We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zoom Video Communications and Estee Lauder have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – December 7, 2023 – Zacks Equity Research shares Zoom Video Communications (ZM - Free Report) as the Bull of the Day and Estee Lauder (EL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Abercrombie & Fitch (ANF - Free Report) and Adidas’ (ADDYY - Free Report) .
Zacks Rank #1 (Strong Buy) stock Zoom Video Communications is a video conferencing platform company that enables people to connect and communicate virtually. Zoom is the most popular conferencing platform and allows users to conduct online meetings, webinars, and virtual conferences through audio and video. Users can join Zoom meetings from various devices, making it a versatile and widely accessible communication solution. With features like screen sharing, chat, and collaboration tools, Zoom has become popular for remote work, online education and social interactions. The platform gained significant traction, especially during the COVID-19 pandemic, and continues to be a go-to choice for virtual meetings and remote collaboration.
Is “Work from Home” Here to Stay?
The work-from-home trend is likely here to stay due to several factors. The COVID-19 pandemic accelerated the adoption of remote work, prompting companies to invest in technologies that support virtual collaboration. Many employees reported experiencing increased flexibility and improved work-life balance during this period, leading to a desire for continued remote work options. Additionally, many employers saw cost savings associated with reduced office space, operational expenses, and actually experienced increased productivity in many instances. While many industries require employees to show up in person, the success of remote work during the pandemic demonstrated that it is a viable and productive model for many industries.
Perfect Earnings Track Record
As the COVID-19 pandemic broke out, Zoom was in the right place, at the right time. However, Zoom’s earnings were brought forward, and as they normalized, investors jumped ship. Nonetheless, Zoom’s expanding international footprint, security and privacy improvement efforts, and the hybrid/remote working wave, are helping the company to re-accelerate earnings.
Image Source: Zacks Investment Research
Most impressively, since its debut in April 2019, Zoom has beat Zacks Consensus Estimates in each quarter.
Cheap from a Valuation Perspective
In the heat of the pandemic, ZM shares clearly got ahead of themselves when the price-to-earnings (p/e) ratio reached 500x. However, now that the stock has corrected from over $500 to under $70, shares once again look attractive from a valuation perspective. In fact, Zoom’s p/e ratio of 14.03x means that it is now cheaper than the S&P 500 Index.
Strong Balance Sheet
Zoom has a strong balance sheet and generates significant cash flow, making it an attractive stock for investors. The company had cash and cash equivalents worth $6.49 billion as of October 31st. The company’s ability to generate strong cash flows will enable it to make major investments in product development and acquisitions in the future.
Bottom Line
Zoom Video Communications stands out as a leader in the video conference space. With its versatile platform, the work-from-home trend, and the favorable valuation, shares should be higher in six to twelve months.
Zacks Rank #5 (Strong Sell) Estee Lauder is a renowned beauty and cosmetics company specializing in the manufacturing and marketing of skincare, makeup, fragrance, and hair care products. Founded by Estee Lauder herself, the company has become a global leader in the beauty industry. Estee Lauder offers a wide range of high-quality beauty products under various brands, including Estee Lauder, Clinique, MAC, Bobbi Brown, and others. Most of Estee Lauder’s products are available at department stores, specialty retailers, and online, catering to a diverse customer base.
International Exposure Weighs on Growth
Weakness in Asia, particularly in China, is weighing on EL shares. Unfortunately, China’s economic woes have dragged on for years with no end in sight. For example, the iShares China ETF, a proxy for large-cap Chinese equities, is working on its fifth consecutive monthly loss and is down ~18% year-to-date. Meanwhile, the earnings picture looks bleak. For the December quarter, Zacks Consensus Analyst Estimates anticipate EPS growth to slow by a whopping 64.29%.
Stretched Valuation Despite Drop in Shares
Though shares of Estee Lauder have plummeted 46% year-to-date, they remain unattractive from a valuation perspective. Estee Lauder’s p/e ratio of 57x is much higher than that of the S&P 500 Index and its peers. Slowing growth coupled with a rich valuation is not a good sign for EL investors.
Competition Taking its Toll
A slew of new, innovative, and flexible competitors has entered the market and is stealing market share from old, legacy, and less “cool” brands like EL. For example, over the past five years, e.l.f.Beautyhave increased by over 1,000%, while Estee Lauder shares are lower. Unfavorable global currency trends and geopolitical disruptions in critical areas like the Middle East are making it more challenging for more prominent players like EL.
Bottom Line
Estee Lauder faces significant challenges as it navigates a landscape market by international economic uncertainties, a stretched valuation, and fierce competition. Once a global leader, the company is grappling with the impact of China’s economic struggles, a concerning earnings outlook, and increased competition from innovative rivals.
Additional content:
Top Apparel Stocks Hitting 52-Week Highs in December
The holiday shopping season is a focal point for retailers and apparel companies with the last few months being very kind to Abercrombie & Fitch and Adidas’ stock.
