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Intuitive Surgical and Hooker Furnishings have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 25, 2024 – Zacks Equity Research shares Intuitive Surgical, Inc. (ISRG - Free Report) as the Bull of the Day and Hooker Furnishings Corp. (HOFT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CrowdStrike (CRWD - Free Report) , Microsoft (MSFT - Free Report) and Palo Alto Networks (PANW - Free Report) .
Intuitive Surgical, Inc. is back to its winning ways as da Vinci procedures continue to grow worldwide. This Zacks Rank #1 (Strong Buy) is expected to see 14% revenue growth in 2024 and 16% in 2025.
Intuitive Surgical manufactures and markets the da Vinci surgical system globally. It strives to make surgery more effective, less invasive and easier on surgeons, patients and their families. As of June 30, 2024, its da Vinci surgical system installed base grew to 9,203 systems.
Another Earnings Beat in the Second Quarter
On July 18, 2024, Intuitive Surgical reported second quarter 2024 results and beat on the Zacks Consensus Estimate by $0.25. Earnings were $1.78 versus the consensus of $1.53.
It was the 6th earnings beat in a row.
The pandemic was a difficult time for the company as surgical procedures plunged worldwide. But that impact has receded.
Worldwide da Vinci procedures grew 17% year-over-year in the second quarter. It placed 341 da Vinci surgical systems, up from 331 last year.
Revenue rose 14% to $2.01 billion from $1.76 billion last year driven by growth in da Vinci procedure volume and an increase in the installed base of systems.
The Company finished the second quarter with $7.68 billion in cash, up $360 million.
Analysts Bullish on 2024 and 2025
No surprise that the analysts are bullish on Intuitive Surgical. 10 estimates were revised higher in the last week for both 2024 and 2025.
The 2024 Zacks Consensus Estimate jumped to $6.62 from $6.26. That is earnings growth of 16% from 2023 as the company made $5.71 last year.
They are bullish on 2025 as well. 10 estimates were also revised higher for 2025 in the last week. The Zacks Consensus rose to $7.60 from $7.32, or another 14.8% earnings growth.
Here's what this strong earnings growth looks like on the price and consensus chart.
Shares at All-Time Highs
Intuitive Surgical went IPO in 2000. The stock has been one of the top performers over the last 24 years and recently hit new all-time highs.
It's not a value stock. Intuitive Surgical trades at 68x earnings.
But for investors looking for growth, Intuitive Surgical, with its double digit revenue and earnings growth, should be on your short list.
Hooker Furnishings Corp. continues to focus on execution during this sustained downturn in the furniture industry. This Zacks Rank #5 (Strong Sell) is expected to see a big decrease in earnings in fiscal 2025.
Hooker Furnishings is celebrating its 100th year of business this year. It is a designer, marketer and importer of casegoods (wooden and metal furniture), leather furniture, fabric-upholstered furniture, lighting, accessories and home decor for the residential, hospitality and contract markets.
The company's corporate offices and manufacturing facilities are located in Virginia, North Carolina and California. It has showrooms in High Point, NC, Las Vegas, Atlanta and Ho Chi Minh City, Vietnam. It also operates distribution centers in Virginia, Georgia and Vietnam.
Hooker Furnishings also sells online.
A Big Miss in the First Quarter of Fiscal 2025
On June 6, 2024, Hooker Furnishings reported its fiscal 2025 first quarter results and missed on the Zacks Consensus by $0.36. Earnings were a loss of $0.39 versus the consensus of a loss of $0.03.
It was the second miss in a row.
Net sales fell 23.2% to $93.6 million year-over-year. All three of its reporting segments experienced a decline in sales driven mostly by the continued weak demand for home furnishings.
Year-over-year, industry-wide US furniture store sales fell compared to the prior year same months for the 14th consecutive month.
Balance Sheet and Dividend
The company is focused on maintaining a healthy financial position and balance sheet while the downturn in the industry continues. After all, Hooker didn't get to 100 years in business without navigating challenging economic conditions.
