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AppLovin and Gildan Activewear have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 3, 2023 – Zacks Equity Research shares AppLovin Corp. (APP - Free Report) as the Bull of the Day and Gildan Activewear Inc. (GIL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shell plc (SHEL - Free Report) , Eni SpA (E - Free Report) and Enbridge Inc (ENB - Free Report) .
AppLovin Corp. shares have soared over 280% YTD to blow away Nvidia and many other tech standouts. Wall Street is diving into the digital application and marketing tool developer for its growth potential within a vital area of the economy, with more people glued to their smartphones and devices than ever before.
AppLovin’s earnings outlook keeps improving and clients are gravitating toward its new AI-enhanced offerings. APP stock also still trades about 60% below its highs, and Wall Street is very high on AppLovin stock.
Driving Growth in the App Economy
AppLovin designs tools to help app developers improve marketing, revenue generation, and other critical aspects of the app business to help drive profitable near-term and long-term expansion. The firm plays a key role in the app ecosystem, with end-to-end software solutions that aim to optimize monetization through various products and solutions.
APP’s products are designed to help companies and app developers acquire and keep their ideal users, increase value across a customer’s lifecycle, measure their marketing and reach, and much more. AppLovin’s solutions aim to boost the average revenue per user, scale ad impressions, acquire more valuable users, and beyond.
AppLovin has been gaining steam recently through new advancements in its machine-learning and AI-focused offerings. The company’s machine learning and AI engine dubbed AXON 2.0, which powers its AppDiscovery platform, is generating strong results, helping it post “record software platform revenue, high margins, impressive operating leverage and ultimately robust free cash flow.”
APP’s CEO believes that AXON 2.0 will help improve nearly every aspect of the business, including its ability to help clients gain exposure in the booming Connected-TV landscape.
Earnings Revisions and Growth Outlook
AppLovin crushed our second quarter EPS estimate by 175% and boosted its guidance as it improves its margins and attracts more business through its predictive, AI-driven updates. AppLovin’s enhanced offerings are leading to better ROIs for its customers, which should lead to further expansion, greater market share, and stability down the road for AppLovin.
APP’s consensus Zacks earnings estimates have soared by 117% for FY23 and 111% for FY24 since its Q2 report to help it land a Zacks Rank #1 (Strong Buy) right now.
Zacks estimates call for AppLovin’s adjusted earnings to skyrocket 333% from $0.18 per share last year to $0.78 a share in 2023 and then climb another 71% higher next year to reach $1.33 a share.
Plus, AppLovin’s most recent/most accurate estimates came in solidly above its already much-improved consensus. For instance, its most up-to-date EPS estimate for FY23 is 5% higher than the current consensus, with its newest EPS figure now 41% higher for FY24 at $1.88 vs. $1.33.
On the revenue front, AppLovin is projected to post roughly 10% sales growth this year and another 13% top-line expansion next year to climb from $2.82 billion in FY22 to $3.48 billion in FY24.
Other Fundamentals
APP shares have skyrocketed roughly 280% YTD to crush Nvidia’s 200% and the market. This performance includes a 56% surge from AppLovin during the past three months.
Despite the run, APP stock still trades roughly 60% below its November 2021 records—APP went public in April 2021. AppLovin’s average Zacks price also marks 5% upside to Monday’s levels.
AppLovin’s stellar run helps it trade above its 50-day and 200-day moving averages right now. The stock experienced the bullish golden cross back in May, where the shorter-dated trendline climbs above the long-term average.
On top of that, APP found buyers around its 50-day moving average recently, following its pullback that sent it from overbought RSI levels to solidly below neutral.
Turning to valuation, AppLovin currently trades at 33.4X forward 12-month earnings, which marks 27% value compared to its own year-long median and a 20% discount against its Technology Services industry. APP’s PEG ratio (which factors in its long-term earnings growth outlook) of 1.7 marks a discount to the Zacks Tech sector’s 1.9 and its industry’s 1.8.
