For Immediate Release
Chicago, IL – May 17, 2019 – Zacks Equity Research Rent-A-Center (RCII - Free Report) as the Bull of the Day, Proto Labs (PRLB - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA (NVDA - Free Report) , Pinterest (PINS - Free Report) and Applied Materials (AMAT - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
A very solid bounce back for the market this week has many investors feeling invincible. Over the last couple of trading days, the dartboard approach would have led to solid gains. By now, we all know that all good things come to an end. In this case, eventually the market is going to stop rewarding every stock out there. It will be become a vehicle of scrutiny. One way to avoid the market’s wrath is to bank on stocks with strong earnings trends. As long as earnings are moving up in a positive direction, a stock can go on an unbelievable run.
Stocks with have favorable Zacks Ranks are those with the strongest earnings trends. Like today’s Bull of the Day, Rent-A-Center.Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a rent-to-own basis. The company operates through four segments: Core U.S., Acceptance Now, Mexico, and Franchising. It offers durable products, such as consumer electronics; appliances; computers, including tablets; smartphones; wheels and tires; and furniture, including accessories under rental purchase agreements. The company also provides merchandise on an installment sales basis; and rent-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within retailer's locations.
The reason for the favorable Zacks Rank lies in the series of earnings estimate revisions to the upside for the current year. Over the last sixty days, six analysts have jacked up their estimates. The bullish moves among analysts have increased our Zacks Consensus Estimate from $1.82 to $2.12. Next year’s estimates have moved dramatically as well, jumping from $2.15 to $2.45. And this isn’t a company that over-promises and under delivers. Last quarter’s EPS beat came in nearly double analysts estimates calling for just 30 cents. The 59-cent print was the last in several earnings beats for the company going back four quarters in a row.
Bear of the Day:
With the market bouncing sharply off Monday’s lows, it makes investors feel invincible. It seems like every stock I look at is jumping up. I’ve seen individual names move two, three, sometimes five percent easily over the last couple of days. I can tell you one thing is for sure, the move will not last forever. Eventually, investors will be looking for stocks with the strongest earnings. Those with weak trends will see pressure. One way to separate stocks with the best trends from the worst trends is by leaning on our Zacks Rank. Stocks with favorable ranks have strong earnings trends while those with unfavorable ranks tend to have weaker trends.
One stock with a weak earnings trend is today’s Bear of the Day, Proto Labs.Proto Labs, Inc., together with its subsidiaries, operates as an e-commerce driven digital manufacturer of custom parts for prototyping and short-run production worldwide. It utilizes injection molding, computer numerical control machining, three-dimensional (3D) printing, and sheet metal fabrication to manufacture custom parts for developers and engineers who use 3D computer-aided design software to design products across a range of end markets.
Currently, Proto Labs is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rating lies in the series of earnings estimate revisions to the downside from analysts. Over the last thirty days, three analysts have cut their estimates for the current year as well as next year. The bearish sentiment has cut the current year Zacks Consensus Estimate from $3.16 to $2.96 for the current year while next year’s number is off from $3.73 to $3.45.
The Rubber – Plastics industry ranks in the Bottom 8% of our Zacks Industry Rank.
New Earnings Beats for NVIDIA, AMAT & Pinterest Revenues
Graphics processor giant NVIDIA reported fiscal Q1 2020 results after the closing bell Thursday, with results beating estimates on both top and bottom lines. Earnings of 88 cents per share outperformed the 82 cents expected by Zacks analysts. Revenues of $2.22 billion surpassed the $2.20 billion anticipated, although this number was down considerably from the $3.21 billion reported in the year-ago quarter.
Further, NVIDIA intends to return $3 billion to shareholders by the end of the current fiscal year. The company has only missed earnings estimates once since calendar Q3 2015, when we recalibrated earnings related to stock-based compensation. NVIDIA shares are trading up more than 5% in the after-hours session.
Pinterest, an Internet-based "visual discovery engine" with a Zacks Rank #3 (Hold) rating, debuted its first earnings release as a publicly traded company, after its late-April IPO. As is often the case with newer companies (without much analyst coverage at this stage), its EPS numbers were way off estimates of -9 cents per share, reporting -32 cents instead. Revenues, however, were slightly better than expected: $201.9 million in sales as opposed to $201.1 million in the Zacks consensus.
Growth numbers were solid for Pinterest, especially globally: overall global growth was +54% year over year, with global monthly active users (MAUs) up 22% from a year ago and average revenue per user (ARPU) +26% globally from its year-ago quarter. However, shares are taking a bath in the wake of the big bottom-line miss, trading down 15% at this hour.
Applied Materials outperformed expectations on its fiscal Q2 top and bottom lines after Thursday's closing bell, putting up 70 cents per share on $3.54 billion in revenues compared with the 66 cents and $3.48 billion expected. Even better, AMAT guidance for Q3 was taken higher -- notable considering competitors like Intel had trimmed guidance in their earnings reports. Applied Materials stock is trading north of 4% in after-hours. For more on AMAT's earnings, click here.
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