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Yeti Holdings, SmileDirectClub, DraftKings, Penn National Gaming and Boyd Gaming highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 13, 2021 – Zacks Equity Research Shares of YETI Holdings, Inc. (YETI - Free Report) as the Bull of the Day, SmileDirectClub, Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on DraftKings Inc. (DKNG - Free Report) , Penn National Gaming, Inc. (PENN - Free Report) and Boyd Gaming Corporation (BYD - Free Report) .
Yeti Holdings is in the midst of an impressive run as the high-end cooler company diversifies its product portfolio to reach more consumers and create sustainable growth opportunities. And Wall Street has loved the stock, pushing Yeti up 130% in the last year.
Expanding Its Cool
The Austin, Texas-based firm began selling its white, heavy-duty coolers that can hold ice for days roughly 15 years ago. Yeti's journey from helping commercial fishing boats, food trucks, and countless other outdoor activities that rely on keeping ice cold for a long time into a billion-dollar retailer is a case study in the combination of functionality and brand building.
Yeti grew its customer base for its rugged, reliable, and simply-branded coolers that cost up to $1,300 by expanding its portfolio far beyond its now-iconic and massive white coolers. Today, the firm sells an ever-growing array of styles, sizes, and colors.
On top of coolers, Yeti sells multi-purpose buckets, gear-boxes, outdoor chairs, dog bowls, and other Yeti-made and branded offerings. The star of its expanding portfolio is drinkwear. The unit includes tumblers, mugs, bottles, jugs, and more. Drinkware accounted for nearly 60% of its total FY20 revenue.
Yeti has also ventured deeper into the bag market, where it's rolling out more luggage, backpacks, and duffels. Wall Street might start to focus more on Yeti's opportunity to compete against the likes of Away and other popular and expensive travel bags.
Other Fundamentals
Yeti is a mainstay everywhere from boats, trucks, and campsites to backyards, car cupholders, and office desks. The company's growing stable of products helped its 2020 sales soar 20% to $1.1 billion, with its direct-to-consumer revenue up 50% to account for nearly half of its sales.
Yeti's DTC growth outside of its wholesale business to stores such as Dick's Sporting Goods and other outdoor-focused retailers will play a larger role going forward. Along with e-commerce, Yeti has slowly and strategically built its brick-and-mortar business beyond its flagship store in Austin.
The company currently has stores in Denver, Charleston, Chicago, and a few other locations. It has cultivated a hip, cool brand in the social media age that's inspired knockoffs and similar looking products. Yeti is also part of a group of newer, higher-end brands thriving in the Amazon-era that includes the likes of Lululemon and Peloton. And perhaps most importantly, its products work and boast strong reviews and ratings across their various channels.
Yeti crushed our first quarter 2021 estimates, with sales up 42%. The top-line expansion marked its highest as a public firm and came on top of 12% growth in Q1 FY20. Meanwhile, its adjusted earnings skyrocketed 245% and its gross margins climbed 5.6% from the year-ago period to 58.6%—its gross margin sat at 42% three years ago.
Yeti's e-commerce segment climbed 60% during the quarter to help boost its margins. The company has invested in modernizing its back-end and supply chain efforts, which includes its beefed-up e-commerce business.
Plus, its wholesales unit popped 26% as its products continue to sell-through in retail. And its international space "grew triple digits for the period to reach an all-time Yeti high of 9% of net sales with good momentum across the global regions."
The company is part of the Zacks Leisure and Recreation Products industry that's in the top 6% of our over 250 industries and includes fellow highly-ranked stocks such as Callaway Golf. Yeti stock has soared 130% in the last 12 months to more than double its peers. This run is part of a roughly 500% climb since its public debut.
Yeti has cooled off a bit, but it's still up 35% in 2021 to easily top the S&P 500's 17% climb and its industry's sideways movement. The stock popped 1.6% during regular hours Monday to close at $93.09 a share, which puts it about 3% below its June records.
