Applied Material, Cirrus Logic, Facebook, Alphabet and Baidu highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – March 15, 2018 – Zacks Equity Research highlights Applied Material AMAT as the Bull of the Day, Cirrus Logic CRUS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Facebook FB, Alphabet GOOGL and Baidu BIDU.

Here is a synopsis of all five stocks:

Bull of the Day:

The Semiconductor sector is one of the best performing sectors this year. It is up about 11%, handily beating the broader technology sector’s return of 9.3% and S&P 500’s return of 3.4%.

About the Company

Headquartered in Santa Clara, CA, Applied Material is a leading equipment supplier to the global semiconductor industry. They have been the industry leader for over twenty years. Their equipment is mainly used in the manufacturing of semiconductors, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules.

Impressive Results 

The company reported excellent fiscal first-quarter 2018 results, beating on both the top and the bottom lines.

Adjusted earnings of $1.06 per share beat the Zacks Consensus Estimate of $0.97 and were also at the higher end of the guided range of 94 cents to $1.02 per share. Earnings were up 14% sequentially and 59% year over year.

Revenues also surpassed our estimate and increased 5.9% sequentially and 28.2% year over year. 

Surging Estimates

After strong results, analysts have been raising their estimates for the company. Rising estimates sent the stock to a Zacks Rank # 1 (Strong Buy).

The company has an excellent record of beating estimates. They have missed only once in the past five years.

Multiple Growth Drivers

The company continues to gain market share in the semiconductor market. Additionally, in the past few years, the company has successfully diversified its business which is no longer PC demand driven. Additional demand drivers have emerged in the areas of big data, Internet of Things (IoT), cloud infrastructure, artificial intelligence, virtual reality and self-driving cars.

The Bottom-Line

Shares of this company are up more than 55% over the past year but despite this surge, they are still trading at an attractive valuation of 13.59 times forward earnings. The Zacks Industry Rank for “Semiconductor Equipment - Wafer Fabrication” is currently 5 out of 265 (top 2%), suggesting more upside in the short to medium term.

Bear of the Day:

Founded in 1984 and headquartered in Austin, Texas, Cirrus Logic is a fabless semiconductor supplier, which develops, manufactures and markets analog, mixed-signal, and audio DSP integrated circuits (ICs).

The company’s product lines include portable audio products and non-portable audio and other products.

Their audio chips are used in the leading smartphone brands, tablets, digital headsets, wearables and many emerging smart home applications.

Apple is CRUS’s largest customer, accounting for ~80% of the revenue though the company develops solutions for many industry leading global brands.  

Weak Earnings

The company reported weak results for third-quarter fiscal 2018. Non-GAAP earnings of $1.59 per share missed the Zacks Consensus Estimate of $1.77 and were also down 15% year over year.

Total revenues were down about 7.7% year over year and missed our estimate. They were also short of the guided range well.

“Unanticipated weakness in smartphone demand that materialized in late December drove our Q3 results below expectations and further impacted our Q4 guidance,” said the CEO.

Estimates Plunging

After weak results, analysts have cut their estimates for the company. Zacks Consensus Estimate for the current year and next fiscal year have fallen to $4.36 per share and $3.95 per share respectively, down from $4.82 and $4.87, before the results. Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell).

Additional content:

Here's Why Facebook Is Actually Cheap Right Now

Facebook shares closed more than 1.2% higher on Wednesday, lifting the stock closer to the all-time high it reached before the early-February correction. The social media behemoth continues to be a popular option among investors looking for unique opportunities to scoop up shares of companies that are both dominating their industry and displaying exciting growth prospects.

Facebook simply cannot be touched in the social media space, and despite rising costs and PR disasters, its stock continues to be one of the best options in the tech sector. But the public’s picture of Facebook over the latest few months has not been a pretty one.

Mark Zuckerberg’s company found itself right in the middle of national debate over fake news and Russian meddling in U.S. elections, with America’s top intelligence agencies placing at least some of the blame on the failure of internet platforms to properly vet content. This headache brought some volatility to Facebook shares, especially after the company promised to spend more on security and hire new employees to focus on preventing abuse.

Despite all of this, Facebook’s fundamental position appears stronger than ever. In its most recent fiscal year, the internet firm saw revenue growth of 49%, while net income improved 56%. Meanwhile, the company’s strong outlook inspired 17 positive revisions for FB’s fiscal 2018 estimates, and now the stock sports a Zacks Rank #2 (Buy).

Stocks with high Zacks Ranks are poised to outperform the broader market over the next one to three months, and Facebook certainly looks like a company that should be dominant for many years to come. But there is still more for investors to consider.

One might also notice that FB is currently sporting a “D” grade in the Value category of our Style Scores system, implying that the stock is trading at a premium to the market—and perhaps forcing traditional value investors to look elsewhere for a cheap internet stock.

Facebook’s Forward P/E of 23.4 is near the lowest it has ever been, and with the stock’s PEG of 0.95, investors are getting a solid price for the company’s expected bottom-line growth.

Still, it is even more important to compare Facebook its industry. This Zacks-defined group of similar companies looks at 50 internet stocks, including global giants like Alphabet and Baidu. This group currently has an average Forward P/E of 31.5, meaning that Facebook is trading at a significant discount to its peers.

Finally, traditional value investors are buy-and-hold minded. Facebook is a company with an incredible track record, but its best days might still be ahead of it. Management knows that user growth will eventually plateau, and it has strategically invested in video content and artificial intelligence to prepare for a shifting business model.

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

Breaking News: Cryptocurrencies Now Bigger than Visa

The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.

Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.

Click here to access these stocks. >>

Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

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.

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 >>.

Follow us on Twitter:  https://twitter.com/zacksresearch

Join us on Facebook:  https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

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.

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
 
Baidu, Inc. (BIDU) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
 
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research