Yahoo Finance ACM Research and J.B. Hunt have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 23, 2024 – Zacks Equity Research shares ACM Research ACMR as the Bull of the Day and J.B. Hunt Transport Services JBHT as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet GOOGL, Amazon AMZN and Meta Platforms META.
Here is a synopsis of all five stocks:
Bull of the Day:
ACM Research is a Zacks Rank #1 (Strong Buy) that develops, manufactures, and sells single-wafer wet cleaning equipment for enhancing the manufacturing process and yield for integrated chips.
The demand for artificial intelligence and the chips that fuel AI have brought demand for ACM's tools. This has helped the company post a long streak of earnings beats, including a 330% EPS beat last quarter.
The stock has pulled back on the recent tech sell-off so the question for investors is if the current dip presents an opportunity.
About the Company
ACM Research is headquartered in Fremont, CA, and employs over 1,500.
The stock has Zacks Style Scores of "D" in Growth, Momentum, and Value.
The company was founded in 1998, has a market cap of $1.4 billion, and a Forward PE of 15. ACMR pays no dividend.
Q4 Earnings Beat
On February 28th, ACMR reported a 330% EPS beat and saw revenues up 56% y/y. The company affirmed its FY24 outlook range of $650-725M versus the $707M expected.
Management cited the strength of ACM's multi-product portfolio and its growing customer base. They added that they have captured market share and made notable strides in penetrating international markets.
The stock gapped higher and ran the next day posting a 30% gain. Investors took notice of this small semiconductor name but it has since pulled back as the next catalyst approaches.
The company will release its preliminary revenue range on April 26th before the market opens. It will then release its full results on May 8th.
That first release will likely give investors the green light to buy the stock again or erase the bull's hopes of getting back to recent highs.
Analyst Estimates
All indications are that the quarter will be solid as analysts lifted estimates since earnings.
For the current quarter, estimates over the last 60 days have gone from $0.19 to $0.36, or 89%.
Looking longer term, the current year shows a 19% jump over that same time frame, moving from $1.36 to $1.62.
Since earnings, the stock has seen multiple upgrades and price target hikes.
ROTH MKM reiterated its Buy and lifted its target from $25 to $40.
Goldman Sach also reiterated its Buy and has a $39 target.
Benchmark has raised its target twice since earnings, first going to $35, then later to $38.
The Technicals
At its highest point, ACMR was up 70% in 2024. The recent pullback has not been nice to the bulls and the stock is now up only 25% this year.
While the upcoming earnings will likely rejuvenate the momentum or erode more gains, there are some levels to look for either way.
The $19.25 area is the 200-day MA and would be in line with former resistance in 2023. If earnings were to disappoint, this would be the area to enter for long-term players.
$22.75 is the gap fill and the 61.8% retracement from the February lows to the 2024 highs. This is a good spot to see a relief bounce and a possible support area.
If the bulls gain back momentum, a move back over the $27 area is a 50-day MA break and a bullish signal. A positive earnings report and a break above $29.50 would give the bulls a 21-day MA break and full control of the momentum.
If we get an impressive preliminary revenue guide, investors could look for the $38 area down the road.
Bottom Line
More investors are looking for smaller stocks to enter the AI/semi-boom. ACMR is a perfect place to be, but a lot of the short-term price movement will be based on upcoming earnings.
Due to the massive demand, the company likely beats once more, but investors need to decide whether to dip their toes in before the preliminary guide or wait for more certainty.
Either way, this is a stock to watch over the next few weeks and if the company holds the earnings momentum, investors should expect new highs before the end of 2024.
Bear of the Day:
J.B. Hunt Transport Services is a Zacks Rank #5 (Strong Sell) that is a provider of a broad range of transportation services to a diverse group of customers.
The stock has drifted sideways over the last few years, but a recent earnings report has JBHT trading at the bottom of its multi-year range.
After the sixth straight EPS miss, investors might give up on the name, bringing the stock much lower over the short term.
About the Company
J.B. Hunt was founded in 1961 and is headquartered in Lowell, Arkansas. The company employs over 34,000 people and operates through five segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT). The JBI segment offers intermodal freight solutions
JBHT is valued at $17 billion and has a Forward PE of 25. The stock holds Zacks Style Scores of "B" in Growth, but "D" in Value. The stock pays a dividend of just over 1%.
Q1 Earnings
Last week J.B. Hunt reported a Q1 miss of 20%. Revenues came in at $2.94B versus the $3.12B expected as overall demand for intermodal service offerings was weaker than expected.
While intermodal revenue was down 9% from last year, Integrated Capacity Solutions revenue took the biggest year-over-year hit, down 26%.
Management blamed competition from over-the-road truck options in the eastern network, as well as the company's disciplined approach to the market for the value. Management also cited inflationary cost pressures and said that customers continue to feel pressure in their business.
This was the sixth straight surprise to the downside for JBHT, but the market has given the stock a break almost every time. However, with analysts dropping numbers aggressively since EPS, will investors finally capitulate?
Earnings Estimates
Over the 7 days, earnings estimates have come down across all time frames.
For the current quarter, analysts have dropped estimates from $1.89 to $1.62, or 14%.
For the next quarter, estimates have been lowered by 10%.
