For Immediate Release
Chicago, IL – June 15, 2018 – Zacks Equity Research highlights Wingstop Inc. (WING - Free Report) as the Bull of the Day, Papa John's International, Inc. (PZZA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AppFolio (APPF - Free Report) , Workday, Inc. (WDAY - Free Report) and Western Digital Corporation (WDC).
Here is a synopsis of all five stocks:
Bull of the Day:
Wingstop Inc. is one of the fastest growing restaurant chains in America. This Zacks Rank #1 (Strong Buy) is expected to see double digit sales growth over the next 2 years.
Wingstop operates and franchises more than 1,000 restaurants across the United States and internationally in Mexico, Singapore, the Philippines, Indonesia, the UAE, Malaysia, Saudi Arabia and Colombia. It's a mid-cap company with a $1.5 billion market cap.
It features classic and boneless wings in 11 distinctive flavors. They are always cooked to order. There are house made sides as well, including seasoned fries.
Wingstop has grown its domestic same store sales for 14 consecutive years.
Another Beat in the First Quarter
On May 3, Wingstop reported its fiscal first quarter results and beat the Zacks Consensus again. Earnings were $0.25 versus the consensus of $0.20.
It extended its impressive earnings surprise streak.
Wingstop has never missed since its 2015 IPO.
Total revenue rose 11.9% to $37.4 million on strong same-store-sales.
Domestic same store sales jumped 9.5%, up from a decline of 1.1% a year ago.
The store count also rose 12.2% to 1,157 global locations.
Bear of the Day:
Papa John's International, Inc. is struggling with a slowdown in its North American business and higher labor costs. This Zacks Rank #5 (Strong Sell) is expected to see falling earnings in 2018.
Papa John's is the third largest pizza delivery company in the world with over 5,000 stores.
Second Miss in a Row in the First Quarter
On May 8, Papa John's reported its first quarter results and missed on the Zacks Consensus. It reported $0.50 versus the consensus of $0.62. It was the second consecutive earnings miss.
Revenue fell 4.9% to $427.3 million due to lower comparable sales.
North American comparable sales fell 5.3% while International managed to finish in the green, up 0.3%. But North America is its bigger market by almost 2 to 1.
Operating margin at company-owned domestic restaurants also fell 2.7% as a percentage of related revenue, mostly due to lower comparable sales as well as increased labor costs including higher minimum wages and increased non-owned automobile costs.
Full Year Estimates Cut
And while the company reaffirmed its prior full year guidance, the analysts weren't really buying it as they slashed both 2018 and 2019 estimates.
3 estimates were cut in the last 2 months for 2018, pushing the Zacks Consensus Estimate down to $2.37 from $2.49.
That's an earnings decline of 9.5% compared to 2017 as it made $2.62 in the prior year.
Analysts see some rebound in earnings in 2019, with earnings growth expected to be 15%, but 3 estimates were still cut for 2019 over the last 2 months.
The shares have struggled in 2018, falling 8.5% year-to-date.
They're at 2-year lows.
3 Cloud Stocks to Buy Right Now
In a matter of just a few years, “the Cloud” has evolved from a budding new tech feature to one of the main factors driving growth in the technology sector. Cloud computing is now an essential focus for software-related companies, and cloud stocks have piqued the interest of many tech-focused investors.
New technologies and changing consumer behavior have changed the shape of the technology landscape, and an industry that was once centered on the personal computer has adapted to survive in the world of mobile computing and the Cloud. The markets have been paying attention, and some of the best tech stocks have been those that are either primarily cloud-based companies, or those that have shown growth in their cloud operations.
With this in mind, we’ve highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics. Check out these three cloud stocks to buy right now:
AppFolio offers cloud-based software solutions for the property management and legal industries. The company’s AppFolio Property Manager is a leading solution for property management, while its MyCase application is ideal for practitioners and small law firms. AppFolio has found consistent profitability, and investors have rewarded the stock with 100% gains over the past year.
APPF is currently sporting a Zacks Rank #2 (Buy), as well as an “A” grade for Growth in our Style Scores system. The stock will hope to maintain its momentum with continued bottom-line expansion, with current consensus estimates projecting EP growth of 66% on net sales growth of 27% this year. AppFolio has also recently become cash positive and is seeing quadruple-digit cash flow growth right now.
2. Workday, Inc.
Workday designs enterprise cloud applications for human resources and finance. It provides its customers—which fall in the tech, financial services, business services, healthcare, retail, and other industries—with the tools to manage critical business functions using industry-leading cloud solutions.
WDAY is holding a Zacks Rank #2 (Buy) and is another explosive growth pick. Based on current analyst estimates, we expect Workday to report EPS growth of 23% and revenue growth of 26% this fiscal year. Its valuation is stretched, but the stock also looks interesting from an earnings momentum perspective, having added 36% to its full-year EPS estimates within the past month. This means analyst sentiment has remained positive recently.
3. Western Digital Corporation
Western Digital is one of the world’s largest memory storage solutions companies. The stock is a cloud play because cloud computing has created massive demand for data storage. Moreover, Western Digital has attempted to make cloud storage a reality for individual consumers through its “MyCloud” product line.
WDC is currently sporting a Zacks Rank #1 (Strong Buy). It trades at an attractive 5.7x forward 12-month earnings, and its PEG of 0.3 implies investors are also getting the stock at dirt-cheap levels based on its expected growth rate. Income-focused investors will also that WDC is cash healthy and currently offers a dividend yield of about 2.4%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
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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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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