Tuesday, July 2, 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 Microsoft Corporation (MSFT), Oracle Corporation (ORCL) and T-Mobile US, Inc. (TMUS), as well as a micro-cap stock EVI Industries, Inc. (EVI). 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 >>>

Microsoft shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+21.4% vs. +15.1%), reflecting continued gains from from Intelligent Cloud and Productivity and Business Processes. Intelligent Cloud revenues are driven by growth in Azure and other cloud services. Productivity and Business Processes revenues continue to rise due to the strong adoption of Office 365 Commercial solutions.

Microsoft 365 Consumer subscribers grew to 80.8 million in the third quarter. Continued momentum in the small and medium businesses and frontline worker offerings, as well as a rise in revenue per user, drove top-line growth.

However, the office's declining commercial licensing has been a headwind due to the continued customer shift to cloud offerings. Higher operating expenses and spending on Azure enhancements amid stiff competition in the cloud space remain a concern.

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

Shares of Oracle have outperformed the Zacks Computer - Software industry over the year-to-date period (+36.1% vs. +15.1%). The company’s fourth-quarter fiscal 2024 results benefited from the steady adoption of strategic cloud applications, autonomous database and OCI, as well as a recovery in cloud revenue growth.

Its Gen 2 Cloud is driving artificial intelligence (AI) clientele because of better performance at a lower cost due to high bandwidth and low-latency RDMA networks. ORCL’s continued investment in cloud infrastructure positions it well for sustained growth in the dynamic software industry. Its share buybacks and dividend policy are noteworthy.

However, the uncertain economy and competition in the cloud computing market weighed on demand for its cloud offerings. Stiff competition in the cloud market is slowing down the growth of its expansion efforts in the competitive market.

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

T-Mobile shares have outperformed the Zacks Wireless National industry over the year-to-date period (+11.6% vs. +11.1%). The company is benefiting from industry-leading postpaid customer growth with a record-low churn rate. The acquisition of U.S. Cellular’s wireless operation will enable TMUS to expand its fast-growing home broadband offerings and fixed wireless products by tapping into the additional capacity and coverage.

Long-term contracts with the U.S. Navy will likely boost commercial prospects. Lower operating expenses are boosting its margin. Solid growth in free cash flow underscores efficient capital management and implies that the company is well-positioned to invest in growth initiatives.

However, the highly competitive and saturated U.S. telecom market affects its growth potential. Promotional offers and low-priced service plans to expand the customer base are putting pressure on its profitability. Soft demand for prepaid services is a headwind.

(You can read the full research report on T-Mobile here >>>)

Shares of EVI have underperformed the Zacks Industrial Services industry over the past year (-17.5% vs. -10.6%). This microcap company with market capitalization of $224.96 million is facing challenges which include declining profitability, higher operating costs and interest expenses, competitive pressures, and environmental regulations, impacting margins and growth.

Nevertheless, EVI is well-positioned in the growing dry-cleaning and laundry services market, benefiting from urbanization, increasing disposable incomes, and demand from the hotel sector. EVI's revenues reached $263.4 million in the nine months ended Mar 31, 2024, driven by price increases to counter rising costs, improving gross profit margins to 29.6%.

The "buy-and-build" strategy, exemplified by acquiring ALCO Washer Center, enhances market presence and service capabilities. EVI maintains a strong balance sheet, reducing long-term debt to $21.9 million and a current ratio of 1.53. Innovations in smart-laundry solutions cater to environmental and convenience demands.

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

Other noteworthy reports we are featuring today include Walmart Inc. (WMT), CSX Corporation (CSX) and Welltower Inc. (WELL).

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>>>