For Immediate Release
Chicago, IL – January 21, 2021 – Zacks Equity Research Shares of eXp World Holdings, Inc. EXPI as the Bull of the Day, Aramark ARMK as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ABM Industries Incorporated ABM, Aptiv PLC APTV and ManpowerGroup Inc. MAN.
Here is a synopsis of all five stocks:
Bull of the Day:
Every once in a while there comes along a stock with performance so insane that you simply cannot believe it. This leads to those headlines like, "If you invested $1,000 in XYZ you would have $20 million today!" We all know this never happens. There's like one old lady out there somewhere that bought and held long enough for something like this to become reality.
Today's Bull of the Day is a stock that has already become a legendary "10-bagger" since late March. It's Zacks Rank #1 (Strong Buy) eXp World Holdings. eXp World Holdings, Inc. provides cloud-based real estate brokerage services for residential homeowners and homebuyers in the United States, Canada, the United Kingdom, Australia, South Africa, Portugal, France, Mexico, and India. The company facilitates buyers to search real-time property listings and sellers to list their properties through its Website, exprealty.com; and provides buyers and sellers with access to a network of professionals, consumer-centric agents, and brokers.
At the surface, that sounds like a relatively run-of-the-mill business. It's real estate, with cloud-based technology. Not exactly reinventing the wheel. But the earnings here are what are driving the expansion. Current year EPS growth estimates call for 446% growth, going from a 15-cent loss per share last year to 52 cents of profitability this year. Next year's numbers are looking great too, with earnings growth slated to hit 56.7%. That's on forecast revenue growth of 32.21%.
This recent jump in estimates is the reason for the favorable Zacks Rank. While the current Zacks Consensus calls for 81 cents EPS next year, that was not always the case. As recently as 90 days ago, our Zacks Consensus Estimate was only 50 cents. Since then, analysts on Wall Street have been coming in and increasing their earnings estimates for the company. This is helping to underpin a rally that has taken shares from under $9 to start April 2020 to over $90 today.
The company also just announced a 2-for-1 stock split effective February 12th.
Bear of the Day:
It's becoming increasingly difficult to find stocks to pick on these days. The obvious ones have already been decimated. In this new post-COVID, and post-Trump world, what will be the next driving force of the market? Who will be left on the sidelines?
Well, the purpose of the Bear of the Day is not to make fun of an individual company. Rather, it is to call attention to what's happening in earnings estimates on Wall Street. Really, these are meant to inform, rather than tear down.
Take a look at what's happening over at today's Bear of the Day, Aramark. Aramark provides food, facilities, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through three segments: Food and Support Services United States, Food and Support Services International, and Uniform and Career Apparel.
Earnings have done a nose-dive for the current year, that's what is making this stock a Zacks Rank #5 (Strong Sell). Our Zacks Consensus Estimate has plummeted from 45 cents just ninety days ago to a 24-cent-loss today. Next year's numbers have tumbled as well, off from $2.07 down to $1.80. That's the bad news, but there is a silver lining to this cloud. Looking forward to next year, FY22, there is a forecast for serious reinflation of growth. While the current year contraction is forecast to come in at -41%, next year's growth is slated for an eye-watering 847% earnings growth. That could lead some long-term investors to start to peck at this holding.
The Food – Miscellaneous industry currently ranks in the Bottom 24% of our Zacks Industry Rank.
3 Buy-Rated Business Services Stocks to Watch Ahead of Q4 Earnings
Looking back at the fourth quarter of 2020, we see the service sector steadily bouncing back from the pandemic-induced weakness. This rebound is being aided by the gradually-reopening and recovering economy, and manufacturing and non manufacturing activities that have been gathering strength since the lockdown relaxations started.
Healthy Economic Numbers
The sector is a major beneficiary of the economy, which can gather further strength on a successful mass vaccination program that could start curbing down the impacts of the recent insurgence that has forced local governments to re-impose partial lockdowns and restrict daily economic activities.
