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Micron Technology, Criteo, AppFolio, Splunk and Microsoft as Zacks Bull and Bear of the Day

Zacks Equity Research
There is a long list of popular averages and ranges that investors like to use while looking at stocks, and that includes the 52-week low and 52-week high metrics. We have found five stocks that are seeing positive estimate revision activity and are hovering near their 52-week highs. Check them out now!

For Immediate Release

Chicago, IL – January 11, 2018 – Zacks Equity Research highlights Micron Technology MU as the Bull of the Day and Criteo S.A. CRTO as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AppFolio, Inc. APPF, Splunk Inc. SPLK and Microsoft Corporation MSFT.

Here is a synopsis of all five stocks:

Bull of the Day:

Micron Technology, a Zacks Rank #1 (Strong Buy), is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking, and mobile products.

Recent Earnings Data

The company reported Q1 18 earnings results on December 19th where they beat both top and bottom line expectations for the third consecutive quarter.  Revenues were up +71% YoY while earnings improved by +760% due to sustained high demand, and improved memory pricing.  Further, MU saw gross margins increase to 55.1%, up from 50.7% in the previous quarter.  To add to this positive news, management commented that its Taiwan facility (back end test and assembly) would produce meaningful output by the end of FY 18.  This will help the company meet the high demand for its products, and increase overall revenues.  Most importantly, management boosted revenue guidance for Q2 18 to a range between $6.8-7.2 billion, well above the consensus estimate of $6.2 billion.  

Management’s Take

According to Sanjay Mehrotra, President and CEO, “Micron's strong results were driven by double-digit sequential revenue growth in mobile, server and SSD applications, with expanded gross margins and improved profitability.  We are making solid progress on our strategic priorities to drive cost competitiveness, deploy high value solutions and strengthen our balance sheet.  We believe these actions will position Micron to benefit from the broad demand trends ahead of us."

Bear of the Day:

 

Criteo S.A., a Zacks Rank #5 (Strong Sell), is a global technology company that specializes in performance display advertising. The Company offers clients a range of solutions such as click per cost, online banner displays, user optimization, data security, and search management tools to control campaign costs. It serves companies in the online retail, classifieds, and travel segments. Criteo SA is headquartered in Paris, France.

Recent Earnings Data

In early November, management announced Q3 17 earnings results where they missed the Zacks consensus earnings estimate, but beat the revenue estimate.  The company saw revenues increase by 32% YoY, with revenues excluding Traffic Acquisition Costs (ex-TAC) improving by +33%.  Adjusted EBITDA was up +45% with cash flows from operations rising by +43%. Lastly, net income gained +51% when compared to the previous year.

Management’s Take

According to Eric Eichmann, CEO, “Criteo Commerce Marketing Ecosystem is seeing very positive acceptance from chief marketing officers worldwide. Our open ecosystem approach brings large opportunities for us." The company’s CFO, Benoit Fouilland, stated, "Our solid Q3 results and increased profitability outlook for 2017 highlight the strengths of our business.  We are confident in our position and growth prospects."

Additional content:

3 Cloud Stocks to Buy Right Now

 

In a matter of just a few years, “the Cloud” has evolved from the new feature that your grandmother just can’t quite seem to understand to one of the main factors driving growth in the technology sector. Cloud computing is now an essential focus for software-related companies, and cloud stocks have piqued the interest of many tech-focused investors.

New technologies and changing consumer behavior have changed the shape of the technology landscape, and an industry that was once centered on the personal computer has adapted to survive in the world of mobile computing and the Cloud. The markets have been paying attention, and some of the best tech stocks have been those that are either primarily cloud-based companies, or those that have shown growth in their cloud operations.

With this in mind, we’ve highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics. Check out these three cloud stocks to buy right now:

1.       AppFolio, Inc.

AppFolio offers cloud-based software solutions for the property management and legal industries. The company’s AppFolio Property Manager is a leading solution for property management, while its MyCase application is ideal for practitioners and small law firms. The young company has posted its first profits in the last three quarters, surpassing the respective Zacks Consensus Estimates in each.

A company’s first profitable quarters often mean huge profits for investors, and with shares up over 73% this year, that has certainly been the case with AppFolio. Earnings and revenue have also soared this year, but that expansion is expected to continue next year, with current estimates calling for EPS growth of 43% and sales growth of 28% in the upcoming fiscal period. And on top of this, strong earnings estimate revision activity and positive earnings surprises have earned the stock a Zacks Rank #1 (Strong Buy).

2.       Splunk Inc.

Splunk provides a software platform, which collects and indexes data and enables users to search, correlate, analyze, monitor and report on this data, all in real time. The company offers a cloud-based version of its core product, Splunk Cloud, and it has integrated with Google’s (GOOGL) cloud platform and Amazon’s (AMZN) AWS system.

Currently, Splunk is a Zacks Rank #2 (Buy). Splunk is also an exciting pick for growth investors and currently rocks an “A” grade in the Growth category of our Style Scores system. The company is expected to expand its earnings by 44% in the current fiscal year. Its earnings are also expected to grow at an annualized rate of 29% over the next three to five years. What’s more, management is expanding its cash flow by 15% right now.

3.       Microsoft Corporation

It feels necessary to include one of the industry’s cloud behemoths, and perhaps no platform’s growth has been as impressive as Microsoft’s as of late. In its most recent quarter, Azure revenues grew by a staggering 89%, while Azure premium revenues grew in the triple digits for the 13th consecutive quarter.

Microsoft is currently a Zacks Rank #2 (Buy). The stock is also sporting an “A” grade for Growth. The firm has met or surpassed earnings estimates in six consecutive quarters, and it will hope to extend that streak when it reports again at the end of the month. Current estimates are calling for earnings growth of 4% and revenue growth of 9% this quarter. Meanwhile, MSFT has a PEG ratio of 2.05, so investors are getting a decent price for that respectable earnings growth.

Bottom Line

Cloud-based companies have been some of the best performing stocks in the tech sector this year, and these cloud stocks also boast strong fundamental metrics. If you’re looking to add tech stocks to your portfolio right now, this list is probably a good place to start.

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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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.

About Zacks Equity Research

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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Splunk Inc. (SPLK) : Free Stock Analysis Report
 
AppFolio, Inc. (APPF) : Free Stock Analysis Report
 
Criteo S.A. (CRTO) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Micron Technology, Inc. (MU) : Free Stock Analysis Report
 
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