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Beat the Market the Zacks Way: PDF Solutions, LifeStance Health, Paychex in Focus
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Key Takeaways
PDFS gained 57.5% since an April 30 Zacks Rank upgrade versus a 2.1% rise for the S&P 500.
LifeStance Health climbed 45.8% since its Zacks Recommendation was upgraded to Outperform on April 27.
Paychex returned 15.8% in 12 weeks as demand for quality dividend stocks supported ECDP holdings
Wall Street wrapped up a holiday-shortened last week with a mixed but encouraging picture. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite index closed the week with gains of 1.4%, 0.6% and 0.05%, respectively. Investor confidence was supported by easing tensions in the Middle East, improving consumer sentiment and upbeat housing data. June consumer confidence edged up to 91.2 from a downwardly revised 90.6 in May. The S&P/Case-Shiller index showed home prices rising 1.1% year-over-year in April, beating expectations.
However, the week wasn't without twists. Tech stocks, especially AI chip companies, experienced heavy volatility as investors began questioning their stretched valuations. June's jobs report showed payroll growth slowing to just 57,000, well below expectations of about 110,000. Although unemployment dipped to 4.2% as labor force participation fell to 61.5%, roughly 720,000 people left the workforce, suggesting the lower unemployment rate was not driven by stronger hiring. That weaker hiring data strengthened hopes that the Federal Reserve may delay further interest-rate hikes.
The overall data suggest that the economy is still expanding, but at a slower pace. But the markets remain focused on corporate earnings and upcoming policy signals to see whether this momentum can continue.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
PDF Solutions and CECO Environmental Following Zacks Rank Upgrade
Shares of PDF Solutions, Inc. (PDFS - Free Report) have gained 57.5% (versus the S&P 500’s 2.1% increase) since it was upgraded to a Zacks Rank #2 (Buy) on April 30.
Another stock, CECO Environmental Corp. (CECO - Free Report) , which was upgraded to a Zacks Rank #1 (Strong Buy) on April 30, has returned 26.8% (versus the S&P 500’s 2.1% increase) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A portfolio of Zacks # 1 Rank (Strong Buy) stocks has outperformed the S&P 500 index by almost 8 percentage points this year. Through May 5, the Zacks # 1 Rank portfolio returned +13.14%, which compares to +5.19% for the S&P 500 index and +7.76% for the equal-weight version of the index in the year-to-date period.
Since its inception in 1988, this portfolio of Zacks # 1 Rank stocks has outperformed the market by 12.6 percentage points. The average annual return for this portfolio of Zacks #1 Rank stocks since inception in 1988 was +24% through May 5, which compared to +11.5% gain for the S&P 500 index and +11.3% gain for the equal-weight version of the index.
Zacks Recommendation Upgrades LifeStance Health and Alignment Healthcare
Shares of LifeStance Health Group, Inc. (LFST - Free Report) and Alignment Healthcare, Inc. (ALHC - Free Report) have advanced 45.8% (versus the S&P 500’s 1.8% increase) and 10.7% (versus the S&P 500’s 1.6% increase) since their Zacks Recommendation was upgraded to Outperform on April 27 and April 28, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
Zacks Focus List Stocks Lam Research, Axon Shoot Up
Shares of Lam Research Corporation (LRCX - Free Report) , which belongs to the Zacks Focus List, have gained 59.3% over the past 12 weeks. The stock was added to the FocusList on December 5, 2016. Another Focus List holding, Axon Enterprise, Inc. (AXON - Free Report) , which was added to the portfolio on June 3, 2020, has returned 44.5% over the past 12 weeks. The S&P 500 has advanced 13.1% over this period.
The 50-stock Focus List portfolio returned +10.73% in 2026 (through the end of May) vs. +11.27% for the S&P 500 index and +9.53% for the equal-weight version of the index.
The portfolio returned +22.1% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.
The Zacks Focus List portfolio returned +18.41% in 2024 vs. +25.04% for the S&P 500 index and +13% for the equal-weight S&P 500 index. The portfolio had returned +29.54% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio returned -15.2% vs. the S&P 500 index’s -17.96%.
Through May 31, 2026, the portfolio’s rolling returns on a one-year, three-year, five-year, 10-year basis, and since 2004 have been +31.42% (vs. +29.78% for the S&P 500 index), +24.26% (vs. +23.62%), +12.94% (vs. +14.15%), +16.40% (vs. +15.64%) and +12.42% vs. (+11.03%), respectively.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Novo Nordisk and Fair Isaac Surge
Novo Nordisk A/S (MNST - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 37.5% over the past 12 weeks. Fair Isaac Corporation (FICO - Free Report) has followed Novo Nordisk with 16.1% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned -7.14% in 2026 Q1 vs. -4.33% for the S&P 500 index.
