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Cree, New York, Under Armour and Nike highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL - February 01, 2017 - Zacks Equity Research highlights Cree, Inc. (NASDAQ: CREE - Free Report ) as the Bull of the Day and New York & Company, Inc. (NYSE: NWY - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Under Armour (NYSE: UAA - Free Report ) and Nike (NYSE: NKE - Free Report ).

Here is a synopsis of all four stocks:

Bull of the Day :

Cree, Inc. (NASDAQ: CREE - Free Report ) is cashing in on the Internet of things. This Zacks Rank #1 (Strong Buy) recently beat the Zacks Consensus Estimate for the second quarter in a row.

Cree makes LED lighting systems and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and RF devices.

Second Beat in a Row

On Jan 24, Cree reported its fiscal second quarter 2017 results and beat on the Zacks Consensus Estimate by a penny. Earnings were $0.09 versus the consensus of $0.08. It was the second consecutive beat in a row.

Its combined revenue, including discontinued operations, was $401 million, an 8% decrease compared to the combined revenue of $436 million in the second quarter of fiscal 2016. But it was an 8% increase over the fiscal first quarter of 2017.

It settled a key patent infringement and false advertising lawsuit with Feit Electric which added to earnings in the quarter.

The company is optimistic about the fiscal year saying, "the fundamentals in our business have improved over the last several quarters, and we remain focused on building a larger and more valuable LED lighting company by bringing better light to our customers."

Estimates Rise for the Full Year

The analyst was bullish on the company after its conference call as the Zacks Consensus Estimate for the full fiscal year 2017 jumped to $0.41 from $0.15 before the earnings call.

Cree has been in a turnaround mode for several quarters. This is just a continuation down that path.

Bear of the Day :

New York & Company, Inc. (NYSE: NWY - Free Report ) is struggling to stay alive in a tough apparel retail environment. This Zacks Rank #5 (Strong Sell) expects to report negative same store sales for the important holiday quarter.

New York & Company operates 483 stores in 41 states specializing in women's fashion apparel and accessories. It also operates a website at nyandcompany.com .

Disappointing Fourth Quarter Results

On Jan 10, New York & Company provided preliminary results for its holiday quarter and the fourth quarter. For the 9 weeks ending on Dec 31, comparable store sales fell about 1.7%.

For the full quarter, sales were expected to be down in the low single-digit percentage range.

That's an operating loss of $2.5 million to a loss of $4.5 million.

The company blamed soft traffic and the highly promotional environment. 70% off sales were not uncommon at many apparel retailers during the holiday period.

The bright spots continue to be the success of the Eva Mendes Collection and dresses. But it saw weakness in woven and knit tops, denim and jewelry. Its eCommerce business is also growing.

It believes that fourth quarter markdowns will allow it to start the spring season "clean."

Can It Survive?

New York & Company is heavily mall based. Its usually located next to or near Express and others like Wet Seal and the Limited, both of which are in financial trouble. The Limited, which also specializes in women's apparel and accessories, recently closed all of its stores and said it would sell only online.

New York & Company said it had $80 million cash on hand at the end of the year versus $60 million a year ago.

But earnings continue to drop. It lost $0.04 a year last year and analysts expect it to lose another $0.14 in fiscal 2016.

One estimate has been lowered for fiscal 2016 in the last 30 days.

Additional content:

As Teammates Outshine Steph Curry, Should Under Armour Worry?

Make no mistake about it: Steph Curry is a superstar. The two-time NBA Most Valuable Player is probably the league's best point guard and without a doubt its best pure shooter ever. However, this season saw the addition of fellow-MVP Kevin Durant to the already-stacked Golden State Warriors, and now that he is surrounded by even more talent, Curry will be hard-pressed to keep the spotlight on himself.

Indeed, the Warriors are doing quite the job spreading the wealth this season; while the team likely won't match its NBA all-time best 73-9 record from last year, its current 41-7 tally is the best in the league right now.

The addition of Durant means the Warriors will be that much more difficult to overcome for the rest of the Western Conference, and fans are already gearing up for a Finals rematch with the defending champions and Eastern Conference favorite Cleveland Cavaliers, who famously overcame a 3-1 deficit against the Warriors to take last season's crown.

While Curry will likely welcome the many Finals opportunities his super team will have over the coming years, playing alongside Durant means sharing more of the spotlight-and the stats.

With the NBA All Star Game in just a few weeks, Curry is on pace to regress statistically this season. The sharpshooter averaged a league-best 30.1 points per game last year; as for now, he is putting in about 25 points per game. In fact, Curry's rebounds, assists, total field-goal percentage, and three-point percentage are all down on the year.

So what does this mean for Under Armour (NYSE: UAA - Free Report ), a company that famously signed the under-appreciated Curry before his rise to stardom? The apparel retailer got an once-in-a-lifetime opportunity with Curry, who quickly rose to be the face of the league's best team shortly after inking his deal with the brand, but now he stands next to Kevin Durant, a Nike (NYSE: NKE - Free Report ) athlete.

As tough as it might be for Under Armour to hear this, the company may be best served by admitting that we have already surpassed "peak Curry." Sure, the 28-year old hooper still has plenty of great years left in him, but he will likely never surpass the level of fame he had while holding down his spot as the Warriors star.

This is a rough period for Under Armour regardless. Just today, the company announced its fourth-quarter 2016 financial results, and investors punished the company for its disappointing report. Shares of UAA plummeted more than 25% after management reported worse-than-expected earnings and revenue and slashed its 2017 guidance.

(Also Read: This is Why Under Armour is Crashing After Earnings )

Nevertheless, Under Armour was able to record revenue over the course of the year. While its North America sales growth slowed to just 6%, international revenues were up 55%, apparel grew by 7%, and footwear was up 36%. All of these categories their success to growth in basketball and the popularity of Steph Curry.

Under Armour will be able to cash Curry-backed checks for a long time, there is no denying that. There is also no denying Curry's continued talent. While he may be averaging 5 less points per game so far this year, he earned another All Star Game appearance and his team is the odds-on favorite to bring home the title.

However, if you are Under Armour, it is always a good time to find the next Steph Curry. It does not even have to be in basketball, but there will always be another soon-to-be superstar, neglected by the other sports apparel giants and ready to become the face of still-growing brand.

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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.

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Cree, Inc. (CREE): Free Stock Analysis Report

New York & Company, Inc. (NWY): Free Stock Analysis Report

Under Armour, Inc. (UAA): Free Stock Analysis Report

Nike, Inc. (NKE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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