Veritone, Brooks Automation, Meritage Homes, Beazer Homes USA and TRI Pointe highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – November 18, 2021 – Zacks Equity Research Shares of Veritone, Inc. VERI as the Bull of the Day, Brooks Automation, Inc. BRKS asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Meritage Homes Corporation MTH, Beazer Homes USA, Inc. BZH and TRI Pointe Group Inc. TPH.

Here is a synopsis of all five stocks:

Bull of the Day:

Veritone is a Zacks Rank #2 (Buy) that sports an F for Value and C for Growth. As the aggressive growth stock strategist, I am always looking for the growth divergence in the Zacks Style Scores.

That means I like a stock with a strong growth score and a weak value score. That tells me right away that I am on the right path as value investors and growth investors are looking for different things. The company just reported earnings last week, so let’s take a deeper look at this stock in this Bull of the Day article.

Description

Veritone, Inc. is an artificial intelligence company. It developed the Veritone Platform, which unlocks the power of AI-based cognitive computing to transform and analyze unstructured public and private audio and video data for clients in the media, politics, legal and law enforcement industries. Veritone, Inc. is based in Newport Beach, United States.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.

A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

For VERI, I see a good history of beating the Zacks Consensus Estimate. There are four beats over the last four quarters.

The average positive earnings surprise over the last fours quarters works out to be 20%, so the beats are pretty small.

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For VERI, I see estimates moving higher.

Over the last 90 days, I see a few increases.

This quarter has held still at $0.11.

Next quarter is at $0.03 and that is up from $0.02.

The full year 2021 is holding still at a loss of 23 cents.

Next year has seen an increase from $0.21 to $0.32.

Positive movement in earnings estimates like that is why this stock is a Zacks Rank #2 (Buy).

Valuation

The forward earnings multiple for VERI comes back as an NA on the Zacks site, but in a few short weeks we will have a working forward earnings multiple. My math works out to see the forward multiple next year at about 85x.

That is a stiff multiple, but this is a growth stock and we just saw 44% topline growth. The price to book of 8.5x is right in line for a company in this space. The price to sales of 11x is a little high, but again there is good growth here.

Bear of the Day:

Brooks Automation is a Zacks Rank #5 (Strong Sell) after missing the Wall Street Consensus Estimate in the most recent quarter. Stocks that miss the number don’t always fall to a Zacks Rank #5 (Strong Sell) so let’s take a look at why that is the case in this Bear of the Day article.

Description

Brooks Automation is a leading worldwide provider of automation, vacuum, and instrumentation solutions for multiple markets including semiconductor manufacturing, life sciences, and clean energy. Their technologies, engineering competencies, and global service capabilities provide customers speed to market, and ensure high uptime and rapid response, which equate to superior value in their mission-critical controlled environments.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.

A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

In the case of BRKS, I see three beats and one miss of the Zacks Consensus Estimate over the last year. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For BRKS I see estimates dropping.

This quarter dropped from $0.74 to $0.09.

Next quarter has seen a similar drop to $0.11 from $0.77

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.

The 2021 consensus number has decreased from $3.01 to $0.52.

The 2022 number has dropped from $3.24 to $0.66 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).

Additional content:

Builder Sentiment Gaining Ground: Top Housing Picks

Homebuilders continue to fly high buoyed by strong demand for housing despite continued challenges stemming from supply-chain disruptions and labor shortages. Accelerating home prices and prolonged delays do not seem to affect the home-buying spree of Americans.

According to the National Association of Home Builders (“NAHB”) report released on Tuesday, the monthly Housing Market Index (HMI) reading leaped three points to 83 in November from September. This marked the third consecutive month of a sequential rise for the index.

The November 2021 reading was, however, down seven points from the year-ago period. Yet, all three HMI components grew sequentially this month. Current sales conditions increased three points to 89. Buyer traffic rose three points to 68 and sales prediction over the next six months was steady at 84. Importantly, the HMI gauge of future sales expectations remained in the 80s, signaling persistent growth in housing demand this year.

