A low-interest-rate environment led a record number of private companies to administer IPOs in 2021. However, not all newly listed stocks have generated momentum. Recent IPO stocks E-Home Household Service (EJH), Pop Culture Group (CPOP), Tian Ruixiang (TIRX), and Sentage Holdings (SNTG) have plunged in price since they began trading. So, read on for details on the performance of these names.

shutterstock.com – StockNews

The record low-interest-rate environment set the stage for many companies to make their stock market debuts. According to a Stock Analysis report, there have been a record1,056 IPOs this year, representing a 120.5% increase year-over-year.

However, even though the major stock market indexes have touched record highs, not all IPOs performed well. With the Fed hinting at three interest rate hikes soon, a decline in the number of companies making stock market debuts may be in the offing. Also, several Chinese companies that listed this year have performed poorly due to worsening geopolitical relations between the United States and China. Furthermore, China has increased scrutiny of major overseas listings after the controversial IPO of DiDi Global Inc. (DIDI) was conducted this year.

Given this backdrop, we think it could be wise to avoid fundamentally weak IPO stocks of China-based companies E-Home Household Service Holdings Limited (EJH), Pop Culture Group Co., Ltd (CPOP), Tian Ruixiang Holdings Ltd (TIRX), and Sentage Holdings Inc. (SNTG). Even though these stocks soared in price on their stock market debuts, they have declined significantly since.

E-Home Household Service Holdings Limited (EJH)

EJH, which is headquartered in Fuzhou, China, delivers household services through an online APP platform or call center. The company operates through three segments: Installation & Maintenance; Housekeeping; and Senior Care Services. The stock soared in price on its market debut on May 14, 2021 but has plunged since.

On November 30, 2021, EJH announced that its affiliated variable interest entity, Pingtan Comprehensive Experimental Area E Home Service Co., Ltd., had entered an equity transfer agreement to acquire 51% of Fuzhou Sijie Cleaning Service Co., Ltd. However, this move could take a toll on its already weak financials.

EJH’s operating expense for the quarter ended June 30, 2021, increased 98.7% year-over-year to $17.14 million. The company’s installation and maintenance expenses increased 65.3% year-over-year to $32.20 million. Also, its general and administrative expenses increased 516% year-over-year to $6.86 million. Over the past six months, the stock has declined 95% in price to close yesterday’s trading session at $1.53.

EJH’s weak fundamentals are reflected in its POWR Ratings. It has an overall D rating. Which equates to a Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

EJH has a D grade for Stability. It is ranked #40 of 46 stocks in the Outsourcing – Business Services industry. Click here to see the additional ratings of EJH for Growth, Value, Momentum, Sentiment, and Quality.

Pop Culture Group Co., Ltd (CPOP)

CPOP is a hip-hop culture company that hosts entertainment events for corporate clients. The Xiamen, China-based concern provides analysis services to advertising and media service providers, and marketing services, including brand promotion and trademark and logo design. The stock hit its 52-week high of $78 on July 1, 2021, after going public on June 30, 2021, after which it declined in price significantly.

For the quarter ended June 30, 2021, CPOP’s revenue from brand promotion decreased 67% year-over-year to $0.80 million. The company’s cost of revenue increased 64% year-over-year to $18.30 million. In addition, its operating expenses came in at $1.39 million, up 2% year-over-year. Over the past three months, the stock has declined 42.1% in price to close yesterday’s trading session at $1.70.

CPOP’s POWR Ratings reflect these weak prospects. It has a D grade for Stability. Within the D-rated Advertising industry, it is ranked #12 of 18 stocks. To see the other ratings of CPOP for Growth, Value, Momentum, Sentiment, and Quality, click here.

Tian Ruixiang Holdings Ltd (TIRX)

TIRX in Beijing, China, operates as an insurance broker serving individuals or institutional customers. It distributes insurance products such as property and casualty insurance, automobile insurance, and commercial property insurance. After making its stock market debut on January 27, 2021, it hit its 52-week high of $103.87 on March 3, 2021 but has since declined in price.

TIRX’s operating expenses for the six months ended April 30, 2021, increased 95.5% year-over-year to $2.10 million. The company’s net loss came in at $0.40 million, up 71.4% year-over-year. Also, its loss per share increased 20% year-over-year to $0.06. The stock has declined 98.1% over the past nine months to close yesterday’s trading session at $1.64.

TIRX’s bleak prospects are reflected in its POWR Ratings. It has an overall D rating, which translates to Sell. It has a D grade for Value, Stability, Sentiment, and Quality. In the Outsourcing – Business Services industry, it is ranked last. Click here to see the other ratings of TIRX for Growth and Momentum.

Sentage Holdings Inc. (SNTG)

Shanghai-based SNTG is a financial service provider that offers a range of financial services across consumer loan repayment and collection management, loan recommendation, and prepaid payment network services. It made its stock market debut on July 9, 2021, posting a near ninefold gain. However, its shares have since retreated in price.

