For Immediate Release
Chicago, IL – May 31, 2018 – Zacks Equity Research highlights Immersion Corp. (IMMR - Free Report) as the Bull of the Day and Molson Coors Brewing Co. (TAP - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Micron (MU - Free Report) , Nvidia (NVDA - Free Report) and Amazon (AMZN - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
Sitting at a #1 (Strong Buy) on the Zacks Rank, Immersion Corp. is a company that develops hardware and software technologies that enable users to interact with computers using touch feedback. Their patented technologies like TouchSense let devices like computer mice, joysticks, knobs, and medical simulation products deliver tactile sensations that correspond to on-screen events.
Immersion focuses on four application areas: computing and entertainment; medical simulation; professional and industrial; and three-dimensional capture and interaction.
Shares Rally on Strong Q1 Earnings
Earlier this month, Immersion reported strong Q1 numbers across the board, and shares rallied 9% as a result.
Earnings of $2.34 per share soared past the Zacks Consensus of $1.39 per share, while record revenues of $85.4 million handily beat our consensus estimate of $30 million as well.
Royalty and license revenues were $85.3 million for the quarter, and operating expenses saw a 31% year-over-year decline.
Additionally, IMMR noted that it entered into a settlement and license agreement with iPhone giant Apple (AAPL) for certain patents.
The company raised its guidance, and now expects fiscal 2018 revenues to be between $108 million and $118 million, with non-GAAP net income to fall in the range of $59 million and $67 million.
For IMMR, its bottom line is trending upward for the foreseeable future.
Earnings are expected to grow almost 73% for the current quarter, though one analyst has cut their outlook recently.
Fiscal 2018 figures are looking pretty great, with two upwards estimates in the past 60 days. The Zacks consensus estimate trend has jumped from $1.34 per share to $2.03 per share.
While earnings are expected to decline over 34% for fiscal 2019, the tech company does have a long-term (3-5 years) earnings growth rate of 15%.
IMMR has an average earnings surprise of +27.6%.
IMMR: What’s Next for the Stock?
Shares of Immersion have gained over 108% since the start of the year and about 74.6% in the past one-year period. In comparison, the S&P 500 has gained 1.2% and around 13%, respectively.
Bear of the Day:
One of the largest global brewers, Molson Coors Brewing Co. has acquired a large portfolio of beer and cider brands over the years, including Coors Light, Miller Lite, Carling, Staropramen, Sharp's Doom Bar, Leinenkugel's Summer Shandy, Blue Moon Belgian White, Hop Valley, Creemore Springs Premium Lager and Crispin Cider.
The company operates through Molson Coors Canada, MillerCoors, Molson Coors Europe and Molson Coors International.
Molson Coors’ first quarter was a disappointing one, with earnings and revenues falling short of expectations. The stock is currently sitting at a #5 (Strong Sell) on the Zacks Rank. What’s next for this brewing giant?
Disappointing Q1 Results
Earlier this year, Molson Coors reported earnings of 48 cents per share, falling way short of the Zacks Consensus of 80 cents and plunging 40% year-over-year.
Revenues of $2.33 billion missed our consensus estimate too and declined 4.8% from the prior-year period. In the U.S., sales decreased 5.8%, while Canada and International sales dipped 2.5% and 7%, respectively.
TAP’s worldwide brand volume inched lower by 3.1% to 19.1 million hectoliters due to soft U.S., International, and Canada volumes. Global priority brand volumes dipped 5.6%, while financial volumes declined 4.9% to 20.8 million hectoliters.
Underlying EBITDA was $426 million during the quarter, marking an 18.5% drop from the year-ago period.
A bright spot this quarter, however, was net sales per hectoliter, which inched up a slight 0.1%.
Estimates took a hit in the days following the report.
For the current quarter, three analysts cut their outlook in the last 60 days, and the consensus has dipped five cents from $1.98 to $1.93 per share. However, earnings are expected to grow around 16% for the period.
Five analysts have revised their estimates downward for the current fiscal year, and earnings are projected to increase not even 10%. The consensus has decreased from $5.16 to $4.89 per share.
