For Immediate Release
Chicago, IL – May 21, 2019 – Zacks Equity Research Crocs, Inc. CROX as the Bull of the Day, Stamps.com STMP asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft MSFT, Intuit Inc. INTU and Oracle ORCL.
Here is a synopsis of all five stocks:
Bull of the Day:
Crocs, Inc.are trendy again. This Zacks Rank #1 (Strong Buy) recently beat on earnings for the fifth straight quarter.
Crocs sells casual footwear for men, women and children through its website and retail stores. It operates 372 stores globally. The vast majority of the shoes within the Crocs collection contains Croslite material, a proprietary, molded footwear technology.
Another Beat in the First Quarter of 2019
On May 7, Crocs reported its first quarter 2019 results and beat the Zacks Consensus Estimate for the fifth time in a row.
Earnings were $0.36 versus the Zacks Consensus of just $0.25. That's a beat of 44%.
Revenue jumped 4.5% to $295.9 million while retail comparable store sales rose 8.7% and e-commerce revenue grew 16.5%.
The Americas saw the best same-store-sales results, jumping 12.4% on top of a great comp in 2018's first quarter of 10.9%.
The weakest region was Asia Pacific which saw a decline of 0.4% after seeing a gain of 4.7% the year before.
Gross margin came in at 46.5%, above the company's guidance of 45.5%. However, that was lower than a year ago as it relocated its Americas distribution center which reduced gross margin by 40 basis points. Freight costs also impacted.
It continues to close stores. In the quarter, it shut 11 stores bringing its total down to 372 from 383.
Increased the Share Buyback Program
Crocs was already in the midst of a $500 million share buyback program of which it had $102 million remaining. It bought back $53.5 million in the first quarter.
However, the board authorized an additional $500 million program which leaves the company with about $600 million available for future repurchases.
Reaffirmed Full Year Guidance
Crocs kept its bullish outlook for the year.
It still sees revenue growth between 5% and 7% over 2018 revenue which was $1,088.2 million.
Revenue will be negatively impacted by about $20 million due to store closures and an additional $25 million due to currency changes.
Gross margins are still forecast to be 49.5%, down from 51.5% in 2018, however.
Analysts like what they heard as 2 estimates were raised for the full year and 2020 since the report.
The 2019 Zacks Consensus Estimate rose to $1.25 from $1.12, which is earnings growth of 45% as the company made $0.86 in 2018.
The 2020 Zacks Consensus jumped to $1.35 from $1.29 during the same period. That's another 8.7% earnings growth.
Shares Fall: Is it a Buying Opportunity?
Even with a solid quarter, Crocs shares took a dive in May, possibly due to tariff fears.
The shares are now down 14% year-to-date.
However, they're cheaper than before with a forward P/E of 17.8.
Bear of the Day:
Stamps.comcut its guidance for the second time this year, causing the stock to crater further. This Zacks Rank #5 (Strong Sell) is expected to see a big earnings decline this year.
Stamps.com isn't only about stamps. It's main business is in shipping software, which does also provide online postage to small businesses, home offices, corporations and individuals.
It Ended Exclusive US Postal Service Agreement in February
On Feb 21, when announcing its fiscal fourth quarter results, Stamps.com surprised the Street by announcing it was ending its exclusive partnership with the USPS.
It then cut its earnings guidance for the year.
The shares plunged.
But that, apparently, wasn't the end of the pain.
Because on May 8, when the company went to report its first quarter results, it cut guidance for a second time.
It's now renegotiating with other partners but, it turns out, they are part of the USPS's reseller program (which Stamps.com was apparently unaware of previously.)
Aka, it's a mess.
Full Year Guidance Cut and Estimates Slashed
Stamps.com cut their full year earnings outlook for the second time to the range of $3.35 to $4.85 from its prior guidance of $5.15 to $6.15.
Not surprisingly, the analysts had to revise their estimates lower once again.
