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Stride, Intuit, Uber, DoorDash and Shopify highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – August 31, 2021 – Zacks Equity Research Shares of Stride, Inc. (LRN - Free Report) as the Bull of the Day, Intuit Inc. (INTU - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Uber Technologies, Inc. (UBER - Free Report) , DoorDash, Inc. (DASH - Free Report) and Shopify Inc. (SHOP - Free Report) .
Stride is a Zacks Rank #1 (Strong Buy) and sports a Zacks Style Score of A for Value and B for Growth. This is a career learning business that is more than just schooling, it also has a job placement arm as it helps customers throughout the career lifecycle. Let’s take a deeper look at this stock in this Bull of the Day article.
Description
Stride Inc. is a premier provider of K-12 education for students, schools and districts, including career learning services through middle and high school curriculum. For adult learners, the company delivers professional skills training in healthcare and technology, as well as staffing and talent development. Stride Inc., formerly known as K12 Inc., is based in Herndon, United States.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For LRN, I see a great history of beating the Zacks Consensus Estimate. There are four beats over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be 69%, which means that they are posting results that are above expectations.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For LRN, I see estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter has moved from $0.12 to $0.22.
Next quarter has moved from $0.56 to $0.69.
The full-year number has increased from $1.43 to $2.02 over the last 60 days.
Next year is at $1.72 and that is up from $2.26 over the same time horizon.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
The valuation for LRN is very reasonable. I see a 16x forward earnings multiple and sales growth in the most recent quarter coming in just over 47%. The price to book multiple of 1.7x is a little above the industry average. Price to sales comes in at 0.9x and I would want to see multiple at or above 1x as it would say that the market values each dollar of revenue.
Intuit is a Zacks Rank #5 (Strong Sell) despite recently beating the Zacks Consensus Estimate. Stocks that meet or beat the number don’t often fall to a Zacks Rank #5 (Strong Sell) so let’s take a look at why that is the case in this Bear of the Day article.
Description
Headquartered in Mountain View, CA, Intuit Inc. is a business and financial software company that develops and sells financial, accounting and tax preparation software and related services for small businesses, consumers and accounting professionals globally.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of INTU, I see four straight beats of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For MFCE I see estimates fluctuating.
This quarter has dipped from $1.10 to $0.97.
Next quarter has moved from $1.35 to $1.42 over the last 30 days.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is negative for those numbers.
The 2021 consensus number has increased from $10.84 to $11.05.
The 2022 number has moved from $12.86 to $12.85 over the last 30 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Uber Hit as NYC Approves Cap on Delivery Fees
Uber Technologies’ Delivery division faces a headwind as the New York City Council approves a legislation to permanently cap commissions that the company charges from restaurants on food delivery orders. Apart from Uber, other food delivery companies affected by the decision, including DoorDash and Just Eat Takeaway.com’s unit Grubhub, are expected to fight against the price controls, a Reuters report stated.
The bill will restrict the amount food delivery companies can charge restaurants to 15% per delivery and 5% for advertising and other services.
Last year, several U.S. cities, including New York, had imposed temporary caps on commissions, which were as high as 30%, to help restaurants cope with dented margins amid the pandemic-led woes.
Another bill passed by the council requires food delivery companies to be licensed by the Department of Consumer and Worker Protection every two years. Both bills need to be signed by Mayor Bill de Blasio and would take effect 120 days after being sanctioned as law.
San Francisco, CA has already implemented permanent commission caps of 15% on each delivery order.
Per the Reuters report, Uber, carrying a Zacks Rank #3 (Hold), is yet to comment on the situation. Grubhub said in a statement, “This permanent price control is flagrantly unconstitutional and will hurt local restaurants, delivery workers and diners across NYC. We will vigorously fight this illegal action.”
DoorDash, carrying a Zacks Rank #4 (Sell), has reportedly said that the commission caps are "unnecessary and unconstitutional ... New York's restaurants need choice more than ever, and this dangerous government overreach will severely limit the options small businesses rely on everyday to succeed."
Upon enforcement, the commission caps are likely to hurt margins and revenues of food delivery companies. This adds to Uber’s struggles on the bottom-line front as the company’s Mobility business continues to be impacted by softness in ride volumes in certain parts of the world that are experiencing higher number of coronavirus cases.
