The Zacks Analyst Blog Highlights: LinkedIn, Facebook, Microsoft, ON Semiconductor and Humana
For Immediate Release
Chicago, IL – February 05, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the LinkedIn Corp (LNKD-Free Report), Facebook Inc. (FB-Free Report), Microsoft (MSFT-Free Report), ON Semiconductor Corp. (ONNN-Free Report) and Humana Inc. (HUM-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Will LinkedIn (LNKD) Disappoint This Earnings Season?
LinkedIn Corp (LNKD-Free Report) is set to report fourth-quarter fiscal 2013 results on Feb 6. Last quarter, the company posted a negative earnings surprise of 100.0%. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter
LinkedIn delivered mixed third-quarter results. Although, the company’s top line surpassed the Zacks Consensus Estimate, the bottom line missed the consensus mark. Year-over-year revenues benefited the most from growth in its Talent Solution and Premium Subscription businesses.
Additionally, LinkedIn is gaining traction on the mobile and tablet platforms, which are expected to generate additional revenues. The company is expected to continue its investments in the near term, which might impact its profitability.
Moreover, we believe that LinkedIn’s rapid growth and new product rollouts could lead to poorer service levels. Also, there is a possibility that companies like Facebook Inc. (FB-Free Report), Microsoft (MSFT-Free Report) and Twitter will develop competing solutions and enter this adjacent market.
The emergence of companies likes ValueClick Inc., which have been introducing new services at regular intervals, could also bring about a rapid change in the scenario.
Earnings Whispers?
Our proven model does not conclusively show that LinkedIn will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 9 cents. Hence, the difference is 0.00%.
Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here is another company which investors may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter:
ON Semiconductor Corp. (ONNN-Free Report), Earnings ESP of +14.29% and a Zacks Rank #2 (Buy).
Will Humana (HUM) Miss Earnings?
Humana Inc. (HUM-Free Report) is set to report fourth-quarter 2013 results on Feb 5, 2014. Last quarter, it posted a 6.94% surprise. Let’s see how things are shaping up for this announcement.
Factors this Past Quarter
Although the launch of the “Humana Helps” campaign, the Accountable Care agreement with St. Luke’s University Health Network, and investments in the trend vendor initiatives like Humana Chronic Cares Program and in-home care for Humana members are expected to help the company enhance revenues, a number of negatives are likely to mar the overall results in the upcoming quarter. Humana has been witnessing rising expenses on account of higher operating cost and depreciation and amortization costs. Moreover, an expected increase in medical costs in the Employer segment in 2014 is believed to mar company financials going forward.
Additionally, since Humana is heavily reliant on Medicare Advantage revenue the health care reform that has reduced the selling season for the Medicare Advantage plans are spelling bad news for the company. Also, ban on annual and lifetime coverage caps, annual fees on health insurance companies and excise tax on high premium insurance policies, will likely increase expenses pressurizing margins. Pricing pressure from competitors, particularly from BlueCross BlueShield and increased capital expenditures to settle lawsuits are likely to dampen the results further.
Earnings Whispers?
Our proven model shows that Humana will lag earnings this quarter. That is because the stock has a negative Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #4.
Negative Zacks ESP: That is because the Most Accurate estimate stands at 89 cents whereas the Zacks Consensus Estimate stands at 93 cents, making the difference –4.30%.
Zacks Rank #4 (Sell): Humana’s Zacks Rank #4 decreases the predictive power of ESP. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum as is the case here.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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