Monday, September 30, 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), Tesla, Inc. (TSLA) and T-Mobile US, Inc. (TMUS), as well as a micro-cap stock Tucows Inc. (TCX).  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 >>>

Shares of Apple have gained +18.8% over the year-to-date against the Zacks Computer - Micro Computers industry’s gain of +19.5%. The company is benefiting from strong growth in Services revenues. It now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago. The expanding content portfolio of Apple TV+ and Apple Arcade helped in driving subscriber growth.

Apple expects the September quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as of June quarter on a year-over-year basis. Unfavorable forex is expected to hurt revenues. For the Services segment, Apple expects a double-digit growth rate similar to the first three quarters of fiscal 2024.

Introduction of Apple Intelligence, an advanced personal intelligence system seamlessly integrated into iOS 18, iPadOS 18 and macOS Sequoia will help Apple shares to push higher. However, weakness in iPhone sales particularly in China is a concern.

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

Tesla’s shares have outperformed the Zacks Automotive - Domestic industry over the year-to-date period (+4.9% vs. +1.8%). Amid competition intensifying in the EV space the company 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 expected rollout of Tesla-supervised Full Self Driving (FSD) software in China and Europe by the end of the year will boost prospects. 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.

Of late, Tesla has been plagued by shrinking automotive margins amid aggressive price cuts and discounts. The company expects its vehicle volume growth rate for 2024 to be noticeably lower than 2023 amid a cooling electric vehicle (EV) market.

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

Shares of T-Mobile US have outperformed the Zacks Wireless National industry over the year-to-date period (+30.0% vs. +29.9%). The company is benefiting from industry-leading postpaid customer growth with a record-low churn rate. In the second quarter, the company added 1.3 million postpaid net customers while postpaid net account additions were 301,000, both metrics being the best in the industry.

TMUS’ 2.5 GHz 5G spectrum delivers superfast speeds and extensive coverage with signals that go through walls and trees. This boosts its competitive edge against the companies that provide 5G networks controlled by the mmWave spectrum.

However, owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, market saturation, or economic downturns can significantly impact overvalued stocks like TMUS. The high debt burden is a concern. Stiff competition is straining profitability. We are reiterating our Neutral recommendation.

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

Tucows’ shares have gained +8.3% over the past year against the Zacks Internet - Content industry’s gain of +14.7%. This microcap company with market capitalization of $230.64 million continues to see strong subscriber growth, with a 25% year-over-year increase to 48,200 in second-quarter 2024. Revenues rose 17% to $14.6 million, supported by expanding infrastructure.

Ting’s gross margin grew 39% year over year, reflecting cost management and efficiency gains. The company completed a $63-million asset-backed securitization, helping fund its fiber expansion while reducing capital risk.

However, rising debt and liquidity concerns due to declining cash raise risks. Depreciation costs and challenges in customer acquisition add pressure as Ting competes with larger ISPs. Additionally, Tucows Domains saw a 3% decline in transactions, and continued pressure in this stable business could affect the overall performance. Slower fiber network expansion and increasing competition can hinder growth.

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

Other noteworthy reports we are featuring today include Novartis AG (NVS), The TJX Companies, Inc. (TJX) and The Bank of New York Mellon Corp. (BK).

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>>>