For Immediate Release
Chicago, IL – May 22, 2019 – Zacks Equity Research The Trade Desk TTD as the Bull of the Day, Lindsay Corporation LNN as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nordstrom JWN and Urban Outfitters URBN.
Here is a synopsis of all four stocks:
Bull of the Day:
The Trade Desk has seen its shares soar over 70% this year alone as the programmatic advertising firm continues to grow in a marketing environment that will only see algorithmic, real-time bidding expand. Looking ahead, The Trade Desk is expected to grow both its top and bottom-lines as it gains more traction and bolsters its business through artificial intelligence, from audio and mobile to connected TVs.
The Trade Desk essentially allows companies who want to advertise the chance to find their target consumers in a more precise, efficient, and modern way. Fewer companies and advertisers want to deal with insertion orders that call for X amount of impressions to appear on website Y or TV channel Z, only to find out how the campaign performed after the ad run is over. This is where the Ventura, California-headquarter firm comes in.
The Trade Desk and the programmatic approach—which has become an ad industry mainstay—allows clients to utilize its cloud-based platform to create, manage, and optimize data-driven digital advertising campaigns across a range of channels and devices in real time. These days, advertisers know that they can turn to Google and Facebook to reach massive audiences. TTD allows their clients to reach giants like these and find consumers across multiple channels, apps, and websites, across connected TVs, audio, mobile and more.
TTD rolled out its own AI technology it calls Koa last summer to help automatically surface data-driven recommendations in real-time to improve ad campaigns. The process allows customers to get a more market-driven price on their ads, reach the right target audience on the right devices, and more. In the end, non-ad supported services such as Netflix, Amazon Prime, Spotify and soon enough Disney and Apple will have made consumers harder to reach. Therefore, companies big and small need a more modern, data-driven way to advertise, and The Trade Desk seems poised to benefit from these needs.
Investors should also note that The Trade Desk recently launched a programmatic ad buying platform in China. The firm also said that its newer connected TV and audio channels “grew multiples faster” than its more mature units, which is a good sign as smart TVs from the likes of Roku and digital audio and podcasts proliferate. On top of that, The Trade Desk boasted that its customer retention rate remained over 95% during Q1, “as it has for the previous 21 quarters.”
Outlook & Earnings Trends
The digital-advertising platform operator is coming off a better-than-projected Q1 of fiscal 2019. The company’s adjusted quarterly earnings soared 44% to reach $0.49 per share and crush our $0.25 per share Zacks Consensus Estimate. Meanwhile, The Trade Desk’s first-quarter revenue jumped roughly 41% to $120.99 million and also top estimates.
Looking ahead, our current Zacks Consensus Estimate calls for the company’s second-quarter revenue to soar over 38% to reach $155.09 million. Peeking further ahead, TTD’s full-year revenue is projected to jump over 36% to touch $649.96 million.
At the bottom end of the income statement, The Trade Desk’s adjusted Q2 earnings are projected to jump 13.3% to $0.68 per share. The company’s fiscal 2019 earnings are then expected to pop 8.5% to $2.93 a share, with 2020’s earnings projected to come in 22.7% higher than our current-year estimate.
As we mentioned earlier, TTD blew past our Q1 2019 earnings estimate by 96%. Jumping back a little further, the firm topped our bottom-line estimates by over 32% in Q4, Q3, and Q2 of 2018. On top of that, The Trade Desk has seen its earnings estimate revision activity trend heavily in the right direction recently, especially for fiscal 2019 and 2020. This means that at least some analysts are more optimistic about the advertising platform company’s bottom line expansion, which is often a good sign.
Shares of TTD are up roughly 144% over the last 12 months, which destroys its industry’s roughly 3% average and the S&P 500. And as the chart at the top shows, The Trade Desk stock has been a top performer since it went public in 2016. TTD stock closed regular trading Tuesday at $199.03 per share, down 15% from its 52-week intraday trading high of 52-week $232.70.
The firm’s positive earnings estimate revision trends help The Trade Desk earn a Zacks Rank #1 (Strong Buy) right now. TTD’s valuation metrics are still pretty stretch at the moment, which means value investors might want to stay away. Yet, for those searching for outsized growth in a potentially booming industry, The Trade Desk could be a stock to consider buying.
Bear of the Day:
Shares of Lindsay Corporation have fallen roughly 16% over the last 12 months, which falls below its industry’s 5% average decline. The irrigation and road safety equipment maker is coming off a worse-than-expected quarter on the back of U.S.-China trade war worries, which have only escalated since it reported its second-quarter fiscal 2019 results in early April.