For 2025, the portfolio returned -1.67% vs. +17.9% gain for the S&P 500 index. For the year 2024, the portfolio returned +16.26% vs. +24.89% for the S&P 500 index (SPY ETF). In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks Payche and Quest Diagnostics Outperform Peers
Paychex, Inc. (PAYX - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 15.8% over the past 12 weeks. Another ECDP stock, Quest Diagnostics Incorporated (DGX - Free Report) , has also climbed 8.4% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps to significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -1.43% in 2026 Q1 vs. -4.33% for the S&P 500 index and +2.3% for the Dividend Aristocrats ETF ((NOBL - Free Report) ).
The portfolio returned -0.6% in 2025 vs. +6.8% gain for the Dividend Aristocrat ETF. For the full year 2024, the portfolio returned +6.95% vs. +24.89% for the S&P 500 index and +6.72% for NOBL. The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Zacks Top 10 Stock FirstCash Delivers Solid Returns
FirstCash Holdings, Inc. (FCFS - Free Report) , from the Zacks Top 10 Stocks for 2026, has jumped 41.6% since the list was released on January 5, 2026, compared with the S&P 500 index’s 9.1% increase during this period.
The Top 10 portfolio retuned +19.72% in 2026 (through May 31) vs. +11.27% for the S&P 500 index and +9.53% for the equal-weight version of the index.
The Top 10 portfolio returned +22.6% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.
The Top 10 portfolio returned +62.98% in 2024, vs. +25.04% for the S&P 500 index and +13% for the equal-weight version of the index. The portfolio had returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.
Through the end of May 2026, the Top 10 portfolio has produced a cumulative return of +3,001.9% since 2012 vs. +636.2.3% for the S&P 500 index and +451.2% for the equal-weight version of the index. The portfolio has produced an average annual return of +26.6% in the period 2012 through May 31, 2026 vs. +13.7% for the S&P 500 index and +11.03% for the equal-weight version of the index.
View the Zacks #1 Rank List
Image: Bigstock
Beat the Market the Zacks Way: PDF Solutions, LifeStance Health, Paychex in Focus
Key Takeaways
Wall Street wrapped up a holiday-shortened last week with a mixed but encouraging picture. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite index closed the week with gains of 1.4%, 0.6% and 0.05%, respectively. Investor confidence was supported by easing tensions in the Middle East, improving consumer sentiment and upbeat housing data. June consumer confidence edged up to 91.2 from a downwardly revised 90.6 in May. The S&P/Case-Shiller index showed home prices rising 1.1% year-over-year in April, beating expectations.
However, the week wasn't without twists. Tech stocks, especially AI chip companies, experienced heavy volatility as investors began questioning their stretched valuations. June's jobs report showed payroll growth slowing to just 57,000, well below expectations of about 110,000. Although unemployment dipped to 4.2% as labor force participation fell to 61.5%, roughly 720,000 people left the workforce, suggesting the lower unemployment rate was not driven by stronger hiring. That weaker hiring data strengthened hopes that the Federal Reserve may delay further interest-rate hikes.
The overall data suggest that the economy is still expanding, but at a slower pace. But the markets remain focused on corporate earnings and upcoming policy signals to see whether this momentum can continue.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
PDF Solutions and CECO Environmental Following Zacks Rank Upgrade
Shares of PDF Solutions, Inc. (PDFS - Free Report) have gained 57.5% (versus the S&P 500’s 2.1% increase) since it was upgraded to a Zacks Rank #2 (Buy) on April 30.
Another stock, CECO Environmental Corp. (CECO - Free Report) , which was upgraded to a Zacks Rank #1 (Strong Buy) on April 30, has returned 26.8% (versus the S&P 500’s 2.1% increase) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A portfolio of Zacks # 1 Rank (Strong Buy) stocks has outperformed the S&P 500 index by almost 8 percentage points this year. Through May 5, the Zacks # 1 Rank portfolio returned +13.14%, which compares to +5.19% for the S&P 500 index and +7.76% for the equal-weight version of the index in the year-to-date period.