Bottom Line
AppLovin’s portfolio of products and solutions are vital in the highly competitive world of digital apps, where countless companies are constantly competing for awareness, screentime, and profitable success in our smartphone-obsessed world.
Wall Street is also very high on APP stock, with 11 of the 16 brokerage recommendations Zacks has coming in at “Strong Buys.”
Gildan Activewear Inc. is an apparel firm focused on the basics and operating behind the scenes through wholesalers and beyond. Gildan is facing a difficult to compete against stretch of growth and a challenging macro backdrop that’s seen its earnings outlook fade.
Proud to Be Basic
Gildan is an apparel giant that some might not even know they own. Gildan’s tagline is that it is a leading manufacturer of “everyday basic apparel.”
The company is essentially a wholesaler of everyday basic apparel that is most often branded by some other entity. If one were to look in their closet at any vacation destination T-shirt, school sweatshirt, or company polo, there is a good chance at least one of them was made by Gildan.
Gildan operates a diverse portfolio of company-owned brands, including its namesake, American Apparel, Comfort Colors, GoldToe, and others. Its products include sweatshirts/fleece, T-shirts & tanks, socks, activewear, underwear, and most other basic wardrobe staples.
Gildan’s customers include screen printers or embellishers, wholesale distributors, traditional and e-commerce retailers, and “global lifestyle brand companies.”
Outlook and EPS Revisions
Gildan posted nearly 50% sales growth in 2021 and another 11% revenue expansion in 2022 after it bounced back from a big Covid-19 downturn. GIL’s revenue is projected to slip about 1% in 2023 and then pop 3.4% next year, based on Zacks estimates.
The company’s bottom line appears to be coming under a bit more pressure. GIL’s consensus earnings estimate has trended lower since its Q2 release, with its FY23 EPS estimate down 14% and its FY24 figure 12% lower. Gildan’s adjusted FY23 earnings are projected to slip by 17% YoY to $2.59 a share vs. $3.11 per share in the prior-year quarter.
Bottom Line
Gildan’s bottom-line revisions help the stock land a Zacks Rank #5 (Strong Sell) at the moment. The company’s Textile – Apparel industry also ranks in the bottom 22% of over 250 Zacks industries right now.
GIL shares have slipped by 18% over the last six months and 15% in the past three months. Gildan stock has hugely underperformed the S&P 500 over the past 10 years, up 19% vs. 163% for the benchmark. GIL is also currently trading below its 50-day and 200-day moving averages.
Gildan is projected to return to earnings growth in 2024. But it might be best to stay away from the stock, at least for now.
Additional content:
3 Oil Companies Leading in Renewable Energy Investment
Economies across the world are gradually transitioning to cleaner energy sources. There has been a steady increase in pressure on energy companies to act on climate change on multiple fronts. Most analysts believe that although renewable energy will meet future energy needs, oil and natural gas demand will not be completely wiped out.
The U.S. Energy Information Administration, in its Annual Energy Outlook 2023, revealed that through 2050, renewables will increasingly match power demand. Thus, there are abundant opportunities for energy companies with a footprint in oil and gas resources or transporting commodities and the renewable energy space. Three such companies are Shell plc, Eni SpA and Enbridge Inc, which are well-poised to gain in the long run.
3 Stocks
Growing renewable business at a rapid pace is among the core strategies of Shell. In the renewable energy front, Shell has roughly 50 gigawatts (GW) of renewable generation capacity, considering projects either in operation, under construction or in the pipeline. Thus, for renewables and energy solutions, SHEL is investing actively in solar energy, wind energy, electric vehicle charging and others.
To implement the production of renewable energy, Plenitude, a benefit company, was established and is being controlled by Eni. To counter the decarbonization challenge, renewable energy generation is among the key strategies of Eni. This is reflected in its ambitious goal for more than 15 GW of installed renewable energy generating capacity by 2030.
