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Should You Retain Alliance Data (ADS) Stock in Your Portfolio?
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Alliance Data Systems Corporation has been in investors’ good books due to the improved credit sales performance, strategic investments and a robust capital position.
Earnings Surprise History
Alliance Data has a solid track record of beating earnings estimates in the last seven quarters.
Zacks Rank & Price Performance
Alliance Data currently carries a Zacks Rank #3 (Hold). Year to date, the stock has declined 17.2% compared with the industry’s decline of 10.8%.
Image Source: Zacks Investment Research
Return on Equity
ADS’ return on equity for the trailing 12 months is 43.4%, better than the industry average of 29.3%, expanding 940 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Style Score
Alliance Data is well-poised for progress as evident from its favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Business Tailwinds
The credit sales performance is expected to improve banking on the strong financial health of consumers and the recovery of in-store sales performance.
In 2022, Alliance Data will continue to strategically invest in the digital platform, product innovation, marketing efforts and technology monetization, with incremental investments of more than $125 million.
In 2022, Alliance Data projects to complete the transformation of the core processing system to Fiserv. The conversion will enable ADS to manage risks effectively and leverage new capabilities which, in turn, will boost revenues and operating efficiencies. The platform is likely to boost the efficient integration of digital technology while supporting data and analytics capabilities and improving operational efficiencies.
Alliance Data remains focused on acquiring several businesses, including Bread, and continues to evaluate potential transactions. Alliance Data continues to make strategic investments in technology, people, data management tools and digital capabilities to further improve its competitive position and drive future growth.
These investments are likely to boost the objective to grow sales through the origination of credit cards and other loans.
The acquisition of Bread in 2020 enhanced the growth prospects of verticals and increased the addressable market of small-and medium-sized businesses. The offerings of Bread are expected to expand the ability of ADS to leverage digital offerings to build strategic technology platform partnerships and more traditional brand partnership sales and loans.
Alliance Data has a strong balance sheet due to its solid cash position.
The Zacks Consensus Estimate for 2022 earnings has moved 3.1% north in the past 30 days. This should instill investors' confidence in the stock. The Zacks Consensus Estimate for Alliance Data’s 2023 earnings per share (EPS) is pegged at $12.70, indicating a year-over-year increase of 3.8%.
Cantaloupe’s earnings surpassed estimates in each of the last four quarters, the average beat being 108.3%. Year to date, Cantaloupe has declined 19%.
The Zacks Consensus Estimate for CTLP’s 2022 and 2023 EPS indicates a year-over-year increase of 50% and 121.4%, respectively.
International Money’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 16.37%. Year to date, International Money has increased 11.3%.
The Zacks Consensus Estimate for IMXI’s 2022 EPS indicates a year-over-year increase of 0.7%.
The bottom line of WEX surpassed earnings estimates in each of the last four quarters, the average being 9.96%. Year to date, WEX has increased 17%.
The Zacks Consensus Estimate for WEX’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days. The expected long-term earnings growth rate is pegged at 17.4%, higher than the industry average of 17%.
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Should You Retain Alliance Data (ADS) Stock in Your Portfolio?
Alliance Data Systems Corporation has been in investors’ good books due to the improved credit sales performance, strategic investments and a robust capital position.
Earnings Surprise History
Alliance Data has a solid track record of beating earnings estimates in the last seven quarters.
Zacks Rank & Price Performance
Alliance Data currently carries a Zacks Rank #3 (Hold). Year to date, the stock has declined 17.2% compared with the industry’s decline of 10.8%.
Image Source: Zacks Investment Research
Return on Equity
ADS’ return on equity for the trailing 12 months is 43.4%, better than the industry average of 29.3%, expanding 940 basis points year over year. This reflects efficiency in utilizing shareholders’ funds.
Style Score
Alliance Data is well-poised for progress as evident from its favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Business Tailwinds
The credit sales performance is expected to improve banking on the strong financial health of consumers and the recovery of in-store sales performance.
In 2022, Alliance Data will continue to strategically invest in the digital platform, product innovation, marketing efforts and technology monetization, with incremental investments of more than $125 million.
In 2022, Alliance Data projects to complete the transformation of the core processing system to Fiserv. The conversion will enable ADS to manage risks effectively and leverage new capabilities which, in turn, will boost revenues and operating efficiencies. The platform is likely to boost the efficient integration of digital technology while supporting data and analytics capabilities and improving operational efficiencies.
Alliance Data remains focused on acquiring several businesses, including Bread, and continues to evaluate potential transactions. Alliance Data continues to make strategic investments in technology, people, data management tools and digital capabilities to further improve its competitive position and drive future growth.
These investments are likely to boost the objective to grow sales through the origination of credit cards and other loans.
The acquisition of Bread in 2020 enhanced the growth prospects of verticals and increased the addressable market of small-and medium-sized businesses. The offerings of Bread are expected to expand the ability of ADS to leverage digital offerings to build strategic technology platform partnerships and more traditional brand partnership sales and loans.
Alliance Data has a strong balance sheet due to its solid cash position.
The Zacks Consensus Estimate for 2022 earnings has moved 3.1% north in the past 30 days. This should instill investors' confidence in the stock. The Zacks Consensus Estimate for Alliance Data’s 2023 earnings per share (EPS) is pegged at $12.70, indicating a year-over-year increase of 3.8%.
Stocks to Consider
Some better-ranked financial transaction service providers are Cantaloupe (CTLP - Free Report) , International Money Express (IMXI - Free Report) and WEX (WEX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cantaloupe’s earnings surpassed estimates in each of the last four quarters, the average beat being 108.3%. Year to date, Cantaloupe has declined 19%.
The Zacks Consensus Estimate for CTLP’s 2022 and 2023 EPS indicates a year-over-year increase of 50% and 121.4%, respectively.
International Money’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 16.37%. Year to date, International Money has increased 11.3%.
The Zacks Consensus Estimate for IMXI’s 2022 EPS indicates a year-over-year increase of 0.7%.
The bottom line of WEX surpassed earnings estimates in each of the last four quarters, the average being 9.96%. Year to date, WEX has increased 17%.
The Zacks Consensus Estimate for WEX’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days. The expected long-term earnings growth rate is pegged at 17.4%, higher than the industry average of 17%.