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Centennial Resource Development and ShotSpotter have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 8, 2022 – Zacks Equity Research shares Centennial Resource Development as the Bull of the Day and ShotSpotter (SSTI - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Pfizer (PFE - Free Report) , BioNTech (BNTX - Free Report) and Moderna's (MRNA - Free Report) .
Centennial Resource Development is a Zacks Rank #1 (Strong Buy) that is an independent oil and natural gas company. The company focus is on the development of crude oil and related liquids-rich natural gas reserves in the United States.
The stock has struggled for the last few years as natural gas and oil prices hung around historical lows. However, the recent rise of the energy commodity prices has helped Centennial's financial position and investors are starting to notice.
More About CDEV
The company was founded in 2015 and is headquartered in Denver, Colorado. It employs about 150 people and has a market cap of almost $2.5 billion.
Centennial is an exploration and production company that is focused in the Permian Basin. The company's properties consist of acreage blocks primarily in Reeves County, West Texas and Lea County, New Mexico.
CDEV has a Zacks Style Score of "B" in both Momentum and Growth, but a "C" in Value. The stock has a Forward PE of 6 and pays no dividend.
Earnings Beat
In late February, Centennial reported a 30% EPS beat for Q4. This was the second straight beat and the fourth out of the last six quarters.
Revenues came in above expectations, with the company seeing $316.4M v the $288M expected. The company also announced a $350 million stock repurchase program.
The current environment has allowed Centennial to generate cash flow to repurchase shares and reduce its debt. Here are some comments from CEO Sean Smith:
"I am pleased to announce our first step in returning capital to shareholders through a disciplined share buyback program, which we believe will drive value creation in today's environment," said Smith. "The program is supported by a robust two-year outlook, during which we expect to generate over $775 million in free cash flow at current strip prices and deliver average crude oil production growth of over 10%."
The news helped the stock move over 20% higher in just a couple weeks, topping out at the $9.30 level. While the bulls have stopped pushing the stock, analysts are raising estimates and lifting their price targets.
Estimates Rising
Over the last 7 days, estimates are ticking higher across all time frames. For the current quarter, numbers have gone up 9%, from $0.32 to $0.35. For the current year, estimates have ticked up 7%, from $1.37 to $1.47.
In addition to raising estimates, multiple analysts are hiking their price targets for CDEV.
Upgrades
Since earnings, we have seen a handful of upgrades. The bullishness stems from Centennial's ability to provide free cash flow with energy prices at current levels. This then results in improvements to the balance sheet and stock buybacks
Stifel recently upgraded the stock to Buy and raised its target to $11.20. They cited free cash flow and Centennial's ability to increase its well count, which will lead to production growth that will outshine its peers.
Stifel isn't the only bull. as the following firms have all raised targets since earnings:
RBC Reiterated CDEV with Sector Perform, price target: $11 from $10
Wells Fargo Raised CDEV to Equal Weight from Underweight, price target: $12 from $8
JPMorgan Chase and Co Reiterated CDEV with Neutral, price target: $13 from $10
Piper/Sandler Raised CDEV to Overweight from Neutral, price target: $13
Those higher end price targets are over 40% from current levels.
The Technical Take
The stock has had a healthy bull run since the beginning of 2021. Trading under $2 to start that year, it has channeled up, holding the 200-day moving average every time it tested.
While that 200-day is way down at $6.76, the 50-day MA is now looking like strong support. This level is at $8.20 and has only cracked once in 2022.
If the bulls take out recent highs, look for a quick move to $10.60. This is the 161.8% Fib extension drawn from March highs to lows.
In Summary
Centennial has positioned itself well for a bullish energy market and sees a robust next couple years. Look for the company to build shareholder value thanks to high oil and gas prices. This will help the stock continue its momentum that started early last year.
Investors looking to enter the stock can lean on the 50-day moving average at $8.20. This area will likely hold support as the bulls try to take out the $10 level.
ShotSpotter is a Zacks Rank #5 (Strong Sell) that provides precision-policing and security solutions for law enforcement and security personnel. Its technology involves a gunshot detection system that helps law enforcement identify, locate, and deter gun violence.
The stock has struggled since July of last year, losing about half its value since. Investors are on the ropes and questioning whether to double down or cut and run.
Recent earnings have not helped the bulls. The stock is now probing 2019 lows as the company sees more earnings estimates revisions to the downside.
About the Company
ShotSpotter is headquartered in Fremont, CA and employs 167 people. The company was founded in 1996 and operates in the United States, Bahamas and South Africa. ShotSpotter sells its solutions through its direct sales teams.
