For Immediate Release
Chicago, IL - October 27, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amazon ( AMZN ), Facebook, Inc. ( FB ), T-Mobile US, Inc. ( TMUS ), LinkedIn Corporation ( LNKD ) and CyberArk Software, Ltd. ( CYBR ).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .
Here are highlights from Monday's Analyst Blog:
After Amazon, Watch These 4 Tech Stocks for Earnings
U.S. stocks closed higher on Friday with The Dow Jones industrial average rising 0.9% to 17,646.70, the S&P 500 index recovering another 1.1% to 2,075.15, and the Nasdaq Composite pulling down the curtains for the week with a gain of 2.27% to close at 5,031.86.
Why the Optimism?
Investors applauded the surprisingly stronger-than-expected results from three tech behemoths Alphabet, Amazon ( AMZN ) and Microsoft in Thursday's after-hours session. The strong results from these companies led the U.S. stock market's revival this week from its nastiest correction in four years in August.
The Standard & Poor's 500 index was back into positive territory for the year and over its 200-day moving average for the first time since Aug. 19. Six of the 10 sectors in the S&P 500 index moved higher, driven by technology stocks, which rose 3% and is up 6.6 % so far this year.
Other factors that drove the market included the unexpected rate cut in China and the possibility of more stimulus for Europe. The People's Bank of China on Friday announced cuts - the sixth cut in a year - in its benchmark interest rates by 25 basis points on loans and deposits.
Another factor was the European Central Bank President Mario Draghi dropping hints that the bank might expand its $1.2 trillion bond purchase program or inject more financial support to fuel the Eurozone's economy.
But the rally in major technology stocks, driven by solid earnings from the three heavyweight tech companies, lifted the main indexes on Friday.
Performance of the Tech Sector
Let's briefly touch on the tech sector's results, following strong reports from Microsoft, Google or Alphabet and Amazon. Many of the tech companies are yet to report but the results of these bellwethers were very impressive and likely sustainable in the coming periods as well.
Given the company-specific drivers that produced the outperformance for each of these three bellwethers, it is reasonable to be skeptical of extrapolating their momentum to the broader Technology space. But the sector's earnings performance nevertheless stands out among all the sectors at this stage in the Q3 reporting cycle.
With results from 53.6% of the Tech stocks (by market cap) in the S&P 500 index already out, total earnings for the sector are up 3.7% on 1.7% revenue growth, with 68% beating EPS estimates and an above index average of 64% coming ahead of revenue estimates.
And the 3 Giants
Microsoft posted a beat in its first quarter fiscal 2016 results on both counts, which sent shares up 10%, its largest gain since Oct 2000. The software giant's shift to the cloud is paying off as cloud sales jumped 8% last quarter. The $20 billion in annualized commercial cloud revenue run rate by 2018 looks achievable as the company is already at $8.2 billion and the business is growing extremely fast (70% year on year).
Alphabet posted stronger-than-expected earnings and revenues in the third quarter, which made its share jump 7.7%. The results were driven by big gains in searches on mobile phones and tight expense controls. The company also surprised investors with a share repurchase program under which the company has been authorized to buy back $5.1 billion worth of Class C shares.
Amazon also surprised analysts after reporting a profit on a 23% sales gain. Shares went up 6.2% in response. Revenues were driven by strong sales in North America and explosive growth in its cloud computing business. Accounting for just 8% of revenues, AWS comprised over 52% of profit.
You might have missed the price rally of these three titans as they fueled indexes on Friday. But there is still some reason to cheer. There are a few big tech stocks, which are yet to report their numbers, and they are poised to deliver earnings beats as well.
4 Other Tech Stocks to Look Out For
By using the Zacks proprietary methodology, investors may select stocks with a favorable Zacks Rank - Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - and a positive Earnings ESP which have a fairly high chance of performing well in the near term. Zacks Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
We have picked the following 4 stocks that meet both the criteria:
Facebook, Inc. ( FB )
Facebook is the leading online social networking service with a market capitalization of $287.9 billion. The key growth factors for Facebook include increasing online and mobile advertising spending, development of engaging apps, strategic acquisitions, strong user base and a robust balance sheet.
These factors have instilled confidence in investors. Its share price has increased over 5% in the past three months. In fact, these can also serve as a natural hedge to currency headwinds and boost its third quarter 2015 results, scheduled to be reported on Nov 4.
Last quarter, it posted a 316.67% negative surprise. The Earnings ESP for this Zacks Rank # 1 stock stands at +5.71%.
T-Mobile US, Inc. ( TMUS )
T-Mobile is a national wireless service provider and has a market capitalization of $33.6 billion. The wireless service business model of T-Mobile US hinges on its "Un-Carrier" value proposition and its strategic marketing efforts makes it stand out in the competitive U.S. wireless market.
T-Mobile's recent initiatives to revolutionize the business enterprise segment, new product offerings to cater to the consumer market and deployment of LTE network on its 700 MHz spectrum holdings to enhance its service quality outside major urban areas have been driving results and share price of the company.
Investor confidence in this stock is high, leading to a share price rally of over 10% in the last three months.
It is set to report its third quarter 2015 results on Oct 27. Last quarter, it posted a 147.06% positive surprise. The Earnings ESP for this Zacks Rank #2 stock stands at +3.13%.
LinkedIn Corporation ( LNKD )
LinkedIn offers an online platform for professionals to enhance their network in the virtual world. It has the highest market capitalization of $27.4 billion.
LinkedIn's initiatives to increase advertising revenues through product launches and partnership programs are praiseworthy. The expansion of its product offerings has increased registered members as well as member engagement, which contributed to the steady revenue stream. Also the company is gaining traction on the mobile and tablet platforms, which are expected to generate additional revenues.
It is set to report its third quarter 2015 results on Oct 29. Last quarter, it posted a 42.31% positive surprise. The Earnings ESP for this Zacks Rank #2 stock stands at +15.63%.
CyberArk Software, Ltd. ( CYBR )
This provider of information technology security solutions has a market capitalization of $1.46 billion.
The company offers services, which protect organizational privileged accounts from cyber-attacks. The company with its products offers privileged account security solution and application identity manager, thereby helping users from being hijacked and exploited by malicious insiders or external cyber attackers
It recently acquired privately held Viewfinity Inc., which complements its products and will further enhance its capabilities.
It's a Zacks Rank #2 stock. CyberArk is scheduled to report third quarter 2015 earnings on Nov 5. Last quarter, it reported a 275.00% positive earnings surprise. The Earnings ESP for this stock stands at +10.00%.
So let's snatch these potential market movers before they release their numbers and skyrocket.
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