Despite its run and the broader market looking due for a bit of a pullback, Yeti sits near neutral RSI levels (50) at 56. The stock is also trading 18% below its year-long highs in terms of forward earnings, providing Yeti plenty of potential runway.
Outlook
Yeti management upped its guidance and it's prepared to continue benefiting from strong consumer spending, highlighted by pent-up demand, especially amid higher-income households who can afford $40 mugs and $300 coolers. "The momentum carried over from 2020 and on display to start 2021 showcases the passion for the brand and the relevance of our product portfolio as consumers continue to participate in the significant growth in active, outdoor lifestyles," CEO Matt Reintjes said in prepared Q1 remarks.
Zacks estimates call for Yeti's fiscal 2021 sales to jump another 22.5% to reach $1.34 billion, with FY22 revenue projected to climb 14% higher. These estimates follow FY19's 17% expansion and FY20's 19.5% and highlight continued strength for a company that went public in the fall of 2018.
At the bottom end of the income statement, Yeti's adjusted earnings are projected to climb over 26% this year and another 17% in 2022. And these growth outlooks could come up well short since the firm has beaten our bottom-line estimates by an average of 82% in the trailing four periods, including a 73% Q1 beat.
Bottom Line
Yeti's positive earnings revisions help it grab a Zacks Rank #1 (Strong Buy) right now, alongside its "B" grade for Growth in our Style Scores system. Plus, eight of the 14 brokerage recommendations Zacks has are "Strong Buys," with nothing below a "Hold."
SmileDirectClub is a direct-to-consumer focused teeth straightening firm that aims to challenge the orthodontics industry, as well as clear braces pioneer Invisalign. But SDC has largely struggled since its September 2019 IPO.
Wall Street Is Not Smiling
SmileDirectClub boasts it is the "first direct-to-consumer medtech platform for transforming smiles." The company uses clear aligners to help customers straighten their teeth. SDC is part of the larger and growing e-commerce and DTC healthcare space.
SmileDirectClub offers consumers the ability to straighten, whiten, and clean their teeth, all without the need to leave their homes. The company now allows its clients to get a free in-person scan at one of its SmileShops, or utilize an at-home kit to create an impression. SDC aims to compete directly against Invisalign maker Align Technology, offering direct comparisons on its website: "Doctor-directed teeth straightening for 60% less than Invisalign, guaranteed for life."
Despite a much-talked-about IPO, SDC has struggled. The company's 2020 sales fell over 12%. SDC also posted an adjusted FY20 loss of $77 million, or -$0.72 a share. The pandemic clearly didn't help SmileDirectClub and many on Wall Street are betting against SDC stock, with it pretty heavily shorted.
Bottom Line
SDC fell short of our adjusted first quarter EPS estimate, posting an adjusted loss of -$0.12 a share. Zacks estimates do call for the company's revenue to climb in 2021 and 2022, with it also projected to trim its losses.
However, SmileDirectClub's EPS outlook has trended in the wrong direction (as the nearby chart shows) to help it land a Zacks Rank #5 (Strong Sell) at the moment. SDC shares have also fallen 35% in 2021, and they recently fell below their 50-day moving average.
The downturn comes in direct contrast to the broader market and Invisalign maker Align's nearly 20% climb so far this year. Therefore, investors might want to stay away from SDC for now, or until it shows signs of a comeback.
DraftKings has expanded its deal with Major League Baseball (MLB) to include the live streaming of games on the sports betting and daily fantasy giant's app. It marks DraftKings' first live streaming deal with a major North American professional sports league.
The new agreement comes with the introduction of the 'Bet & Watch' streaming integration, enabling fans with MLB.com and DraftKings accounts to watch one free, live game per week from the baseball league through DraftKings app.
In addition, DraftKings and MLB plan to collaborate on future sports betting-themed game broadcast experiences that will be live within the MLB.TV product. As part of the expanded relationship, DraftKings remains the exclusive official daily fantasy sports partner of MLB.
DraftKings has also been named as a co-exclusive official sports betting partner of MLB, joining BetMGM, receiving on-site brand exposure and activation opportunities during all MLB Jewel Events, such as the World Series.
