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KLA-Tencor, Iconix Brand Group and Amazon highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL - February 03, 2017 - Zacks Equity Research highlights KLA-Tencor (NASDAQ: KLAC - Free Report ) as the Bull of the Day and Iconix Brand Group (NASDAQ: ICON - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amazon (NASDAQ: AMZN - Free Report ).

Here is a synopsis of all three stocks:

Bull of the Day :

KLA-Tencor (NASDAQ: KLAC - Free Report ) recently beat the Zacks Consensus Estimate and then guided Wall Street higher which has sent estimate higher. This has caused the Zacks Rank to move up to a Zacks Rank #1 (Strong Buy) and today it is the Bull of the Day.

The last several months have been very good ones to the semiconductor stocks. It looks like there is evidence that the run will continue if not pick up speed. Other high profile names have seen renewed interest from analysts as Artificial Intelligence, Autonomous Driving, and 3-D Virtual Reality concepts begin to move from beta into the mainstream. This is all good news for the chip industry.

Description

KLAC is a semiconductor capital equipment company, they make the equipment that will help the chip companies make their chips.

Recent Earnings

KLA Tencor beat the Zacks Consensus Estimate of $1.41 by $0.11 in posting earnings of $1.52. That translates into a positive earnings surprise of 7.8% marking the 10th straight beat of the Zacks Consensus Estimate.

Guidance called for revenue of between $860M - $920M when the consensus estimate was calling for $849M. As the aggressive growth stock strategist at Zacks, this is what I love to see. Also on the call, management noted that they expect CY17 gross margin to be a "couple hundred basis points" better than previously expected.

It world of beating and raising this stock has higher revenues and higher margins. Usually, when that happens you see higher multiples. Speaking of multiples, KLAC trades at 15.6x forward estimates and over the last two years the stock has traded between 13.2x and 17.8x. This tells me that the stock could go as high as $109 (17.8*6.17) if it trades at the high end of the range over the last two years.

Room for Upgrades for KLAC

One thing that I like to see is a stock that has room for future catalysts. KLAC has three brokerages that have "Hold" or equivalent ratings on the stock. Instinet is by far the most bearish of the three with a price target of $78 and a neutral rating. Stifel Nicolaus has a hold and a price target of $83. A few days after the most recent report Deutsche Bank reiterated their "Hold" on the stock and increased their price target from $78 to $85.

Goldman Sachs, Cowen and Company, Credit Suise, B. Riley and Needham all have KLAC at either "Buy" or "Strong Buy" or the equivalent. Of those, B. Riley is the most bullish with a $106 price target and Needham is just a dollar behind at $105.

The Big Tell for KLAC

Over the years I have picked up on the lingo for chip stocks. At first I learned all about book to bill and after that the focus became backlog. More recently I have picked up an even bigger tell than a stock with records billings or record backlog. The phrase that pays is "design wins."

During the most recent conference call management spoke the phrase that pays when talking to 3D NAND. If there is anything that is as good as a design win, I have yet to know what it is. This ensures some high margin business over the next 6 to 18 months, and that alone should have the multiple for this stock increasing.

Bear of the Day :

Iconix Brand Group (NASDAQ: ICON - Free Report ) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day. Let's take a look at why the stock is the Bear of the Day and if there are some trends that might help investors avoid other stocks that could become a Zacks Rank #5 (Strong Sell).

Description

ICON is a brand management company. The Company's brand portfolio includes brands, such as Candie's, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Umbro, Lee Cooper, Strawberry Shortcake and Artful Dodger, and interests in Material Girl, Peanuts, Ed Hardy, Truth or Dare, Modern Amusement, Buffalo, Nick Graham Hydraulic and PONY brands.

Recent Earnings

It isn't too often that a Bear of the Day has a good earnings history. Usually I see a bunch of misses but ICON has 3 straight beats of the Zacks Consensus Estimate. That is pretty good.

Estimates

Estimate revision are the key to the Zacks Rank. As estimates fall, so does the Rank. The current quarter estimates is at $0.14, but that is down from $0.19 about 90 days ago. The current year estimate of $1.11 is down 2 cent from about 90 days ago as well. Both of those items don't help, but the real issue here is the move in 2017 estimates.

The 2017 Zacks Consensus Estimate moved from $1.08 to $1.00 in the last thirty days. That move lower is what has pushed this stock down to a Zacks Rank #5 (Strong Sell).

Additional content:

Amazon (AMZN) Q4 Earnings In-Depth: AWS Growth Slows

E-commerce giant Amazon (NASDAQ: AMZN - Free Report ) just released its fourth-quarter fiscal 2016 earnings results. While Amazon made its name as an online shopping marketplace, one of the most notable aspects of today's report was the latest data from Amazon Web Services.

(Also Read:The Complete Guide To Everything Owned By Amazon )

Web Services is a collection of enterprise-level platforms designed for websites and companies that can't afford the time or money it takes to develop their own server farms. In other words, AWS provides cloud-based storage and templates for companies to quickly boost their computing capabilities.

Launched a decade ago, AWS has really exploded in popularity over the past few years. In the third quarter, Amazon reported AWS revenues of $3.231 billion, which represented growth of 55% year-over-year and 12% sequentially.

According to today's report, Amazon Web Services revenues came in at $3.536 billion for the fourth quarter. This figure was up 47% from the prior-year quarter and represents sequential growth of 9.4%.

Make sure to check back later for more commentary on the growth of Amazon Web Services!

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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 >>.

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KLA-Tencor Corporation (KLAC): Free Stock Analysis Report

Iconix Brand Group, Inc. (ICON): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): 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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