SSTI is valued at $325 million, which has been cut in half since last summer. The company holds a Zacks Style Score of "A" in Growth and Momentum, but "F" in Value. With earnings coming in below market expectations, the stock is falling on valuation questions.
Q2 Earnings
In late February, SSTI reported a both an EPS and revenue miss. On a positive note, the company did raise its FY22 revenue guidance to $81-83M v the $71.4M expected.
The stock shot higher on the guide, which helped it bounce well off the 2022 lows. However, the stock has slowly given away half its gains.
One reason for the lack of follow trough, was year over year margins were lower. This was because of lower gross margins from LEEDS, which the company sees improving next year.
Another reason the stock stalling is that estimates are falling for the current year.
Estimates
Because of the positive guide, the current quarter has seen estimates tick higher. Over the last 60 days, numbers have been revised higher to $0.04 from $0.02.
However, as we look into the rest of 2022, numbers are going lower over the same time frame.
For next quarter, we see an expected $0.04 drop to a negative $0.04. For next year, we see a fromer $0.17 estiamte, that has been lowered to negative $0.03. So in both cases, analysts estimates have been lowered to reflect negative earnings.
The EPS miss was the third straight and the downside surprise continues to get bigger, with the last quarter a -1300% miss.
After earnings, we did see Roth Capital reiterate its Buy rating, but they dropped the price target to $50 from $60.
Technical Take
Looking at the chart, we see a serious bleed over the last ten months. Since the July high of $51.50, the stock fell by over 56% to the low of $22.63. The stock saw a nice bounce to $30, but is starting to creep lower once more.
The stock is now trading below its 50-day moving average after a couple weeks above that level at $27. This is a bearish sign and the bulls will want to hold the $25.70 area, which is the 61.8% retrace from recent lows to highs. If this level fails, look for new 2022 lows and possibly a move down to $18.
In Summary
ShotSpotter has a solid mission and has been a great stock until recently. Investors need to consider that the growth might not be what the market is looking for right now.
It might be time to accept that the valuation will get in the way of a higher stock price.
Additional content:
EU Agencies Doubtful About Need for 2nd Covid Booster
On Wednesday, European health agencies said it was too early to decide whether to allow the use of a fourth dose or a "second booster" dose ofPfizer, BioNTech and Moderna's mRNA-based COVID-19 vaccines, Comirnaty and Spikevax, in the general population in Europe.
The European Centre for Disease Prevention and Control and EMA's COVID-19 task force, however, did agree that a fourth dose of these vaccines may be given to adults 80 years of age and above.
However, these agencies said that there was no evidence suggesting that the vaccines' protection against severe disease eventually fades in healthy adults 60 to 79 years of age with normal immune systems. Accordingly, it was not clear if there was an immediate need for a fourth booster for this population.
Nonetheless, if the present situation changes for the worse in Europe, the health agencies may consider allowing a fourth dose for the older adult population.
For adults below 60, there is also no evidence to suggest that protection afforded by vaccines against severe disease is waning, leading to a need to provide a second booster shot.
The first booster dose or "third" dose of Comirnaty and Spikevax are currently authorized for adults 18 years of age and older in the EU.
COVID infection rates have been rising in several European countries from early March due to the Omicron variant and probably BA.2, an Omicron subvariant, after curbs were lifted. However, there is not much evidence to show that a fourth COVID shot can restore protection against severe disease. It has also been argued that repeated booster doses may not be a practical or a sustainable global strategy, especially when there are several unvaccinated people in low-income nations.
A second booster dose of Pfizer/BioNTech and Moderna's mRNA-based COVID-19 vaccines was authorized by the FDA late last month for older adults and some immunocompromised people.
The second booster dose of Pfizer/BioNTech and Moderna's vaccine can be given to people 50 years of age and older at least four months after they have taken the first booster dose of any authorized or approved COVID-19 vaccine.
Additionally, the FDA authorized a second booster dose of Pfizer/BioNTech's vaccine for certain immunocompromised individuals 12 years and older and Moderna's vaccine for individuals 18 years of age and older with the same certain kinds of immunocompromise.
The FDA said that emerging evidence showed that additional booster doses of mRNA-based COVID-19 vaccines improved protection levels and were also quite safe.
Pfizer/BioNTech and Moderna's first booster doses were granted EUA for all adults 18 years of age and older in November 2021. Later, Pfizer's EUA was extended to allow its use in individuals 16 and 17 years of age and thereafter in adolescents 12 to 15 years of age.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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/performancefor information about the performance numbers displayed in this press release.