Solid Partner Base to Drive Expansion
Notably, sports betting and online gambling companies like DraftKings and Penn National Gaming stand to benefit from the accelerated betting on digital platforms like online poker, casino games and lottery.
The partnership with Major League Baseball is the latest in the string of similar deals between DraftKings and various sports leagues and media companies, which help the company attract new customers, thereby aiding customer acquisition.
DraftKings is the only U.S.-based vertically integrated sports betting operator, powering sports and gaming entertainment for 50 operators across more than 15 regulated U.S. and global markets.
In May, the company announced becoming the first official daily fantasy sports, iGaming and sports betting partner of 23XI Racing and its esteemed driver, Bubba Wallace at the EchoPark Automotive Texas Grand Prix at Circuit of the Americas. While DraftKings is already the official daily fantasy partner of NASCAR, the agreement with 23XI Racing positions DraftKings to hit a new high in its motorsports offerings, integration and entertainment.
In April, the company became the Official Sports Betting Partner of the National Football League (NFL). Moreover, DraftKings has renewed its exclusive relationship as the official daily fantasy partner of the NFL, which provides DraftKings with exclusive rights to NFL marks to promote daily fantasy sports contests.
Further, this Zacks Rank #3 (Hold) company's partnerships with MansionBet (the sports betting brand of Mansion Group), Turner Sports – a subsidiary of WarnerMedia, sports icon Michael Jordan, the New York Giants, Chicago Cubs and Disney's ESPN are expected to expand its reach and drive customer engagement on its platform.
These partnerships bode well with the company's aim to gain brand exposure and secure market share in the U.S. sports betting market.
Additionally, persistent strength in iGaming such as online Blackjack and Roulette is expected to drive active user growth, thereby aiding user acquisition in the near term. Such efforts also improve its competitive prowess against the likes of Capcom and Boyd Gaming.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Yeti Holdings, SmileDirectClub, DraftKings, Penn National Gaming and Boyd Gaming highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 13, 2021 – Zacks Equity Research Shares of YETI Holdings, Inc. (YETI - Free Report) as the Bull of the Day, SmileDirectClub, Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on DraftKings Inc. (DKNG - Free Report) , Penn National Gaming, Inc. (PENN - Free Report) and Boyd Gaming Corporation (BYD - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Yeti Holdings is in the midst of an impressive run as the high-end cooler company diversifies its product portfolio to reach more consumers and create sustainable growth opportunities. And Wall Street has loved the stock, pushing Yeti up 130% in the last year.
Expanding Its Cool
The Austin, Texas-based firm began selling its white, heavy-duty coolers that can hold ice for days roughly 15 years ago. Yeti's journey from helping commercial fishing boats, food trucks, and countless other outdoor activities that rely on keeping ice cold for a long time into a billion-dollar retailer is a case study in the combination of functionality and brand building.
Yeti grew its customer base for its rugged, reliable, and simply-branded coolers that cost up to $1,300 by expanding its portfolio far beyond its now-iconic and massive white coolers. Today, the firm sells an ever-growing array of styles, sizes, and colors.
On top of coolers, Yeti sells multi-purpose buckets, gear-boxes, outdoor chairs, dog bowls, and other Yeti-made and branded offerings. The star of its expanding portfolio is drinkwear. The unit includes tumblers, mugs, bottles, jugs, and more. Drinkware accounted for nearly 60% of its total FY20 revenue.
Yeti has also ventured deeper into the bag market, where it's rolling out more luggage, backpacks, and duffels. Wall Street might start to focus more on Yeti's opportunity to compete against the likes of Away and other popular and expensive travel bags.
Other Fundamentals
Yeti is a mainstay everywhere from boats, trucks, and campsites to backyards, car cupholders, and office desks. The company's growing stable of products helped its 2020 sales soar 20% to $1.1 billion, with its direct-to-consumer revenue up 50% to account for nearly half of its sales.
