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Arista Networks and Luminar Technologies have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – March 2, 2022 – Zacks Equity Research shares Arista Networks(ANET - Free Report) as the Bull of the Day and Luminar Technologies (LAZR - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Salesforce.com (CRM - Free Report) , SoFi (SOFI - Free Report) and Nordstrom (JWN - Free Report) .
Arista Networks is a Zacks Rank #1 (Strong Buy) that develops, markets, and sells cloud networking solutions globally. The company offers cloud networking solutions that consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms.
The stock has held up relatively well compared to most tech companies and the last couple earnings reports are the reason why. Despite all the uncertainty in the marketplace, the stock might be a good place to hide until the market calms down.
More About ANET
The company incorporated in 2004 and is headquartered in Santa Clara, California. It employs almost 3,000 and has a market cap of almost $38 billion. The company went public in June 2014 and currently has more than 7,000 cloud customers worldwide.
Here is how the company describes itself:
Arista Networks is an industry leader in data-driven, client to cloud networking for large data center, campus and routing environments. Arista's award-winning platforms deliver availability, agility, automation, analytics and security through CloudVision® and Arista EOS®, an advanced network operating system.
Earnings Keeping Bulls Interested
A lot of tech stocks have been sold hard over the last few months, but ANET has held up relatively well, still trading above the October levels it saw before a large gap higher.
The reasoning is two EPS beats that impressed investors. The earnings report back in November helped the stock higher by over 25% in one day. The company guided fiscal year 2022 revenue growth higher, announced a stock split and a $1B buyback program.
The stock had pulled back with the market into Arista's next earnings report, which came on February 14th. The company saw a beat on the top line and surprised to the upside by 11%. Arista also guided Q1 revenue higher, seeing $840-860M v the $837M expected.
Management complemented the Arista team in the quarter, which delivered its first billion-dollar cash flow year, despite industry-wide challenges.
Arista is getting some love from analysts, seeing numbers come up across all time-frames over the last 30 days.
For the current quarter, estimates have moved higher by 3.8%, from $0.77 to $0.80. For the current year, we see a 3.6% jump, from $3.53 to $3.66.
After earnings, a handful of analysts also lifted their price targets. Citi reiterated ANET with a Buy and $160 target, up from $150. Morgan Stanley lifted to $144 from $138 and kept its equal weight. Wells Fargo went from $122.50 to $142
The stock has a Forward PE of 33 and pays no dividend. Arista has a Zacks Style Score of "B" in Momentum, but that PE give it a score of "F" in Value
The Technical Take
The stock really took off after the November earnings report, moving from $100 to $148 in just under two months. This happens when most tech stocks were being sold off aggressively. 2022 hasn't been kind to stocks, so naturally, some profit talking began in the stock.
It pulled back to $120, then dipped to $110 during the initial Russia/Ukraine panic. This was a 61.8% Fib retrace from the October low to December high and we saw buyers step in. The stock almost hit the 200-day as well, which resides at $107 at the moment.
There seems to be clear support at the $110 area, so traders have a good setup at current prices to at least test the 50-day moving average at $129.
A break above that area could eventually bring the stock back to all-time highs.
In Summary
Arista is holding up in a time when most stocks are getting punished. This is often a good sign that some opportunity lies beneath all the fear in the marketplace.
Investors have a great long-term opportunity to buy this dip for all-time highs later in the year. Moreover, traders have a nice short-term setup for higher prices.
This stock, which has a great track record on earnings, could be one of the gems that stick out in 2022.
Luminar Technologies is a Zacks Rank #5 (Strong Sell) stock that operates as a vehicle sensor and software company for passenger cars and commercial trucks. The company specializes in lidar sensors and autonomy software solutions.
The stock surged late in 2020, as electric and autonomous car companies became the hottest stocks out there. However, these stocks came down to earth and have struggled to gain any ground throughout 2021.
So far this year, LAZR has traded under 2021 lows in a choppy range. Investors will need to see momentum or the stock is in danger of falling back to its SPAC price of $10.
About the Company
Luminar operates in two segments, Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment deals with lidar sensors, and related perception and autonomy software solutions for original equipment manufacturers in the automobile, commercial vehicle, robo-taxi, and other related industries. The Other Component Sales segment engages in the designing, testing, and consulting of non-standard integrated circuits for government agencies and defense contractors.
Luminar was founded in 2012 and is headquartered in Orlando, Florida. The company employs 500 and has a market cap of $5 billion
The stock has Zacks Style Scores of "A" in Momentum, but "F" in Value. In a market where valuations are being question, the stock is being put aside for now.
