Friday, July 19, 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 Broadcom Inc. (AVGO), Roche Holding AG (RHHBY) and Micron Technology, Inc. (MU), as well a micro-cap stock Moving iMage Technologies, Inc. (MITQ). 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 >>>

Broadcom shares have outperformed the Zacks Electronics - Semiconductors industry over the year-to-date period (+45.1% vs. -47.5%). The company’s fiscal second quarter benefited from strong deployment of AI by hyperscalers, service providers and enterprises. Networking remained strong as the company witnessed strong growth. 

Sales of the PAM-5 and Jericho 3, which Broadcom deployed successfully in close collaboration with partners like Arista Networks, Dell, Juniper, and Supermicro, doubled year over year. It also doubled shipments of PCI Express switches and NICs in the AI backend fabric. 

AI sales surged an astounding 280% year over year and is now expected to be more than $11 billion for fiscal 2024. Broadcom expects networking revenues to be strong. Server storage connectivity revenues are expected to recover modestly in the second half of 2024.

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

Shares of Roche have gained +8.2% over the year-to-date period against the Zacks Large Cap Pharmaceuticals industry’s gain of +18.4%. The company’s Vabysmo, Ocrevus, Hemlibra and Polivy boost growth. Vabysmo has put up a stellar performance against Eylea. 

The company’s efforts to develop new drugs to combat the decline in legacy drugs are encouraging. However, the approval of a higher dose of Eylea might pose challenges for Vabysmo. Roche’s performance has been negatively impacted by lower COVID-19-product-related sales. 

This, in turn, has significantly affected its top line, even though the diagnostics base business and newer drugs maintain growth.  The outlook for 2024 is ordinary as well. Competition from biosimilars for established cancer medicines like Avastin, MabThera/Rituxan and Herceptin also hurt sales.

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

Micron Technology shares have gained +37.0% over the year-to-date period against the Zacks Semiconductor Memory industry’s gain of +37.7%. 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 should 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. The stock has outperformed the S&P 500 year to date. 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 >>>)

Shares of Moving iMage Technologies have underperformed the Zacks Technology Services industry over the year-to-date period (-27.0% vs. +19.1%). This microcap company with market capitalization of $7.03 million is witnessing supply chain disruptions, competition from OTT platforms and regulatory compliance costs pose risks.

Nevertheless, Moving Image Technologies' new share repurchase program, effective until Jun 30, 2024, signals confidence in financial stability and growth. This follows a previous program where 6.3% of shares were repurchased. MiT's significant contract win with Alamo Drafthouse Cinema and expansion into high-margin SaaS and subscription-based products like MiTranslator and CineQC promise higher margins and recurring revenues. 

Diversifying into live entertainment and esports markets mitigates cinema industry cyclicality. Operating in a growing market, MiT is well-positioned to capitalize on technological advancements and increased demand for high-quality cinema experiences. Financial stability, as evidenced by $5.9 million in cash, supports growth.

(You can read the full research report on Moving iMage Technologies here >>>)

Other noteworthy reports we are featuring today Boston Scientific Corporation (BSX), UBS Group AG (UBS) and MercadoLibre, Inc. (MELI).

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>>>