For the six months ended June 30, 2021, SNTG’s operating revenue decreased 24% year-over-year to $1.32 million. The company’s revenue from the consumer loan repayment and collection management business declined 84.4% year-over-year to $0.12 million. In addition, its net income came in at $0.45 million, down 38.3% year-over-year. Over the past three months, SNTG’s stock has declined 49.3% in price to close yesterday’s trading session at $1.23.

Our POWR Ratings reflect the stock’s weak prospects. It has a D grade for Stability. It is ranked #44 of 55 stocks in the Consumer Financial Services industry. To see the additional ratings of SNTG for Growth, Value, Momentum, Sentiment, and Quality, click here.

EJH shares fell $1.53 (-100.00%) in premarket trading Tuesday. Year-to-date, EJH has declined -97.19%, versus a 29.66% rise in the benchmark S&P 500 index during the same period.

About the Author: Dipanjan Banchur

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.

More…

The post The 4 Worst Performing IPOs in 2021 appeared first on StockNews.com

https://www.entrepreneur.com/article/410375

The shares of human capital management company Paychex (PAYX) soared to their $137.20 all-time price high on December 23, after posting impressive second-quarter earnings. So, does the stock have further upside to deliver? Read on, let’s find out.

shutterstock.com – StockNews

Integrated human capital management (HCM) solutions provider Paychex, Inc. (PAYX) in Rochester, N.Y., serves more than 700,000 clients across the United States and Northern Europe. Its shares soared to hit their all-time high of $137.20 on Dec. 23, 2021, after the company posted better than expected earnings in its fiscal second quarter (ended November 30, 2021). Its total revenue increased 13% year-over-year to $1.11 billion in the quarter, while its adjusted EPS came in at $0.91, up 25% year-over-year.

The stock has gained 24.7% in price over the past three months and 10.8% over the past month to close yesterday’s trading session at $135.64.

However, the shares are currently trading 1.1% below their all-time high. PAYX faces intense competition in the business services space, such as Automatic Data Processing, Inc. (ADP). Furthermore, the ongoing labor shortage could adversely impact its business. So, we think PAYX’s near-term prospects look uncertain.

Here are the factors that could influence PAYX’s performance in the upcoming months:

Positive Developments

In October, PAYX enhanced its Paychex Flex Document Management tool functionality to help employers who choose to track vaccination status to restrict access and maintain the confidentiality of information. This is expected to help businesses as they continue to navigate the impacts of the COVID-19 pandemic.

PAYX acquired Flock in the same month. The company’s president and CEO, Martin Mucci, said, “Paychex provides HR services to more than 1.7 million worksite employees and is among the 30 largest insurance agencies in the U.S. The combination of Paychex’s full-service HR and benefits capabilities and Flock’s innovative platform will position us for continued growth and expansion in the marketplace.”

Stable Dividend Growth

PAYX’s dividends have grown consistently over the past 11 years. Its dividend payout has grown at an 8.1% CAGR over the past five years and 6.1% over the past three years. While its four-year average dividend yield is 2.89%, the current dividend translates to a 1.95% yield. PAYX paid a $0.66 per share quarterly dividend on Nov. 29, 2021, amounting to an annual dividend of $2.64.

Lofty Valuation

In terms of forward non-GAAP P/E, PAYX’s 37.02x is 50.5% higher than the 24.60x industry average. The stock’s 3.82x forward non-GAAP PEG is 121.1% higher than the 1.73x industry average. And its  forward EV/S, EV/EBITDA, and P/S of 10.74x, 24.45x, and 10.77x, respectively, are higher than the 4.23x, 16.51x, and 4.13x industry averages.

POWR Ratings Reflect Uncertainty

PAYX has an overall C rating, equating to a Neutral in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. PAYX has a C grade for Sentiment, which is in sync with unfavorable analyst sentiment. Wall Street analysts expect the stock to hit $133.13 in the near term, which indicates a potential decline of nearly 2%.

Furthermore, it has a D grade for Value, which is consistent with its higher-than-industry valuation ratios.

PAYX is ranked #21 out of 46 stocks in the Outsourcing – Business Services industry. Beyond what I have stated above, we have also given the stock grades for Growth, Momentum, Stability, and Quality. Click here to get all PAYX’s ratings.

Bottom Line

PAYX’s shares soared in price after the company posted top- and bottom-line growth in its latest quarter. Its revenue and EPS are expected to increase 6.6% and 7.2%, respectively, year-over-year to $4.78 billion and $3.87 in fiscal 2023. However, the stock seems to have peaked and looks overvalued at the current price level. So, we think it could be wise to wait for a pullback before buying into the stock.

How Does Paychex (PAYX) Stack Up Against its Peers?

