FormFactor, Harley Davidson and Tesla highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – February 3, 2020 – Zacks Equity Research Shares of FormFactor FORM as the Bull of the Day, Harley Davidson Inc HOG asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla TSLA.

Here is a synopsis of all three stocks:

Bull of the Day:

FormFactor is a Zacks Rank #1 (Strong Buy) and they are reporting earnings on February 5 after the close.  I see Wall Street is looking for $174M on top and $0.31 in EPS. Let's take a look at why this stock is a Zacks Rank #1 (Strong Buy) and if this name is good to own before the print.

Description

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, integrated measurement systems, and thermal sub-systems, as well as provides related services. It operates in two segments, Probe Cards and Systems.

FormFactor, Inc. markets and sells its products through direct sales force, manufacturers' representatives, and distributors in the United States, Taiwan, South Korea, China, Japan, Europe, the Asia-Pacific, and internationally. The company was founded in 1993 and is headquartered in Livermore, California.

Earnings History

I see a great history of beating the Zacks Consensus Estimate.  In each of the last four quarters, FORM has topped the number by an average positive earnings surprise of 11%.

Consistently beating the number is something that investors love to see.

Estimates Move Higher

60 days ago, the Zacks Consensus Estimate for the current quarter was at $0.26, but that number has jumped to $0.32.

We have also seen the estimates for the full year and next year moving higher.

Valuation

At 24x forward earnings, the multiple is right in line with where the industry has been trading.  A 3.2x price to book multiple is a little low, but that is good for value oriented investors who like to see stocks at a P/B of less than 3x.

I see a slight move lower in margins lately, so if FORM can turn that around then this stock could be off to the races.

Chip Stocks 

This earnings season has been a good one for chip stocks.  This name is reporting on Wednesday, Feb 5 after the close. The chart looks solid and the recent pullback gives an even better reason to take a deeper look at being long this stock into the earnings report.

Bear of the Day:

Harley Davidson Increcently fell to a Zacks Rank #5 (Strong Sell) after the company missed earnings. Let's take a look at the report and what else happened afterward in this Bear of the Day article.

Description

Harley-Davidson, Inc. manufactures and sells custom, cruiser, and touring motorcycles. The company was founded in 1903 and is based in Milwaukee, Wisconsin.

Recent Earnings

Sometimes the estimates that are availbe are not complete.  In the case of HOG, the Zacks data is a little light.  I see the Wall Street consensus for the more recent quarter at $0.22 and the company reporting $0.20.  That is a miss of two cents as revenues fell 8.4% on an annual basis to $874M and below the $928M estimate.

Estimate Movements

Since the miss, the Zacks Consensus Estiamte has been falling.  The number for the current quarter was at $1.00 90 days ago, but is now just $0.66.

The full year number is more important to the Zacks Rank and that has slipped as well.  The 2020 fiscal number moved from $3.47 to $3.09 and the fiscal year for 2021 has dropped to $3.31 from $3.55 60 days ago.

This is the primary reason the Zacks Rank has fallen to the lowest level.

Since The Earnings Report

The other day I see that KeyBanc Capital Markets upgraded HOG to Sector Weight from Underweight.  They believe that sentiment may have bottomed.  They went on to mention that the guidance offered by management still seems a little aggressive which is keeping the risk / reward in unfavorable territory.

That all said, investors like to see an upgrade in a stock like this and hopefully it will be a sign of good things to come.

Additional content:

Can Tesla’s Relentless Rally Continue?

Look what happens when Tesla finally starts keeping its promises: its stock goes on a relentless rally with seemingly no end. Since the beginning of June, TSLA has surged 260%, which is nothing less than incredible for a public company of this size. TSLA met its seemingly unreachable vehicle delivery goals (up 50% from 2018) and was ahead of schedule with its Shanghai factory. The company just beat big on top and bottom-line metrics for Q4 earnings, sending TSLA to levels few could have predicted.

This euphoria can’t last forever but that doesn’t mean it’s over. Investor, analysts, and traders alike have been trying to find a way to value this enigma of a stock that not only has no close comparables but is wildly unpredictable.

Tesla hit a record number of deliveries as well as positive operating and free cash flows for the past 3 quarters in a row. This electric vehicle giant has also begun to turn a quarterly profit with the anticipation of having its first annual profit in 2020. The anticipated Model Y commercial production is several quarters ahead of schedule and is being released less than a year after its prototype. This quick turnaround proves the company’s ability to leverage its platform effectively to stay ahead of quickly evolving trends.

Now that Tesla has begun to keep its promises, it will be an expectation from shareholders moving forward. Any wildly outlandish claims made by its eccentric CEO Elon Musk are going to be taken seriously. He tweeted back in August of 2018 that he would take the company private at $420 (a modest 23% premium at the time), but no one took him seriously. Today TSLA is trading at more than 50% premium to that $420 level.

Will Elon and his EV giant be able to maintain its current growth trajectory? I think the answer is yes and more. Tesla’s Shanghai Gigafactory gives the company direct access to the largest EV market in the world. Now Tesla is planning its construction of a European factory outside of Berlin, which will further establish this enterprise’s world domination of the automotive market.

The only concern that I have with this stock is its excessive amount of volatility. Like I said, the stock has run up 260% in 8 months, and this means that a pullback is not out of the question. None the less analysts, are raising their price targets on TSLA with one analyst betting this stock will make it to $6,000 in the next 5 years.

Take Away

Tesla was one of the most bet against stocks in the market, but I think it’s time for the short sellers to throw in the towel. Tesla is finally keeping its promises, and the markets are loving it.

Deep down, everyone wants this electric vehicle giant to succeed because it represents a greener, more efficient world.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>

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
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
FormFactor, Inc. (FORM) : Free Stock Analysis Report
 
Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research