For Immediate Release
Chicago, IL – April 27, 2020 –
Zacks Equity Research Shares of CURO Group ( CURO Quick Quote CURO - Free Report) as the Bull of the Day, Foot Locker ( FL Quick Quote FL - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft ( MSFT Quick Quote MSFT - Free Report) , Amazon ( AMZN Quick Quote AMZN - Free Report) and Slack ( WORK Quick Quote WORK - Free Report) . Here is a synopsis of all five stocks: : Bull of the Day
The market is on the mend after the coronavirus shutdown hit the economy like a ton of bricks. While many industries remain on the defensive, some are rallying higher each and every day. In order to find stocks with the greatest chance of future success, I lean on the strength of the Zacks Rank. Stocks in top industries with strong Zacks Ranks have the strongest earnings trends. These are trends which have developed over several quarters and don’t just change on a dime, like stock prices. By investing in stocks with a strong Zacks Rank, you can remain confident holding during short-term market downturns.
Today’s Bull of the Day is one of these stocks with a strong Zacks Rank. Today’s Bull is Zacks Rank #1 (Strong Buy)
CURO Group. CURO Group Holdings Corp., a diversified consumer finance company, provides consumer finance to a range of underbanked consumers in the United States, Canada, and the United Kingdom. It offers unsecured installment loans, secured installment loans, open-end loans, and single-pay loans, as well as ancillary financial products, including check cashing, proprietary reloadable prepaid debit cards, credit protection insurance, gold buying, retail installment sales, and money transfer services.
The Financial – Consumer Loans industry ranks in the Top 33% of our Zacks Industry Rank. The reason for the favorable ranks on CURO is the series of earnings estimate revisions coming to the upside recently. Current year estimates have been on the rise. With analysts revising earnings to the upside, current year EPS estimates have gone up from $2.98 sixty days ago to $3.17 currently. That would represent earnings growth of 12.01% year-over-year.
The stock is set to report earnings after the bell this Thursday, April 30
th. Analysts are expecting 91 cents EPS heading into the print. There is a positive earnings ESP of 1.27% heading into the print giving it a chance at beating estimates this upcoming week. Bear of the Day:
Malls all over the world have closed their doors as the COVID-19 pandemic rages. This was terrible news for retailers already under pressure. In many cases, there are going to be entire malls which never reopen. Some retailers will be shuttering their doors as well. One retailers getting stung during the closure is today’s Bear of the Day.
Foot Locker operates as an athletic shoes and apparel retailer. The company operates in two segments, North America and International. The company retails athletic footwear, apparel, accessories, and equipment under various formats, including Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep, and SIX:02. It also sells team licensed merchandise for high school and other athletes.
The Retail – Apparel and Shoes industry is in the Bottom 19% of our Zacks Industry Rank. Foot Locker itself is currently a Zacks Rank #5 (Strong Sell). Over the course of the last sixty days, twelve analysts have cut their earnings expectations for the current year while seven have cut next year’s projections. The bearish sentiment has pushed down our Zacks Consensus Estimates for both periods. The current year consensus has dropped precipitously, from $5.28 to $3.08, while next year is down from $5.62 to $4.11.
Additional content: What's in the Offing for Microsoft's Q3 Earnings? Microsoft is slated to report third-quarter fiscal 2020 results on Apr 29.
The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $1.27 per share, indicating an improvement of 11.4% from the year-ago reported figure. The estimates declined 2.3% over the past 30 days.
The Zacks Consensus Estimate for revenues stands at $33.85 billion, suggesting growth of 10.7% year over year.
Notably, the company has a trailing four-quarter positive earnings surprise of 13%, on average. In the last reported quarter, Microsoft delivered a positive earnings surprise of 14.39%.
Factors to Consider
Momentum in Microsoft’s cloud computing platform — Azure — is likely to have contributed to the fiscal third-quarter performance.
Moreover, the company’s workspace communication offering, Teams, has been witnessing a robust surge in usage owing to the coronavirus-induced demand. Notably, the company stated that Teams recently set a new daily record of 2.7 billion meeting minutes, up 200% from 900 million minutes on Mar 16. On Mar 19, Microsoft noted that Teams had
44 million daily active users (DAU). Moreover, out of Fortune 100 companies, 93 have implemented Microsoft Teams.
Increasing popularity of the company's products instill investor confidence in the stock. Notably, shares of Microsoft have returned 9% year to date, outperforming the
industry’s rally of 2.7%.
The company also enhanced Teams with a slew of new capabilities enabling users to work from home seamlessly, in the wake of the coronavirus crisis.
Furthermore, the company has been strengthening Microsoft 365 (revamped version of Office 365 software suite) and Dynamics 365 suite of solutions to boost enterprise productivity. These initiatives are expected to have driven subscriber base, which in turn is likely to have contributed to the fiscal third-quarter performance.
Moreover, Microsoft has been striving to enhance the LinkedIn platform with robust AI, CRM capabilities at different levels, while maintaining user data privacy preferences. This is expected to have bolstered the adoption of LinkedIn’s subscription products, comprising membership, and education programs. This, in turn, is likely to have favored the top line in the quarter to be reported.
In the gaming segment, the tech giant is expected to have benefited from an increase in Xbox Live monthly active users and the adoption of Game Pass subscriptions as lockdowns trigger the demand for online gaming solutions.
Further, work-from-home and stay-at-home trend in the wake of coronavirus-led lockdown has been boosting demand for office equipment, which is likely to have generated incremental revenues from Surface devices in the to-be-reported quarter.
deteriorating trend in PC shipments in the first quarter, due to coronavirus crisis-induced supply constraints, is likely to have weighed on the company’s performance in the to-be-reported quarter. Per Gartner’s preliminary data, PC shipments in first-quarter 2020 declined 12.3% year over year to 51.6 million units.
Moreover, higher investments in cloud and AI engineering, amid stiff competition from Amazon in the cloud computing vertical and Slack in enterprise communication domain, are likely to have limited margin expansion in the fiscal third quarter.
Key Developments in Q3
deal to acquire Affirmed Networks with an aim to gain advanced software and 5G edge computing capabilities to deliver enhanced cloud experience. The latest buyout is anticipated to aid Azure in providing customers with robust 5G edge computing offerings, which is the need of the hour amid rising demand for networking at the edge and data center. Zacks Rank
Currently, Microsoft has a Zacks Rank #3 (Hold).
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