For Immediate Release
Chicago, IL – August 30, 2018 – Zacks Equity Research Nova Measuring Instruments (NVMI - Free Report) as the Bull of the Day, Scotts Miracle-Gro (SMG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on PayPal (PYPL - Free Report) and eBay (EBAY - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
Nova Measuring Instrumentsis a Zacks Rank #2 (Buy) and is participating in a broad recovery trade in the chip space. In early June, this stock was breaking out over $31 per shares, but the breakout turned into a breakdown and the stock traded back to the $27 range as earnings were released at the start of August. Since that time, the stock has been climbing and today it is the Bull Of The Day.
Nova Measuring Instruments makes and sells process control systems used in the manufacture of semiconductors. The company offers in-line optical and x-ray stand-alone metrology systems, as well as integrated optical metrology systems that attach directly to wafer fabrication process equipment. Nova Measuring Instruments was founded in 1993 and is headquartered in Rehovot, Israel.
Recent Earnings Report
On August 1, the company reported EPS of $0.46 and that was $0.04 ahead of the Zacks Consensus Estimate of $0.42. That translates to a positive earnings surprise of 9.5%.
The company also guided Wall Street at that time. The company expects 3Q EPS to be between $0.37 and $0.49. At the time the Wall Street Consensus was calling for $0.46. Revenues are expected to be between $58M and $64M and that too falls in line with the expectation that was at $62.8M at the time.
Bear of the Day:
Scotts Miracle-Grois a Zacks Rank #5 (Strong Sell) and has been since May 3 of 2018. That is almost 6 months of being a Strong Sell. The reason the stock has been a Zacks Rank #5 (Strong Sell) is that earnings estimates keep falling. Let's review where the numbers stand in this Bear of the Day article.
The Scotts Miracle-Gro Company makes and sells consumer lawn and garden products. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.
A quick check of the detailed estimates page: https://www.zacks.com/stock/quote/SMG/detailed-estimates shows why this stock has been sliding over the last few months.
The current quarter has seen estimates drop by 20 cents over the last 90 days.
The next quarter has softened up by about 6 cents over that same time period.
When you look at the annual number, you really get a sense of what is happening. The Zacks Consensus Estimate for 2018 moved from $4.14 to $3.77 over the last 90 days and that will cause your stock to drop.
The 2019 Zacks Consensus Estimate has fallen from $4.83 to $4.23 over the same time period. Again, this is not what you want to see.
Reason to Speculate
Earnings estimates give you an idea of why investors are selling some stocks, but at some point, the estimates for SMG might turn around. If they do, it could be due to the recent big moves in the pot space. For that reason alone I want to keep SMG on my radar screen.
Why Is PayPal (PYPL - Free Report) Trading at New All-Time Highs?
Shares of PayPal surged over 2.2% to touch a new all-time high Wednesday on the back of an analyst upgrade and momentum following the slow rollout of its newly redesigned app.
Jefferies analyst John Hecht upped his price target for PayPal from $100 per share to $110 per share. This new price target marked a 21% upside to PYPL’s closing price of $90.61 on Tuesday. "We believe core P2P and mobile trends - which have been impressive - should be followed more closely alongside the Venmo success," Hecht wrote in a note to clients Wednesday.
The analyst also said that the company will be able to manage its breakup with eBay since PayPal has been “growing away from eBay” since it spun off from the online seller in July 2015.
Investors should note that eBay announced that PayPal will no longer be its top payment option after their current deal ends in 2020. Customers will still be able to use PayPal to make purchases on eBay, but it will no longer be prominently featured ahead of debit and credit card options, nor will it process card payments.
PayPal saw its stock price jump over 2.2% through mid-morning trading to touch a new 52-week and all-time high of $92.94 per share following the Jefferies price target hike.
Redesigned Mobile App
Last week, PayPal announced that will return to its core payment roots on its main mobile app after users appeared annoyed that it had become too crowded and focused more on food ordering and investments. “The most popular feature of the app still remains sending and requesting money – ranging from paying someone back, covering a portion of a bill, sending a gift, or buying something from a casual seller,” PayPal wrote in a statement.
“We are making the app simpler to use and making it even easier for our customers to send and request money.”
The updated PayPal app is set to make it easier for users to send and move money, view their balances, and get notifications. PayPal added the send and receive money buttons to the home screen. The firm also simplified the process of adding photos and importing contacts so there is less worry about sending money to the wrong people.
PayPal’s redesigned app is currently available to Android users in Australia, Italy, and a few other markets. The company is set to roll out an iOS version and introduce the updated app in more markets, which includes the U.S., “over the coming weeks.”
Shares of PYPL are up roughly 165% over the last three years, which crushes its industry’s 75% climb and the S&P 500’s 47% gain. Even though PayPal stock has cooled down over the last six month, its outsized growth has continued over the last two years. Plus, the payment giant has seen its stock price surge 13% in the last month.
PayPal currently operates a variety of financial services and has grown through a series of acquisitions that include the widely popular millennial-focused, peer-to-peer payment platform Venmo. PayPal has also made some acquisitions this year, which include its June purchase of Hyperwallet for roughly $400 million to help it expand its global payout capabilities. PayPal acquired fraud prevention and risk management firm Simility for $120 million in cash that same month.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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