Top Research Reports for VMware, Applied Materials & Equinix

Friday, February 14, 2020

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including VMware (VMW), Applied Materials (AMAT) and Equinix (EQIX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

VMware’s shares have underperformed the Zacks Software industry over the past year (-5.8% vs. +45.7%). The Zacks analyst believes that VMware is benefiting from robust demand for NSX, VeloCloud and vSAN product lines.

The company’s dominance in software-defined data center (SDDC) and an expanding customer base in cloud, driven by partnerships with the likes of IBM, AWS and Microsoft Azure, are positives. The Pivotal and Carbon Black acquisitions along with the recently launched Tanzu portfolio are expected to drive recurring hybrid cloud subscription and SaaS revenues in the long haul.

Nevertheless, sluggish server shipment is a headwind. Apart from an unfavorable revenue mix, which is expected to hurt license revenues, margins are anticipated to remain under pressure due to heavy spending on hybrid cloud and SaaS portfolio. The Carbon Black acquisition is also expected to hurt operating margin in fiscal 2021. 

(You can read the full research report on VMware here >>>)

Shares of Applied Materials have gained +42.7% in the past six months against the Zacks Semiconductor Equipment - Wafer Fabrication industry's rise of +52.6%. The Zacks analyst believes that strong momentum in conductor etches is benefiting the company’s position in DRAM and NAND.

Applied Materials reported strong fiscal first-quarter results due to an uptick in demand for semiconductor equipment and solid execution. Further, increased customer spending in foundry and logic on the back of rising need for specialty nodes in IoT, communications, automotive and sensor solutions remained a positive.

It remains positive about price elasticity of NAND, which is expected to bolster NAND customer spending. However, market uncertainties continue to persist. Softness in semiconductor and display markets on account of slowdown in memory and display customers’ spending is a concern.

(You can read the full research report on Applied Materials here >>>)

Equinix’s shares have gained +17.3% over the past three months against the Zacks REIT and Equity Trust – Retail industry's fall of -1.5%. The Zacks analyst believes that the company’s better-than-expected fourth-quarter 2019 adjusted funds from operations (AFFO) per share reflect healthy top-line growth.

In January, it completed the buyout of three data centers from Axtel S.A.B. de C.V., making it one of the largest network-neutral data-center operators in Mexico. Amid higher demand from cloud users, it remains committed to expand its International Business Exchange (IBX) platform.

A global footprint and solid interconnected ecosystems have helped the company deliver its 17th year of consecutive quarterly revenue growth, though rising debt burden might affect its operating results as interest expenses flare up. Also, consolidation in the telecommunications industry might mar demand for co-location space, hurting its growth.

(You can read the full research report on Equinix here >>>)

Other noteworthy reports we are featuring today include Shopify (SHOP), Exelon (EXC) and Johnson Controls International (JCI).

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Sheraz Mian

Director of Research

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

Portfolio Strength, Expanding Partner Base Aids VMware (VMW)

Applied Materials (AMAT) Rides on Logic Spending, Risk Remain

Expansion Strategy Aids Equinix (EQIX) Amid Stiff Competition

Featured Reports

Product Rollouts & Growing Merchant Base Aid Shopify (SHOP)

Per the Zacks analyst, Shopify is benefiting from robust adoption of latest Fraud Protect and Shopify Email solutions.

Regulated Investments & Cost Management Aid Exelon (EXC)

Per the Zacks analyst Exelon's cost management initiatives will have positive impact on margins and $26B investments in next four years will strengthen its operation.

Acquisitions Aid Johnson Controls (JCI), Divestitures Hurt

Per the Zacks analyst, Johnson Controls' focus on acquisitions and mergers will provide customers with world-class technologies.

Restructuring Efforts Aid Ameriprise (AMP), High Costs a Woe

Per the Zacks analyst, Ameriprise's well-diversified portfolio, and its restructuring and streamlining efforts will aid revenues.

Steady Investment Aids Ameren Corp. (AEE), Regulations Hurts

Per the Zacks Analyst, it plans to invest $13.9 billion over 2019-2023 period in regulated operations to boost earnings.

Season Pass Program Aids Vail Resorts (MTN), Cost Woes Stay

Per the Zacks analyst strong season pass program, increased focus on acquisitions along with efficient marketing efforts, bode well for Vail Resorts.

Strength in U.S. Spine Business Aids Globus Medical (GMED)

The Zacks analyst is bullish about the strong ExcelsiusGPS placements within U.S. Spine Business of Globus Medical. Robust performance by Musculoskeletal Solutions segment is another plus.

New Upgrades

Cadence (CDNS) Rides on EDA, Hardware & IP Solutions Demand

Per the Zacks analyst, Cadence benefits from solid demand of its broad based product portfolio. Traction witnessed by Palladium Z1 and EDA-optimized Cloud-Hosted Design solution is also a positive.

Solid Comparable Sales to Fuel Zumiez's (ZUMZ) Top Line

Per the Zacks analyst, Zumiez's sturdy comps performance and omni-channel capabilities bode well. Comps rose 5.5% in third-quarter fiscal 2019. Management expects comps to rise 6% in fourth quarter.

Expense Control & Efforts to Aid Rite Aid (RAD) FY20 Earnings

Per the Zacks analyst, improved pharmacy network at EnvisionRxOptions, higher prescription count at retail pharmacies and tight expense control are likely to aid Rite Aid's earnings in fiscal 2020.

New Downgrades

Softness in Core BD Medical Arm Hurts Becton, Dickinson (BDX)

BD Medical sees softness in its core Medical segment lately. The Zacks Analyst is also apprehensive of a slashed guidance for fiscal 2020.

J.B. Hunt (JBHT) Stung by High Costs & Low Truck Volumes

The Zacks analyst is concerned about the below-par performance of the truck segment. Segmental revenues declined 6.7% in 2019 due to the lackluster freight scenario.

Higher Operating Costs a Concern for World Wrestling (WWE)

Per the Zacks analyst, higher operating costs on account of development of new revenue generation avenues, content creation and expenses associated to staff may weigh on margins.

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VMware, Inc. (VMW): Free Stock Analysis Report
Shopify Inc. (SHOP): Free Stock Analysis Report
Johnson Controls International plc (JCI): Free Stock Analysis Report
Exelon Corporation (EXC): Free Stock Analysis Report
Equinix, Inc. (EQIX): Free Stock Analysis Report
Applied Materials, Inc. (AMAT): Free Stock Analysis Report
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Zacks Investment Research

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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