For the current year, we see an 11% drop, with estimates falling from $7.61 to $6.76
The drop in estimates is beginning to look like a larger trend. Looking at a long-term term time frame, we see that next year's estimates have fallen 9% over the last 90 days, going from $9.58 to $8.72.
Analysts are also lowering price targets. Some more notable names include UBS going from $234 to $211 and Barclays dropping to $170 from $200.
Technical Take
When you look at a chart from 2021, we see a range from $160- 200, with the stock seeing a couple of false breakouts above that $200 figure.
$160 is a big support level long-term, so some investors likely will want to buy the current dip. This level has held up about ten times over the last three years, but if it were to break, we might see some panic selling.
The stock is trading below all its moving averages and took out 2023 lows. This isn't a positive sign when the overall stock market has rallied significantly. If that $160 level were to break, the $130 level could be in play. This is the 61.8% Fibonacci retracement from COVID lows to all-time highs. This move would be another 20% lower from here so investors should be patient or simply avoid the stock altogether.
In Summary
The trucking industry is going through some hurdles in the current economic environment, with one such hurdle being inflationary pressure. J.B. Hunt is also experiencing competition issues, which is hurting revenues.
Until the company can manage the issues, investors should look elsewhere.
Additional content:
Should You Consider Alphabet (GOOGL) Ahead of Q1 Earnings?
Alphabet is scheduled to report first-quarter 2024 results on Apr 25.
The company has been benefiting from growing investments in the generative AI technology, expanding presence in the booming cloud-computing market, increasing efforts to improve search results, solid uptake of Android and deepening focus on the wearables category in the quarter under review.
Nevertheless, increasing litigation issues and expenses are likely to have been concerning.
Let us delve deeper into the fundamentals of Alphabet ahead of its first-quarter 2024 results.
Search, YouTube & Ad Efforts to Consider
Alphabet's continued efforts toward innovation in AI techniques for the advancement of its search business are expected to have continued aiding its search revenues in the first quarter.
The Search Generative Experience, which leverages the generative AI technology to make search results more natural and intuitive, is likely to have contributed well. With the large language model-powered enhanced search results, Google is anticipated to have driven its search momentum in the quarter under review.
Large language models, coupled with multi-search and visual exploration features, are expected to have continued improving the search results.
Growing momentum with Bard is anticipated to have contributed well to Search revenues in the first quarter.
Improving features of Google Maps are expected to have benefited the search traffic.
The Zacks Consensus Estimate for Google Search & Other revenues is pegged at $44.73 billion, indicating an increase of 10.8% from the year-ago quarter's reported figure.
Apart from this, Google's growing advertisement offerings, infused with generative AI technology, are expected to have contributed well to its advertising revenues in the first quarter. Solid momentum in the retail vertical is anticipated to have been a plus.
The consensus mark for Google advertising is pegged at $60.18 billion, implying growth of 10.3% from the prior-year quarter's reported figure.
Coming to non-advertisement revenues of YouTube, strengthening user momentum in YouTube Shorts is likely to have been a tailwind. Google's growing efforts to bolster relationships with content creators are likely to have acted as a positive.
Solid momentum across YouTubeTV and major updates in YouTube Premium are likely to have been other positives.
The growing momentum across Android and Pixel devices is expected to have benefited Alphabet's performance in the to-be-reported quarter.
The above-mentioned factors are anticipated to have benefited Google's Services segment's performance in the first quarter.
The Zacks Consensus Estimate for Google Services revenues is pegged at $69.04 billion, indicating growth of 11.4% from the year-ago reported figure.
Strength in Cloud & Other Bets to Benefit
Alphabet has been significantly gaining momentum in the highly competitive cloud market for a while on the back of its expanding cloud service portfolio and an increasing number of data centers.
The solid adoption of Google Cloud Platform and Google Workspace is likely to have contributed well to the performance of the Google Cloud segment in the to-be-reported quarter.
Its strengthening generative AI-backed cloud offerings are expected to have driven Google's momentum among cloud customers.
Alphabet's strengthening efforts to bolster its healthcare technology portfolio are expected to have driven growth in its Other Bets segment in the first quarter.
The Zacks Consensus Estimate for Other Bets revenues is pegged at $384 million, suggesting growth of 33.3% from the year-ago quarter's reported figure.
Estimate Trend
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $66.02 billion, indicating an improvement of 13.7% from the year-ago reported number.
The consensus mark for earnings is pegged at $1.49, indicating 27.3% growth from the previous year's reported figure. The figure has been unchanged over the past 30 days.
What Our Model Says
Our proven model predicts an earnings beat for Alphabet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you will see below.
Alphabet has an Earnings ESP of +1.43%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
GOOGL carries a Zacks Rank #3 at present.
Other Stocks to Consider
Here are some other companies that, too, per our model, have the right combination of elements to post an earnings beat in the soon-to-be-reported quarterly results.
Amazon has an Earnings ESP of +11.66% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.
Amazon shares have gained 14.9% year to date. AMZN is set to report its first-quarter 2024 results on Apr 30.
Meta Platforms has an Earnings ESP of +0.62% and a Zacks Rank #2 at present.
Meta shares have gained 36.1% year to date. META is set to report its first-quarter 2024 results on Apr 24.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
ACM Research, Inc. (ACMR) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