Various homebuilding companies have been registering gains from the positive momentum of the industry. Notable among them are Meritage Homes, Beazer Homes USA and TRI Pointe Group.

Let's Check Out the Pros & Cons of the Industry

Low existing homes for sale and strong underlying demand for housing raise optimism despite headwinds like rising costs and a persistent shortage of skilled labor that continues to vex builders. Labor and building lot access remain key constraints for housing supply. Hence, this improved confidence among builders is not rendering a higher construction pace.

NAHB Chief Economist Robert Dietz noted, “Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions. Policymakers need to focus on resolving these issues to help builders produce more housing to meet strong market demand.”

Nevertheless, builders are keen on keeping the construction pace in tandem with the rising demand. They are slowing sales in order to make deliveries on time.

New single-family home demand has seen a significant recovery throughout the country amid widespread stay-at-home orders, with homebuilders benefiting from the same. Lower interest rates have helped the company deliver a solid performance.

Markedly, the 30-year fixed-rate mortgage averaged 2.98%, with an average of 0.7 point for the week ended Nov 10, 2021, down from the last week when it averaged 3.09%. In the year-ago period, the 30-year fixed-rate mortgage averaged 2.84%.

How Homebuilding Industry Will Fare

The Zacks Building Products - Home Builders currently falls within the top 30% (75 out of 253 industries) of the Zacks Industry Rank, which hints at further growth.

Freddie Mac pointed out, “Despite the re-acceleration of economic growth, the recent bond rally drove mortgage rates down for the second consecutive week. These low mortgage rates, combined with the tailwind of first-time homebuyers entering the market, means that purchase demand will remain strong into next year.”

As purchasing a new home or refinance seems to benefit from the current rate environment, we are suggesting a few homebuilding stocks that are likely to gain, given the ongoing housing tailwinds.

Key Housing Picks

Adding some housing stocks to your portfolio looks like a smart move at this point as there are myriad reasons to be optimistic about the broader housing sector over both the short and the long term. With the help of the Zacks Stock Screener, we have zeroed in on four stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) with favorable metrics.

A top Zacks Rank indicates that these stocks have been witnessing positive estimate revisions, which generally translate into rapid price appreciation. You can see the complete list of today’s Zacks #1 Rank stocks here.

Meritage Homes: Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE. NOW homes has been a major driving factor. The Zacks Consensus Estimate for Meritage Homes' 2021 earnings has moved up 3% over the past 30 days.

Meritage Homes currently sports a Zacks Rank #1. The stock has gained 42.5% year to date (YTD), outperforming the industry’s 24.6% rally. Earnings are expected to grow 74.6% in 2021 and 21.2% for the next.

Beazer Homes USA: This Atlanta-based homebuilder continues to gain from strong operational execution and persistent strength in the housing market. This has helped Beazer Homes to register significant gains in operating margin and adjusted EBITDA, leading to full-year 2021 net income that more than doubled from the prior year.

Beazer Homes currently sports a Zacks Rank #1. The stock has gained 46.4% YTD. Earnings are expected to grow 23.7% in fiscal 2022 and 6.4% for fiscal 2023.

TRI Pointe Group: This Irvine, CA-based homebuilder designs, constructs, and sells single-family detached and attached homes in the United States. Robust demand and pricing as well as improved operating leverage have been driving TRI Pointe's performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives.

TRI Pointe, carrying a Zacks Rank #2 at present, has gained 50.3% YTD. The Zacks Consensus Estimate for its 2021 earnings has been upwardly revised by 8.6% over the past 30 days. Earnings for 2021 and 2022 are expected to grow 80.2% and 9.6%, respectively.

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Brooks Automation, Inc. (BRKS) : Free Stock Analysis Report
 
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
 
Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
 
Tri Pointe Homes Inc. (TPH) : Free Stock Analysis Report
 
Veritone, Inc. (VERI) : Free Stock Analysis Report
 
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