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Centennial Resource Development and ShotSpotter have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – April 8, 2022 – Zacks Equity Research shares Centennial Resource Development as the Bull of the Day and ShotSpotter (SSTI - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Pfizer (PFE - Free Report) , BioNTech (BNTX - Free Report) and Moderna's (MRNA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Centennial Resource Development is a Zacks Rank #1 (Strong Buy) that is an independent oil and natural gas company. The company focus is on the development of crude oil and related liquids-rich natural gas reserves in the United States.
The stock has struggled for the last few years as natural gas and oil prices hung around historical lows. However, the recent rise of the energy commodity prices has helped Centennial's financial position and investors are starting to notice.
More About CDEV
The company was founded in 2015 and is headquartered in Denver, Colorado. It employs about 150 people and has a market cap of almost $2.5 billion.
Centennial is an exploration and production company that is focused in the Permian Basin. The company's properties consist of acreage blocks primarily in Reeves County, West Texas and Lea County, New Mexico.
CDEV has a Zacks Style Score of "B" in both Momentum and Growth, but a "C" in Value. The stock has a Forward PE of 6 and pays no dividend.
Earnings Beat
In late February, Centennial reported a 30% EPS beat for Q4. This was the second straight beat and the fourth out of the last six quarters.
Revenues came in above expectations, with the company seeing $316.4M v the $288M expected. The company also announced a $350 million stock repurchase program.
The current environment has allowed Centennial to generate cash flow to repurchase shares and reduce its debt. Here are some comments from CEO Sean Smith:
"I am pleased to announce our first step in returning capital to shareholders through a disciplined share buyback program, which we believe will drive value creation in today's environment," said Smith. "The program is supported by a robust two-year outlook, during which we expect to generate over $775 million in free cash flow at current strip prices and deliver average crude oil production growth of over 10%."
The news helped the stock move over 20% higher in just a couple weeks, topping out at the $9.30 level. While the bulls have stopped pushing the stock, analysts are raising estimates and lifting their price targets.
Estimates Rising
Over the last 7 days, estimates are ticking higher across all time frames. For the current quarter, numbers have gone up 9%, from $0.32 to $0.35. For the current year, estimates have ticked up 7%, from $1.37 to $1.47.
Centennial Resource Development price-consensus-chart | Centennial Resource Development Quote
In addition to raising estimates, multiple analysts are hiking their price targets for CDEV.
Upgrades
Since earnings, we have seen a handful of upgrades. The bullishness stems from Centennial's ability to provide free cash flow with energy prices at current levels. This then results in improvements to the balance sheet and stock buybacks
Stifel recently upgraded the stock to Buy and raised its target to $11.20. They cited free cash flow and Centennial's ability to increase its well count, which will lead to production growth that will outshine its peers.
Stifel isn't the only bull. as the following firms have all raised targets since earnings:
RBC Reiterated CDEV with Sector Perform, price target: $11 from $10
Wells Fargo Raised CDEV to Equal Weight from Underweight, price target: $12 from $8
JPMorgan Chase and Co Reiterated CDEV with Neutral, price target: $13 from $10
Piper/Sandler Raised CDEV to Overweight from Neutral, price target: $13
Those higher end price targets are over 40% from current levels.
The Technical Take
The stock has had a healthy bull run since the beginning of 2021. Trading under $2 to start that year, it has channeled up, holding the 200-day moving average every time it tested.
While that 200-day is way down at $6.76, the 50-day MA is now looking like strong support. This level is at $8.20 and has only cracked once in 2022.
If the bulls take out recent highs, look for a quick move to $10.60. This is the 161.8% Fib extension drawn from March highs to lows.
In Summary
Centennial has positioned itself well for a bullish energy market and sees a robust next couple years. Look for the company to build shareholder value thanks to high oil and gas prices. This will help the stock continue its momentum that started early last year.
Investors looking to enter the stock can lean on the 50-day moving average at $8.20. This area will likely hold support as the bulls try to take out the $10 level.
Bear of the Day:
ShotSpotter is a Zacks Rank #5 (Strong Sell) that provides precision-policing and security solutions for law enforcement and security personnel. Its technology involves a gunshot detection system that helps law enforcement identify, locate, and deter gun violence.
The stock has struggled since July of last year, losing about half its value since. Investors are on the ropes and questioning whether to double down or cut and run.
Recent earnings have not helped the bulls. The stock is now probing 2019 lows as the company sees more earnings estimates revisions to the downside.
About the Company
ShotSpotter is headquartered in Fremont, CA and employs 167 people. The company was founded in 1996 and operates in the United States, Bahamas and South Africa. ShotSpotter sells its solutions through its direct sales teams.