Enbridge has been investing in wind farms, solar energy, geothermal projects and power transmission developments, reflecting the company's strong focus on renewables. Considering all the renewable energy projects that are either operational or under construction, Enbridge boasts a net of 2,173 megawatts of zero-emission energy generating capacity.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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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AppLovin and Gildan Activewear have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 3, 2023 – Zacks Equity Research shares AppLovin Corp. (APP - Free Report) as the Bull of the Day and Gildan Activewear Inc. (GIL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shell plc (SHEL - Free Report) , Eni SpA (E - Free Report) and Enbridge Inc (ENB - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
AppLovin Corp. shares have soared over 280% YTD to blow away Nvidia and many other tech standouts. Wall Street is diving into the digital application and marketing tool developer for its growth potential within a vital area of the economy, with more people glued to their smartphones and devices than ever before.
AppLovin’s earnings outlook keeps improving and clients are gravitating toward its new AI-enhanced offerings. APP stock also still trades about 60% below its highs, and Wall Street is very high on AppLovin stock.
Driving Growth in the App Economy
AppLovin designs tools to help app developers improve marketing, revenue generation, and other critical aspects of the app business to help drive profitable near-term and long-term expansion. The firm plays a key role in the app ecosystem, with end-to-end software solutions that aim to optimize monetization through various products and solutions.
APP’s products are designed to help companies and app developers acquire and keep their ideal users, increase value across a customer’s lifecycle, measure their marketing and reach, and much more. AppLovin’s solutions aim to boost the average revenue per user, scale ad impressions, acquire more valuable users, and beyond.
AppLovin has been gaining steam recently through new advancements in its machine-learning and AI-focused offerings. The company’s machine learning and AI engine dubbed AXON 2.0, which powers its AppDiscovery platform, is generating strong results, helping it post “record software platform revenue, high margins, impressive operating leverage and ultimately robust free cash flow.”
APP’s CEO believes that AXON 2.0 will help improve nearly every aspect of the business, including its ability to help clients gain exposure in the booming Connected-TV landscape.
Earnings Revisions and Growth Outlook
AppLovin crushed our second quarter EPS estimate by 175% and boosted its guidance as it improves its margins and attracts more business through its predictive, AI-driven updates. AppLovin’s enhanced offerings are leading to better ROIs for its customers, which should lead to further expansion, greater market share, and stability down the road for AppLovin.
APP’s consensus Zacks earnings estimates have soared by 117% for FY23 and 111% for FY24 since its Q2 report to help it land a Zacks Rank #1 (Strong Buy) right now.
Zacks estimates call for AppLovin’s adjusted earnings to skyrocket 333% from $0.18 per share last year to $0.78 a share in 2023 and then climb another 71% higher next year to reach $1.33 a share.
Plus, AppLovin’s most recent/most accurate estimates came in solidly above its already much-improved consensus. For instance, its most up-to-date EPS estimate for FY23 is 5% higher than the current consensus, with its newest EPS figure now 41% higher for FY24 at $1.88 vs. $1.33.
On the revenue front, AppLovin is projected to post roughly 10% sales growth this year and another 13% top-line expansion next year to climb from $2.82 billion in FY22 to $3.48 billion in FY24.
Other Fundamentals
APP shares have skyrocketed roughly 280% YTD to crush Nvidia’s 200% and the market. This performance includes a 56% surge from AppLovin during the past three months.
Despite the run, APP stock still trades roughly 60% below its November 2021 records—APP went public in April 2021. AppLovin’s average Zacks price also marks 5% upside to Monday’s levels.
AppLovin’s stellar run helps it trade above its 50-day and 200-day moving averages right now. The stock experienced the bullish golden cross back in May, where the shorter-dated trendline climbs above the long-term average.
On top of that, APP found buyers around its 50-day moving average recently, following its pullback that sent it from overbought RSI levels to solidly below neutral.
Turning to valuation, AppLovin currently trades at 33.4X forward 12-month earnings, which marks 27% value compared to its own year-long median and a 20% discount against its Technology Services industry. APP’s PEG ratio (which factors in its long-term earnings growth outlook) of 1.7 marks a discount to the Zacks Tech sector’s 1.9 and its industry’s 1.8.
Bottom Line
AppLovin’s portfolio of products and solutions are vital in the highly competitive world of digital apps, where countless companies are constantly competing for awareness, screentime, and profitable success in our smartphone-obsessed world.