Meanwhile, a steady recovery is evident from the latest third-quarter GDP number, which according to the "third" estimate released by the Bureau of Economic Analysis, increased at an annual rate of 33.4% against a 31.4% decline in the second quarter.
Notably, economic activity in the manufacturing sector expanded 3.2% from November to December last year, as the PMI measured by Institute for Supply Management (ISM) touched 60.7%. This is the eighth consecutive month of expansion after April's contraction that had interrupted an impressive growth rally of 131 consecutive months.
Non-manufacturing activities clocked 1.3% growth from November to December, as the Services PMI measured by ISM touched 57.2%. This is the seventh consecutive month of expansion after a two-month period of contraction that followed 122 straight months of expansion.
Home-Working, Service Essentiality — Key Drivers in Q4
Markedly, companies that have established successful work-from-home models, focused on digital transformation, and offered essential services or services that customers cannot delay, witnessed demand shooting up or staying constant through the October-December quarter.
For instance, remote working with increased adoption of technology has been helping consulting and outsourcing firms get the job done uninterrupted. On top of that, service demand increased as organizations have increased their search for advice that can help them protect employees, and stay close to customers and shareholders.
Likewise, many maintenance service providers' businesses were deemed as essential services and so, their brands remained open in every part of the world, where they operate. And clean- up companies have handled increase in municipal waste from residential areas and those from medical centers.
Thus, their stellar performance will likely be reflected in the top- and bottom-line numbers placing the companies solidly to beat estimates.
Here Are Our Picks
We have narrowed down our search to business services stocks slated to release quarterly numbers this season. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy), and has a positive Earnings ESP. You can see the complete list of today's Zacks #1 Rank stocks here.
Our quantitative model suggests that a company needs the right combination of the following two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of a positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
ABM Industries: This integrated facility solutions provider is focused on upgrading its human-resources information, labor management and enterprise-resource planning systems. It is utilizing technology to enhance account planning, labor management, payroll and procurement.
ABM's strategy entails growth through acquisitions, while maintaining desirable profit margins. The acquisition of GCA Services Group has expanded the company's long-term operational and financial position, and is making significant contributions to overall operational results predominantly within the Technology & Manufacturing, Business & Industry and Education segments.
ABM has an Earnings ESP of +5.17% and currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for current-year EPS moved up 3.8% in the past 60 days, suggesting a year-over–year increase of 16.3%.
Aptiv: We believe that with an excellent system integration expertise, this designer, manufacturer and global seller of vehicle components is well positioned to leverage on growing electrification, connectivity and autonomy trends in the automotive sector. The company's smart architecture provides a competitive advantage and will help it continue gaining market share.
The company recently launched its next-generation Level 1-3 capable advanced driver-assistance systems platform for driverless and electrified vehicles. Powered by its perception systems, software and compute platforms, and connectivity capabilities, the open and scalable platform helps decrease complexity and system costs.
Aptiv has an Earnings ESP of +3.15% and currently carries a Zacks Rank #2. The consensus estimate for the ongoing-year EPS has moved 2.6% north in the past two months to $4.01. Yearly earnings are expected to increase more than 100%.
ManpowerGroup: This global provider of workforce solutions has a digitization, diversification and innovation based business strategy.
ManpowerGroup's investment in Experis, its professional resourcing and IT expertise is expected to pave the way for robust growth after the pandemic dissipates, as companies continue to ramp up technology investments.
The company has an Earnings ESP of +6.20% and currently carries a Zacks Rank of 2. The consensus mark for this year's earnings has been revised 3% upward in 60 days' time to $5.55, calling for a year-over-year jump of 66%.
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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report
ABM Industries Incorporated (ABM) : Free Stock Analysis Report
Aramark (ARMK) : Free Stock Analysis Report
Aptiv PLC (APTV) : Free Stock Analysis Report
Exp World Holdings, Inc. (EXPI) : Free Stock Analysis Report
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