Yeti's DTC growth outside of its wholesale business to stores such as Dick's Sporting Goods and other outdoor-focused retailers will play a larger role going forward. Along with e-commerce, Yeti has slowly and strategically built its brick-and-mortar business beyond its flagship store in Austin.
The company currently has stores in Denver, Charleston, Chicago, and a few other locations. It has cultivated a hip, cool brand in the social media age that's inspired knockoffs and similar looking products. Yeti is also part of a group of newer, higher-end brands thriving in the Amazon-era that includes the likes of Lululemon and Peloton. And perhaps most importantly, its products work and boast strong reviews and ratings across their various channels.
Yeti crushed our first quarter 2021 estimates, with sales up 42%. The top-line expansion marked its highest as a public firm and came on top of 12% growth in Q1 FY20. Meanwhile, its adjusted earnings skyrocketed 245% and its gross margins climbed 5.6% from the year-ago period to 58.6%—its gross margin sat at 42% three years ago.
Yeti's e-commerce segment climbed 60% during the quarter to help boost its margins. The company has invested in modernizing its back-end and supply chain efforts, which includes its beefed-up e-commerce business.
Plus, its wholesales unit popped 26% as its products continue to sell-through in retail. And its international space "grew triple digits for the period to reach an all-time Yeti high of 9% of net sales with good momentum across the global regions."
The company is part of the Zacks Leisure and Recreation Products industry that's in the top 6% of our over 250 industries and includes fellow highly-ranked stocks such as Callaway Golf. Yeti stock has soared 130% in the last 12 months to more than double its peers. This run is part of a roughly 500% climb since its public debut.
Yeti has cooled off a bit, but it's still up 35% in 2021 to easily top the S&P 500's 17% climb and its industry's sideways movement. The stock popped 1.6% during regular hours Monday to close at $93.09 a share, which puts it about 3% below its June records.
Despite its run and the broader market looking due for a bit of a pullback, Yeti sits near neutral RSI levels (50) at 56. The stock is also trading 18% below its year-long highs in terms of forward earnings, providing Yeti plenty of potential runway.
Outlook
Yeti management upped its guidance and it's prepared to continue benefiting from strong consumer spending, highlighted by pent-up demand, especially amid higher-income households who can afford $40 mugs and $300 coolers. "The momentum carried over from 2020 and on display to start 2021 showcases the passion for the brand and the relevance of our product portfolio as consumers continue to participate in the significant growth in active, outdoor lifestyles," CEO Matt Reintjes said in prepared Q1 remarks.
Zacks estimates call for Yeti's fiscal 2021 sales to jump another 22.5% to reach $1.34 billion, with FY22 revenue projected to climb 14% higher. These estimates follow FY19's 17% expansion and FY20's 19.5% and highlight continued strength for a company that went public in the fall of 2018.
At the bottom end of the income statement, Yeti's adjusted earnings are projected to climb over 26% this year and another 17% in 2022. And these growth outlooks could come up well short since the firm has beaten our bottom-line estimates by an average of 82% in the trailing four periods, including a 73% Q1 beat.
Bottom Line
Yeti's positive earnings revisions help it grab a Zacks Rank #1 (Strong Buy) right now, alongside its "B" grade for Growth in our Style Scores system. Plus, eight of the 14 brokerage recommendations Zacks has are "Strong Buys," with nothing below a "Hold."
Bear of the Day:
SmileDirectClub is a direct-to-consumer focused teeth straightening firm that aims to challenge the orthodontics industry, as well as clear braces pioneer Invisalign. But SDC has largely struggled since its September 2019 IPO.
Wall Street Is Not Smiling
SmileDirectClub boasts it is the "first direct-to-consumer medtech platform for transforming smiles." The company uses clear aligners to help customers straighten their teeth. SDC is part of the larger and growing e-commerce and DTC healthcare space.