It has $41 million in cash on hand and inventory levels are well-aligned to current demand. They have actually come down $5.2 million to $56.6 million compared to $61.8 million three months prior, which was at the end of the fiscal year.
"Given the uncertainty in the furniture industry and the general economy, we remain committed to our capital allocation policy. Our short-term capital allocation strategy is focused on preserving capital until we begin to see an industry-turnaround, while also protecting our 50-plus year history of quarterly dividends and continuing to invest in organic growth," said Chief Financial Officer, Paul Huckfeldt.
"We believe we have a conservative balance sheet, which can help us weather the current demand environment", he continued, "but understand the need for caution in a cyclical industry like ours," he added.
Earnings Estimates Were Cut
Given the tough industry conditions, it's not a surprise that the earnings estimates have been cut.
One estimate was cut for fiscal 2025 in the last 60 days but it took the Zacks Consensus down to $0.09 from $1.10. That's a decline of 90.1% as Hooker made $0.91 last year.
Shares Near 5-Year Lows
Shares of Hooker soared during the pandemic as furniture sales also soared. But the party ended in 2021 and the stock has struggled.
It's trading near 5-year lows.
But is it cheap?
With the cutting of earnings estimates, Hooker still has a high forward P/E of 171.
The company is committed to its dividend, however. That is yielding 5.96%.
But investors might want to wait for the furniture industry to see some green shoots before jumping in on Hooker Furnishings.
Additional content:
Is CrowdStrike a Buy Here?
CrowdStrike, a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services, has been at the forefront of headlines following a global IT outage that halted many aspects of the economy and affected many Microsoft Windows devices.
It's been a rough few days for the stock, reflective of the incident. But is the move a buying opportunity, or should investors stay on the sidelines until we learn more? Let's take a closer look.
CrowdStrike Plunges
The recent move has pushed valuation multiples down, with shares currently trading at a 14.3X forward 12-month price-to-sales ratio compared to a 23.8X high just this year. The company is forecasted to see 30% sales growth in its current fiscal year, though it's critical to note that these expectations will likely be adjusted following the fiasco.
In addition, Guggenheim Securities, BTIG, and Scotiabank all downgraded their ratings for the stock from 'Strong Buy' to 'Hold' just this week, again reflecting the potential negative ramifications.
Microsoft released a statement following the incident, stating, 'While software updates may occasionally cause disturbances, significant incidents like the CrowdStrike event are infrequent. We currently estimate that CrowdStrike's update affected 8.5 million Windows devices, or less than one percent of all Windows machines. While the percentage was small, the broad economic and societal impacts reflect the use of CrowdStrike by enterprises that run many critical services.'
While the recent dip is certainly appetizing, given the company's established nature and pure size, investors should wait on the sidelines until the situation becomes clearer. In addition, its current Zacks Rank #5 (Strong Sell) rating alludes to further near-term share pressure.
Competition Looks to Pounce
Given the recent development, several cybersecurity stocks could see some beneficial tailwinds, such as Palo Alto Networks. The company's current year outlook has remained bullish, with the $5.57 per share expected up 12% over the last year.
Palo Alto Networks' sales growth is also expected to remain strong, forecasted to jump 16% in its current fiscal year. The stock has remained on a strong growth trajectory, posting double-digit percentage year-over-year revenue growth rates in each of its last ten quarterly releases.
Bottom Line
The recent CrowdStrike fiasco that brought down Microsoft devices has certainly brought about some headwinds for the stock, plunging following the incident.
While the rough price action could be seen as a buying opportunity among some, the company's cloudy earnings outlook, reflected by its Zacks Rank #5 (Strong Sell) alludes to further share pressure in the near term. Instead, investors should pivot to stocks enjoying positive earnings estimate revisions.