While PAYX has an overall POWR Rating of C, one  might want to consider investing in Outsourcing – Business Services stocks having an A (Strong Buy) rating: TriNet Group, Inc. (TNET), Ituran Location and Control Ltd. (ITRN), and ARC Document Solutions, Inc. (ARC).

PAYX shares were unchanged in premarket trading Tuesday. Year-to-date, PAYX has gained 49.22%, versus a 29.35% rise in the benchmark S&P 500 index during the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst.

More…

The post After Reporting Better Than Expected Q2 Earnings, is Paychex Stock a Buy? appeared first on StockNews.com

https://www.entrepreneur.com/article/410374

The shares of renowned used car retailer CarMax (KMX) have been losing momentum despite the company reporting better than expected third-quarter earnings. Analysts expect surging inflation levels and a resurgence of COVID-19 cases to limit KMX’s growth in the near term. Given this backdrop, should one invest in KMX stock now? Read on to find out.

shutterstock.com – StockNews

Carmel, Ind.-based CarMax, Inc. (KMX) is the largest retailer of used cars in the United States. For its fiscal third quarter, ended Nov. 30, 2021, KMX’s net revenues increased 64.5% year-over-year to a record $8.50 billion, which was 15.2% higher than the $7.38 billion FactSet consensus estimate. This can be attributed to a 29.3% rise in total unit sales through retail and wholesale channels. KMX’s total gross profit improved 32.5% from the prior-year quarter to $836.60 million. Its EPS came in at $1.63, up 14.8% from the same period last year, and its surpassed FactSet Street’s $1.45 estimates by 12.4%.

KMX President and CEO Bill Nash said, “Our top line momentum continued into this quarter, and we achieved record levels of third-quarter unit sales in both retail and wholesale, generating all-time record revenues. We also bought more cars from customers than ever before. We are excited about the opportunities ahead of us and believe that by delivering the most customer-centric experience in the industry, we will enable sustainable growth and create meaningful long-term shareholder value.”

However, shares of KMX have since declined 6.1% in price to close yesterday’s trading session at $127.49. Investors have been concerned about KMX’s rising SG&A and interest expenses as well as macroeconomic headwinds, such as record-high inflation and COVID-19 related concerns.

Here is what could shape KMX’s performance in the near term:

Lower-Than-Industry Profit Margins

KMX’s 13.1% trailing-12-month gross profit margin is 63.5% lower than the 35.91% industry average. Its 6.07% EBITDA margin is 52.6% lower than the 12.8% industry average. In addition, the company’s 3.92%, 4.61%, and 4.7% respective trailing-12-month net income margin, ROTC, and ROA compare with the 6.56%, 7.56%, and 5.94% industry averages.

Also, the company’s trailing-12-month levered free cash flow margin is negative.

Solvency Concerns

KMX’s total debt stands at $18.58 billion. With $62.60 million in total cash, the company’s net debt amounts to $18.52 billion. Its total debt-to-equity ratio is 363.57%. However, the company does not have sufficient cash flows to meet its debt and principal repayment obligations. Its trailing-12-month net operating cash outflow and levered free cash outflow stand at $2.28 billion and $778.48 million, respectively. Consequently, the company’s debt/free cash flow ratio is negative 22.43. KMX’s long-term debt accounts for 75.94% of its total capital.

Stretched Valuation

In terms of forward non-GAAP P/E, KMX is currently trading at 17.23x, which is 18% higher than the 14.60x industry average. And its 1.10 forward non-GAAP PEG multiple is 12% higher than the 0.98 industry average.

The stock’s 20.45 forward EV/EBITDA ratio is 99.7% higher than the 10.24 industry average. Its forward Price/Book and Price/Cash Flow multiples of 4.58 and 47.40, respectively, are significantly higher than the 3.37 and 12.68 industry averages.

POWR Ratings Reflect Bleak Prospects

KMX has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has a D grade for Quality and a C for Momentum. Its lower-than-industry profit margins justify the Quality grade. In addition, KMX is currently trading below its 50-day and 200-day moving averages of $143.18 and $132.42, respectively, indicating a downtrend. This justifies the Momentum grade.

Of the 26 stocks in the B-rated Auto Dealers & Rentals industry, KMX is ranked #22.

In addition to the grades I have highlighted, one can view KMX ratings for Growth, Sentiment, Stability, and Value here.

Bottom Line

Despite the ongoing Santa Claus rally, shares of KMX have been foundering lately. And investors and analysts expect the company’s lower-than-industry profit margins to fall further amid rising expenses, record-high inflation levels, and the rapid spread of the COVID-19 omicron variant. So, analysts expect KMX’s EPS to decline 17.9% in the next quarter. Thus, we think KMX is best avoided now.

How Does CarMax, Inc. (KMX) Stack Up Against its Peers?

