Tuesday, January 14, 2025

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), Mastercard Incorporated (MA) and Netflix, Inc. (NFLX). 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 past year (+99.6% vs. +63%), with the stock jumping back following the blockbuster results on December 12th. The company reported strong fiscal fourth-quarter results, with revenues and earnings increasing year over year. The company benefited from strong demand for Broadcom’s custom AI accelerators (XPUs) and networking.

Broadcom experienced four times growth in AI connectivity revenues, driven by global shipments of its Tomahawk and Jericho solutions. The acquisition of VMware has benefited Infrastructure software solutions. AVGO’s strong partner base, including Arista Networks, Dell Technologies, Juniper and Supermicro, served as a key catalyst.

However, non-AI semiconductor revenues declined, reflecting a cyclical downturn that acted as a headwind. High cash interest expenses, a higher tax burden, and ongoing restructuring costs related to the VMware acquisition affected overall profitability.

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

Shares of Mastercard have gained +14.4% over the past year against the Zacks Financial Transaction Services industry’s gain of +19.1%. The company’s numerous acquisitions have helped it grow its addressable markets and drive new revenue streams. Mastercard expects low-teens net revenue growth in the fourth quarter of 2024.

The accelerated adoption of digital and contactless solutions is providing an opportunity for its business to expedite its shift to the digital mode. MA's strong cash flow supports its growth initiatives and enables shareholder value-boosting efforts through share repurchases and dividends.

However, steep operating expenses might stress its margins in the future. The Zacks analyst expect total operating expenses to increase 10.9% year over year in 2024. High rebates and incentives may weigh on net revenues. Also, it is overvalued than the industry at current levels. As such, the stock warrants a cautious stance.

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

Netflix shares have outperformed the Zacks Broadcast Radio and Television industry over the past year (+62.8% vs. +46.2%). The company is benefiting from its growing subscriber base, thanks to a robust content portfolio and healthy engagement levels with about two hours of viewing per member per day, indicating strong member retention. NFLX added 5.07 million paid subscribers globally in Q3 2024.

The planned launch of an in-house ad tech platform in 2025 signals Netflix's commitment to maximizing this new revenue stream, with ad revenues expected to roughly double year-over-year in 2025. NFLX has raised its guidance for the full year 2024, projecting revenue growth at the high end of its previous 14-15% range.

However, stiff competition in the streaming space from the likes of Apple, Amazon Prime Video and Disney+ is a headwind. NFLX’s leveraged balance sheet and a higher streaming obligation are concerns.

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

Other noteworthy reports we are featuring today include Chubb Limited (CB), Eversource Energy (ES) and RPM International Inc. (RPM).

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>>>