For Immediate Release
Chicago, IL – September 28, 2018 – Zacks Equity Research Aspen Technologies (AZPN - Free Report) as the Bull of the Day, Electronic Arts (EA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis NetApp, Inc. (NTAP - Free Report) , AppFolio, Inc. (APPF - Free Report) and MobileIron, Inc. (MOBL - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Based in Bedford, MA, Aspen Technologies is a company that provides process optimization software solutions. One of its primary products, aspenONE, is a software that has been developed specifically for companies in the broad process industries like energy, chemicals, engineering, and construction.
AspenTech’s performance in its recent fourth quarter was strong. Earnings of 59 cents per share beat the Zacks Consensus and also surpassed the higher end of the company’s management’s guided range of 53-55 cents per share. Revenues came in line with our consensus, also came ahead of the higher end of management’s projected range.
Thanks to an increase in subscription and software revenues—up 3.5% year-over-year—total revenues inched up around 2% year-over-year; impressive performance of its Asset Performance Management (APM) suite and SMB business also drove growth.
Additionally, annual spend, which is the annualized value of all term license and maintenance contracts at the end of Q4, was roughly $489 million, up 6.4% from the prior year period.
AspenTech generated $79.1 million cash from operations in the quarter compared with $73.1 million reported in the previous quarter. Free cash flow came in at $79.5 million compared with $78.1 million at the end of the previous quarter.
In its Q4 earnings release, Antoni Pietri, President and CEO, said “AspenTech ended fiscal 2018 with a solid performance across all areas of the business. Our results reflect encouraging signs of improvement among Engineering & Construction customers, as well as continued strength from our owner-operator customers.”
“We are pleased with the significant progress made with APM in its first year in the market and believe we are well positioned to generate meaningful growth from this market opportunity in fiscal 2019 and beyond,” he continued.
Bear of the Day:
Electronic Arts is a well-known gaming company that develops, markets and publishes game content and services that can be played on consoles, PCs, mobile phones, and tablets. Some of its established brands include FIFA, Madden NFL, Star Wars, Battlefield, The Sims, and Need for Speed.
During the first half of 2018, shares of EA seemed like they could not be stopped, and were up over 36% heading into its first-quarter earnings report.
Its Q1 performance was mixed overall, but EA did beat the Zacks Consensus Estimate on both the top and bottom line; the company noted strong results in its sports franchises, Madden NFL and FIFA. Additionally, digital net bookings were up 13% year-over-year, hitting $3.55 billion.
But, lower-than-expected guidance and a delayed release of Battlefield V, one of its biggest brands, took a huge hit on the stock.
In a press release, CEO and CFO Blake Jorgensen said, "We're updating our fiscal year guidance to reflect the updated launch date for Battlefield V, the ongoing impact of foreign exchange rate changes, and our current outlook for our mobile business."
EA now expects net bookings to be $5.2 billion, down from $5.55 billion; roughly $115 million of this change is driven by foreign exchange rate movements.
With Battlefield V, EA pushed the release date back by a month. There are preliminary reports out suggesting that the game will bring in disappointing sales numbers.
3 Tech Stocks for Growth Investors to Buy Now
By their very nature, growth investors are primarily focused on finding companies whose earnings and revenue are expected grow at a rate that outpaces the market. This investment strategy comes with its fair share of risks, but it also brings the exciting possibility of outsized returns—an end goal that every investor desires.
Over the past several years, Wall Street’s most exciting growth stocks have emerged from the technology sector. From industry innovators like Amazon and Netflix to exciting foreign stocks such as Alibaba, tech-focused growth investors have been rewarded with massive profits recently.
Strong earnings and impressive sales imply that the technology sector’s hot streak could continue throughout the remainder of 2018 and well into 2019. That means that growth investors searching for the next great market-beating stock might want to keep their focus on tech companies.
Luckily, we can pair the proven Zacks Rank with our innovative Style Scores system, which includes a “Growth” category, to find strong growth tech stocks. Investors should note that our Growth category values earnings and sales growth, as well as improvements to a company’s financial statements—including strong cash flows and great return on equity.
With all of this said, check out these three tech stocks for growth investors to consider now:
1. NetApp, Inc.
NetApp specializes in hybrid cloud solutions; in other words, it provides data-based services which simplify the management of applications cloud and on-premises environments. NetApp’s products and solutions are in high demand as enterprises around the world continue modernizing and adapting to cloud technology. The stock sports a Zacks Rank #1 (Strong Buy) and sports promising growth characteristics.
Notably, NetApp has a “B” grade for Growth in our Style Scores system. Earnings are projected to improve by more than 27% in 2018, and that growth is expected to continue to the tune of 14% on a long-term, annualized basis. NetApp is also notching cash flow growth of about 25% right now.
2. AppFolio, Inc.
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. Currently, the stock is a Zacks Rank #2 (Buy).
AppFolio recently surged into profitability, which is something that investors tend to reward. This fiscal year, current estimates are calling for earnings growth of 93% and net sales growth of 28%. Earnings and revenue are expected to improve by an additional 55% and 24%, respectively, next year.
The company is also improving its cash position, generating quadruple-digit-percentage cash flow growth and operating with a net margin of nearly 11%. AppFolio has also proven to be efficient, with Return on Equity of 20% crushing its industry average.
AppFolio should be able to use this, and its solid margins, to capitalize on its new business opportunities. APPF has also displayed the strength of small caps recently, adding about 30% over the past three months.
3. MobileIron, Inc.
MobileIron is a mobile software company. Its solutions provide management tools for mobile devices in enterprise environments and secure connections to enterprise data in mobile environments. Many people thinks of smartphones and tablets as consumer devices, but this is a key growth business moving forward as the enterprise world continues to expand its mobile capabilities.
MOBL is currently a Zacks Rank #2 (Buy). It has an “A” grade for Growth in our Style Scores system and is expected to see earnings growth in excess of 64% this year. The company also has a five-year historical sales growth record of 13%. Meanwhile, MobileIron belongs to a group of business which falls in the Top 36% of the Zacks Industry Rank right now.
5 Medical Stocks to Buy Now
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