While KMX has a D rating in our proprietary rating system, one might want to consider looking at its industry peers, PT Astra International Tbk (PTAIY), Rush Enterprises, Inc. (RUSHA), and AutoNation, Inc. (AN), which have an A (Strong Buy) rating.

KMX shares were unchanged in premarket trading Tuesday. Year-to-date, KMX has gained 34.97%, versus a 29.35% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.

More…

The post After Reporting Q3 Earnings, is CarMax a Buy? appeared first on StockNews.com

https://www.entrepreneur.com/article/410373

Construction equipment manufacturer Caterpillar (CAT) has benefited nicely from rebounding construction equipment demand and surging commodity prices and delivered a solid quarterly report. Bernstein analysts recently upgraded the stock to outperform, while JP Morgan analysts called CAT their “top pick into 2022.” However, given continuing supply chain disruptions, will CAT meet analysts’ expectations? Keep reading to learn our view.

shutterstock.com – StockNews

Caterpillar Inc. (CAT) in Peoria, Ill., manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. CAT shares have gained 15.6% in price over the past year and 13.3% year-to-date to close yesterday’s trading session at $206.38. Furthermore, Wall Street analysts’ $232.67 median price target indicates a potential 12.7% upside from the stock’s last closing price.

Also, a Bernstein analyst recently upgraded the stock to outperform from market perform and boosted his price target to $240. CAT shares climbed on the news. In addition, Deutsche Bank analyst Nicole Deblase raised her price target to $242 earlier this month.

In its last reported quarter, the company outperformed analysts’ expectations, bolstered by rebounding construction equipment demand and surging commodity prices. Higher end-user demand and CAT’s fixed-cost-cutting policies helped offset the operational headwinds and deliver solid bottom-line growth. Furthermore, the infrastructure bill recently signed into law by President Biden is expected to boost the company. “CAT is well-positioned to benefit from infrastructure spending in the U.S.,” said Cowen analyst Matt Elkott. He listed the stock as one of his best choices for 2022. Also, in October, JPMorgan analysts reiterated an overweight rating on the stock, with a price target of $248 per share, and called the construction equipment maker their “top pick into 2022.”

Here is what could shape CAT’s performance in the near term:

CAT Looks undervalued at its Current Price level

In terms of forward P/E, CAT is currently trading at 20.59x, which is 7.8% lower than the 22.34x industry average. Also, its 0.77x forward non-GAAP PEG is 55% lower than the 1.71 industry average. And CAT’s 14.19 trailing-12-months Price/Cash Flow ratio is 10.2% lower than the industry average.

Solid Third-Quarter Earnings Report

CAT’s total sales and revenues increased 25.5% year-over-year to $12.40 billion in its fiscal third quarter, ended September 30. Its operating profit stood at $1.66 billion, up 68.9% from the same period last year. Its profit attributable to common shareholders grew 113.5% from its year-ago value to $1.43 billion. And CAT’s adjusted EPS increased 75% year-over-year to $2.66, topping the consensus estimate by 20.9%.

Profitable

CAT’s 10.64% net income margin is 67% higher than the 6.37% industry average. Also, its 19.15% EBITDA margin is 42.8% higher than the industry average. Furthermore, CAT’s 32.57% and 6.37% respective ROE and ROA are 139.9% and 23.9% higher than the industry averages.

Dividend Aristocrat

CAT has paid a dividend every year since the company was formed and has paid a quarterly dividend since 1933. The company has increased its annual dividends for 28 consecutive years and is recognized as a member of the S&P 500 Dividend Aristocrat Index. On December 8, CAT announced that a $1.11 per share quarterly dividend will be paid on February 18, 2022. CAT’s dividend payouts have increased at a 9.3% CAGR over the past three years and a 6.8% CAGR over the past five years.

POWR Ratings Reflect Growth Prospects

CAT has an overall B rating, which translates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has a B grade for Value, which is consistent with its lower-than-industry valuation multiples.

CAT also has a B grade for Growth. The stable top- and bottom-line growth in its last reported quarter justifies this grade.

Of 78 stocks in the Industrial – Machinery industry, CAT is ranked #24.

Beyond what I have stated above, one can also view CAT’s grades for Sentiment, Quality, Momentum, and Stability here.

View the top-rated stocks in the B-rated Industrial – Machinery industry here.

Bottom Line

As one of the largest construction equipment manufacturers, CAT is expected to benefit significantly from the Biden administration’s infrastructure spending plan. The company has delivered robust bottom-line growth in its most recent quarter. Moreover, analysts expect its EPS to grow 58.5% in the current quarter and grow 32.2% per annum over the next five years. Also, considering its significantly higher than industry ROE, we think the stock could be an ideal investment heading into 2022.

How Does Caterpillar Inc. (CAT) Stack Up Against its Peers?