Since its inception in 1988, this portfolio of Zacks # 1 Rank stocks has outperformed the market by 12.6 percentage points. The average annual return for this portfolio of Zacks #1 Rank stocks since inception in 1988 was +24% through May 5, which compared to +11.5% gain for the S&P 500 index and +11.3% gain for the equal-weight version of the index.
You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check PDF Solutions’ historical EPS and Sales here>>>
Check CECO Environmental’s historical EPS and Sales here>>>
Image Source: Zacks Investment Research
Zacks Recommendation Upgrades LifeStance Health and Alignment Healthcare
Shares of LifeStance Health Group, Inc. (LFST - Free Report) and Alignment Healthcare, Inc. (ALHC - Free Report) have advanced 45.8% (versus the S&P 500’s 1.8% increase) and 10.7% (versus the S&P 500’s 1.6% increase) since their Zacks Recommendation was upgraded to Outperform on April 27 and April 28, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
Zacks Focus List Stocks Lam Research, Axon Shoot Up
Shares of Lam Research Corporation (LRCX - Free Report) , which belongs to the Zacks Focus List, have gained 59.3% over the past 12 weeks. The stock was added to the FocusList on December 5, 2016. Another Focus List holding, Axon Enterprise, Inc. (AXON - Free Report) , which was added to the portfolio on June 3, 2020, has returned 44.5% over the past 12 weeks. The S&P 500 has advanced 13.1% over this period.
The 50-stock Focus List portfolio returned +10.73% in 2026 (through the end of May) vs. +11.27% for the S&P 500 index and +9.53% for the equal-weight version of the index.
The portfolio returned +22.1% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.
The Zacks Focus List portfolio returned +18.41% in 2024 vs. +25.04% for the S&P 500 index and +13% for the equal-weight S&P 500 index. The portfolio had returned +29.54% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio returned -15.2% vs. the S&P 500 index’s -17.96%.
Through May 31, 2026, the portfolio’s rolling returns on a one-year, three-year, five-year, 10-year basis, and since 2004 have been +31.42% (vs. +29.78% for the S&P 500 index), +24.26% (vs. +23.62%), +12.94% (vs. +14.15%), +16.40% (vs. +15.64%) and +12.42% vs. (+11.03%), respectively.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Novo Nordisk and Fair Isaac Surge
Novo Nordisk A/S (MNST - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 37.5% over the past 12 weeks. Fair Isaac Corporation (FICO - Free Report) has followed Novo Nordisk with 16.1% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned -7.14% in 2026 Q1 vs. -4.33% for the S&P 500 index.
For 2025, the portfolio returned -1.67% vs. +17.9% gain for the S&P 500 index. For the year 2024, the portfolio returned +16.26% vs. +24.89% for the S&P 500 index (SPY ETF). In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks Payche and Quest Diagnostics Outperform Peers
Paychex, Inc. (PAYX - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 15.8% over the past 12 weeks. Another ECDP stock, Quest Diagnostics Incorporated (DGX - Free Report) , has also climbed 8.4% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
Check Payche‘s dividend history here>>>
Check Quest Diagnostics' dividend history here>>>
With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps to significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -1.43% in 2026 Q1 vs. -4.33% for the S&P 500 index and +2.3% for the Dividend Aristocrats ETF ((NOBL - Free Report) ).
The portfolio returned -0.6% in 2025 vs. +6.8% gain for the Dividend Aristocrat ETF. For the full year 2024, the portfolio returned +6.95% vs. +24.89% for the S&P 500 index and +6.72% for NOBL. The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stock FirstCash Delivers Solid Returns
FirstCash Holdings, Inc. (FCFS - Free Report) , from the Zacks Top 10 Stocks for 2026, has jumped 41.6% since the list was released on January 5, 2026, compared with the S&P 500 index’s 9.1% increase during this period.
The Top 10 portfolio retuned +19.72% in 2026 (through May 31) vs. +11.27% for the S&P 500 index and +9.53% for the equal-weight version of the index.
The Top 10 portfolio returned +22.6% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.
The Top 10 portfolio returned +62.98% in 2024, vs. +25.04% for the S&P 500 index and +13% for the equal-weight version of the index. The portfolio had returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.
Through the end of May 2026, the Top 10 portfolio has produced a cumulative return of +3,001.9% since 2012 vs. +636.2.3% for the S&P 500 index and +451.2% for the equal-weight version of the index. The portfolio has produced an average annual return of +26.6% in the period 2012 through May 31, 2026 vs. +13.7% for the S&P 500 index and +11.03% for the equal-weight version of the index.