e.l.f. Beauty and Rambus have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 25, 2023 – Zacks Equity Research shares e.l.f. Beauty ELF as the Bull of the Day and Rambus RMBS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CVR Energy CVI, Solaris Oilfield Infrastructure SOI and Profire Energy PFIE.
Here is a synopsis of all five stocks:
Bull of the Day:
Stocks are one of the few things that people don't want to buy when they go on sale. That's insane when you think about it because most of the other stuff that goes on sale is worth less than you paid for it the minute you write the check. What if I told you that there was a stock out there that is on sale while its earnings are going up? The company is making more money than previously expected but the stock is trading 25% less than highs.
That is exactly the scenario with today's Bull of the Day, e.l.f. Beauty. The company offers eye, lip, face, paw, and skin care products. It sells its products through national and international retailers and direct-to-consumer channels, which include e-commerce platforms in the United States, and internationally primarily through distributors.
The reason that the stock is a Zacks Rank #1 (Strong Buy) is the recent earnings estimate revisions coming from analysts. Over the last sixty days, ten analysts have increased their earnings estimate revision for the current year while nine have done the same for next year. The result is a huge move higher for our Zacks Consensus Estimates for both the current year and next year. Current year estimates have rocketed up from $1.82 to $2.37 while next year's number is up from $2.17 to $2.76.
That means that current year EPS growth is forecast to come in at 42.77% while next year's number is set to be 16.54%. That's on revenue growth of 64.7% this year and 17.74% next year.
A quick look at the Price, Consensus and EPS Surprise Chart shows the meteoric rise of this stock. That sort of parabolic move scares away some investors. However, the chart here shows that earnings estimates have also pushed higher. Earnings more than double from early 2022 to mid-2023. From there, onward and upward has been the prevailing trend.
Bear of the Day:
With the market caving through some serious support levels, it can feel like everything you touch turns to garbage. It's the opposite of the Golden Touch of King Midas. Don't feel alone if you're out there watching your recent stock picks turn to stone. I am not here to tell you to be a fair-weather fan for your stock. Rather, now is a time to decide whether or not your stocks deserve your patience.
Patience pays when you are adding to a stock that has great earnings that keep moving in a positive direction. When earnings are moving the wrong way, you better have a good reason to stick with the script. Today's Bear of the Day is a stock that has seen earnings move in the wrong direction.
Today's Bear of the Day is Rambus. Rambus Inc. provides semiconductor products in the United States, Taiwan, South Korea, Japan, Europe, Canada, Singapore, China, and internationally. The company offers DDR memory interface chips, including DDR5 and DDR4 memory interface chips to module manufacturers, and OEMs; silicon IP comprising, interface and security IP solutions that move and protect data in advanced data center, government, and automotive applications; and physical interface and digital controller IP to offer industry-leading, integrated memory, and interconnect subsystems.
The reason for the unfavorable rank is that analysts have been moving their earnings estimates to the downside. Over the last sixty days, analysts have cut their numbers for the current year and next year. The Zacks Consensus Estimate came down from $1.79 to $1.76 for the current year while next year's number is off from $2.26 to $2.16.
That's not that bad in the grand scheme of things. This is a stock that has seen estimates rise consistently over the last three years. The problem has been the last six months. Earnings estimates appear to have topped out a bit. That is a departure from his stocks' previous behavior of under-promising and over-delivering.
The Electronics – Semiconductor industry is in the Bottom 22% of our Zacks Industry Rank.
Additional content:
Capitalize on Oil's Ascent with These 3 Highly Ranked Stocks
The oil market is experiencing a resurgence, with crude prices surging due to production cuts by Saudi Arabia and Russia. Over the past three months, the Oil/Energy sector has outperformed appreciably, yielding an 12.9% total return compared to the S&P 500's 0.8% loss.
WTI crude hit a 10-month high above $90 recently. While higher oil prices typically mean increased profits for oil companies, the sector's volatility requires careful investment. Considering the commodity's unpredictable nature, it's advisable to consider top-rated, affordable stocks with favorable risk-reward profiles.