Further, we could be in the early stages of the incident, with the overall impact not yet fully understood. A rival, Palo Alto Networks, could see buying pressure given its competitive nature with CrowdStrike.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
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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Intuitive Surgical and Hooker Furnishings have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 25, 2024 – Zacks Equity Research shares Intuitive Surgical, Inc. (ISRG - Free Report) as the Bull of the Day and Hooker Furnishings Corp. (HOFT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CrowdStrike (CRWD - Free Report) , Microsoft (MSFT - Free Report) and Palo Alto Networks (PANW - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Intuitive Surgical, Inc. is back to its winning ways as da Vinci procedures continue to grow worldwide. This Zacks Rank #1 (Strong Buy) is expected to see 14% revenue growth in 2024 and 16% in 2025.
Intuitive Surgical manufactures and markets the da Vinci surgical system globally. It strives to make surgery more effective, less invasive and easier on surgeons, patients and their families. As of June 30, 2024, its da Vinci surgical system installed base grew to 9,203 systems.
Another Earnings Beat in the Second Quarter
On July 18, 2024, Intuitive Surgical reported second quarter 2024 results and beat on the Zacks Consensus Estimate by $0.25. Earnings were $1.78 versus the consensus of $1.53.
It was the 6th earnings beat in a row.
The pandemic was a difficult time for the company as surgical procedures plunged worldwide. But that impact has receded.
Worldwide da Vinci procedures grew 17% year-over-year in the second quarter. It placed 341 da Vinci surgical systems, up from 331 last year.
Revenue rose 14% to $2.01 billion from $1.76 billion last year driven by growth in da Vinci procedure volume and an increase in the installed base of systems.
The Company finished the second quarter with $7.68 billion in cash, up $360 million.
Analysts Bullish on 2024 and 2025
No surprise that the analysts are bullish on Intuitive Surgical. 10 estimates were revised higher in the last week for both 2024 and 2025.
The 2024 Zacks Consensus Estimate jumped to $6.62 from $6.26. That is earnings growth of 16% from 2023 as the company made $5.71 last year.
They are bullish on 2025 as well. 10 estimates were also revised higher for 2025 in the last week. The Zacks Consensus rose to $7.60 from $7.32, or another 14.8% earnings growth.
Here's what this strong earnings growth looks like on the price and consensus chart.
Shares at All-Time Highs
Intuitive Surgical went IPO in 2000. The stock has been one of the top performers over the last 24 years and recently hit new all-time highs.
It's not a value stock. Intuitive Surgical trades at 68x earnings.
But for investors looking for growth, Intuitive Surgical, with its double digit revenue and earnings growth, should be on your short list.
Bear of the Day:
Hooker Furnishings Corp. continues to focus on execution during this sustained downturn in the furniture industry. This Zacks Rank #5 (Strong Sell) is expected to see a big decrease in earnings in fiscal 2025.
Hooker Furnishings is celebrating its 100th year of business this year. It is a designer, marketer and importer of casegoods (wooden and metal furniture), leather furniture, fabric-upholstered furniture, lighting, accessories and home decor for the residential, hospitality and contract markets.
The company's corporate offices and manufacturing facilities are located in Virginia, North Carolina and California. It has showrooms in High Point, NC, Las Vegas, Atlanta and Ho Chi Minh City, Vietnam. It also operates distribution centers in Virginia, Georgia and Vietnam.
Hooker Furnishings also sells online.
A Big Miss in the First Quarter of Fiscal 2025
On June 6, 2024, Hooker Furnishings reported its fiscal 2025 first quarter results and missed on the Zacks Consensus by $0.36. Earnings were a loss of $0.39 versus the consensus of a loss of $0.03.
It was the second miss in a row.
Net sales fell 23.2% to $93.6 million year-over-year. All three of its reporting segments experienced a decline in sales driven mostly by the continued weak demand for home furnishings.
Year-over-year, industry-wide US furniture store sales fell compared to the prior year same months for the 14th consecutive month.
Balance Sheet and Dividend
The company is focused on maintaining a healthy financial position and balance sheet while the downturn in the industry continues. After all, Hooker didn't get to 100 years in business without navigating challenging economic conditions.