Wall Street is also very high on APP stock, with 11 of the 16 brokerage recommendations Zacks has coming in at “Strong Buys.”
Bear of the Day:
Gildan Activewear Inc. is an apparel firm focused on the basics and operating behind the scenes through wholesalers and beyond. Gildan is facing a difficult to compete against stretch of growth and a challenging macro backdrop that’s seen its earnings outlook fade.
Proud to Be Basic
Gildan is an apparel giant that some might not even know they own. Gildan’s tagline is that it is a leading manufacturer of “everyday basic apparel.”
The company is essentially a wholesaler of everyday basic apparel that is most often branded by some other entity. If one were to look in their closet at any vacation destination T-shirt, school sweatshirt, or company polo, there is a good chance at least one of them was made by Gildan.
Gildan operates a diverse portfolio of company-owned brands, including its namesake, American Apparel, Comfort Colors, GoldToe, and others. Its products include sweatshirts/fleece, T-shirts & tanks, socks, activewear, underwear, and most other basic wardrobe staples.
Gildan’s customers include screen printers or embellishers, wholesale distributors, traditional and e-commerce retailers, and “global lifestyle brand companies.”
Outlook and EPS Revisions
Gildan posted nearly 50% sales growth in 2021 and another 11% revenue expansion in 2022 after it bounced back from a big Covid-19 downturn. GIL’s revenue is projected to slip about 1% in 2023 and then pop 3.4% next year, based on Zacks estimates.
The company’s bottom line appears to be coming under a bit more pressure. GIL’s consensus earnings estimate has trended lower since its Q2 release, with its FY23 EPS estimate down 14% and its FY24 figure 12% lower. Gildan’s adjusted FY23 earnings are projected to slip by 17% YoY to $2.59 a share vs. $3.11 per share in the prior-year quarter.
Bottom Line
Gildan’s bottom-line revisions help the stock land a Zacks Rank #5 (Strong Sell) at the moment. The company’s Textile – Apparel industry also ranks in the bottom 22% of over 250 Zacks industries right now.
GIL shares have slipped by 18% over the last six months and 15% in the past three months. Gildan stock has hugely underperformed the S&P 500 over the past 10 years, up 19% vs. 163% for the benchmark. GIL is also currently trading below its 50-day and 200-day moving averages.
Gildan is projected to return to earnings growth in 2024. But it might be best to stay away from the stock, at least for now.
Additional content:
3 Oil Companies Leading in Renewable Energy Investment
Economies across the world are gradually transitioning to cleaner energy sources. There has been a steady increase in pressure on energy companies to act on climate change on multiple fronts. Most analysts believe that although renewable energy will meet future energy needs, oil and natural gas demand will not be completely wiped out.
The U.S. Energy Information Administration, in its Annual Energy Outlook 2023, revealed that through 2050, renewables will increasingly match power demand. Thus, there are abundant opportunities for energy companies with a footprint in oil and gas resources or transporting commodities and the renewable energy space. Three such companies are Shell plc, Eni SpA and Enbridge Inc, which are well-poised to gain in the long run.
3 Stocks
Growing renewable business at a rapid pace is among the core strategies of Shell. In the renewable energy front, Shell has roughly 50 gigawatts (GW) of renewable generation capacity, considering projects either in operation, under construction or in the pipeline. Thus, for renewables and energy solutions, SHEL is investing actively in solar energy, wind energy, electric vehicle charging and others.
To implement the production of renewable energy, Plenitude, a benefit company, was established and is being controlled by Eni. To counter the decarbonization challenge, renewable energy generation is among the key strategies of Eni. This is reflected in its ambitious goal for more than 15 GW of installed renewable energy generating capacity by 2030.
Enbridge has been investing in wind farms, solar energy, geothermal projects and power transmission developments, reflecting the company's strong focus on renewables. Considering all the renewable energy projects that are either operational or under construction, Enbridge boasts a net of 2,173 megawatts of zero-emission energy generating capacity.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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.