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The Zacks Analyst Blog Highlights: Pfizer, Goldman Sachs, Mattel, Glu Mobile and Nautilus

Zacks Equity Research
·8 min read

For Immediate Release

Chicago, IL – November 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Pfizer Inc. PFE, The Goldman Sachs Group, Inc. GS, Mattel, Inc. MAT, Glu Mobile Inc. GLUU and Nautilus, Inc. NLS.

Here are highlights from Tuesday’s Analyst Blog:

3 Cheap Stocks Under $20 to Buy for Holiday Season and Beyond

Wall Street had been hoping for good news on the coronavirus front as cases rise in Europe and the U.S., and they certainly got what they were craving. The market began back-to-back weeks by surging to records on positive vaccine news, first from Pfizer and then from Moderna.

Analysts at Goldman Sachs and elsewhere have turned far more bullish for 2021 since the Pfizer announcement. And the S&P 500 is now up roughly 12% in 2020 and 10% since the end of October. On top of that, the U.S. economy continues to show signs of improvement, as it bounces back from its coronavirus fall.

The S&P 500 earnings outlook and stronger-than-expected Q3 results help support the economic comeback figures. Traders are also apparently pleased enough with the likelihood of divided government (also read: What to Expect from the Retail Sector).

The wave of positive factors doesn’t necessarily mean investors should dive back into the hardest hit social distancing industries such as travel and leisure. Nonetheless, the current environment, fueled by the combination of factors we already touched on, along with low interest rates, means investors might want to buy stocks as we enter the second half of the fourth quarter and beyond.  

Today we dive into three highly-ranked stocks that are all trading for under $20 per share that appear worth considering…

Mattel

Prior Close: $14.36 USD

The iPhone Age has seen a rise in kids playing with phones and tablets. But there could be a push from some parents to get their children to spend less time on screens, especially as millions of kids are remote learning on Zoom and other platforms. Mattel, which boasts a portfolio that includes Barbie, Hot Wheels, Fisher-Price, and more, said recently it’s seeing higher-than-expected demand. The toy and games power topped Q3 estimates in October, with sales up 10% and adjusted earnings up 265%.

More specifically, Mattel’s Barbie category jumped 29%, which was its largest quarterly expansion going back at least two decades. It’s worth pointing out that MAT has actively increased its range of dolls to feature more skin tones, hair colors, career paths, and body sizes to help appeal to a wider swath of people. And Mattel’s Toys-Games-Hobbies industry ranks in the top 11% of our over 250 Zacks industries at the moment.

Zacks estimates call for the firm’s adjusted Q4 earnings to soar 100% on 6.5% stronger revenue. Better still, Mattel’s first quarter fiscal 2021 sales are projected to climb over 9% to $648.2 million. Mattel’s FY21 outlook appears strong and its longer-term earnings revisions help it grab a Zacks Rank #2 (Buy) right now. MAT also boasts a “B” grade for Growth and an “A” for Momentum in our Style Scores system.

Mattel shares have surged over 75% in the last six months to crush its industry’s 9% climb. This run includes a 15% jump in the last month that has MAT trading right near its recent 52-week highs. Overall, the stock is up over 22% in the past 12 months. But investors might be pleased to know that Mattel was trading above $30 back in 2016. This could give the stock miles of room to run. And along with its under $15 a share price tag, MAT trades at 1.1X forward sales, which marks a big discount against its industry’s 5.3X.

Glu Mobile

Prior Close: $8.75 USD

Glu stands somewhat in contrast to Mattel, but both companies can still grow as the American consumer drives the economy. Plus, the overall trends provide a strong tailwind for mobile video gaming. For instance, mobile gaming is projected to play a pivotal role in the growth of the global gaming industry that is set to climb from $159 billion in 2020 and over $200 billion by 2023. Glu’s offerings include Deer Hunter, Kim Kardashian: Hollywood, MLB Tap Sports Baseball, Disney Sorcerer’s Arena and other popular titles.

Glu beat our Q3 earnings estimates by roughly 60% in the first week of November. Meanwhile, Glu’s revenue soared 48% to a company record of $158.5 million, with bookings up 22%. Peeking ahead, Zacks estimates call for its fiscal 2020 sales to climb 31% to $553 million, with another 10.1% expansion projected in FY21. The mobile gaming firm’s adjusted earnings are expected to skyrocket over 140% this year and another 34% next year.

Glu’s impressive post-release earnings revisions help it grab a Zacks Rank #1 (Strong Buy) right now, alongside its “A” grade for Growth in our Styles Scores system. The company is also part of the same highly-ranked industry as Mattel, and simply put: millions and millions of people are addicted to their smartphones.

GLUU stock has surged 30% since its Q3 earnings release and the stock is up over 60% in the past year. Plus, Glu shares still hover 20% off their April 2019 highs. And GLUU trades below its own year-long highs in terms of forward sales and at a big discount to its industry at 2.5X vs. 5.3X.

Nautilus

Prior Close: $18.73 USD

Nautilus is one of the legacy players in the home-workout industry that Peloton has thrived in during the pandemic. NLS and its home-gym portfolio includes Bowflex, Nautilus, Octane Fitness, and Schwin. These offerings feature free weights, treadmills, ellipticals, indoor cycling equipment, and more, which makes it a much more diverse firm than PTON.

The company beat our Q3 earnings and revenue estimates on November 9, with sales up a whopping 152%. Nautilus entered the fourth quarter with a backlog of $72.8 million, as it raced to bolster production to keep up with demand. On top of that, NLS saw its gross profit soar over 250% to $67.9 million.

Zacks estimates call for its fourth quarter revenue to surge 83%, with Q1 projected to climb another 56%. Meanwhile, adjusted earnings are projected to soar by roughly 530% in both Q4 and the first quarter of next year. Nautilus has seen its earnings outlook surge since its report to help it earn a Zacks Rank #1 (Strong Buy), and investors should note that it has blown away our bottom-line estimates by an average of 300% in the trailing four periods.

Nautilus rocks an “A” grade for Momentum and a “B” for Growth in our Style Scores system and it’s part of an industry that rests in the top 3% of our over 250 Zacks industries. NLS stock has suffered a substantial earnings and vaccine-focused selloff recently.

Yet, Nautilus, Peloton, and others could continue to see increased demand as gyms might be some of the last things to return to normal, even if we have a vaccine. And Wall Street also likely used the news and the report as a chance to take profits on the stock that’s still up over 930% in 2020. Investors might want to consider NLS, which is now trading over 35% off its recent highs, as it rolls out more digital offerings.

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Zacks Investment Research

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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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Mattel, Inc. (MAT) : Free Stock Analysis Report
 
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Pfizer Inc. (PFE) : Free Stock Analysis Report
 
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Glu Mobile Inc. (GLUU) : Free Stock Analysis Report
 
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