CAT has an overall POWR Rating of B. However, one could also check out these other stocks within the Industrial – Machinery industry with an A (Strong Buy) rating: Tennant Company (TNC), Crane Co. (CR), and ABB Ltd (ABB).

Click here to check out our Infrastructure Sector Report

CAT shares rose $0.72 (+0.35%) in premarket trading Tuesday. Year-to-date, CAT has gained 15.75%, versus a 29.35% rise in the benchmark S&P 500 index during the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.

More…

The post Is Caterpillar a Good Stock to Own in 2022? appeared first on StockNews.com

https://www.entrepreneur.com/article/410360

Here are four stocks with buy ranks and strong growth characteristics for investors to consider today, December 28th:

– Zacks

Berry Global Group, Inc. BERY: This company that manufactures and supplies non-woven, flexible, and rigid products carries a Zacks Rank #1 (Strong Buy), has witnessed the Zacks Consensus Estimate for its current year earnings increasing nearly 18% over the last 60 days.

Berry Global has a PEG ratio of 0.95 compared with 1.66 for the industry. The company possesses a Growth Score of B.

Signet Jewelers Limited SIG: This company that engages in the retail sale of diamond jewelry, watches, and other products carries a Zacks Rank #1, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 days.

Signet Jewelers has a PEG ratio of 0.96, compared with 2.83 for the industry. The company possesses a Growth Score of B.

Greif, Inc. GEF: This company that engages in the production and sale of industrial packaging products and services carries a Zacks Rank #1, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.6% over the last 60 days.

Greif has a PEG ratio of 0.92, compared with 1.66 for the industry. The company possesses a Growth Score of B.

HeadHunter Group PLC HHR: This online recruitment platform carries a Zacks Rank #1, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 17.2% over the last 60 days.

HeadHunter has a PEG ratio of 0.74, compared with 6.41 for the industry. The company possesses a Growth Score of A.

See the full list of top ranked stocks here.

Learn more about the Growth score and how it is calculated here.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Signet Jewelers Limited (SIG): Free Stock Analysis Report
 
Greif, Inc. (GEF): Free Stock Analysis Report
 
Berry Global Group, Inc. (BERY): Free Stock Analysis Report
 
HeadHunter Group PLC Sponsored ADR (HHR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

https://www.entrepreneur.com/article/410362

EV maker Nikola (NKLA) delivered its first electric truck this month and settled fraud charges with the SEC. So, let’s evaluate if it is wise to buy the stock now even though the smart money’s interest in the name has declined recently. Read on.

shutterstock.com – StockNews

Phoenix, Ariz.-based manufacturer of heavy-duty commercial battery-electric vehicles, fuel-cell electric vehicles, and energy solutions, Nikola Corporation (NKLA), delivered its first Tre battery-electric vehicle (BEV) pilot trucks on Dec. 17. And on Dec. 21 it agreed to settle civil fraud charges brought by the Securities and Exchange Commission. It is expected to pay a $125 million fine to compensate investors. Nevertheless, the stock soared in price on Dec.23 on investors’ optimism after NKLA promised ‘more to come’ regarding its electric vehicles (EVs) on Twitter, Inc. (TWTR).

However, the stock has retreated 26.2% in price over the past year and 38.6% over the past six months to close the last trading session at $11.09. 

On September 27, NKLA entered a second $300 million common stock equity line purchase agreement, providing it with the right to issue and sell to Tumim up to $600 million worth of shares. However, this move could lead to share dilution. The company’s founder, Trevor Milton, sold $33.50 million of shares. And hedge fund’s interest in the stock has declined lately. So, NKLA’s near-term prospects look bleak.

Here is what could influence NKLA’s performance in the upcoming months:

Industry Headwinds

Governments worldwide have been taking steps to boost EV production amid growing climate change concerns, but high battery costs remain a concern. According to Bloomberg New Energy Finance‘s annual battery price survey report, global average battery prices fell 6% between 2020 -2021, but they might be on the rise going forward. The report also noted that higher raw material prices are already pushing up prices. Also, at the point when prices fall below $100 per kWh—generally considered a crucial milestone for EV affordability—is delayed by two years.

Furthermore,  the ongoing semiconductor shortage continues to impact EV production. According to a Deloitte report, the chip shortage is expected to last until early 2023. So, NKLA’s output could be hurt.

Lack of Profitability

NKLA’s loss from operations increased 131.8% year-over-year to $271.83 million for the third quarter, ended September 30, 2021. Its net loss increased 235.7% year-over-year to $267.57 million, while its non-GAAP loss per share came in at $0.22, up 37.5% year-over-year. In addition, its adjusted EBITDA was negative $85.02 million, compared to $58.75 million in the year-ago quarter.

In terms of trailing-12-month ROTC, NKLA’s negative 45.61% is lower than the 6.73% industry average. And the stock’s negative trailing-12-month ROCE and ROTA compare to the respective 13.58% and 5.15% industry averages.

