Thursday, September 5, 2024
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 Apple Inc. (AAPL), Tesla, Inc. (TSLA) and NextEra Energy, Inc. (NEE), as well as two micro-cap stocks Investors Title Co. (ITIC) and Autoscope Technologies Corp. (AATC). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
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 >>>
Shares of Apple have gained +15.1% over the year-to-date period against the Zacks Computer - Micro Computers industry’s gain of +15.7%. The company is benefiting from strong growth in Services revenues. It now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago.
The expanding content portfolio of Apple TV+ and Apple Arcade helped in driving subscriber growth. Apple expects the September quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as of June quarter on a year-over-year basis. Unfavorable forex is expected to hurt revenues.
For the Services segment, Apple expects a double-digit growth rate similar to the first three quarters of fiscal 2024. Introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia will help Apple shares to push higher. However, weakness in iPhone sales particularly in China is a concern.
(You can read the full research report on Apple here >>>)
Tesla’s shares have underperformed the Zacks Automotive - Domestic industry over the year-to-date period (-11.7% vs. -10.8%). The company has been plagued by shrinking automotive margins amid aggressive price cuts and discounts.
Tesla expects its vehicle volume growth rate for 2024 to be noticeably lower than 2023 amid a cooling electric vehicle (EV) market. With competition intensifying in the EV space, Tesla’s focus on autonomous driving and artificial intelligence (AI) is expected to be a game changer. It aims to launch affordable vehicles, transition into an AI company and is banking on its robotaxi venture.
The expected rollout of Tesla-supervised Full Self Driving (FSD) software in China and Europe by the end of the year will boost prospects. Additionally, TSLA’s Energy Generation and Storage business is thriving. While near-term challenges persist, long-term prospects appear promising, driven by its big bet on driverless software and AI.
(You can read the full research report on Tesla here >>>)
Shares of NextEra Energy have outperformed the Zacks Utility - Electric Power industry over the past year (+27.3% vs. +23.6%). The company continues to expand its operations through organic projects and acquisitions. NextEra Energy will add more renewable projects to its portfolio and has nearly 22.6 GW of renewable projects in its backlog.
Efficient cost management is boosting the company's margins. Florida’s improving economy boosts the company’s subsidiary Florida Power & Light Company’s customer base. NextEra Energy has ample liquidity to meet its short-term debt obligations.
Yet, due to the nature of NextEra Energy’s business, it is subject to complex rules and regulations. Risks in operating nuclear power-based generation units, unfavorable weather conditions, and increasing supply costs can adversely impact earnings.
(You can read the full research report on NextEra Energy here >>>)
Investors Title’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+58.5% vs. +33.6%). This microcap company with market capitalization of $422.46 million has demonstrated exceptional performance through consistent revenue and profit increases, with the first half of 2024 net income reaching $13.4 million, up from $8.8 million in the first half of 2023, driven by a 10% jump in net premiums and strong escrow and other service outputs.
Investors Title's resilience is further underscored by its robust balance sheet, with $26.7 million in cash and minimal liabilities, offering financial flexibility for potential growth initiatives like acquisitions. Technological advancements have propelled operational efficiencies, setting the stage for market share gains in a burgeoning global title insurance market.
The company's commitment to shareholder returns is evident from consistent dividends. However, it faces challenges from rising operating expenses, competitive pressures and volatile investment income, which could impact future earnings stability.
(You can read the full research report on Investors Tile here >>>)
Shares of Autoscope Technologies have outperformed the Zacks Technology Services industry over the past year (+63.4% vs. +42.2%). This microcap company with market capitalization of $41.51 million is built on a stable revenue base, driven by recurring royalties, particularly from Autoscope Vision, which benefits from government-funded safety initiatives like the Bipartisan Infrastructure Law.
Autoscope Technologies showcases strong profitability with a 33% year-over-year increase in net income in second-quarter 2024, supported by a high gross margin and reduced operating expenses. A solid balance sheet, strategic dividend policy and alignment with long-term traffic safety trends further strengthen its appeal.
