For Immediate Release
Chicago, IL - May 05, 2016 - Zacks Equity Research highlights Headwaters ( HW ) as the Bull of the Day and Build A Bear Workshop ( BBW ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla Motors ( TSLA ).
Here is a synopsis of all three stocks:
Headwaters ( HW ) beat the Zacks Consensus Estimate two days ago extending its streak to 11 in a row. The stock is a Zacks Rank #1 (Strong Buy) and today it is the Bull of the Day.
HW beat the Zacks Consensus Estimate of $0.10 by $0.03 for a 30% positive earnings surprise. Revenues came in a little above expectations at $202 million for a 1.5% positive revenue surprise.
Headwaters is a building materials company that provides products and services to building and construction materials sectors. Headwaters was founded in 1987 and is headquartered in South Jordan, Utah.
As noted above, the most recent earnings beat was the eleventh consecutive time the company posted earnings ahead of the Zacks Consensus Estimate. Beats are always good to see, but the numbers that HW has been posting are even better.
The positive earnings surprises of 240%, 145% 17%, 11%, 47% and 30% (respectively) are nothing to shake a stick at. Those are big beats!
The FY16 Zacks Consensus Estimate has been moving higher for the most part but has also ticked lower recently. The number stood at $1.08 in January and moved higher to $1.38 in February on the strength of a solid 47% positive earnings surprise.
Since that time estimates have kicked lower twice. Once in March to $1.34 and then again in early May to $1.32. Following the most recent beat we could see analysts move their numbers higher again.
The FY2017 Zacks Consensus Estimate has seen a similar move. The number moved from $1.23 to $1.46 in February, then higher to $1.56 in March. In early May the number ticked lower to $1.53.
For the most part, the valuation here looks really good. The forward PE of 13x is well below the 21x industry average, while the price to book multiple of 5.1x is higher than the 4.2x industry average. The 1.4x price to sales multiple is half the 2.8x industry average, so while the numbers are a little mixed on the metrics we normally look at, the overall picture is a positive one.
Normally, I talk a little about growth rates here, but the price and consensus chart is such a good one that I want to jump right to it.
Build A Bear Workshop ( BBW ) has missed the Zacks Consensus Estimate in two of the last three reports, and it wasn't even close. Misses of $0.12 and $0.17 translated into a miss of 54% and 43%. The stock is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.
BBW missed the Zacks Consensus Estimate of $0.39 by $0.17 for a 43% negative earnings surprise. Revenues came in a little below expectations at $95M for a 1.6% negative revenue surprise.
Build-A-Bear Workshop operates as a specialty retailer of plush animals and related products. The company was founded in 1997 and is headquartered in St. Louis, Missouri.
Usually when a stock is the Bear of the Day, the earnings history is filled with misses. This is not the case for BBW, as there are only two misses in the last seven quarters.
Here is the real reason the stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day. The Zacks Consensus Estimate has fallen steadily over the last few months. The FY16 estimate stood at $1.21 in September but fell to $0.98 in February and is now down to $0.93 in May.
Next year has seen estimates move from $1.19 when they first came out in October of last year. It has kicked lower to $1.16 as of May, but there is limited visibility to those numbers at this time.
Premier American electric car manufacturer Tesla Motors ( TSLA ) has released Q1 earnings after the bell Wednesday, with results largely in-line with what we've seen from the company's pre-guidance earlier. A bottom line of -$1.24 per share on sales (accounting for stock-based compensation and other BNRI) on $1.6 billion in the quarter compare with Zacks consensus expectations of -$0.78 and $1.59 billion, respectively. So the wider-than-expected loss is definitely a big miss, but Tesla is still all about forward sales.
The good news for Tesla this quarter came from its various outlooks: the company bumped up its 500K units-per-year goal from as of year 2020 to 2018 now. Deliveries for the very popular Model 3 (400K+ advanced orders) stay in line for deliveries beginning late 2017, and its Gigafactory remains on target to deliver its first batteries late this year. Model S deliveries were 45 percent higher year over year, again in-line with estimates.
Tesla's lowered guidance for Q1 deliveries of 14,820 (from 16K originally) nearly met the expectation but was short by 10 cars. Q2 deliveries are now expected to reach 17K instead of the earlier guidance of 19K. Much of this stems from supplier parts shortages for the Model X, which has since been resolved. Yet another reminder that Tesla is still a toddler in the auto-manufacturing game. But the Model X has grown substantially quarter over quarter, producing roughly 500 SUVs in Q4, but over 2600 in Q1.
Shares are up more than 5 percent following the mildly positive earnings results. (Tesla is one of those companies where actuals can swing wildly from estimates quarter to quarter, so an in-line report can be seen as something of a victory of steadiness.) This follows a big move down in regular Wednesday trading and a woeful -12 percent over the last 5 trading days, so we see traders sopping up some of the value here. The VIX ahead of the earnings report was +/- 9.4 percent.
The big stuff is still to come for this company -- Gigafactory production, Model 3 deliveries. If these bigger-scale projects manage to take hold in a meaningful way for Tesla, we may see new valuations unfold for this stock, which is currently at a Zacks Rank #3 (Hold).
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.
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