For Immediate Release
Chicago, IL – April 21, 2017 –Zacks Equity Research highlights KB Home (NYSE: (KBH - Free Report) – Free Report ) as the Bull of the Day, Canadian Solar Inc. (NASDAQ: (CSIQ - Free Report) – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple (NASDAQ: (AAPL - Free Report) – Free Report ).
Here is a synopsis of all three stocks:
Bull of the Day :
KB Home (NYSE:(KBH - Free Report) – Free Report ) is riding the wave of strong housing demand in 2017. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in 2017 as American rush back into home buying.
KB Home is one of the largest homebuilders in the United States with developments across the country. It is headquartered in Los Angeles.
Another Beat in the First Quarter
On March 23, KB Home reported its fiscal first quarter results and beat the Zacks Consensus by a penny. It reported $0.15 versus the consensus of $0.14.
It was the fifth earnings beat in a row.
Revenue jumped 21% to $818.6 million as deliveries rose 14% to 2224 homes. It saw an increase in deliveries in all four of its regions.
Average selling price continues to rise, jumping by 6% to $364,600.
All of its metrics were strong in the quarter. Net orders rose 14% to 2580 and net order value grew 32% to $1.1 billion.
The West Coast region, which is in the company's own backyard, remained hot, as net orders rose 49% and the average selling price of those orders was up 16%.
The backlog rose 11% to 4,776 as its value grew 25% to $1.79 billion. That was the company's highest first quarter backlog value since 2007, which was the height of the housing bubble.
The average selling price of homes in the backlog rose 12%.
This is one of the best quarters the company has had in the last few years and it looks like it should continue for the rest of this year.
Analysts Bullish Too
The analysts liked what they heard as they've been raising full year estimates since the earnings report.
The 2017 Zacks Consensus Estimate has jumped to $1.60 from $1.54 in the last 30 days with an analyst even raising just this week, presumably after bullish reports by several of KB Home's competitors.
That is earnings growth of 43.2% as the company earned just $1.12 last year.
Sales are also expected to rise 18.8% this year.
Shares Finally on the Move Higher
Since being the hottest industry in the market in 2012, homebuilder stocks have gone nowhere until now.
Shares have finally broken out of its recent range. They're now hitting 3-year highs.
Bear of the Day :
Canadian Solar Inc. (NASDAQ:(CSIQ - Free Report) – Free Report ) is in a tough industry as global demand has fallen resulting in lower prices. This Zacks Rank #5 (Strong Sell) has seen its 2017 estimates cut in recent weeks.
Canadian Solar is one of the world's largest solar power companies. It makes solar photovoltaic modules and provides solar energy solutions.
A Fourth Quarter Miss
On March 21, Canadian Solar reported its fourth quarter results and missed on the Zacks Consensus Estimate by 5 cents. Earnings were $0.24 compared to the consensus of $0.29.
Total solar module shipments were a record high at 1,612 MW, of which 1,581 MW were recognized in revenue, compared to 1,161 MW recognized in revenue in the third quarter of 2016.
Net revenue was $668.4 million up from $657.3 million in the third quarter of 2016.
"Despite strong demand levels, our revenue for both the fourth quarter and full year was lower compared to the prior year's periods due to the industry-wide declines in average selling price that have been persistent all year," said Dr. Shawn Qu, Chairman and Chief Executive Officer.
Full Year Estimates Cut
Despite the record high module shipments, the analysts cut full year estimates due to the weak selling prices.
5 estimates were cut in the last 30 days with 1 cut in the last week.
The 2017 Zacks Consensus Estimate has fallen to $1.84 from $2.15 over the last month.
3 Key Predictions for Apple's Q2 Earnings Report
Although critics will say that Apple (NASDAQ: (AAPL - Free Report) – Free Report ) has lost some of its luster over the past few years, you better believe that investors will be paying attention when the world’s largest publicly-traded company releases its fiscal second-quarter financial results in less than two weeks.
The technology behemoth has been one of the hottest stocks on Wall Street so far this year, and shares are up more than 15% in just the last 12 weeks. Of course, if Apple wants to continue that momentum, it will have to deliver another solid quarterly earnings report on May 2.
Last quarter, the company posted earnings of $3.36 per share and revenues of $78.4 billion, easily topping the respective consensus estimates of $3.22 and $76.9 billion. Total iPhone unit sales grew 5% to about 78.3 million in the all-important holiday quarter, and Services revenue—the segment that includes the App Store, Apple Music, and Apple Pay—surged 18%.
So what’s in store for Apple this quarter? Well, Apple guided for revenue between $51.5 billion and $53.5 billion, and our current consensus estimates call for revenue of $52.61 billion and earnings of $2.01 per share.
Of course, earnings and revenue are just two of the many things investors will be looking at when Apple reports. Check out these three additional things to expect:
1. iPhone unit sales will come in at about 52 million
According to our consensus estimate, which compiles figures from 19 independent analysts, iPhone unit sales are expected to come in at 51.82 million this quarter. This is a slight uptick from the 51.2 million units sold in the year-ago quarter, and it should be encouraging to see continued growth in this segment after a brief stretch of slumping sales. Apple sold about 78.3 million iPhones in the previous quarter, which marked growth of about 5%.
2. Revenues from China will continue to be sluggish
Last year, Apple reported sales of $12.49 billion in the Greater China region. However, based on the estimates of four analysts, our consensus estimate calls for sales of $11.39 billion in the region this quarter. China is Apple’s second-largest market behind the Americas, but Chinese regulators have made operations more difficult for outside services that directly compete with the country’s domestic offerings. Add these conditions to the uncertainty that has surrounded the Chinese economy recently, and it’s easy to see why Apple might struggle in the region.
3. The Services unit will continue its impressive growth
As mentioned before, the growth of Apple’s Services unit was one of the most impressive parts of its last report. This quarter, our consensus estimate—based on 20 separate estimates—calls for Services revenue of $6.74 billion this quarter. This would represent growth of 12.5% from last year’s Q2 total of $5.99 billion. At least part of these gains can be attributed to the insane growth of Apple Music, the company’s music streaming service that reportedly has more than 40 million users.
These important stock drivers are from the daily non-financial metrics consensus estimate file. You can learn more about these metrics and all of the different estimates we are tracking here>>>
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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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