Lofty Valuation

In terms of forward EV/S, NKLA’s 1,545.99x is higher than the 2x industry average. Also, its forward P/S and P/B of 1,767.31x and 5.88x, respectively, are higher than the 1.64x and 2.96x industry averages.

POWR Ratings Reflect Bleak Prospects

NKLA has an overall F rating, which equates to a Strong Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. 

Our proprietary rating system also evaluates each stock based on eight distinct categories. NKLA has a D grade for Quality, which is consistent with its lower-than-industry profitability ratios.

The stock has a D grade for Growth. This is in sync with analysts’ expectations that its EPS will decline 40.3% in fiscal 2021 and 17.2% in fiscal 2022 and remain negative.

NKLA has an F grade for Value, which is consistent with its higher-than-industry valuation ratios.

NKLA is ranked #59 of 67 stocks in the F-rated Auto & Vehicle Manufacturers industry. Also, click here to see the additional POWR Ratings for NKLA (Stability, Sentiment, and Momentum).

Click here to check out our Automotive Industry Report 

Bottom Line

Investors were optimistic after NKLA delivered its first electric truck this month and settled fraud charges with the SEC. However, the stock is currently trading below its 50-day and 200-day moving averages of $11.29 and $12.47, respectively, indicating a downtrend. Furthermore, analysts expect its EPS to remain negative in the coming months. So, the stock is best avoided now.

How Does Nikola (NKLA) Stack Up Against its Peers?

While NKLA has an overall POWR Rating of F, one could check out these A-rated (Strong Buy) stocks in the same industry: Mazda Motor Corporation (MZDAY) and Daimler AG (DDAIF).

NKLA shares rose $0.80 (+7.21%) in premarket trading Monday. Year-to-date, NKLA has declined -21.04%, versus a 28.01% rise in the benchmark S&P 500 index during the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst.

More…

The post Is Nikola a Buy After Settling Fraud Charges with the SEC? appeared first on StockNews.com

https://www.entrepreneur.com/article/410196

The stock of global analytics and data solutions provider FactSet Research (FDS) has outperformed the broader market year-to-date because investors remain bullish on its growth prospects. So, given the company’s continuing efforts to boost its operational performance and its solid fundamentals, is it worth betting on the stock now? Let’s find out.

shutterstock.com – StockNews

Financial data and analytics company FactSet Research Systems Inc. (FDS) in Norwalk, Conn., provides insight and information through research, analytics, and trading workflow solutions, content, and technology solutions, and wealth management. The company was added to the S&P 500 index on Dec. 20, 2021.

The stock has soared 44.2% in price year-to-date, outperforming the benchmark S&P 500 index’s 25.8% returns. In addition, the stock hit its all-time high of $485.48 on December 23.

FDS’ impressive quarterly results and continuing investments to boost its top-line growth have contributed to the stock’s price rally. Furthermore, because FDS intends to capitalize on its leading open content and analytics platform because the demand for distinctive content remains high, it could gain significant momentum in the coming months.

Here is what could shape FDS’ performance in the near term:

Strategic Acquisition

In October, FDS acquired Cobalt Software, Inc., a leading provider of portfolio monitoring solutions to the private capital market. This acquisition contributes to FDS’ goal of scaling its data and workflow solutions through targeted investments as part of a multi-year investment plan and expands its private markets offering.

Positive Developments

This month, FDS announced the addition of fixed-income trading capabilities to its market-leading execution management solution (EMS). FactSet trading solution Portware is recognized for its electronic trading and automation services in the listed asset and foreign exchange markets. With the addition of fixed-income trading, it can now assist clients in trading more effectively across a broader range of asset classes.

Last month, FDS added a complete financial data and analytics solution to the Amazon Web Services (AWS) Data Exchange. More than 30 proprietary datasets accessible inside the FactSet ecosystem will be deployed on AWS Data Exchange, allowing clients to leverage the company’s leading content for faster, more efficient decision-making. This feature will assist clients in connecting proprietary and third-party information currently held on Amazon Redshift, while also simplifying the extract, transform, and load (ETL) process to shorten time-to-market and enhance data quality.

Strong Financials and Profitability

During the first quarter, ended November 30, 2021, FDS’ revenue increased 9.4% year-over-year to $424.73 million. Its operating income grew marginally from its year-ago value to $122.66 million. Its net income surged 6.4% from the prior-year quarter to $107.65 million, while its EPS increased 6.5% year-over-year to $6.5. In addition, its annual subscription value (ASV) plus professional services rose 6.3% year-over-year to $1.7 billion.

FDS’ 29.2% trailing-12-months EBITDA margin is 42% higher than the 23.5% industry average. Also, its ROC, asset turnover ratio, and ROA are 150.7%, 258.3%, and 1221.6% higher than the respective industry averages. Furthermore, its $538.87 million in cash from operations is 292.3% higher than the $137.37 million industry average.

