Thursday, June 13, 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 SAP SE (SAP), Applied Materials, Inc. (AMAT) and Micron Technology, Inc. (MU), as well as two micro-cap stocks Canterbury Park Holding Corporation (CPHC) and Village Super Market, Inc. (VLGEA).  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 >>>

SAP shares have outperformed the Zacks Computer - Software industry over the past year (+46.8% vs. +25.7%). This German software giant’s performance is benefiting from strengthening cloud business, especially robust demand for the Rise with SAP and Grow with SAP solutions. Momentum in its business technology platform along with proliferation of generative AI bodes well.

It is now focusing more on vital strategic growth areas, especially Business AI, and position the company for future growth. Management also reaffirmed its guidance for 2024 cloud revenues along with 2025 long-term targets including cloud and total revenues.

However, continued softness in the Software license and support business segment along with uncertainty prevailing over global macroeconomic conditions continues to remain concerns for SAP. Rising costs are likely to put pressure on margin performance.

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

Shares of Applied Materials have outperformed the Zacks Semiconductor Equipment - Wafer Fabrication industry over the year-to-date period (+47.1% vs. +41.6%). The company is benefiting from strength in the Applied Global Services segment, owing to the growing adoption of the 200-mm system, strong recurring services and rising parts sales. Solid momentum in the subscription and display businesses is a plus.

AMAT remains optimistic about its strategies and investments in IoT and AI. Its strength in IoT, Communications, Auto, Power and Sensors (ICAPS) is likely to continue aiding its position in the semiconductor industry in the days ahead. Its broad-based diversified portfolio remains its key growth driver.

However, softness in the Semiconductor Systems segment is a concern. Weakening momentum across Taiwan, Korea, the United States and Europe is a negative. The sluggish demand environment and geo-political tensions are headwinds.

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

Micron Technology shares were in line with the Zacks Semiconductor Memory industry over the year-to-date period (+65.1% vs. +65.1%). The company is benefiting from improved market conditions, robust sales executions and strong growth across multiple business units.

The positive impact of inventory improvement in the data center, as well as stabilization in other markets, such as automotive, industrial and others, is contributing to top-line growth. It anticipates the pricing of DRAM and NAND chips to increase next year, thereby improving its revenues. The pricing benefits will primarily be driven by rising AI servers, causing a scarcity in the availability of cutting-edge DRAM and NAND supply.

Also, 5G adoption in the Internet of Things devices and wireless infrastructure is likely to spur demand for memory and storage. However, the United States and China’s tit-for-tat trade war is a major threat to the company.

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

Canterbury Park shares have outperformed the Zacks Gaming industry over the year-to-date period (+12.3% vs. +0.1% for the Russell 2000 index and +7.6% for the large-cap S&P 500 index). This microcap company with market capitalization of $114.15 shows potential with consistent revenue growth, reporting a 6% year-over-year rise to $14.1 million in the first quarter of 2024, buoyed by diverse segments like casinos and food services.

Adjusted EBITDA improved 14% year over year to $3.2 million, indicating efficient operations. The expansion at Canterbury Commons and partnerships in real estate ventures like Triple Crown Residences promise growth and revenue diversification. The company maintains a strong balance sheet, with $25.2 million in cash and no debt, bolstered by strategic gaming expansions and real estate monetization.

However, it faces challenges, including a 64% year-over-year drop in net income, increasing operating costs and regulatory hurdles with new gaming terminals. Seasonal operations and intense competition also pose risks. million

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

Shares of Village Super Market have gained +25% over the past year against the Zacks Retail - Supermarkets industry’s gain of +26.8%. This microcap company with market capitalization of $397.97 million is well-positioned for growth in the steadily expanding supermarket industry, driven by urbanization, rising disposable incomes, e-commerce, health trends, and advanced technologies.

The company's robust financial performance is evident in its 6% year-over-year rise in adjusted net income for the 39 weeks ended Apr 27, 2024, and a steady increase in same-store sales. Strategic real estate investments support expansion. Village's strong liquidity, with $113.9 million in cash, supports its growth initiatives and consistent dividend payments.

Expansion efforts, including new store openings, enhance operational efficiency and customer experience. However, Village faces challenges from intense competition, narrow profit margins, labor relations, cybersecurity risks, significant capital expenditures, and regulatory compliance.

(You can read the full research report on Village Super Market here >>>)

Other noteworthy reports we are featuring today include Digital Realty Trust, Inc. (DLR), Kinder Morgan, Inc. (KMI) and First Solar, Inc. (FSLR).

Director of Research

Sheraz Mian

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>>>