For Immediate Release
Chicago, IL – November 20, 2018 – Zacks Equity Research highlights Canada Goose GOOS as the Bull of the Day, Western Digital WDC as the Bear of the Day. In addition, Zacks Equity Research provides analysis onSquare SQ, Goldman Sachs GS and Bitcoin Investment Trust GBTC.
Here is a synopsis of all five stocks:
Bull of the Day:
Shares of Canada Goose have soared over 30% in the last month alone and its recently reported quarterly financial results show signs that the parka power remains headed in the right direction.
Toronto-based Canada Goose sells high-end and high-priced parkas, winter coats, and other cold weather gear. The firm, which reported its fiscal Q2 results on November 14, saw its total quarterly revenues surged 33.7% to reach $230.3 million Canadian dollars.
Meanwhile, the retailer’s adjusted quarterly earnings skyrocketed 59% to 46 Canadian cents per share. Investors should also note that Canada Goose’s wholesale revenues jumped 18%, while direct-to-consumer revenues soared 150%.
Canada Goose went public in March 2017, but its roots date back to the late 1950s. By the 1980s, the company that would become Canada Goose’s parkas had become a staple in the world of extreme cold, which included expeditions in Antarctica to the summit of Mt. Everest.
Canada Goose began to gain even more traction in the early 2000s when the company’s jackets appeared in two Hollywood blockbusters: The Day After Tomorrow and National Treasure. Since then, the company has remained a mainstay on film sets and expeditions, while expanding into cold weather cities throughout North America.
Investors should note that Canada Goose didn’t even open it first two flagships stores, in Toronto and New York City, until 2016. The company currently boasts 11 stores, with locations in Boston, Chicago, New Jersey, Montréal, Vancouver, Calgary, London, Hong Kong, and Tokyo—the company plans to open a Beijing location soon.
Moving on, Canada Goose lifted its full-year sales growth guidance to climb at least 30%, which marked a jump from its previously-guided 20% top-line expansion. The company based its new optimism on wholesale revenue growth outlook in the high-single-digits, along with the fact that it opened five new retail stores by the start of its peak winter shopping season.
At the bottom end of the income statement, Canada Goose projects that its adjusted fiscal year net income per share will surge by at least 40%, up from 25% higher guidance at the end of Q1.
Now let’s dive a little deeper into Canada Goose’s earnings estimates. Our current Zacks Consensus Estimate is calling for the company’s adjusted current quarter earnings to jump roughly 35%. Better yet, the parka seller’s adjusted fiscal year earnings are projected to soar over 53%.
Bear of the Day:
Western Digital has been one of the worst-performing stocks in the computer storage industry this year. The company’s earnings outlook is also much worse than it was not too long ago, as the industry appears to be headed in the wrong direction.
Western Digital’s quarterly revenues slipped roughly 3% from the year-ago period to $5.03 billion, which missed the Zacks Consensus Estimate of $5.14 billion. WDC’s fiscal Q1 2019 revenues, which it reported near the end of October, also fell 1.7% sequentially.
Meanwhile, at the bottom end of the income statement, Western Digital’s adjusted quarterly earnings sunk 14.6% from the prior-year quarter to $3.04 per share. The company pointed to falling flash prices, among other broader headwinds, as major reasons for its decline. “In response to these conditions, we are taking immediate actions to align our flash output with projected demand,” CEO Steve Milligan said in a company statement.
Western Digital specializes in data storage devices and solutions, and sells products under the SanDisk and WD brands, among others. The company has suffered as the demand for data storage slows along with the broader chip market.
Things continued to get worse for Western Digital after the Wall Street Journal reported Monday that Apple Inc. has cut production orders for all three of its newest iPhone models, which helped send shares of WDC and other tech stocks down.
Stock Price Movement
Shares of Western Digital dropped 3.20% in regular trading hours Monday to touch $45.11 per share. WDC stock is down roughly 44% since the start of the year, which falls well below its industry’s 8.5% average decline. Shares of WDC have plummeted 30% in the last three months and are down over 50% during the past 52 weeks after trading as high as $106.96 per share.
Outlook & Earnings Trends
Now that we have covered some of Western Digital’s price movement and recent news, let’s look to see what’s next.
Our current Zacks Consensus Estimate is calling for the firm’s quarterly revenues to fall by 19.3% to reach $4.31 billion. Plus, Western Digital’s fiscal year revenues are projected to sink by over 12% to hit $18.13 billion.
The bottom end of the income statement appears even worse for the data storage firm. Western Digital’s adjusted quarterly earnings are expected to tumble nearly 60% to hit $1.59 per share. Plus, WDC’s current fiscal year EPS figure is projected to plummet by 50%.
Here’s Why Bitcoin & Other Cryptocurrencies Fell Monday
Bitcoin and several other major cryptocurrencies—including ripple, ethereum, and litecoin—have tumbled in the past day after a rash of headlines sparked concern about uncertainty among investors and traders.
According to CoinMarketCap.com, bitcoin has slumped about 8% in the last 24 hours, while ethereum is down more than 12%. Ripple, the second-largest cryptocurrency in terms of market cap, has lost 6% of its value, and litecoin has fallen over 11%.
One story causing frustration in the cryptocurrency community relates to a so-called “fork” of bitcoin, bitcoin cash. Bitcoin cash originally split from the world’s top crypto in order to alleviate certain barriers to entry and make the digital asset easier to use, but now, the fork has run into its own problems.
Bitcoin cash developers and miners have clashed about the coin’s future. Bitcoin ABC, a developer group that has served as a de-facto leader for Bitcoin Cash, recently proposed upgrades to the coin’s network that would include reordering transactions to increase capacity.
This proposal was met with disagreement from Bitcoin SV, a newer group jousting for control of bitcoin cash. Bitcoin SV suggested restoring retired code from the original bitcoin protocol and increasing bitcoin cash’s block size—moves which it argued fit better with the vision of bitcoin creator Satoshi Nakamoto.
The clash between Bitcoin ABC and Bitcoin SV eventually resulted in a “hard fork” of bitcoin cash and the creation of two new coins named after the competing groups.
The bitcoin cash fork has created an uncertain future for the popular network, which itself was created to solve headaches associated with the original bitcoin. But this disagreement also speaks to the unpredictably of the entire concept of cryptocurrencies, and that has created volatility which has seeped into the broader crypto space.
Despite growing acceptance of cryptocurrencies and rising interest in the blockchain technology that powers them, these virtual assets are still searching for credibility in the traditional finance world.
KPMG last week published a report that warned investors about using bitcoin as a tool to store value. The accounting behemoth said that cryptocurrencies still need what it calls “institutionalization” in order to prosper.
“More participation from the broader financial services ecosystem will help drive trust and scale for the tokenized economy and help the crypto market grow and mature,” wrote KPMG.
There was some progress on this front in the past year, with fintech giant Square adding bitcoin support to one of its apps and Goldman Sachs reportedly expressing interest in the industry, but much more institutionalization is likely needed to increase adoption and smooth out volatility.
Bitcoin is now more than 70% off its highs reached last December. The Bitcoin Investment Trust just touched a new 52-week low of $5.34.
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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Western Digital Corporation (WDC) : Free Stock Analysis Report
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