Looking at the next fiscal year, earnings could grow about 6.7%, and the current consensus sits at $5.22 per share, falling 35 cents in the past 60 days.
Can TAP Stock Turn Around?
Shares of Molson Coors are down 24% so far this year and have slipped about 35% in the past one year. Compared to the S&P 500, the index has gained 1.2% and 13%, respectively.
Better Buy: Micron vs. NVIDIA
Shares of Micron and Nvidia both opened higher on Wednesday, with Micron touching a new 52-week high and Nvidia inching closer to its all-time mark. Both of these semiconductor powers are also currently Zacks Rank #1 (Strong Buy) stocks, so let’s take a quick look at some of their current fundamentals to see if either stock has an advantage at the moment.
Nvidia stock has skyrocketed 1,021% over the last three years, while Micron stock has soared 125%. Narrowing the focus a bit more, the two stocks are much more neck and neck. Shares of Nvidia are up 437% during the last two years, outpacing Micron’s nearly 404% surge. Nvidia and Micron both crushed the S&P 500’s 28% climb and also made fellow growth giant Amazon’s 123% move look small.
Within the last year, the picture shifts much more heavily in Micron’s favor. Shares of Micron have soared 108% over the last year, while Nvidia has surged nearly 74%.
Investors will see that Micron stock has performed insanely well since the start of the year. Shares of Nvidia have also greatly outperformed the market and investors might like to see that its stock is not currently sitting at a new 52-week high, meaning there is some room to move before the added burden of climbing into a new range.
Now that we have reviewed the two chip stocks recent movement, let’s move onto their current valuation picture. This is where investors will see a massive difference but must try to evaluate the stocks against each other as well as their own historical standing.
Coming into Wednesday, Micron stock was trading at 5.9X forward 12-month Zacks Consensus EPS estimates, which marks a significant discount compared to its industry’s 13.2X. Over the last year, Micron stock has traded as high as 6.9X, as low as 4.1X, and rocks a one-year median of 5.5X.
Clearly, investors will notice that Nvidia stock is trading at a massive premium to Micron, at 34.8X forward 12-month earnings estimates. Nvidia also rests far above the industry’s average of 18.3X and the S&P 500’s 16.6X. With that said, Nvidia stock has traded as high as 57.4X, with a one-year median of 45.5X, and is currently trading just above its year-long low.
Therefore, investors should be able to say with confidence that Nvidia stock is not expensive at the moment. Stepping out a bit further, it is not too much of a stretch to say that Nvidia stock appears attractive at this current valuation. And of course, Micron stock looks like one of the stronger value plays on the market, especially considering its growth projections.
Our current Zacks Consensus Estimates are calling for Micron’s quarterly revenues to hit $7.7 billion, which would mark over a 38% climb from the year-ago period. Looking a bit further ahead, the company’s full-year revenues are projected to soar nearly 46% to reach $29.62 billion.
Micron’s quarterly earnings are projected to skyrocket roughly 94% to touch $3.14 per share. Meanwhile, the company’s full-year earnings are expected to soar over 132% to reach $11.53 per share.
Transitioning to Nvidia, the company is projected to report quarterly revenues of $3.11 billion, representing a 39% climb. For the full-year, Nvidia’s revenues are expected to surge nearly 36% to touch $13.18 billion. The company’s adjusted earnings are expected to expand by 81% this quarter and 61% this year.
Both Nvidia and Micron are currently Zacks Rank #1 (Strong Buy) stocks and sport “A” grades for Growth in our Style Scores system. Investors will also be pleased to note that NVDA and MU have received a ton of earnings estimate revisions within the last 30 days for both the current quarter and full-year, with 100% agreement to the upside.
Clearly, it is hard to go wrong with either stock at the moment as both are projected to experience massive top and bottom line growth this year. The companies also operate in a growth industry and have set their sights on new areas just starting to boom, from AI to self-driving vehicle technology. Still, at the moment, the advantage has to go to Micron because of its outstanding value.
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