3 estimates were cut since the earnings report, pushing the Zacks Consensus down to $3.83. That's an earnings decline of 67% from the prior year as the company made $11.78.
Just 90 days ago, before the surprised February announcement, analysts had expected earnings of $11.78.
2020 full year estimates were cut as well, pushing the Zacks Consensus Estimate down to $3.41 from $11.96 just 3 months ago.
Are They Cheap?
Shares have plunged twice in 2019, wiping out most of the gains in the shares over the last year.
Shares have fallen 84% over the prior year and are down 75% year-to-date.
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Shares of Microsoft have surged 25% in 2019 to outpace the S&P 500’s roughly 13% climb and its industry’s 21%. The tech giant is coming off better-than-projected Q3 fiscal 2019 financial results that once again saw its cloud business stand out. Microsoft’s Intelligent Cloud revenue climbed 22%, with its vital Azure division up 73%. The firm’s expansion into cloud computing has seen it compete directly with industry giant Amazon and partner with behemoths such as Walmart for cloud, artificial intelligence, and more. More recently, MSFT joined forces with gaming rival Sony for a cloud-gaming partnership.
Microsoft is also a dividend payer that has paid out a $0.46 per share quarterly dividend throughout fiscal 2019, for an annualized payout of $1.84 a share. Microsoft’s current dividend represented a 9.5% jump from the prior year’s quarterly payout. The company’s dividend yield rests at 1.44% at the moment. Plus, Microsoft’s positive, longer-term earnings estimate revision activity helps it earn a Zacks Rank #2 (Buy) at the moment. MSFT also rocks a “B” grade for Growth in our Style Scores system. Peeking ahead, our Zacks Consensus Estimate calls for MSFT’s current full-year earnings to pop 18% on the back of 13.1% revenue growth.
2. Intuit Inc.
Intuit offers a variety of financial services geared toward taxes, small business money management, and personal finance. Intuit’s software-as-a-service products include QuickBooks and TurboTax and boast a total of approximately 50 million customers around the world. Going forward, Intuit’s SaaS model and cloud focus look poised to attract more clients and customers as both of these industries continue to boom. INTU last paid a quarterly dividend of $0.47 per share, up from its previous $0.39 a share payout. The firm’s dividend yield rests at 0.77% at the moment, with its stock price up 24% in 2019.
The company is scheduled to release its Q3 fiscal 2019 earnings results after the market closes on Thursday, May 23. Intuit’s adjusted third-quarter EPS figure is projected to climb 12.2% to reach $5.41 per share. Meanwhile, the company’s revenue is expected to pop 10.6% to reach $3.24 billion. Double-digit top and bottom-line growth is projected in fiscal 2020 as well. Intuit has also experienced positive earnings estimate revision activity recently. Intuit is a Zacks Rank #2 (Buy) right now that sports an “A” grade for Growth.
Previously-underperforming Oracle stock has outpaced the broader Computer Software-Services Market industry over the last 12 months, up 14% against the industry’s 4.5% average climb. ORCL’s positivity helps it rest near new 52-week and all-time highs. Plus, the firm is coming off a better-than-expected Q3 fiscal 2019. ORCL is also dividend payer that recently paid out a $0.24 per share dividend, up roughly 25% from its previous $0.19 payout. ORCL’s annualized dividend rests at $0.96 per share, with a yield of 1.76% at the moment. Oracle is also currently trading at 16.2X forward 12-month Zacks Consensus EPS estimates. This represents a discount compared to its industry’s 27X average and its own five-year high of 19.3X.
The historic tech giant has tried to expand its cloud business in recent years. Looking ahead, Oracle adjusted current-quarter earnings are projected to pop 8.1% to hit $1.07 per share. The tech giant’s fiscal 2019 EPS figure is expected to jump by 10.3%. Better yet, ORCL’s full-year 2020 earnings are projected to come in 10.1% higher than our 2019 estimate, in a sign of continued bottom-line expansion. Oracle is a Zacks Rank #2 (Buy) right now that boasts a “B” grade for Value.
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