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Stamps.com, Anheuser-Busch InBev, The Rubicon Project, Mitek Systems and Digital Turbine highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research
·11 mins read

For Immediate Release

Chicago, IL – March 9, 2020 – Zacks Equity Research Shares of Stamps.com STMP as the Bull of the Day, Anheuser-Busch InBev BUD asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on The Rubicon Project, Inc. RUBI, Mitek Systems, Inc. MITK and Digital Turbine, Inc. APPS.

Here is a synopsis of all five stocks:

Bull of the Day:

Stamps.com is a leading provider of digital postage services, helping small businesses, enterprises, and consumers print U.S. Postal Service-approved postage right from their home or office. Users can easily mail or ship letters, packages, or parcels.

Blowout Q4 Earnings

Stamps.com skyrocketed 65.5% the day after it released fourth quarter results, plus another 10.5% the day after that. Last month alone saw shares climb nearly 90%.

The company crushed expectations on both the top and bottom line, posting earnings of $2.12 per share (vs. $1.03 per share) and revenue of $160.9 million (vs. $144.7 million).

Stamps.com has also secured a new partnership with UPS, as well as a new long-term agreement with the United States Postal Service. Last February, the firm terminated its exclusive deal with the USPS, which had been a crucial relationship for STMP.

“In 2019, we continued to make significant strides toward our goal of being the leading worldwide multi-carrier e-commerce software company. We continued to invest in our products and partnerships throughout 2019 to address the significant opportunities in the U.S. and internationally. We are very excited about our business prospects in 2020 and beyond,” said CEO Ken McBride.

Looking ahead, management guided for 2020 revenue between $570 million and $600 million, with adjusted EPS between $4.00 and $5.00 per share. Before the release of its Q4 earnings, Wall Street had only been anticipating revenue of $540 million and earnings of $3.23.

Shares Surging

Along with reassuring investors about its growth prospects, STMP has been one of the few stocks to weather the coronavirus-related sell-off these past few weeks. Shares of Stamps.com are up over 48% and 78% in the last one and six months, respectively. Comparatively, the S&P 500 has lost about 12.6% and 2%.

Earnings estimates have been on the rise, and Stamps.com is a Zacks Rank #1 (Strong Buy) pick right now.

For the current fiscal year, two analysts have revised their bottom line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up one dollar from $3.31 to $4.31. 2021 looks strong too, with earnings seeing positive year-over-year growth.

If you’re an investor searching for an internet stock to add to your portfolio, make sure to keep STMP on your shortlist.

Bear of the Day:

Anheuser-Busch InBev is one of the biggest brewing companies by volume. Following the acquisition of SABMiller in October 2016, the company holds the top spot in the beer industry, controlling about one-third of the global beer market. Its portfolio includes more than 500 brands like Budweiser, Stella Artois, Corona, Beck’s, and Michelob Ultra.

Earnings Drop Substantially in Q4

Last month, Anheuser-Busch released fourth quarter financial results, reporting a sales volume increase of 2.5% in the U.S. market. But normalized earnings declined 32.4% to 48 cents a share, missing the Zacks Consensus Estimate of 53 cents.

Its key beer segment only saw organic growth of 0.8%

The company blamed the huge demand for hard seltzer drinks for its weak performance, and its U.S. market share fell both in Q4 and fiscal 2019.

"Our performance in 2019 was below our expectations," management explained in a press release, "and we are not satisfied with the results.

Anheuser-Busch, however, is optimistic about the recent launch of Bud Light Seltzer, which, along with Natural Light Seltzer and Bon & Viv, will help it create a niche for itself in the growing hard seltzer market.

Shares of the beer giant are down around 43% over the past six months, and have lost more than 35% in the last one year.

BUD is now a Zacks Rank #5 (Strong Sell).

Earnings are expected to see double-digit negative growth for the year, and the Zacks Consensus Estimate has dropped 90 cents for that same time period from $4.29 to $3.39 per share.This sentiment has stretched into 2021, though sales and earnings growth could rebound.

Like many other companies, Anheuser-Busch is facing some challenges because of the coronavirus outbreak; the company said it lost $285 million in revenue, and pre-tax operating earnings in China have taken a $170 million hit. And because of the coronavirus, Anheuser-Busch expects to see the most growth in the second half of this current fiscal year.

For the time being, shifting consumer preferences and rising costs will continue to be a challenge for BUD.

Additional content:

3 Tech Stocks Under $10 to Buy Despite Coronavirus Volatility

Markets continued their volatile week Friday, with the Dow, the S&P 500, and the Nasdaq all down around 2% through morning trading. The up and down week follows a lightning quick market correction that came as the coronavirus dents the Chinese economy and spreads around the world and the U.S.

Market uncertainty is likely here to stay until there is a better understanding of when the spread of the coronavirus might end and how much it will impact the global economy.

