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SilverBow Resources and FrontDoor have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – May 27, 2022 – Zacks Equity Research shares SilverBow Resources (SBOW - Free Report) as the Bull of the Day and FrontDoor (FTDR - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Costco (COST - Free Report) , The Gap, Inc. (GPS - Free Report) and Ulta Beauty (ULTA - Free Report) .
SilverBow Resources is a Zacks Rank #1 (Strong Buy) that recently reported a strong quarter as did several oil stocks. Crude has been near or above $100 for the better part of the last few months. High oil prices tend to help the oil patch stocks. Let's explore more about this stock in this Bull Of The Day article.
Description
SilverBow Resources, Inc. engages in the exploration, development and production of oil and natural gas properties. Its primary project includes the Eagle Ford wells, Burr Ferry, South Bearhead Creek and Lake Washington fields. SilverBow Resources, Inc. is headquartered in Houston, TX.
Earnings History
When I look at a stock, the first thing I do 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 communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For SBOW, I see four straight quarters where the company beat of the Zacks Consensus Estimate. That is always good to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
The average positive earnings surprise over the course of the last year works out to be 20%.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For SBOW, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
The full fiscal year 2022 has moved from $7.60 to $12.69.
Next has more than doubled, going from $7.96 to $16.57.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
I see a great valuation for SBOW. The forward PE is 2.8x and that is very low considering the 49% topline growth the company posted in the most recent quarter. The price to book of 2.7x is very low given the growth in earnings. The price to sales comes in at 1.4, which is low and indicates that the market does not value each sales dollar all that highly. Margins have increased in a big way over the last couple quarters moving from 28.5% to 34.3% and if they keep that up with solid revenue growth then earnings are going to be moving a lot higher.
FrontDoor is a Zacks Rank #5 (Strong Sell) after missing on the bottom line in the most recent earnings release. With the economy looking at the real possibility of a recession investors are not going to be kind to stocks that miss earnings. Let's look at why this stock is a Zacks Rank #5 (Strong Sell) and in this Bear of the Day article.
Description
Frontdoor Inc. is the parent company of home service plan brands consisting of American Home Shield, HSA, Landmark and OneGuard. The company's customizable home service plans help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. Frontdoor Inc. is based in TN, United States.
Earnings History
When I look at a stock, the first thing I do 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 communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of FTDR, I see two straight misses which preceded two straight beats of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn't make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For FTDR I see annual estimates moving lower.
The current year 2022 consensus number has dropped from $1.80 to $1.37 over the last 60 days.
The next year has dropped from $2.21 to $1.94 over the same time period.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Pending Home Sales Lower; COST, ULTA Beat in Q1
Markets rallied again today, building up investors' hopes that we may finally have a breakout week to the upside for the first time in nearly two months. The Dow gained +517 points, +1.61%, the S&P 500 was +1.99%, the Nasdaq won the day, +2.68% or +306 points and the small-cap Russell 2000 +2.51% on the day.
Pending Home Sales for April, released this morning by the National Association of Realtors, came in almost twice as low as expected: -3.9% on the headline, from -2.0% estimated, and well off the previous month's downwardly revised -1.6%. This marks six straight months of Pending Home Sales declines, the slowest pace in almost a decade.
This metric is a forward indicator on the housing market, as is thus far the most sluggish we've seen in a series of softer figures elsewhere in the industry. Rising mortgage rates have added an average of 25% higher costs for housing year over year, with continuing higher prices adding another 15% on average. Potential home buyers, when not being priced out of the market completely, are starting to turn to 5-year ARMs and expanding the regions of their home searches.
The only region to witness month-over-month gains was the Midwest, +6.6%, though still -2.8% year over year. The West dropped -4.3% from March, the South -4.7%, and the Northeast is down a whopping -16.2% month over month. These figures, as we've discussed in this column recently, may have a positive effect on overall inflation numbers if price points start coming down, over time.
Q1 earnings reports continue filing in for the Retail space, with Costco posting its fifth-straight earnings beat: $3.04 per share topped the Zacks consensus by 4 cents, while quarterly sales of $52.60 billion outpaced expectations of $51.76 billion. Twelve-week comps overall reached +15%; adjusted for gas prices in the U.S., this number comes to a still-strong +11% in the quarter. Yet shares sold off on the news in late trading, though they are buoying back toward the closing price.
The Gap, Inc., on the other hand, is down -15% in late trading on a big miss on its bottom line: -44 cents per share versus -11 cents expected. Revenues beat consensus, however, with $3.48 billion outpacing the $3.43 billion expected. Comps were down -14%, as compared to expectations of -12%, even with a surprise boost from Banana Republic, which was +27% year over year.
The best of the bunch this afternoon comes from cosmetics retailer Ulta Beauty, which posted a huge beat on the bottom line — $6.30 per share versus $4.44 expected — on $2.35 billion in sales, which surpassed the Zacks consensus $2.14 billion. Comps rose +18% and guidance for full-year earnings and revenues were also up; shares have gained +7% in the after-market.