In this context, we highlight CVR Energy, Solaris Oilfield Infrastructure and Profire Energy. With the expectation of strong forward returns, we advise investors to add them to their portfolio.
CVR Energy: Let's start with CVR Energy, established in 2006. It is a holding company primarily involved in renewable energy, petroleum refining, marketing, and nitrogen fertilizer manufacturing through its stake in CVR Partners. It's committed to developing renewable biofuels and actively participating in the energy transition to reduce carbon emissions.
Notably, CVI belongs to the Zacks Oil and Gas - Refining & Marketing industry, which carries a Zacks Industry Rank #83 — placing it in the top 34% of around 250 Zacks industries. Reflecting its solid industry rank and positive outlook, CVR Energy's annual earnings estimates have surged 38.8% for 2023 and 18.3% for the following year over the last 60 days.
Despite an expected dip in earnings per share to $5.80 this year from $6.04 in 2022, CVI is an attractive option, trading at $34.07 and a low 6.08X forward earnings. This valuation is lower than the industry average of 7.20X and well under the S&P 500's 20.59X.
CVR Energy's rising earnings estimates indicate that the stock is undervalued, offering investors a compelling opportunity. Additionally, with a year-to-date increase of 9.8%, CVI provides an impressive 5.9% dividend yield, making it an attractive choice for income-seeking investors. Overall, the Zacks Rank #1 (Strong Buy) company appears well-positioned for growth and profitability, supported by its strong industry rank and strategic focus on renewable energy.
You can see the complete list of today's Zacks #1 Rank stocks here.
Solaris Oilfield Infrastructure: Next up is Solaris Oilfield Infrastructure. SOI specializes in providing essential services and systems to support oil and gas well drilling operations, particularly in major U.S. unconventional basins. Their offerings include management systems for handling critical materials like chemicals and proppant during well construction, optimizing supply-chain efficiency.
Headquartered in Houston, TX, Solaris' stock is an exciting investment option, with expectations of steady top and bottom-line growth. Earnings are projected to increase by 25% in 2023 and a substantial 104.7% in 2024, reaching $1.94 per share.
On the revenue front, sales are predicted to inch up 0.5% in the current year and then surge by 21.2% in 2024, reaching $389.7 million. What makes this growth even more appealing is SOI's stock, which offers an attractive 4.2% dividend yield. It's currently trading at a forward earnings multiple of 11, considerably lower than the industry's average of 16.82.
Although the #1 Ranked stock has seen modest gains of just 1% in 2023, trading at around $10 per share, its potential for an upward move is becoming increasingly likely, especially with its strong growth prospects and compelling valuation.
Profire Energy: Lastly, Profire Energy's stock offers valuable exposure to the rising oil sector as it provides products and technologies that enhance the efficiency, safety and compliance of energy companies, primarily in the upstream, midstream and downstream transmission segments of the oil and gas industry in North America.
PFIE holds a Zacks Rank #2 (Buy) and shows strong potential for both top and bottom-line growth. The stock currently trades below $3 and at an attractive forward earnings multiple of 11.39X, presenting a significant discount compared to the Zacks Oil and Gas - Mechanical and and Equipment industry's average of 35.86X and the market benchmark.
Additionally, PFIE's earnings are projected to surge by an impressive 187.5% in 2023 and increase by another 2.2% in 2024, reaching 24 cents per share. Despite a significant rise of 146.2% in the stock's value this year, there appears to be further growth potential, making it an appealing choice for investors.
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Rambus, Inc. (RMBS) : Free Stock Analysis Report
CVR Energy Inc. (CVI) : Free Stock Analysis Report
Profire Energy, Inc. (PFIE) : Free Stock Analysis Report
e.l.f. Beauty (ELF) : Free Stock Analysis Report
Solaris Oilfield Infrastructure, Inc. (SOI) : Free Stock Analysis Report
