For Immediate Release
Chicago, IL – April 20, 2020 – Zacks Equity Research Shares of MYR Group MYRG as the Bull of the Day, ASGN Inc. ASGN asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix, Inc. NFLX.
Here is a synopsis of all three stocks:
Bull of the Day:
MYR Group is a Zacks Rank #1 (Strong Buy) and it has a clean slate of A’s for the Zacks Style Scores. This stock is the Bull of the Day today after an impressive move on Friday.
Let's take a look at why this stock is moving so much and why it has the highest Zacks Rank.
MYR Group Inc. is a holding company of leading specialty contractors serving the electrical infrastructure market throughout the United States and Canada who have the experience and expertise to complete electrical installations of any type and size. Their comprehensive services on electric transmission and distribution networks and substation facilities include design, engineering, procurement, construction, upgrade, maintenance and repair services. Transmission and distribution customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Commercial and industrial electrical contracting services are provided to general contractors, commercial and industrial facility owners, local governments and developers generally throughout the western and northeastern United States and western Canada.
I see a good earnings history with 3 beats and 1 miss in the last 4 quarters.
The most recent beat had the company posting EPS of $0.76 when the Zacks Consensus Estimate was calling for $0.55. That $0.21 beat translates to a positive earnings surprise of 38%.
Over the last year the average positive earnings surprise is 7.4%.
The estimate revisions for MYRG are just what we like to see. A smooth trickle higher for this quarter, next quarter, this year and next year.
I see a bump of 3 cents for this quarter and a penny for next.
The 2020 Zacks Consensus Estimate is $2.72 but it was just $2.59 60 days ago.
Next year we are looking at $3.16 and that is up from $3.09 60 days ago.
I love this valuation. 8.5x forward earnings is a steal. 28% topline growth is wonderful to see. 1x book is also a steal! I don’t like that price to sales is 0.2x but that is a result of margins being so thin at 1.8%.
Bear of the Day:
ASGN Inc. is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. Let's a take a look at why this stock has the lowest Zacks Rank and if there is any light at the end of the tunnel.
ASGN Incorporated provides IT and professional services primarily in the technology, creative/digital, engineering, life sciences and government sectors. ASGN Incorporated, formerly known as On Assignment Inc., is based California, United States.
The earnings history isn't that bad here with two beats and two misses. The earnings history really only plays a small role in how the Zacks Rank is determined. I have seen much worse from stocks that are Zacks Rank #1 (Strong Buy).
The single biggest factor in the Zacks Rank is the movement in earnings estimates. When estimates come down, the Zack Rank is likely to fall as well. I see the 2020 Zacks Consensus Estimate sliding from $5.05 to $2.91.
Next year shows more of the same with the 2021 Zacks Consensus Estimate dropping from $5.48 to $3.71 over the last 60 days.
This is the major reason the stock is now a Zacks Rank #5 (Strong Sell).
With the stock falling so much in the last few months the valuation has really come down as well. The forward PE of 12x is pretty good considering the company posted growth of 10% on an annual basis in the most recent quarter. Price to book of 1.4x is pretty good and i would like to see the price to sales at over above 1x and ASGN has a 0.5x multiple.
Can Netflix (NFLX) Continue to Beat Estimates in Q1?
Netflix, Inc. is scheduled to report first-quarter 2020 earnings on Apr 21, after market close. The streaming entertainment service provider’s quarterly earnings surpassed the Zacks Consensus Estimate in all the last four quarters, the average being 57.6%. In fact, shares of the company have gained 21.9% over a year and this stock price appreciation also came in against the Zacks Broadcast Radio and Television industry’s decline of 5.2%.
Q120 Was an Eventful Quarter for the NFLX Stock
Netflix, which carries a Zacks Rank #2 (Buy), is particularly in focus because of the coronavirus-triggered lockdown, which stranded millions across the globe in their homes with little or no option left other than working from home. The streaming giant proved to be a significant source of entertainment in recent weeks, and registering strong viewership. Specifically, in the United States, Netflix witnessed a spike in new subscriptions, per a Forbes report.
In fact, the company’s reliance on its streaming services led the stock to hit a two-year high on Apr 14 during a phase when movie theatres and other media companies have their doors locked. On that date, the stock closed at more than $413 per share, reaching the maximum since July 2018.
Of course, the lockdown and strict social-distancing measures are the major reasons behind this uptrend. But there are also other factors soaring up this streaming giant’s fortunes. Netflix released an array of diverse shows throughout first-quarter 2020, some of which acquired international acclaim and solid viewership because of their unique and gripping content.
For example, Tiger King, a true-crime miniseries about private zookeepers released by the leading streaming entity on Mar 20, was watched by as many as 34.3 million people around the globe within Mar 30, according to Nielsen.Other popular shows (both originals and new episodes of an existent show) that released in the firstquarter 2020 included Dracula, Pandemic: How to Prevent an Outbreak, Chilling Adventures of Sabrina, BoJack Horseman, Narcos: Mexico, Cable Girls, Elite and Archibald's Next Big Thing, which garnered robust viewership and attracted new subscribers onto the streaming giant’s platform.
Q120 Earnings and Revenue Expectations
The Zacks Consensus Estimate for Netflix’s first-quarter earnings is pegged at $1.62 per share, suggesting a significant improvement (113.2%) from the year-ago quarter’s reported earnings of $0.76.
In addition, the Zacks Consensus Estimate for Netflix’s first-quarter revenues stands at $5.70 billion, indicating a 26.1% rise from the revenues reported for the quarter ended March 2019.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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