SmileDirectClub offers consumers the ability to straighten, whiten, and clean their teeth, all without the need to leave their homes. The company now allows its clients to get a free in-person scan at one of its SmileShops, or utilize an at-home kit to create an impression. SDC aims to compete directly against Invisalign maker Align Technology, offering direct comparisons on its website: "Doctor-directed teeth straightening for 60% less than Invisalign, guaranteed for life."
Despite a much-talked-about IPO, SDC has struggled. The company's 2020 sales fell over 12%. SDC also posted an adjusted FY20 loss of $77 million, or -$0.72 a share. The pandemic clearly didn't help SmileDirectClub and many on Wall Street are betting against SDC stock, with it pretty heavily shorted.
Bottom Line
SDC fell short of our adjusted first quarter EPS estimate, posting an adjusted loss of -$0.12 a share. Zacks estimates do call for the company's revenue to climb in 2021 and 2022, with it also projected to trim its losses.
However, SmileDirectClub's EPS outlook has trended in the wrong direction (as the nearby chart shows) to help it land a Zacks Rank #5 (Strong Sell) at the moment. SDC shares have also fallen 35% in 2021, and they recently fell below their 50-day moving average.
The downturn comes in direct contrast to the broader market and Invisalign maker Align's nearly 20% climb so far this year. Therefore, investors might want to stay away from SDC for now, or until it shows signs of a comeback.
Additional content:
DraftKings (DKNG - Free Report) , MLB Extend Betting Deal
DraftKings has expanded its deal with Major League Baseball (MLB) to include the live streaming of games on the sports betting and daily fantasy giant's app. It marks DraftKings' first live streaming deal with a major North American professional sports league.
The new agreement comes with the introduction of the 'Bet & Watch' streaming integration, enabling fans with MLB.com and DraftKings accounts to watch one free, live game per week from the baseball league through DraftKings app.
In addition, DraftKings and MLB plan to collaborate on future sports betting-themed game broadcast experiences that will be live within the MLB.TV product. As part of the expanded relationship, DraftKings remains the exclusive official daily fantasy sports partner of MLB.
DraftKings has also been named as a co-exclusive official sports betting partner of MLB, joining BetMGM, receiving on-site brand exposure and activation opportunities during all MLB Jewel Events, such as the World Series.
Solid Partner Base to Drive Expansion
Notably, sports betting and online gambling companies like DraftKings and Penn National Gaming stand to benefit from the accelerated betting on digital platforms like online poker, casino games and lottery.
The partnership with Major League Baseball is the latest in the string of similar deals between DraftKings and various sports leagues and media companies, which help the company attract new customers, thereby aiding customer acquisition.
DraftKings is the only U.S.-based vertically integrated sports betting operator, powering sports and gaming entertainment for 50 operators across more than 15 regulated U.S. and global markets.
In May, the company announced becoming the first official daily fantasy sports, iGaming and sports betting partner of 23XI Racing and its esteemed driver, Bubba Wallace at the EchoPark Automotive Texas Grand Prix at Circuit of the Americas. While DraftKings is already the official daily fantasy partner of NASCAR, the agreement with 23XI Racing positions DraftKings to hit a new high in its motorsports offerings, integration and entertainment.
In April, the company became the Official Sports Betting Partner of the National Football League (NFL). Moreover, DraftKings has renewed its exclusive relationship as the official daily fantasy partner of the NFL, which provides DraftKings with exclusive rights to NFL marks to promote daily fantasy sports contests.
Further, this Zacks Rank #3 (Hold) company's partnerships with MansionBet (the sports betting brand of Mansion Group), Turner Sports – a subsidiary of WarnerMedia, sports icon Michael Jordan, the New York Giants, Chicago Cubs and Disney's ESPN are expected to expand its reach and drive customer engagement on its platform.
These partnerships bode well with the company's aim to gain brand exposure and secure market share in the U.S. sports betting market.
Additionally, persistent strength in iGaming such as online Blackjack and Roulette is expected to drive active user growth, thereby aiding user acquisition in the near term. Such efforts also improve its competitive prowess against the likes of Capcom and Boyd Gaming.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Zacks Investment Research
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.