For Immediate Release
Chicago, IL – August 7, 2018 – Zacks Equity Research highlights Amazon.com, Inc. (AMZN - Free Report) as the Bull of the Day, Ford Motor Company (F - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Etsy (ETSY - Free Report) .
Here is a synopsis of all three stocks:
Bull of the Day:
Headquartered in Seattle, WA, Amazon.com, Inc. is one of the largest online retailers in the world, with extensive operations in North America, and strong expansion across the globe.
The company, founded by Jeff Bezos in July 1994, went public in May 1997. It currently operates through the following segments: North America, International, and Amazon Web Services (AWS).
Exceptionally Strong Q2 Results
The retail behemoth’s Q2 2018 earnings trounced street expectations, thanks to strong growth in its cloud and advertising businesses.
Net income surged to $2.5 billion or $5.07 per share, from $197 million, or $0.40 per share, in second quarter 2017. Earnings were significantly ahead of the Zacks Consensus Estimate of $2.49 per share
Net sales increased 39% to $52.9 billion from $38.0 billion in second quarter 2017. Sales however missed our estimate of $53.4 billion.
AWS revenues soared 48.9% year over year to $6.11 billion, thanks mainly to expanding customer base.
After an exceptionally strong quarterly report, analysts have significantly raised their estimates for the company.
Zacks Consensus Estimates for the current and the next fiscal year have jumped to $17.27 per share and $25.87 per share respectively, from $12.44 per share and $20.30 per share, before the results. The company has beaten Zacks Consensus Estimate in each of the past four quarters, with an average quarterly surprise exceeding 1347%.
Bear of the Day:
Founded by Henry Ford in 1903 and is headquartered in Dearborn, MI. Ford Motor Company is an automotive, financial services and mobility company with operations in the U.S. and across the world.
The company operates through the following segments: Automotive and Financial Services. It manufactures and distributes automobiles in 200 markets across six continents.
Disappointing Quarterly Results
Ford reported Q2 adjusted earnings of 27 cents per share, short of the Zacks Consensus Estimate of 31 cents per share. Adjusted earnings in the prior-year quarter were 56 cents per share.
Higher commodity costs, mainly due to steel and aluminum tariffs hurt results. Rising challenges faced by the company in the China market and the North American production disruption also impacted results.
Analysts have slashed their estimates significantly after lackluster results. Zacks Consensus Estimates for the current and next year are down to $1.38 per share and $1.39 per share respectively, down from $1.54 and $1.56, before the results.
The Bottom Line
Auto sales slowed down in July with higher interest rates and rising gas prices.
Etsy (ETSY - Free Report) Q2 Earnings Miss Estimates
Etsy reported quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.04 per share. This compares to earnings of $0.10 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -25%. A quarter ago, it was expected that this online crafts marketplace would post earnings of $0.05 per share when it actually produced earnings of $0.10, delivering a surprise of 100%.
Etsy, which belongs to the Zacks Internet - Services industry, posted revenues of $132.39 million for the quarter ended June 2018, surpassing the Zacks Consensus Estimate by 4.66%. This compares to year-ago revenues of $101.69 million. The company has topped consensus revenue estimates four times over the last four quarters.
Total revenue was up 30.2% from the year-ago period, thanks in part to growth in both Marketplace and Services revenue. GMS for the quarter gained 20.4% to touch $901.7 million. Total operating expenses were down 4.5% to $74.2 million.
“We've made meaningful progress to enable significantly more investment in the Etsy platform, and are leveraging our strong financial position to support what we believe is a long runway for future growth,” said CFO Rachel Glaser.
Etsy now expects full-year revenue to fall in the range of $587 million to $596 million, up from previous guidance of $582 million to $591 million. This new guidance would represent growth of 33% to 35%.
As of 4:27 pm EDT, Etsy shares were up 7.2% in after-hours trading to touch $45.50.
What's Next for Etsy?
While Etsy has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
Ahead of this earnings release, the estimate revisions trend for Etsy was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.10 on $149.93 million in revenues for the coming quarter and $0.46 on $588.87 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Services is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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 >>.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.