Q4 Earnings
Luminar reported earlier this week, seeing a beat on EPS of 13%. Revenue also beat, coming slightly ahead of expectations. However, the company guided FY22 revenues below expectations.
While the quarter numbers were fine, investors should take caution, as estimates are flat to lower over the next year.
Estimates
There is some improvement in numbers over the short term, with estimates going from -$0.18 to -$0.16 over the last sixty days for the current quarter. However, for the current year we see them tick lower, going from -$0.54 to -$0.53.
Earnings are pretty fresh, so be on the lookout for the change in these estimates going forward and how they may affect the stock price.
The stock surged in late 2020, going from its SPAC price of $10 to $47.80 in under a month. From there, the stock saw some wild volatility between $25 and $40. Then the bleed began and the stock steadily drifted lower, marking a 2020 low at $11.42.
The stock has seen a nice bounce off those lows, recently jumping above $15 or more than a 30% bounce.
But this current trading level is the 50-day moving average and a spot that has been hard to maintain for the bulls. If the stock can get over the $16 area, it still would have to contend with the $17.50 area, where the 200-day MA is.
Investors should be aware, there is a lot of supply waiting to be sold into these areas. Until both the fundamentals and technicals improve, the stock should be avoided.
In Summary
Luminar was a former high-flyer that some investors fell in love with as the next Tesla type company. However, it will take a lot of time to get going again.
Investors should let this one settle in a bit and look elsewhere until things improve. For now, a better niche auto play might be LCI Industries (LCII). The stock is a Zacks Rank #1 (Strong Buy) and the company is coming off a 15% EPS beat about a month ago.
Additional content:
Markets Sink Again: CRM, JWN and SOFI
Markets dropped another rung down the ladder in regular trader Tuesday, starting a new month basically where the first two for 2022 left us. We were once again off session lows, however: the Dow, which had been -785 points at its low point, finished -598, or -1.77%. The S&P 500 dunked another -1.55% while the Nasdaq fell -218 points, -1.59%. Worst of the bunch was the small-cap Russell 2000, -1.93%.
Once again, Energy led the way of the 11 sectors on the S&P today, with WTI crude rising +10% on the day and closing above $100 per barrel for the first time in seven years. A new OPEC+ meeting tomorrow should get lots of attention, especially in light of Russia's dilemma. Financials hit the skids today, -3.7%, while Tech dropped another -1.9%.
Russia has announced it is ratcheting up its offensive on neighboring Ukraine, including its capital city, Kyiv. This promises to be a bloody, drawn-out event which will keep strict sanctions on Russia in both its energy and financial spaces. With Russian investments now seen as toxic in most corners of the world — and President Biden with a chance to articulate U.S. policy toward sanctioning Russia tonight — the pressure is on the country to back off its aggression. Instead, it looks to be doubling-down.
salesforce.coms hares are up +4% in late trading on beats for both top and bottom lines in the company's Q4 report Tuesday afternoon. Earnings of 84 cents per share were 9 cents higher than the Zacks consensus, with $7.33 billion in sales bettering the $7.23 billion expected for the customer relationship management tech giant.
Guidance was up nicely for revenues both next quarter and full fiscal year for salesforce, even if earnings guidance for next quarter is lower than expected. The stock still has a long way to go to be whole again: shares are -18.2% year to date and -2.15% from this time a year ago. The company has averaged a +44% positive earnings surprise in the trailing four quarters.
Nordstrom shares are rocketing +32% in after-hours trading on beats on its Q4 earnings and sales report: $1.23 per share on $4.49 billion outpaced the $1.04 and $4.42 billion expected. Gross margins rose +38.4% year over year and are up sequentially. Guidance for the full fiscal year on the bottom line nearly doubled expected earnings per share to $3.15-3.50. Nordstrom has made up lots of lost ground; shares had been -48% from this time a year ago.
And San Francisco-based fintech firm SoFi shares are +16.7% following its outperformance in Q4, with a loss of -15 cents per share beating expectations by a penny on $279.9 million, which topped the $275.5 million estimate. Loan origination grew +168% in the quarter, with new members growing +39% quarter over quarter. Again, there's lots of room to make up: shares of SOFI are -40.33% from a year ago.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It's a little-known chemical company that's up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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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Arista Networks and Luminar Technologies have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – March 2, 2022 – Zacks Equity Research shares Arista Networks(ANET - Free Report) as the Bull of the Day and Luminar Technologies (LAZR - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Salesforce.com (CRM - Free Report) , SoFi (SOFI - Free Report) and Nordstrom (JWN - Free Report) .