It has $41 million in cash on hand and inventory levels are well-aligned to current demand. They have actually come down $5.2 million to $56.6 million compared to $61.8 million three months prior, which was at the end of the fiscal year.
"Given the uncertainty in the furniture industry and the general economy, we remain committed to our capital allocation policy. Our short-term capital allocation strategy is focused on preserving capital until we begin to see an industry-turnaround, while also protecting our 50-plus year history of quarterly dividends and continuing to invest in organic growth," said Chief Financial Officer, Paul Huckfeldt.
"We believe we have a conservative balance sheet, which can help us weather the current demand environment", he continued, "but understand the need for caution in a cyclical industry like ours," he added.
Earnings Estimates Were Cut
Given the tough industry conditions, it's not a surprise that the earnings estimates have been cut.
One estimate was cut for fiscal 2025 in the last 60 days but it took the Zacks Consensus down to $0.09 from $1.10. That's a decline of 90.1% as Hooker made $0.91 last year.
Shares Near 5-Year Lows
Shares of Hooker soared during the pandemic as furniture sales also soared. But the party ended in 2021 and the stock has struggled.
It's trading near 5-year lows.
But is it cheap?
With the cutting of earnings estimates, Hooker still has a high forward P/E of 171.
The company is committed to its dividend, however. That is yielding 5.96%.
But investors might want to wait for the furniture industry to see some green shoots before jumping in on Hooker Furnishings.
Additional content:
Is CrowdStrike a Buy Here?
CrowdStrike, a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services, has been at the forefront of headlines following a global IT outage that halted many aspects of the economy and affected many Microsoft Windows devices.
It's been a rough few days for the stock, reflective of the incident. But is the move a buying opportunity, or should investors stay on the sidelines until we learn more? Let's take a closer look.
CrowdStrike Plunges
The recent move has pushed valuation multiples down, with shares currently trading at a 14.3X forward 12-month price-to-sales ratio compared to a 23.8X high just this year. The company is forecasted to see 30% sales growth in its current fiscal year, though it's critical to note that these expectations will likely be adjusted following the fiasco.
In addition, Guggenheim Securities, BTIG, and Scotiabank all downgraded their ratings for the stock from 'Strong Buy' to 'Hold' just this week, again reflecting the potential negative ramifications.
Microsoft released a statement following the incident, stating, 'While software updates may occasionally cause disturbances, significant incidents like the CrowdStrike event are infrequent. We currently estimate that CrowdStrike's update affected 8.5 million Windows devices, or less than one percent of all Windows machines. While the percentage was small, the broad economic and societal impacts reflect the use of CrowdStrike by enterprises that run many critical services.'
While the recent dip is certainly appetizing, given the company's established nature and pure size, investors should wait on the sidelines until the situation becomes clearer. In addition, its current Zacks Rank #5 (Strong Sell) rating alludes to further near-term share pressure.
Competition Looks to Pounce
Given the recent development, several cybersecurity stocks could see some beneficial tailwinds, such as Palo Alto Networks. The company's current year outlook has remained bullish, with the $5.57 per share expected up 12% over the last year.
Palo Alto Networks' sales growth is also expected to remain strong, forecasted to jump 16% in its current fiscal year. The stock has remained on a strong growth trajectory, posting double-digit percentage year-over-year revenue growth rates in each of its last ten quarterly releases.
Bottom Line
The recent CrowdStrike fiasco that brought down Microsoft devices has certainly brought about some headwinds for the stock, plunging following the incident.
While the rough price action could be seen as a buying opportunity among some, the company's cloudy earnings outlook, reflected by its Zacks Rank #5 (Strong Sell) alludes to further share pressure in the near term. Instead, investors should pivot to stocks enjoying positive earnings estimate revisions.
Further, we could be in the early stages of the incident, with the overall impact not yet fully understood. A rival, Palo Alto Networks, could see buying pressure given its competitive nature with CrowdStrike.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
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/performancefor information about the performance numbers displayed in this press release.