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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Stride, Intuit, Uber, DoorDash and Shopify highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 31, 2021 – Zacks Equity Research Shares of Stride, Inc. (LRN - Free Report) as the Bull of the Day, Intuit Inc. (INTU - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Uber Technologies, Inc. (UBER - Free Report) , DoorDash, Inc. (DASH - Free Report) and Shopify Inc. (SHOP - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Stride is a Zacks Rank #1 (Strong Buy) and sports a Zacks Style Score of A for Value and B for Growth. This is a career learning business that is more than just schooling, it also has a job placement arm as it helps customers throughout the career lifecycle. Let’s take a deeper look at this stock in this Bull of the Day article.
Description
Stride Inc. is a premier provider of K-12 education for students, schools and districts, including career learning services through middle and high school curriculum. For adult learners, the company delivers professional skills training in healthcare and technology, as well as staffing and talent development. Stride Inc., formerly known as K12 Inc., is based in Herndon, United States.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For LRN, I see a great history of beating the Zacks Consensus Estimate. There are four beats over the last four quarters.
The average positive earnings surprise over the last fours quarters works out to be 69%, which means that they are posting results that are above expectations.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For LRN, I see estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter has moved from $0.12 to $0.22.
Next quarter has moved from $0.56 to $0.69.
The full-year number has increased from $1.43 to $2.02 over the last 60 days.
Next year is at $1.72 and that is up from $2.26 over the same time horizon.
Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).
Valuation
The valuation for LRN is very reasonable. I see a 16x forward earnings multiple and sales growth in the most recent quarter coming in just over 47%. The price to book multiple of 1.7x is a little above the industry average. Price to sales comes in at 0.9x and I would want to see multiple at or above 1x as it would say that the market values each dollar of revenue.
Bear of the Day:
Intuit is a Zacks Rank #5 (Strong Sell) despite recently beating the Zacks Consensus Estimate. Stocks that meet or beat the number don’t often fall to a Zacks Rank #5 (Strong Sell) so let’s take a look at why that is the case in this Bear of the Day article.
Description
Headquartered in Mountain View, CA, Intuit Inc. is a business and financial software company that develops and sells financial, accounting and tax preparation software and related services for small businesses, consumers and accounting professionals globally.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of INTU, I see four straight beats of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For MFCE I see estimates fluctuating.
This quarter has dipped from $1.10 to $0.97.
Next quarter has moved from $1.35 to $1.42 over the last 30 days.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is negative for those numbers.
The 2021 consensus number has increased from $10.84 to $11.05.
The 2022 number has moved from $12.86 to $12.85 over the last 30 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Uber Hit as NYC Approves Cap on Delivery Fees
Uber Technologies’ Delivery division faces a headwind as the New York City Council approves a legislation to permanently cap commissions that the company charges from restaurants on food delivery orders. Apart from Uber, other food delivery companies affected by the decision, including DoorDash and Just Eat Takeaway.com’s unit Grubhub, are expected to fight against the price controls, a Reuters report stated.
The bill will restrict the amount food delivery companies can charge restaurants to 15% per delivery and 5% for advertising and other services.
Last year, several U.S. cities, including New York, had imposed temporary caps on commissions, which were as high as 30%, to help restaurants cope with dented margins amid the pandemic-led woes.
Another bill passed by the council requires food delivery companies to be licensed by the Department of Consumer and Worker Protection every two years. Both bills need to be signed by Mayor Bill de Blasio and would take effect 120 days after being sanctioned as law.
San Francisco, CA has already implemented permanent commission caps of 15% on each delivery order.
Per the Reuters report, Uber, carrying a Zacks Rank #3 (Hold), is yet to comment on the situation. Grubhub said in a statement, “This permanent price control is flagrantly unconstitutional and will hurt local restaurants, delivery workers and diners across NYC. We will vigorously fight this illegal action.”
DoorDash, carrying a Zacks Rank #4 (Sell), has reportedly said that the commission caps are "unnecessary and unconstitutional ... New York's restaurants need choice more than ever, and this dangerous government overreach will severely limit the options small businesses rely on everyday to succeed."
Upon enforcement, the commission caps are likely to hurt margins and revenues of food delivery companies. This adds to Uber’s struggles on the bottom-line front as the company’s Mobility business continues to be impacted by softness in ride volumes in certain parts of the world that are experiencing higher number of coronavirus cases.
Key Picks
A better-ranked stock in the Internet - Services industry is Shopify, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Shopify have rallied more than 43% in a year’s time, respectively.
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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.