For Immediate Release
Chicago, IL – May 16, 2018 – Zacks Equity Research highlights Twitter Inc. TWTR as the Bull of the Day, Farmer Bros FARM as the Bear of the Day. In addition, Zacks Equity Research provides analysis onTexas Instruments Inc. TXN, Applied Materials, Inc. AMAT and Mellanox Technologies, Inc. MLNX.
Here is a synopsis of all five stocks:
Bull of the Day:
Twitter Inc., a Zacks Rank #1 (Strong Buy) is a public, real-time, global platform where any user can create a Tweet and any user can follow other users. The platform is unique in its simplicity: Tweets are limited to 140 characters of text. This constraint makes it easy for anyone to quickly create, distribute and discover content that is consistent across our platform and optimized for mobile devices. As a result, Tweets drive a high velocity of information exchange that makes Twitter uniquely live.
Recent Earnings Data
The company announced Q1 18 earnings data in late April where it crushed the Zacks consensus earnings and revenue estimates for the fifth consecutive quarter. On a year over year basis, revenues improved by 21% while earnings grew by just under 150%. Also, average monthly active users rose to 336 million a +3% increase from the year ago quarter, and average daily active users grew by 10% YoY. The biggest area of improvement for the company is coming from the international segment where revenues improved by +53% YoY, and was the highest since the third quarter 2016.
More Positive News for the Future
In the beginning of May, management announced that were expanding its premium video lineup with 30 new programs and renewals. This programming includes sports, gaming, news, entertainment with big partners like Disney/ESPN, Viacom, NBCUniversal, and Vice Media. This is in addition to previous current live deals that are in place with Live Nation, Bloomberg, and the PGA. This announcement was after management made several very positive comments regarding its video segment during its earnings presentation; it accounts for more than 50% of advertisement revenues, it is the fastest growing segment for advertisement growth, and that views almost doubled in the past year.
According to Jack Dorsey, CEO, “The first quarter was a strong start to the year. We grew our audience and engagement, marking another quarter of double digit year-over-year DAU growth, and continued our work to make it easier to follow topics, interests, and events on Twitter. We also introduced a new framework to think more cohesively about the issues affecting our service, including information quality and safety. This holistic approach will help us more effectively address these challenges by viewing them through the broader lens of the health of the public conversation, and we're encouraged by our initial progress in this area.”
Bear of the Day:
Farmer Bros, a Zacks Rank #5 (Strong Sell) is in the business of roasting, packaging and distributing coffee and allied products to restaurants, hotels, hospitals, convenience stores and fast food outlets. The company's primary raw material is green coffee. Green coffee is purchased through domestic commodity brokers.
Recent Earnings Miss
Last week, the company reported Q3 18 results where they significantly missed the Zacks consensus earnings estimate, and came in short of the revenue estimate. The company posted a net loss of -$3.9 million compared to net income gain of $1.6 million in the year ago quarter. Also, adjusted EBITDA fell by $1.7 million to $10.5 million verse the prior year period. Further, gross margins declined by 170 basis points to 37.2% compared to the year ago quarter. To add to the quarter, operating expenses increased by $9.9 million to $61.7 million (+19.1%) due to a rise in general & administrative, and selling expenses.
According to Mike Keown, President and CEO, “We continue to make meaningful progress in executing our strategy and working to leverage our solid platform for growth. While we did not achieve year-to-date results at the level we had initially projected to reach our Adjusted EBITDA objective for the fiscal year, we expect that our recently achieved SQF certification and the continued ramp-up of our state of the art Northlake, Texas facility will position us well to secure more national accounts. Further, we are pleased with the continued integration of the Boyd’s business, which remains on-track. Looking ahead, we continue to be focused on leveraging the investments we have made in our roasting facilities, expanding our distribution network, adding new customers, and increasing business with existing customers. Our pipeline remains robust and we believe that Farmer Brothers has the right foundation and strategy in place for long-term growth.”
3 Strong Buy Semiconductor Stocks to Buy Now
Semiconductor stocks were battered by the recent market sell-off, but tech has made a strong recovery, and with several interesting trends like the Internet of Things and artificial intelligence on the rise, it is still an exciting time to be investing in chip-making corner of the technology sector.
While tech behemoths like Microsoft and Apple may hog all the headlines, it has really been the companies powering their technologies—the semiconductor manufacturers—that have been garnering the attention of Wall Street.
Indeed, as our “Computer and Technology” sector has gained nearly 19% over the past year, semiconductor companies have been a driving factor behind its growth. The aforementioned emerging tech trends have created new consumer demand, and the semiconductor makers are delivering.
Luckily, the proven Zacks stock picking methods are effective across all industries. Check out these Zacks Rank #1 (Strong Buy) semiconductor stocks right now:
1. Texas Instruments Inc.
Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. It functions as one of the top players in the analog IC and embedded processor fields. The company has also developed into a major IoT pick, reporting year-over-year sales growth of 20% in the unit that handles this business during its most recent quarter.
Meanwhile, the semiconductor firm surpassed revenue estimates and released in-line guidance. This has led to more bullish analyst sentiment and propelled the stock to a Zacks Rank #1 (Strong Buy). The stock also has a Forward P/E of 20.5 and a PEG of 2.1, so investors are getting a decent price for its earnings and earnings growth outlook.
It is also worth noting that TXN offers investors a dividend yield of about 2.3% right now.
2. Applied Materials, Inc.
Applied Materials is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD, and solar PV cell manufacturers. When the semiconductor business is booming, Applied benefits as its clients demand new equipment and services.
On top of its #1 (Strong Buy) designation, AMAT is also presenting some interesting valuation metrics. The stock is trading at just over 12.5x forward earnings, and with its PEG ratio of 0.9, investors can see that they are getting a great price for its earnings growth potential.
Applied is scheduled to release its latest quarterly earnings results later this week. Based on our latest Zacks Consensus Estimates, analysts expect the firm to see adjusted earnings growth of 43% and total revenue growth of 26%. Also, our Most Accurate Estimate for earnings—which only accounts for the most recent analyst projections—sits higher than the consensus, indicating that sentiment has warmed recently.
3. Mellanox Technologies, Inc.
Mellanox Technologies is a leading supplier of semiconductor-based, interconnected products to world-class server, storage, and infrastructure OEMs. The company's VPI enables standard communication protocols to operate over any converged network with the same software solution.
MLNX has started to pick up steam after its fourth consecutive earnings beat. It is also an explosive growth pick, with earnings and revenue expected to improve by 78% and 19%, respectively, this year. Shares are currently trading with a reasonable Forward P/E of 20.8 and an attractive PEG of 1.4.
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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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Twitter, Inc. (TWTR) : Free Stock Analysis Report
Mellanox Technologies, Ltd. (MLNX) : Free Stock Analysis Report
Farmer Brothers Company (FARM) : Free Stock Analysis Report
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
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