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The Zacks Analyst Blog Highlights: Snap, Square, ON Semiconductor, Ebix and Perceptron

Zacks Equity Research

For Immediate Release

Chicago, IL –March 08, 2017 – 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 Snap Inc. (NYSE: SNAP – Free Report ), Square, Inc. (NYSE: SQ – Free Report ), ON Semiconductor Corporation (NASDAQ: ON – Free Report ), Ebix, Inc. (NASDAQ: EBIX – Free Report ) and Perceptron, Inc. (NASDAQ: PRCP – Free Report ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Tuesday’s Analyst Blog:

Forget Snapchat, Buy These Tech Stocks Instead

Snapchat parent Snap Inc. (NYSE: SNAP – Free Report ) made a blockbuster debut on the New York Stock Exchange last Thursday. The stock opened at $24, 41.2% higher than its initial price of $17 and appreciated another 2% before closing its inaugural trading day at $24.48.

The stock was up another 10.6% the next day after CNBC parent NBCUniversal confirmed that it has poured $500 million in the company.

However, the impact of analyst initiations took the shine off the stock, which declined 12.3% at market close on Monday, bringing the stock below its opening price for the first time. Out of the seven analysts covering the stock, five gave it a sell rating on Monday.

What Went Wrong?

Despite having a strong user base comprising mainly millennials, heavy engagement, high brand value and an innovative approach to business, Snap’s total addressable market (TAM) is currently 80% smaller than that of Facebook. Moreover, the company has already reached 50% penetration of its TAM in the U.S.

Snapchat’s user growth rate has slowed down over the last few quarters. It added respective 21 million, 10 million and 5 million daily active users in the second, third and fourth quarters of 2016.

Given its low market penetration and expansion opportunities and sluggish user growth, analysts believe that the stock is currently overvalued.

Other potential overhangs include lack of profitability, slowing monetization, fierce competition, inability to prevent replication of its best ideas and lack of experience with the management team.

Alternative Picks

Snap’s lost momentum doesn’t bode well for the investors. Here we pick few other stocks using the Zacks Momentum Style Score , which indicates when the time is right to grab a stock and benefit from its momentum with the highest probability of success.

Our research shows that stocks with a Momentum Score of 'A,' when combined with a Zacks Rank #1 (Strong Buy) offer the best upside potential in the short term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Here we present four such stocks.

Square, Inc. (NYSE:SQ – Free Report ) offers financial services and marketing services. The company provides payments and point-of-sale, which include hardware and software to accept payments, streamline operations and analyze business information.

For the current year, five estimates moved higher while none was revised lower in the past 30 days. The Zacks Consensus Estimate improved from a loss of 33 cents per share 30 days ago to a loss of 25 cents per share, marking a 32% improvement.

Square has beaten estimates in three of its last four quarters with an average positive surprise of 23.3%.

Square, Inc. Price, Consensus and EPS Surprise

Square, Inc. Price, Consensus and EPS Surprise | Square, Inc. Quote

ON Semiconductor Corporation (NASDAQ: ON – Free Report ) is a supplier of broadband and power management integrated circuits and standard semiconductors used in numerous advanced devices ranging from high-speed fiber optic networking equipment to the precise power management functions found in portable electronics.

Estimate revisions have been positive with 10 estimates moving higher in the past month compared with none lower. The consensus estimate also increased from $1.15 per share 30 days ago to $1.24 per share currently, an increase of 7.8%.

Over the trailing four quarters, ON Semiconductor has beaten estimates three times, posting an average positive surprise of 13.3%.

ON Semiconductor Corporation Price, Consensus and EPS Surprise | ON Semiconductor Corporation Quote

Ebix, Inc. (NASDAQ:EBIX – Free Report ) is one of the leading international suppliers of software and e-commerce solutions to the insurance industry.

For the current year, the consensus for EBIX has gone up by 5.2% in the past 30 days, thanks to one upward revision in the past one month compared to none lower. The company’s average positive surprise for the last four quarters was 14.4%.

Ebix, Inc. Price, Consensus and EPS Surprise | Ebix, Inc. Quote

Perceptron, Inc. (NASDAQ:PRCP – Free Report ) designs, manufactures and markets information based process measurement and guidance solutions, which help customers improve performance.

This stock has also seen estimates rise significantly over the past month for the current fiscal year backed by one upward estimate revision. The company’s average positive beat for the last four quarters was an impressive 131.2%.

Perceptron, Inc. Price, Consensus and EPS Surprise | Perceptron, Inc. Quote

To Conclude

The above-mentioned stocks have grabbed the spotlight with striking performances supported by solid earnings results and strong growth projections. With this in mind, we believe investing in these stocks will generate strong returns in the short term.

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 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.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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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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Square, Inc. (SQ): Free Stock Analysis Report
 
ON Semiconductor Corporation (ON): Free Stock Analysis Report
 
Ebix, Inc. (EBIX): Free Stock Analysis Report
 
Perceptron, Inc. (PRCP): Free Stock Analysis Report
 
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