Here is a synopsis of all five stocks:
Bull of theDay:
Arista Networks is a Zacks Rank #1 (Strong Buy) that develops, markets, and sells cloud networking solutions globally. The company offers cloud networking solutions that consist of extensible operating systems, a set of network applications, as well as gigabit Ethernet switching and routing platforms.
The stock has held up relatively well compared to most tech companies and the last couple earnings reports are the reason why. Despite all the uncertainty in the marketplace, the stock might be a good place to hide until the market calms down.
More About ANET
The company incorporated in 2004 and is headquartered in Santa Clara, California. It employs almost 3,000 and has a market cap of almost $38 billion. The company went public in June 2014 and currently has more than 7,000 cloud customers worldwide.
Here is how the company describes itself:
Arista Networks is an industry leader in data-driven, client to cloud networking for large data center, campus and routing environments. Arista's award-winning platforms deliver availability, agility, automation, analytics and security through CloudVision® and Arista EOS®, an advanced network operating system.
Earnings Keeping Bulls Interested
A lot of tech stocks have been sold hard over the last few months, but ANET has held up relatively well, still trading above the October levels it saw before a large gap higher.
The reasoning is two EPS beats that impressed investors. The earnings report back in November helped the stock higher by over 25% in one day. The company guided fiscal year 2022 revenue growth higher, announced a stock split and a $1B buyback program.
The stock had pulled back with the market into Arista's next earnings report, which came on February 14th. The company saw a beat on the top line and surprised to the upside by 11%. Arista also guided Q1 revenue higher, seeing $840-860M v the $837M expected.
Management complemented the Arista team in the quarter, which delivered its first billion-dollar cash flow year, despite industry-wide challenges.
Arista Networks, Inc. price-eps-surprise | Arista Networks, Inc. Quote
Estimates Rising
Arista is getting some love from analysts, seeing numbers come up across all time-frames over the last 30 days.
For the current quarter, estimates have moved higher by 3.8%, from $0.77 to $0.80. For the current year, we see a 3.6% jump, from $3.53 to $3.66.
After earnings, a handful of analysts also lifted their price targets. Citi reiterated ANET with a Buy and $160 target, up from $150. Morgan Stanley lifted to $144 from $138 and kept its equal weight. Wells Fargo went from $122.50 to $142
The stock has a Forward PE of 33 and pays no dividend. Arista has a Zacks Style Score of "B" in Momentum, but that PE give it a score of "F" in Value
The Technical Take
The stock really took off after the November earnings report, moving from $100 to $148 in just under two months. This happens when most tech stocks were being sold off aggressively. 2022 hasn't been kind to stocks, so naturally, some profit talking began in the stock.
It pulled back to $120, then dipped to $110 during the initial Russia/Ukraine panic. This was a 61.8% Fib retrace from the October low to December high and we saw buyers step in. The stock almost hit the 200-day as well, which resides at $107 at the moment.
There seems to be clear support at the $110 area, so traders have a good setup at current prices to at least test the 50-day moving average at $129.
A break above that area could eventually bring the stock back to all-time highs.
In Summary
Arista is holding up in a time when most stocks are getting punished. This is often a good sign that some opportunity lies beneath all the fear in the marketplace.
Investors have a great long-term opportunity to buy this dip for all-time highs later in the year. Moreover, traders have a nice short-term setup for higher prices.
This stock, which has a great track record on earnings, could be one of the gems that stick out in 2022.
Bearof the Day:
Luminar Technologies is a Zacks Rank #5 (Strong Sell) stock that operates as a vehicle sensor and software company for passenger cars and commercial trucks. The company specializes in lidar sensors and autonomy software solutions.
The stock surged late in 2020, as electric and autonomous car companies became the hottest stocks out there. However, these stocks came down to earth and have struggled to gain any ground throughout 2021.
So far this year, LAZR has traded under 2021 lows in a choppy range. Investors will need to see momentum or the stock is in danger of falling back to its SPAC price of $10.
About the Company
Luminar operates in two segments, Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment deals with lidar sensors, and related perception and autonomy software solutions for original equipment manufacturers in the automobile, commercial vehicle, robo-taxi, and other related industries. The Other Component Sales segment engages in the designing, testing, and consulting of non-standard integrated circuits for government agencies and defense contractors.
Luminar was founded in 2012 and is headquartered in Orlando, Florida. The company employs 500 and has a market cap of $5 billion
The stock has Zacks Style Scores of "A" in Momentum, but "F" in Value. In a market where valuations are being question, the stock is being put aside for now.