Overview & Recent Performance
Lindsay Corporation is a manufacturer and distributor of irrigation and infrastructure equipment and technology. The company is well-known for its massive Zimmatic irrigation equipment, and other offerings, that have become popular with farmers around the world. The Omaha, Nebraska-based company also operates an infrastructure division, which includes transportation safety and roadway maintenance products such as energy-absorbing crash cushions and moveable barriers.
The company has been negatively impacted by the ongoing trade fight between the U.S. and China that has hurt farmers and caused uncertainty. Lindsay Corporation’s revenue fell 16% last quarter, some of which was attributed to previously announced business divestitures. Meanwhile, LNN posted a quarterly net loss of $3.4 million, or $0.32 per diluted share, down big from positive earnings of $0.16 per share in the prior-year period.
Lindsay Corporation did report positive adjusted Q2 earnings and saw its international irrigation segment revenue jump 15%, driven by strong sales in developing markets. Nonetheless, shares of LNN have dipped roughly 4% since it reported and 15% in 2019. “North America irrigation sales volumes were significantly lower than anticipated as the unresolved US-China trade dispute contributed to a further decline in farmer sentiment,” CEO Tim Hassinger said in prepared remarks last quarter.
Overall, shares of LNN are down roughly 4% over the past five years, which falls well below its industry’s 30% climb and the S&P 500’s 53% expansion. Lindsay Corporation stock closed regular trading Tuesday at $80.61 per share, down roughly 26% off its 52-week intraday trading highs.
Outlook & Earnings Trends
Looking ahead, the company’s current-quarter revenue is projected to fall over 19% to $136.87 million, based on our current Zacks Consensus Estimate. The firm’s full-year fiscal 2019 revenue is then expected to slip nearly 14% to $472.03 million. Peeking ahead to fiscal 2020, the company is projected to see its full-year revenue pop 6% above our 2019 estimate to reach $500.79 million. This, however, would still fall well below 2018’s $547.71 million.
Moving onto the bottom end of the income statement, LNN’s adjusted quarterly EPS figure is projected to plummet over 41.5% to $0.97 per share. The firm’s adjusted fiscal 2019 earnings are expected to fall roughly 37%. Luckily for current long-term LNN holders, the company’s earnings are projected to soar 70% above our 2019 estimate in fiscal 2020.
With that said, the company’s earnings estimate revision activity has moved completely in the wrong direction recently. Investors will also notice just how much its quarterly and full-year earnings estimates have come down.
Lindsay Corporation’s negative earnings estimate revision activity helps it earn a Zacks Rank #5 (Strong Sell) at the moment. The company also rocks a “D” grade for Value and an “F” for Growth in our Style Scores system. LNN is trading at 28.2X forward 12-month Zacks Consensus EPS estimates, which marks a premium compared to its industry’s 14.5X average and its own five-year median of 26.5X.
LNN’s 1.6 price/sales ratio also comes in above its industry’s 0.8 average. With all this in mind, investors might want to stay away from Lindsay Corporation stock at the moment, especially amid increased trade war-related woes.
A Tale of 2 Retailers’ Earnings: JWN & URBN
Nordstrom shares are falling off a cliff in late trading Tuesday, down 9+%, following a fiscal Q1 earnings report that was weaker-than-expected across the board: earnings of 23 cents per share was way down from the Zacks consensus estimate of 43 cents, and less than half of the year-ago quarter's 51 cents per share.
Revenues of $3.44 billion in the quarter was notably beneath the $3.54 billion expected. The company has also lowered fiscal year earnings guidance on what the company is calling expected "further deceleration" in its key businesses. Shares of JWN are now trading at 5-year lows.
This is in sharp contrast to Urban Outfitters' fiscal Q1 earnings results, which saw beats on both top and bottom-lines: 31 cents per share versus the Zacks consensus 26 cents, with sales of $864 million easily topping the expected $857.3 million.
With the help of double-digit growth in its digital business and an unexpected boost from Anthropologie, URBN was able to post its seventh consecutive quarter of positive comps, up 1% for the quarter. Shares are trading up slightly, but still well off the highs we saw in early April.
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The Trade Desk Inc. (TTD) : Free Stock Analysis Report
Lindsay Corporation (LNN) : Free Stock Analysis Report
Nordstrom, Inc. (JWN) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
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