However, heavy reliance on royalties, weak product sales margins, increasing tax expenses and dependence on a single customer pose risks. Emerging technologies and competitive pressures could challenge market share and profitability, adding volatility to the stock. As such, the AATC stock warrants a cautious stance.
(You can read the full research report on Autoscope Technologies here >>>)
Other noteworthy reports we are featuring today include HCA Healthcare, Inc. (HCA), Mondelez International, Inc. (MDLZ) and GSK plc (GSK).
Mark Vickery
Senior Editor
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
Robust Portfolio, Services Strength to Benefit Apple (AAPL)
Tesla (TSLA) Set to Ride on its Energy Storage Business
NextEra (NEE) Gains from Renewable Focus, Steady Investment
Featured Reports
Mondelez (MDLZ) Gains on Solid Chocolate & Biscuit Categories
Per the Zacks analyst, Mondelez gains on core chocolate and biscuit categories, as they show resilience amid challenges. The company aims to derive most of its revenues from these categories by 2030.
GSK (GSK) Specialty Medicines Unit to Drive Sales Growth
GSK's is witnessing increased sales in Specialty Medicines unit, driven by successful new launches in Oncology and for long-acting HIV medicines. The Zacks analyst says expects sales to remain strong.
Solid Demand for AI Servers Aids Dell Technologies (DELL)
Per the Zacks analyst, Dell is benefiting from strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications.
Welltower (WELL) to Gain From Strong Senior Housing Demand
Per the Zacks Analyst, Welltower is likely to benefit from the favorable SHO demand backed by an expected rise in senior citizens' population. However, elevated interest rates remain a concern.
Eni's (E) Upstream Gains and Renewables Drive Future Growth
Eni's upstream growth, supported by Egypt's Zohr and Noroos fields, is paving the way for increased gas production. However, its high debt reliance concerns the Zacks analyst.
Solid Momentum in Product Portfolio Aids Cirrus Logic (CRUS)
Per the Zacks analyst, strength across its high-performance mixed-signal and audio segments is driving Cirrus Logic's performance. Rising costs are likely to weigh on margin performance.
Strategic Education's (STRA) ETS Unit Aid, High Expenses Ail
Per the Zacks analyst, the company will gain from the Education Technology Services (ETS) unit given platforms like Sophia Learning and Workforce Edge. Yet, higher operating expense hurts.
New Upgrades
Improving Admissions, Acquisitions Aid HCA Healthcare (HCA)
Per the Zacks analyst, HCA Healthcare's growing revenues, driven by increasing admissions, have led to significant growth. Strategic acquisitions have helped it expand and remain a driving factor.
Inspire Medical (INSP) Continues to Gain From Focus on R&D
The Zacks analyst is upbeat about Inspire Medical's solid efforts to improve its research and development (R&D) stature. Steady expansion in the international markets is an added plus.
RingCentral (RNG) Rides on Strong Portfolio, Partner Base
Per the Zacks analyst, RingCentral benefits from solid demand for its Unified Communications as a Service and contact center software-as-a-service solutions.
New Downgrades
J. B. Hunt (JBHT) Continues to Grapple With Segmental Weakness
The Zacks Analyst is worried about the fact that lower revenues across the majority of the segments, higher equipment-related costs, and higher insurance and claims expenses hurt J. B. Hunt's results.
Low Order Levels, High Costs Ail Rockwell Automation (ROK)
Per the Zacks Analyst, low order levels are denting Rockwell Automation's margins. Higher logistics costs are other headwinds.
Soft Comps Performance to Hurt Five Below's (FIVE) Top Line
Per the Zacks analyst, Five Below is grappling with soft comparable sales performance. The metric slid 5.7% in Q2. Management expects comps to decline mid-single-digit decline in third-quarter.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
GSK PLC Sponsored ADR (GSK) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report
Investors Title Company (ITIC) : Free Stock Analysis Report
Autoscope Technologies Corporation (AATC) : 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.