Q4 Earnings
Luminar reported earlier this week, seeing a beat on EPS of 13%. Revenue also beat, coming slightly ahead of expectations. However, the company guided FY22 revenues below expectations.
While the quarter numbers were fine, investors should take caution, as estimates are flat to lower over the next year.
Estimates
There is some improvement in numbers over the short term, with estimates going from -$0.18 to -$0.16 over the last sixty days for the current quarter. However, for the current year we see them tick lower, going from -$0.54 to -$0.53.
Earnings are pretty fresh, so be on the lookout for the change in these estimates going forward and how they may affect the stock price.
Luminar Technologies, Inc. price-consensus-chart | Luminar Technologies, Inc. Quote
Technical Take
The stock surged in late 2020, going from its SPAC price of $10 to $47.80 in under a month. From there, the stock saw some wild volatility between $25 and $40. Then the bleed began and the stock steadily drifted lower, marking a 2020 low at $11.42.
The stock has seen a nice bounce off those lows, recently jumping above $15 or more than a 30% bounce.
But this current trading level is the 50-day moving average and a spot that has been hard to maintain for the bulls. If the stock can get over the $16 area, it still would have to contend with the $17.50 area, where the 200-day MA is.
Investors should be aware, there is a lot of supply waiting to be sold into these areas. Until both the fundamentals and technicals improve, the stock should be avoided.
In Summary
Luminar was a former high-flyer that some investors fell in love with as the next Tesla type company. However, it will take a lot of time to get going again.
Investors should let this one settle in a bit and look elsewhere until things improve. For now, a better niche auto play might be LCI Industries (LCII). The stock is a Zacks Rank #1 (Strong Buy) and the company is coming off a 15% EPS beat about a month ago.
Additional content:
Markets Sink Again: CRM, JWN and SOFI
Markets dropped another rung down the ladder in regular trader Tuesday, starting a new month basically where the first two for 2022 left us. We were once again off session lows, however: the Dow, which had been -785 points at its low point, finished -598, or -1.77%. The S&P 500 dunked another -1.55% while the Nasdaq fell -218 points, -1.59%. Worst of the bunch was the small-cap Russell 2000, -1.93%.
Once again, Energy led the way of the 11 sectors on the S&P today, with WTI crude rising +10% on the day and closing above $100 per barrel for the first time in seven years. A new OPEC+ meeting tomorrow should get lots of attention, especially in light of Russia's dilemma. Financials hit the skids today, -3.7%, while Tech dropped another -1.9%.
Russia has announced it is ratcheting up its offensive on neighboring Ukraine, including its capital city, Kyiv. This promises to be a bloody, drawn-out event which will keep strict sanctions on Russia in both its energy and financial spaces. With Russian investments now seen as toxic in most corners of the world — and President Biden with a chance to articulate U.S. policy toward sanctioning Russia tonight — the pressure is on the country to back off its aggression. Instead, it looks to be doubling-down.
salesforce.coms hares are up +4% in late trading on beats for both top and bottom lines in the company's Q4 report Tuesday afternoon. Earnings of 84 cents per share were 9 cents higher than the Zacks consensus, with $7.33 billion in sales bettering the $7.23 billion expected for the customer relationship management tech giant.
Guidance was up nicely for revenues both next quarter and full fiscal year for salesforce, even if earnings guidance for next quarter is lower than expected. The stock still has a long way to go to be whole again: shares are -18.2% year to date and -2.15% from this time a year ago. The company has averaged a +44% positive earnings surprise in the trailing four quarters.
Nordstrom shares are rocketing +32% in after-hours trading on beats on its Q4 earnings and sales report: $1.23 per share on $4.49 billion outpaced the $1.04 and $4.42 billion expected. Gross margins rose +38.4% year over year and are up sequentially. Guidance for the full fiscal year on the bottom line nearly doubled expected earnings per share to $3.15-3.50. Nordstrom has made up lots of lost ground; shares had been -48% from this time a year ago.
And San Francisco-based fintech firm SoFi shares are +16.7% following its outperformance in Q4, with a loss of -15 cents per share beating expectations by a penny on $279.9 million, which topped the $275.5 million estimate. Loan origination grew +168% in the quarter, with new members growing +39% quarter over quarter. Again, there's lots of room to make up: shares of SOFI are -40.33% from a year ago.
Questions or comments about this article and/or its author? Click here>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It's a little-known chemical company that's up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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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.