With Christmas approaching, Abercrombie and Adidas shares may be early to what is hopefully an end-of-the-year and infamous Santa Claus rally. Hitting their 52-week highs this week both remain top-rated Zacks stocks at the moment.
Recent Performance Overview
Adidas shares have now rebounded and soared +57% in 2023 as the footwear and sporting apparel leader has been able to put inventory issues from the fallout with fashion collaborator Kanye West behind it. As for Abercrombie, its resurgence as a high-quality casual apparel retailer has been underestimated upon easing inflation with its stock catapulting over +240% YTD.
Strong Q3 Results
Continuing the ascension of Abercrombie and Adidas shares were their favorable third quarter results in November after widely surpassing Q2 bottom line expectations during the summer.
Abercrombie’s Q3 earnings of $1.83 per share blasted the Zacks Consensus of $1.14 a share by 60% and skyrocketed from $0.01 a share in the prior year quarter. On the top line, Q3 sales of $1.05 billion came in 8% above estimates and soared 19% from $880.08 million a year ago.
Similarly, Adidas easily surpassed Q3 earnings expectations with EPS at $0.76 per share and 46% above estimates of $0.52 a share. Third quarter earnings also leaped 347% year over year from $0.17 a share in Q3 2022. Quarterly sales of $6.52 billion topped estimates by 3% and was up a percentage point from the comparative quarter.
Earnings Estimate Revisions
Since reporting strong Q3 results, Abercrombie's current fiscal 2024 EPS estimates have soared 30% over the last 30 days from $4.44 a share to $5.76 per share. Even better, FY25 EPS estimates have climbed 24% in the last month from $4.42 a share to $5.50 per share.
Meanwhile, Adidas’ fiscal 2023 earnings estimates now call for an adjusted loss of -$0.16 a share compared to -$0.13 a share 30 days ago but FY24 EPS estimates have risen 2% and are expected to be further in the black next year at $2.18 a share versus $2.08 per share a month ago.
Bottom Line
After reaching 52-weeks highs in December, Abercrombie’s stock currently boasts a Zacks Rank #1 (Strong Buy) while Adidas stock sports a Zacks Rank #2 (Buy). As we move closer to rounding out 2023, the strengthening outlook for both companies next year is still compelling and may lead to more short-term upside.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zoom Video Communications and Estee Lauder have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 7, 2023 – Zacks Equity Research shares Zoom Video Communications (ZM - Free Report) as the Bull of the Day and Estee Lauder (EL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Abercrombie & Fitch (ANF - Free Report) and Adidas’ (ADDYY - Free Report) .
Here is a synopsis of all four stocks.
Bull of the Day:
The Leader in Video Conferencing
Zacks Rank #1 (Strong Buy) stock Zoom Video Communications is a video conferencing platform company that enables people to connect and communicate virtually. Zoom is the most popular conferencing platform and allows users to conduct online meetings, webinars, and virtual conferences through audio and video. Users can join Zoom meetings from various devices, making it a versatile and widely accessible communication solution. With features like screen sharing, chat, and collaboration tools, Zoom has become popular for remote work, online education and social interactions. The platform gained significant traction, especially during the COVID-19 pandemic, and continues to be a go-to choice for virtual meetings and remote collaboration.
Is “Work from Home” Here to Stay?
The work-from-home trend is likely here to stay due to several factors. The COVID-19 pandemic accelerated the adoption of remote work, prompting companies to invest in technologies that support virtual collaboration. Many employees reported experiencing increased flexibility and improved work-life balance during this period, leading to a desire for continued remote work options. Additionally, many employers saw cost savings associated with reduced office space, operational expenses, and actually experienced increased productivity in many instances. While many industries require employees to show up in person, the success of remote work during the pandemic demonstrated that it is a viable and productive model for many industries.
Perfect Earnings Track Record
As the COVID-19 pandemic broke out, Zoom was in the right place, at the right time. However, Zoom’s earnings were brought forward, and as they normalized, investors jumped ship. Nonetheless, Zoom’s expanding international footprint, security and privacy improvement efforts, and the hybrid/remote working wave, are helping the company to re-accelerate earnings.
Image Source: Zacks Investment Research
Most impressively, since its debut in April 2019, Zoom has beat Zacks Consensus Estimates in each quarter.
Cheap from a Valuation Perspective
In the heat of the pandemic, ZM shares clearly got ahead of themselves when the price-to-earnings (p/e) ratio reached 500x. However, now that the stock has corrected from over $500 to under $70, shares once again look attractive from a valuation perspective. In fact, Zoom’s p/e ratio of 14.03x means that it is now cheaper than the S&P 500 Index.