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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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SilverBow Resources and FrontDoor have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 27, 2022 – Zacks Equity Research shares SilverBow Resources (SBOW - Free Report) as the Bull of the Day and FrontDoor (FTDR - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Costco (COST - Free Report) , The Gap, Inc. (GPS - Free Report) and Ulta Beauty (ULTA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
SilverBow Resources is a Zacks Rank #1 (Strong Buy) that recently reported a strong quarter as did several oil stocks. Crude has been near or above $100 for the better part of the last few months. High oil prices tend to help the oil patch stocks. Let's explore more about this stock in this Bull Of The Day article.
Description
SilverBow Resources, Inc. engages in the exploration, development and production of oil and natural gas properties. Its primary project includes the Eagle Ford wells, Burr Ferry, South Bearhead Creek and Lake Washington fields. SilverBow Resources, Inc. is headquartered in Houston, TX.
Earnings History
When I look at a stock, the first thing I do 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 communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For SBOW, I see four straight quarters where the company beat of the Zacks Consensus Estimate. That is always good to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
The average positive earnings surprise over the course of the last year works out to be 20%.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For SBOW, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
The full fiscal year 2022 has moved from $7.60 to $12.69.
Next has more than doubled, going from $7.96 to $16.57.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
I see a great valuation for SBOW. The forward PE is 2.8x and that is very low considering the 49% topline growth the company posted in the most recent quarter. The price to book of 2.7x is very low given the growth in earnings. The price to sales comes in at 1.4, which is low and indicates that the market does not value each sales dollar all that highly. Margins have increased in a big way over the last couple quarters moving from 28.5% to 34.3% and if they keep that up with solid revenue growth then earnings are going to be moving a lot higher.
Bear of the Day:
FrontDoor is a Zacks Rank #5 (Strong Sell) after missing on the bottom line in the most recent earnings release. With the economy looking at the real possibility of a recession investors are not going to be kind to stocks that miss earnings. Let's look at why this stock is a Zacks Rank #5 (Strong Sell) and in this Bear of the Day article.
Description
Frontdoor Inc. is the parent company of home service plan brands consisting of American Home Shield, HSA, Landmark and OneGuard. The company's customizable home service plans help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. Frontdoor Inc. is based in TN, United States.
Earnings History
When I look at a stock, the first thing I do 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 communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of FTDR, I see two straight misses which preceded two straight beats of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn't make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For FTDR I see annual estimates moving lower.
The current year 2022 consensus number has dropped from $1.80 to $1.37 over the last 60 days.
The next year has dropped from $2.21 to $1.94 over the same time period.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Pending Home Sales Lower; COST, ULTA Beat in Q1
Markets rallied again today, building up investors' hopes that we may finally have a breakout week to the upside for the first time in nearly two months. The Dow gained +517 points, +1.61%, the S&P 500 was +1.99%, the Nasdaq won the day, +2.68% or +306 points and the small-cap Russell 2000 +2.51% on the day.
Pending Home Sales for April, released this morning by the National Association of Realtors, came in almost twice as low as expected: -3.9% on the headline, from -2.0% estimated, and well off the previous month's downwardly revised -1.6%. This marks six straight months of Pending Home Sales declines, the slowest pace in almost a decade.
This metric is a forward indicator on the housing market, as is thus far the most sluggish we've seen in a series of softer figures elsewhere in the industry. Rising mortgage rates have added an average of 25% higher costs for housing year over year, with continuing higher prices adding another 15% on average. Potential home buyers, when not being priced out of the market completely, are starting to turn to 5-year ARMs and expanding the regions of their home searches.
The only region to witness month-over-month gains was the Midwest, +6.6%, though still -2.8% year over year. The West dropped -4.3% from March, the South -4.7%, and the Northeast is down a whopping -16.2% month over month. These figures, as we've discussed in this column recently, may have a positive effect on overall inflation numbers if price points start coming down, over time.
Q1 earnings reports continue filing in for the Retail space, with Costco posting its fifth-straight earnings beat: $3.04 per share topped the Zacks consensus by 4 cents, while quarterly sales of $52.60 billion outpaced expectations of $51.76 billion. Twelve-week comps overall reached +15%; adjusted for gas prices in the U.S., this number comes to a still-strong +11% in the quarter. Yet shares sold off on the news in late trading, though they are buoying back toward the closing price.
The Gap, Inc., on the other hand, is down -15% in late trading on a big miss on its bottom line: -44 cents per share versus -11 cents expected. Revenues beat consensus, however, with $3.48 billion outpacing the $3.43 billion expected. Comps were down -14%, as compared to expectations of -12%, even with a surprise boost from Banana Republic, which was +27% year over year.
The best of the bunch this afternoon comes from cosmetics retailer Ulta Beauty, which posted a huge beat on the bottom line — $6.30 per share versus $4.44 expected — on $2.35 billion in sales, which surpassed the Zacks consensus $2.14 billion. Comps rose +18% and guidance for full-year earnings and revenues were also up; shares have gained +7% in the after-market.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.