For Immediate Release
Chicago, IL – October 17, 2016 – Zacks Equity Research highlights definitely Acacia Communications ( NASDAQ:(ACIA - Free Report) – Free Report ) as the Bull of the Day and TripAdvisor ( NASDAQ:(TRIP - Free Report) – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Citigroup (NYSE:(C - Free Report) – Free Report),JPMorgan Chase (NYSE:(JPM - Free Report) – Free Report) and Wells Fargo (NYSE:(WFC - Free Report) – Free Report).
Here is a synopsis of all three stocks:
Bull of the Day:
Acacia Communications ( NASDAQ:(ACIA - Free Report) – Free Report ) provides high-speed coherent interconnect products in the Americas, Europe, the Middle East, Africa and the Asia Pacific region. The company’s mission is to deliver high-speed coherent optical interconnect products that transform communications networks, relied upon by cloud infrastructure operators and content and communication service providers, through improvements in performance and capacity and a reduction in associated costs. Acacia was founded in 2009, is based in Maynard, Massachusetts and employs 211 employees. The stock is Zacks Rank #1 (Strong Buy) and todays Bull of the Day.
Acacia has a market cap of $3.2 billion with a Forward PE of 41. The stock sports Zacks Style Scores of “A” in Momentum, but “D” in both Value and Growth. The company sits in an industry that is ranked 107 out of 265 (Top 40%) in the Zacks Industry Rank.
Recent IPO and Stock Run
Acacia priced at $23 back in May and traded in the $30-40 area, until it broke out in early July. From there it ran all the way to $128.73 before recently pulling back. Undoubtedly, a pullback was warranted in one of the hottest stocks of the year after 200% plus move. So when you add a secondary offering, you bet that investors will get nervous and short sellers will pounce on the stock.
Bear of the Day :
TripAdvisor ( NASDAQ:(TRIP - Free Report) – Free Report ) is a popular online travel research company. The company features reviews and advice on hotels, resorts, flights, vacation rentals, vacation packages, and travel guides. The sites operate in many countries worldwide, including China under daodao.com. The company has two segments, Hotel and Other. The stock is the Bear of the Day after it recently became a Zacks Rank #5 (Strong Sell) because of falling estimates after a poor earnings in early in August.
TripAdvisor was founded in 2000 and is based in Needham, Massachusetts where it employs 3,300. The company has a market cap of $9 billion and a Forward PE of 54. The stock sports Zacks Style Scores of “F” in Value because of the high PE. The stock is down over 20% this year, after a series of missed EPS reports and continued revisions lower to estimates.
The company reported Q2 EPS on August 3rd, where it missed on both the top and bottom line. The 10% miss on EPS was the seventh miss in the last nine quarters. Over this time period, the stock has fallen from $110 a share to $60. Some might view the stock as a bargain, but given its high valuation and falling estimates, the stock might have further to fall.
TripAdvisor will report earnings on November 3rd. According to analysts, investors should be concerned about the report, especially the forward looking guidance. Over the last 90 days, estimates have been revised lower for all time frames. For fiscal year 2016, the numbers have been taken down 31%, from $1.27 to $1.14. For next year, estimates are now seen at $1.50, down from $1.69 or 11%. If this trend continues and the company disappoints again in November, expect the stock the head to the $50 area.
Big Banks Q3 Earnings Roundup: JPM, C, WFC
Q3 earnings season kicked off in a big way this week, and several of the world’s largest banks released their most recent reports before the market opened on Friday morning. Here’s a round-up of the latest earnings data from Citigroup (NYSE:(C - Free Report) – Free Report), JPMorgan Chase (NYSE:(JPM - Free Report) – Free Report) and Wells Fargo (NYSE:(WFC - Free Report) – Free Report).
More Good News Than Bad
While there wasn’t any absolutely spectacular news from these big banks this morning, we still saw some pretty solid results.
JPMorgan posted the biggest positive earnings beat, with EPS coming in at $1.58 versus the Zacks Consensus Estimate of $1.40. JPMorgan has now surpassed earnings expectations by an average of nearly 9% in each of the trailing four quarters.
The company also posted revenues of $25.51 billion, which was well ahead of our consensus estimate of $24 billion. Improved fixed income and equity trading revenues, higher mortgage banking fees and growth in investment banking income drove the results. Further, higher net interest income, perhaps attributable to the rise in loan supported top line (also read: JPMorgan Q3 Earnings Easily Top on Solid Trading & Lending ).
Citigroup also came in ahead of expectations; it posted earnings of $1.24 per share on $17.76 billion in revenue, which beat our consensus estimates of $1.16 and $17.38 billion, respectively. Revenues from fixed income markets grew 35% and investment banking gained 15%, while adjusted net income fell 8% to $3.84 billion (also read: Citi Beats on Q3 Earnings Estimates ).
Finally, controversy-riddled Wells Fargo also reported Friday morning. The company posted earnings of $1.02 per share, which beat the Zacks Consensus Estimate by a penny. Revenues came in at $22.2 billion, which was better than our consensus estimate of $22.02 billion (also read: Wells Fargo Beats Q3 Earnings on Higher Revenues ).
Wells Fargo’s new CEO Tim Sloan will still face an uphill battle, and his company’s fraudulent account-opening scandal is certainly not going anywhere anytime soon. Nevertheless, today’s positive results will provide some comfort for the company and its investors.
All three stocks opened higher, with JPM and C gaining more than 2% and WFC up 1%, but they’ve been slumping back down throughout the day. Today’s morning gains have basically been wiped out.
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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