Impressive Growth Prospects

Street expects FDS’ revenues and EPS to rise 23.3% and 18.8% year-over-year to $1.96 billion and $12.31, respectively, in the current year. Moreover, the company’s EPS is expected to increase 9.2% in the current quarter and 12.1% next quarter. In addition, FDS’ EPS is expected to rise at a 7.1% CAGR over the next five years.

POWR Ratings Reflect Solid Prospects

FDS has an overall B grade, which equates to a Buy rating in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. FDS has an A grade for Quality. The company’s solid earnings and profitability are consistent with the Quality grade.

The stock is graded B for Stability, which is justified given the stock’s 0.75 beta.

Of the 124 stocks in the D-rated Financial Services (Enterprise) industry, FDS is ranked #14.

Beyond what is stated above, we have graded FDS for Growth, Value, Sentiment, and Momentum. Get all FDS ratings here.

Bottom Line

FDS’ strong top-line performance and rapid technological advancements have boosted its earnings and revenue growth over the past few quarters. In addition, the company successfully beat analysts’ earnings estimates in its last reported quarter. So, given its solid fundamentals and impressive growth outlook, we think the stock could be a great pick now.

How Does FactSet Research Systems Inc. (FDS) Stack Up Against its Peers? 

FDS has an overall grade of B in our proprietary rating system. This rating is superior to its peers Nelnet Inc. (NNI), Evertec Inc. (EVTC), and Donnelley Morningstar Inc. (MORN), which have C (Neutral) rating.

FDS shares were unchanged in premarket trading Monday. Year-to-date, FDS has gained 45.52%, versus a 27.55% rise in the benchmark S&P 500 index during the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

More…

The post Is FactSet Research Systems Stock a Buy, Sell, or Hold? appeared first on StockNews.com

https://www.entrepreneur.com/article/410195

Iconic apparel brands marketer Hanesbrands (HBI) delivered strong revenue and profit in the third quarter, driven by momentum in its activewear and innerwear businesses. And because the demand for athleisure is expected to accelerate with more consumers adding comfort wear to their wardrobes, HBI is well-positioned to see strong sales growth in the near term. So, now that the stock is trading below its 52-week high, is it the perfect time to scoop up its shares? Let’s discuss.

shutterstock.com – StockNews

Winston-Salem, N.C.-based leading marketer of basic apparel Hanesbrands Inc. (HBI) manufactures, designs, and sells activewear and innerwear apparel under Hanes, Champion, Maidenform, DKNY, and various other brands worldwide. The clothing company reported solid revenue growth in the third quarter, with operating profit and EPS exceeding guidance thanks to continuing demand for athleisure and comfort wear. 

HBI’s shares have rallied 11.2% in price so far this year, driven by the company’s enhanced e-commerce capabilities. The stock is currently trading 29% below its 52-week high of $22.82.

The launch of a limited-edition collection of its Champion Athleticwear brand with Hasbro Gaming is expected to boost its sales during the holiday season. Furthermore, with brick-and-mortar stores reopening in Australia and with its ramping-up of partnerships in China, the apparel company is poised to grow significantly.

Click here to checkout our Retail Industry Report 

Here is what could shape HBI’s performance in the coming months:

Favorable Analyst Estimates

Analysts expect HBI’s EPS to increase 15.8% year-over-year to $0.44 in the current quarter, ending December 2021. Its consensus EPS estimates indicate a 26.2% increase in the current year and a 4.9% increase in fiscal 2022. Also, its EPS is expected to grow at 16.1% over the next five years. HBI has an impressive earnings surprise history; it surpassed the Street’s EPS estimates in each of the trailing four quarters.

A $1.58 billion consensus revenue estimate for the next quarter, ending March 2022, indicates a 4.9% improvement year-over-year. Also, its revenue is estimated to increase 3.9% year-over-year to $7.07 billion in 2022.

Strategic Collaboration

This month, HBI’s Champion brand, in partnership with Hasbro Gaming, announced a limited-edition footwear and apparel collection. The new apparel and footwear line feature global board game favorites like Monopoly, Twister, Scrabble, and Candy Land.

Jon Ram, Group President of Global Activewear at Hanesbrands Inc, said, “Spirited play, competition, and board games go together during the holiday season, and this collection lets fans look good doing it.” Given the popularity of these games among all ages, Champion’s limited-edition collection, in collaboration with Hasbro Gaming, should help the company witness a surge in sales in the coming months.

Robust Demand for Athleisure

The global athleisure market is expected to reach $549.41 billion by 2028, registering an 8.6% CAGR. With athleisure fashion trends gaining ground as more people focus on fitness, there is burgeoning demand for activewear. Also, as more consumers seek comfortable clothing, especially at workplaces and social gatherings, the activewear category is expected to grow rapidly.

