Wednesday, July 3, 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), Meta Platforms, Inc. (META) and Tesla, Inc. (TSLA), as well as a micro-cap stock Natural Health Trends Corp. (NHTC).  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 >>>

Apple’s shares have only slightly outperformed the Zacks Computer - Mini computers industry over the past year (+14.5% vs. +14.3%). The company is benefiting from increasing customer engagement in the services segment. The expanding content portfolio of Apple TV+ and Apple Arcade helped drive subscriber growth. Apple’s top-line benefits from strong growth in emerging markets and growing adoption of its devices among enterprises.

However, Apple’s near-term prospects remain foggy due to sluggish China sales amid stiff competition. It expects the June quarter’s (third-quarter fiscal 2024) revenues to grow low-single-digit year over year. Unfavorable forex is expected to hurt revenues by 2.5%.

Apple has been playing catch-up in the AI space compared with Alphabet, Microsoft and Amazon, its peers in the “Magnificent 7” group. Following the launch of Apple Intelligence, its competitive position is expected to improve.

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

Shares of Meta Platforms have far outperformed the Zacks Internet - Software industry over the past year (+78.1% vs. +32.7%). The company is benefiting from steady user growth across all regions, particularly Asia/Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.

Meta Platform is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels, Llama 2, Ray-Ban Meta smart glass, and mixed reality device Quest 3 is likely to aid prospects.

AI-recommended content now comprises more than 50% of the content people see on Instagram. Threads have more than 150 million monthly actives. Meta now expects to invest significantly more over the next few years in developing more advanced models and the largest AI services in the world. However, monetization of these AI services will take considerable time, which is a concern.

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

Tesla’s shares have underperformed the Zacks Automotive - Domestic industry over the past year (-17.3% vs. -16.9%). The company’s recently shrinking automotive margins amid aggressive price cuts and discounts have been plaguing Tesla. 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 successful introduction of its Full Self Driving (FSD) software in China amid stiff competition marks a significant win. 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 Natural Health Trends have outperformed the Zacks Consumer Products - Discretionary industry over the past year (+25.6% vs. -10.1%). This microcap company with market capitalization of $79.12 million shows a promising uptick, with an 11% quarterly order rise and a 1% annual increase, suggesting a market and operational recovery.

Despite a slight revenue drop, cash flow remains positive, supported by prudent financial strategies, including a $0.20 dividend. The company is capitalizing on emerging markets like India, showing substantial growth, and aligning with global e-commerce trends to boost online sales. Strategic initiatives, new products and member incentives such as MetaBoost are aimed at growth and market share.

However, challenges include a significant membership decline, impacting sales potential, and heavy reliance on volatile markets like Hong Kong and China. Additionally, deferred revenue and regulatory risks in key markets pose financial and operational concerns.

(You can read the full research report on National Health Trends here >>>)

Other noteworthy reports we are featuring today include Coca-Cola (KO), S&P Global (SPGI) and Realty Income (O).

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>>>