarter, shooting the stock up 10% after hours. Unfortunately, this excitement was not long lived and the stock went into the red the next day.

While investors did jump back in this week, estimates have flatlined. This is something most investors do not want to see in a growth company with a high valuation.

Atlassian Corporation PLC price-eps-surprise | Atlassian Corporation PLC Quote

Estimates

The estimates are pretty much flat to trending lower into next year. For the current quarter, we have seen a drop from $0.39 to $0.38 over the last 30 days. For next year, we see a drop from $2.09 to $2.03 over that same time frame.

While the magnitude is not large on the estimated movements, it shows that perhaps growth could be stalling for a bit.

While investors are taking caution, analysts are dropping price targets for the stock:

Oppenheimer reiterated TEAM with Outperform and a price target of $430, down from $500.

Canaccord Genuity reiterated TEAM with Buy and price target of $375, lowered from $500

BMP Capital reiterated TEAM with Market Perform and a price target $382, down from $515.

Technical Take

The stock was up almost 150% at one-point last year. So you can’t blame investors for taking profits. Down almost 20% in 2022, the question is where the next move is headed.

The earnings gap higher was positive, but the selling into the gap was negative. A market bounce helped TEAM higher, but the 200-day has seen resistance.

Fairly important for the bulls to get this stock back above that 200-day and then test the $345 level which is the 50-day.

If the bears take out those recent lows, we could see valuation correct is a serious way.

In Summary

TEAM has been a great stock, but is the run over?

Investors might want to wait until both the fundamental and technical stories look better before they jump in.

Additional content:

Meta , Spotify (SPOT - Free Report) Down Big on Q4 Earnings; TMUS Beats

Another solid up-day in regular-session markets have given way to deep sell-offs in specific names that have disappointed investors on quarterly earnings reports in the after-hours period. First the good news: the Dow was +0.63% on the day, now within 4% of its all-time trading highs reached the first week of January; the S&P 500, now 5% from its highs, gained +0.94% on the day; the Nasdaq was up +0.50% (still -11% off its November all-time highs); and the small-cap Russell 2000 took it on the chin today, -1.03%.

Now for the bad news, starting with Meta Platforms, in its first reporting quarter since changing the company name from Facebook: a miss on the Q4 bottom line — $3.67 per share versus $3.78 expected — joined a beat on the top: $33.67 billion, above the $33.04 billion. But a bigger reason the stock is down a whopping -23% in after-hours trading is the weak revenue guidance for Q1 to $27-29 billion from $30.78 billion expected.

Further, the companies Daily Active Users (DAU) both missed expectations and declined overall, to 1.93 billion, slipping by 1 million in North America and 3 million in the Rest of World, with Europe and Asia-Pacific unable to grow back the difference. Its revenue forecast amounts to 3-11% growth; by way of comparison, Meta’s Q3 revenue growth was a much-more robust +35%. Meta’s Q4 report is causing negative reverberations among social media stocks elsewhere this afternoon, as well.

Spotify is another company struggling currently; while the company came out ahead on earnings results in its Q4 report, lower subscriber growth guidance is down from expectations — without even mentioning the Joe Rogan controversy this week, which has seen an exodus of major recording artists pulling their music from the streaming platform. SPOT shares are -16% in late trading, though not yet low enough to be given a serious look to value-oriented portfolios.

Meanwhile, T-Mobile has boasted its best growth year ever, capped with a Q4 report today that put up earnings of 34 cents per share which more than doubled the 16 cents expected. Revenues of $20.79 billion was a bit lower than the $21.13 billion analysts were looking for, but the company having added 1.2 million post-paid accounts in the quarter shows it continues to take share from competitors. Shares are up +8.8% on the earnings release, taking a bite out of the -24% T-Mobile has experienced in the past six months.

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