SSTI is valued at $325 million, which has been cut in half since last summer. The company holds a Zacks Style Score of "A" in Growth and Momentum, but "F" in Value. With earnings coming in below market expectations, the stock is falling on valuation questions.
Q2 Earnings
In late February, SSTI reported a both an EPS and revenue miss. On a positive note, the company did raise its FY22 revenue guidance to $81-83M v the $71.4M expected.
The stock shot higher on the guide, which helped it bounce well off the 2022 lows. However, the stock has slowly given away half its gains.
ShotSpotter price-eps-surprise | ShotSpotter Quote
One reason for the lack of follow trough, was year over year margins were lower. This was because of lower gross margins from LEEDS, which the company sees improving next year.
Another reason the stock stalling is that estimates are falling for the current year.
Estimates
Because of the positive guide, the current quarter has seen estimates tick higher. Over the last 60 days, numbers have been revised higher to $0.04 from $0.02.
However, as we look into the rest of 2022, numbers are going lower over the same time frame.
For next quarter, we see an expected $0.04 drop to a negative $0.04. For next year, we see a fromer $0.17 estiamte, that has been lowered to negative $0.03. So in both cases, analysts estimates have been lowered to reflect negative earnings.
The EPS miss was the third straight and the downside surprise continues to get bigger, with the last quarter a -1300% miss.
After earnings, we did see Roth Capital reiterate its Buy rating, but they dropped the price target to $50 from $60.
Technical Take
Looking at the chart, we see a serious bleed over the last ten months. Since the July high of $51.50, the stock fell by over 56% to the low of $22.63. The stock saw a nice bounce to $30, but is starting to creep lower once more.
The stock is now trading below its 50-day moving average after a couple weeks above that level at $27. This is a bearish sign and the bulls will want to hold the $25.70 area, which is the 61.8% retrace from recent lows to highs. If this level fails, look for new 2022 lows and possibly a move down to $18.
In Summary
ShotSpotter has a solid mission and has been a great stock until recently. Investors need to consider that the growth might not be what the market is looking for right now.
It might be time to accept that the valuation will get in the way of a higher stock price.
Additional content:
EU Agencies Doubtful About Need for 2nd Covid Booster
On Wednesday, European health agencies said it was too early to decide whether to allow the use of a fourth dose or a "second booster" dose ofPfizer, BioNTech and Moderna's mRNA-based COVID-19 vaccines, Comirnaty and Spikevax, in the general population in Europe.
The European Centre for Disease Prevention and Control and EMA's COVID-19 task force, however, did agree that a fourth dose of these vaccines may be given to adults 80 years of age and above.
However, these agencies said that there was no evidence suggesting that the vaccines' protection against severe disease eventually fades in healthy adults 60 to 79 years of age with normal immune systems. Accordingly, it was not clear if there was an immediate need for a fourth booster for this population.
Nonetheless, if the present situation changes for the worse in Europe, the health agencies may consider allowing a fourth dose for the older adult population.
For adults below 60, there is also no evidence to suggest that protection afforded by vaccines against severe disease is waning, leading to a need to provide a second booster shot.
The first booster dose or "third" dose of Comirnaty and Spikevax are currently authorized for adults 18 years of age and older in the EU.
COVID infection rates have been rising in several European countries from early March due to the Omicron variant and probably BA.2, an Omicron subvariant, after curbs were lifted. However, there is not much evidence to show that a fourth COVID shot can restore protection against severe disease. It has also been argued that repeated booster doses may not be a practical or a sustainable global strategy, especially when there are several unvaccinated people in low-income nations.
A second booster dose of Pfizer/BioNTech and Moderna's mRNA-based COVID-19 vaccines was authorized by the FDA late last month for older adults and some immunocompromised people.
The second booster dose of Pfizer/BioNTech and Moderna's vaccine can be given to people 50 years of age and older at least four months after they have taken the first booster dose of any authorized or approved COVID-19 vaccine.
Additionally, the FDA authorized a second booster dose of Pfizer/BioNTech's vaccine for certain immunocompromised individuals 12 years and older and Moderna's vaccine for individuals 18 years of age and older with the same certain kinds of immunocompromise.
The FDA said that emerging evidence showed that additional booster doses of mRNA-based COVID-19 vaccines improved protection levels and were also quite safe.
Pfizer/BioNTech and Moderna's first booster doses were granted EUA for all adults 18 years of age and older in November 2021. Later, Pfizer's EUA was extended to allow its use in individuals 16 and 17 years of age and thereafter in adolescents 12 to 15 years of age.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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/performancefor information about the performance numbers displayed in this press release.