Meanwhile, the yield on the benchmark 10-year Treasury sank below 0.8% for the first time ever. This came after the Fed cut its benchmark interest rate by half a percentage point on Tuesday in an effort to curb the economic slowdown. Plus, U.S. lawmakers passed an $8 billion-emergency spending package Wednesday.

There are, however, signs that the spread of the coronavirus in China has slowed and analysts are calling for the Fed to cut rates again. With all that said, the market has already tumbled and interest rates are historically low, so now might be time for investors to think about buying stocks, or at least adding some to their watchlists.  

Today, we are diving into a more niche category of securities: tech industry stocks trading under $10 a share. Stocks trading under $10 can be more volatile than their pricier peers, but investors can still scoop up big returns with the right low-priced stocks…

The Rubicon Project, Inc.

Prior Close: $10.35 USD

The Rubicon Project is an ad exchange firm. RUBI, which topped our Q4 earnings estimates in late February, helps execute “tens of billions” of ad transactions every month and has carved out space in an industry dominated by Facebook and Google. The firm enables advertisers to reach consumers across Spotify, eBay and other giant platforms, which is key as a majority of ad spending shifts online.  

RUBI’s fiscal 2019 revenue jumped 25% and the firm announced in December that it plans to merge with Telaria to help form what it calls the “largest independent sell-side advertising platform.” When the stock-for-stock merger is completed, the combined company aims to offer a single platform for “transacting Connected TV, desktop display, video, audio, and mobile inventory across all geographies and auction types.”

Shares of The Rubicon Project have soared 445% in the last two years, from under $2 per share to their current price—which fell under our $10 threshold Friday. In fact, the market correction has set up a better buying opportunity for those high on RUBI, as they sit far below their recent and all-time highs.

RUBI’s positive earnings revision activity, especially for fiscal 2020, helps it earn a Zacks Rank #1 (Strong Buy) at the moment. The Rubicon Project also sports an “A” grade for Growth and a “B” for Momentum in our Style Scores system. Our Zacks estimates call for RUBI’s adjusted 2020 earnings to skyrocket from a loss of -$0.02 a share to +$0.21, with 2021 expected to jump all the way to +$0.32 per share. RUBI’s revenue is also expected to climb another 15% and 12%, respectively over the next two years.

Mitek Systems, Inc.

Prior Close: $8.78 USD

Mitek Systems utilizes AI and machine learning to help financial institutions and other enterprises verify a user’s identity during digital transactions. MITK’s solutions are embedded in the apps of over 6,500 organizations and used by more than 80 million consumers to perform tasks such as mobile check deposit. Mitek topped our Q1 FY20 estimates at the end of January, driven by double-digit growth in mobile deposit and identity verification products.

Mitek’s fiscal 2020 and 2021 earnings revisions have climbed to help it earn a Zacks Rank #1 (Strong Buy). MITK also sports an “A” grade for Growth and it has crushed our bottom-line estimates in the trailing four quarters by a 32% average. Mitek shares are up 15% in the last three months and 165% in the last five years. Perhaps most importantly, the stock has plenty of room to run before it runs into its 52-week highs of $13 a share. 

The San Diego-based company’s adjusted 2020 earnings are projected to surge 21.4% to $0.51 per share on 18.3% higher revenues. Then the company’s sales and earnings are both expected to climb another roughly 15% higher in 2021. And the mobile capture and digital identity verification firm could be poised to grow for years to come in our online and mobile-heavy economy.

Digital Turbine, Inc.

Prior Close: $7.14 USD

Digital Turbine connects OEMs, mobile operators, and publishers with advertisers and app developers. The Austin, Texas-based firm has landed on Deloitte's Technology Fast 500 list multiple times and it completed on March 3 its acquisition of Mobile Posse. The company said that Mobile Posse’s “suite of highly-engaging content discovery products is a perfect complement to our core Digital Turbine platform offering.”

APPS shares have surged 115% in the last 12 months and its positive earnings estimate revision activity helps it grab a Zacks Ranks #2 (Buy). Digital Turbine also boasts “A” grades for Growth and Momentum for an overall “B” VGM grade. Plus, Digital Turbine’s valuation is now far more reasonable.

Digital Turbine’s adjusted Q4 2020 earnings are projected to soar 67% on 33% stronger revenue. Meanwhile, its full-year fiscal 2020 EPS figure is expected to surge 163%, while sales are set to jump over 33% to $137.8 million. Peeking forward, the company’s adjusted 2021 EPS figure is projected to climb another 42% higher, on 39% stronger revenue.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Anheuser-Busch InBev SA/NV (BUD) : Free Stock Analysis Report
 
The Rubicon Project, Inc. (RUBI) : Free Stock Analysis Report
 
Mitek Systems, Inc. (MITK) : Free Stock Analysis Report
 
Stamps.com Inc. (STMP) : Free Stock Analysis Report
 
Digital Turbine, Inc. (APPS) : Free Stock Analysis Report
 
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