Strong Balance Sheet
Zoom has a strong balance sheet and generates significant cash flow, making it an attractive stock for investors. The company had cash and cash equivalents worth $6.49 billion as of October 31st. The company’s ability to generate strong cash flows will enable it to make major investments in product development and acquisitions in the future.
Bottom Line
Zoom Video Communications stands out as a leader in the video conference space. With its versatile platform, the work-from-home trend, and the favorable valuation, shares should be higher in six to twelve months.
Bear of the Day:
Zacks Rank #5 (Strong Sell) Estee Lauder is a renowned beauty and cosmetics company specializing in the manufacturing and marketing of skincare, makeup, fragrance, and hair care products. Founded by Estee Lauder herself, the company has become a global leader in the beauty industry. Estee Lauder offers a wide range of high-quality beauty products under various brands, including Estee Lauder, Clinique, MAC, Bobbi Brown, and others. Most of Estee Lauder’s products are available at department stores, specialty retailers, and online, catering to a diverse customer base.
International Exposure Weighs on Growth
Weakness in Asia, particularly in China, is weighing on EL shares. Unfortunately, China’s economic woes have dragged on for years with no end in sight. For example, the iShares China ETF, a proxy for large-cap Chinese equities, is working on its fifth consecutive monthly loss and is down ~18% year-to-date. Meanwhile, the earnings picture looks bleak. For the December quarter, Zacks Consensus Analyst Estimates anticipate EPS growth to slow by a whopping 64.29%.
Stretched Valuation Despite Drop in Shares
Though shares of Estee Lauder have plummeted 46% year-to-date, they remain unattractive from a valuation perspective. Estee Lauder’s p/e ratio of 57x is much higher than that of the S&P 500 Index and its peers. Slowing growth coupled with a rich valuation is not a good sign for EL investors.
Competition Taking its Toll
A slew of new, innovative, and flexible competitors has entered the market and is stealing market share from old, legacy, and less “cool” brands like EL. For example, over the past five years, e.l.f.Beautyhave increased by over 1,000%, while Estee Lauder shares are lower. Unfavorable global currency trends and geopolitical disruptions in critical areas like the Middle East are making it more challenging for more prominent players like EL.
Bottom Line
Estee Lauder faces significant challenges as it navigates a landscape market by international economic uncertainties, a stretched valuation, and fierce competition. Once a global leader, the company is grappling with the impact of China’s economic struggles, a concerning earnings outlook, and increased competition from innovative rivals.
Additional content:
Top Apparel Stocks Hitting 52-Week Highs in December
The holiday shopping season is a focal point for retailers and apparel companies with the last few months being very kind to Abercrombie & Fitch and Adidas’ stock.
With Christmas approaching, Abercrombie and Adidas shares may be early to what is hopefully an end-of-the-year and infamous Santa Claus rally. Hitting their 52-week highs this week both remain top-rated Zacks stocks at the moment.
Recent Performance Overview
Adidas shares have now rebounded and soared +57% in 2023 as the footwear and sporting apparel leader has been able to put inventory issues from the fallout with fashion collaborator Kanye West behind it. As for Abercrombie, its resurgence as a high-quality casual apparel retailer has been underestimated upon easing inflation with its stock catapulting over +240% YTD.
Strong Q3 Results
Continuing the ascension of Abercrombie and Adidas shares were their favorable third quarter results in November after widely surpassing Q2 bottom line expectations during the summer.
Abercrombie’s Q3 earnings of $1.83 per share blasted the Zacks Consensus of $1.14 a share by 60% and skyrocketed from $0.01 a share in the prior year quarter. On the top line, Q3 sales of $1.05 billion came in 8% above estimates and soared 19% from $880.08 million a year ago.
Similarly, Adidas easily surpassed Q3 earnings expectations with EPS at $0.76 per share and 46% above estimates of $0.52 a share. Third quarter earnings also leaped 347% year over year from $0.17 a share in Q3 2022. Quarterly sales of $6.52 billion topped estimates by 3% and was up a percentage point from the comparative quarter.
Earnings Estimate Revisions
Since reporting strong Q3 results, Abercrombie's current fiscal 2024 EPS estimates have soared 30% over the last 30 days from $4.44 a share to $5.76 per share. Even better, FY25 EPS estimates have climbed 24% in the last month from $4.42 a share to $5.50 per share.
Meanwhile, Adidas’ fiscal 2023 earnings estimates now call for an adjusted loss of -$0.16 a share compared to -$0.13 a share 30 days ago but FY24 EPS estimates have risen 2% and are expected to be further in the black next year at $2.18 a share versus $2.08 per share a month ago.
Bottom Line
After reaching 52-weeks highs in December, Abercrombie’s stock currently boasts a Zacks Rank #1 (Strong Buy) while Adidas stock sports a Zacks Rank #2 (Buy). As we move closer to rounding out 2023, the strengthening outlook for both companies next year is still compelling and may lead to more short-term upside.
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 >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
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.