Consequently,  HBI’s expanding activewear product line and improvements in core e-commerce capabilities should help it witness strong demand in the fast-growing market.

Solid Top and Bottom-Line Performance

HBI’s activewear sales grew 42% year-over-year in the third quarter, ended October 2, 2021. This was driven primarily by double-digit growth in the Champion and Hanes brands. Its net sales from continuing operations rose 6% from the prior-year period to $1.79 billion, while U.S. innerwear sales increased 12%. The company’s adjusted operating profit came in at $264 million, representing a 9% increase year-over-year.

Also, its net income amounted to $151.78 million, up 47% from the same period last year. HBI’s cash and cash equivalents at the end of the period stood at $890.44 million, compared to $731.48 million in the prior-year period.

POWR Ratings Reflect Promising Outlook

HBI has an overall B rating, which translates to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. 

Our proprietary rating system also evaluates each stock based on eight distinct categories. HBI has a B Value grade. The stock’s 8.87x non-GAAP P/E, which is  39.2% lower than the 14.60x industry average, is in sync with this grade.

Click here to see the additional POWR Ratings for HBI (Stability, Sentiment, Growth, Quality, and Momentum).

The stock is ranked #42 of 63 stocks in the A-rated Fashion & Luxury industry.

Bottom Line

HBI’s strong revenue growth from increased innerwear and activewear sales across its brand portfolio and continued investment in enhancing its e-commerce platform should help the company maintain its dominant position in the apparel market. In addition, the growing popularity of activewear should help the stock price soar in the coming months. So, it could be wise to bet on the stock now.

How Does Hanesbrands Inc. Stack Up Against its Peers?

HBI has an overall B rating in our proprietary rating system. Check out these other stocks within the Fashion & Luxury industry with an A (Strong Buy) rating: J. Jill, Inc. (JILL), Shoe Carnival, Inc. (SCVL), and Caleres, Inc. (CAL).

HBI shares were unchanged in premarket trading Monday. Year-to-date, HBI has gained 14.81%, versus a 27.55% rise in the benchmark S&P 500 index during the same period.

About the Author: Imon Ghosh

Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization.

More…

The post Should You Buy the Dip in Hanesbrands Stock? appeared first on StockNews.com

https://www.entrepreneur.com/article/410194

Canon (CAJ) closed at $25.07 in the latest trading session, marking a +0.44% move from the prior day. This change lagged the S&P 500’s 0.62% gain on the day. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.03%.

– Zacks

Prior to today’s trading, shares of the office machine company had gained 9.96% over the past month. This has outpaced the Computer and Technology sector’s gain of 0.29% and the S&P 500’s gain of 0.87% in that time.

Canon will be looking to display strength as it nears its next earnings release. In that report, analysts expect Canon to post earnings of $0.42 per share. This would mark a year-over-year decline of 14.29%. Meanwhile, our latest consensus estimate is calling for revenue of $9.26 billion, down 2.45% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.76 per share and revenue of $32.62 billion. These totals would mark changes of +131.58% and +8.48%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Canon. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.19% higher. Canon is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Canon is currently trading at a Forward P/E ratio of 14.24. This represents a discount compared to its industry’s average Forward P/E of 17.35.

We can also see that CAJ currently has a PEG ratio of 14.24. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Office Automation and Equipment was holding an average PEG ratio of 14.24 at yesterday’s closing price.

The Office Automation and Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Canon, Inc. (CAJ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.

https://www.entrepreneur.com/article/410100

Hormel Foods (HRL) closed at $47.77 in the latest trading session, marking a +0.15% move from the prior day. This change lagged the S&P 500’s 0.62% gain on the day. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.03%.

– Zacks

Prior to today’s trading, shares of the maker of Spam canned ham, Dinty Moore stew and other foods had gained 11.25% over the past month. This has outpaced the Consumer Staples sector’s gain of 3.14% and the S&P 500’s gain of 0.87% in that time.

Hormel Foods will be looking to display strength as it nears its next earnings release. In that report, analysts expect Hormel Foods to post earnings of $0.48 per share. This would mark year-over-year growth of 17.07%. Meanwhile, our latest consensus estimate is calling for revenue of $2.95 billion, up 19.74% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.98 per share and revenue of $12.22 billion. These totals would mark changes of +14.45% and +7.32%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Hormel Foods. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Hormel Foods is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Hormel Foods is currently trading at a Forward P/E ratio of 24.18. This represents a premium compared to its industry’s average Forward P/E of 11.85.

We can also see that HRL currently has a PEG ratio of 3.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Food – Meat Products was holding an average PEG ratio of 1.59 at yesterday’s closing price.

The Food – Meat Products industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 115, which puts it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Hormel Foods Corporation (HRL): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

https://www.entrepreneur.com/article/410102