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The Progressive and Kohl's have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 26, 2024 – Zacks Equity Research shares The Progressive (PGR - Free Report) as the Bull of the Day and Kohl's (KSS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CrowdStrike (CRWD - Free Report) , Okta (OKTA - Free Report) , CyberArk Software (CYBR - Free Report) and Zscaler (ZS - Free Report) .
The Progressive has been a standout stock in the market leading insurance sector, delivering exceptional performance both in the short term and over the long haul. With a strong growth outlook, a top Zacks Rank, and a discounted valuation, Progressive stock is well-positioned to continue its impressive run.
Investors seeking a reliable, growth-oriented stock might consider Progressive as a key component of their portfolios.
The Progressive Stock Relative Strength
Progressive stock has exhibited remarkable strength throughout the year, significantly outperforming the broader market.
This robust performance is not a recent phenomenon; Progressive has consistently delivered outstanding returns over the long term. Over the past 15 years, the stock has compounded at an annual rate of 18.8%, nearly 13xing investors' money during that period.
This track record of consistent growth underscores Progressive's resilience and its ability to thrive in various market conditions.
Steadily Rising Earnings Revisions Trend
Progressive's impressive business performance is reflected in its Zacks Rank #1 (Strong Buy) rating. The company's earnings estimates have seen steady upward revisions over the past year, with analysts unanimously raising their forecasts across timeframes. This positive trend highlights the confidence analysts have in Progressive's growth prospects and increases the odds of a near-term rally.
The company's earnings per share (EPS) are projected to grow at an impressive annual rate of 23.8% over the next three to five years. This robust growth forecast is driven by Progressive's strong underwriting performance, innovative product offerings, and efficient cost management. As the company continues to capitalize on its competitive advantages, investors can expect sustained earnings growth.
Discounted Valuation at Progressive
Despite its strong performance and promising growth outlook, Progressive is currently trading at a relatively discounted valuation. The stock's one-year forward earnings multiple stands at 17.9x, which is below the market average of 22.9x and below its five-year median of 20.6x. This attractive valuation provides a margin of safety for investors, reducing downside risk while offering substantial upside potential.
Additionally, Progressive's PEG ratio is a mere 0.75, indicating that the stock is undervalued relative to its expected growth. This low PEG ratio suggests that Progressive offers exceptional value for growth-oriented investors, making it an appealing choice in today's market.
Bottom Line
The Progressive Corporation stands out as a top-performing stock with a strong growth outlook, favorable earnings revisions, and a discounted valuation. Its track record of consistent long-term growth, combined with its impressive short-term performance, makes it a compelling investment opportunity.
As the company continues to execute its growth strategy and capitalize on its competitive advantages, investors can expect Progressive to deliver sustained returns. For those looking to add a reliable, growth-oriented stock to their portfolios, Progressive should be at the top of the list.
Kohl's, a specialty department store chain with 1,100 locations across the United States, has struggled significantly in recent years due to deteriorating business fundamentals.
The company's lackluster performance is underscored by a Zacks Rank #5 (Strong Sell) rating, falling sales growth, and a relatively high valuation despite its challenges. Given this setup, investors should approach Kohl's stock with caution and consider avoiding it altogether.
Falling Sales Growth at Kohl's
One of the most alarming signs for any company is negative sales growth over an extended period. Unfortunately for Kohl's, the company has experienced a 15% decline in sales over the past five years.
This downward trend is particularly concerning in the retail industry, where sustained growth is crucial for long-term success. As sales continue to fall, it becomes increasingly difficult to justify holding the stock until there is a significant turnaround.
Deep Underperformance for Kohl's Stock
Kohl's stock has been a severe underperformer over the past decade, significantly lagging behind the broader market.
This underperformance is not just a relic of the past; recent performance has been equally dismal. Year-to-date, Kohl's stock is down 29% and is currently trading near its recent lows. This consistent downward trend highlights the ongoing challenges the company faces in a highly competitive retail environment.
Kohl's Valuation Remains Elevated
Despite its weakening business fundamentals, Kohl's stock continues to trade at a relatively premium valuation. The stock's one-year forward earnings multiple is 14.4x, which is above its 10-year median of 11.1x and significantly higher than the industry average of 9x.
This elevated valuation is hard to justify given the company's declining sales and overall poor performance. Investors typically seek bargains in struggling companies, but Kohl's current valuation suggests it is far from being a bargain.
Bottom Line
While Kohl's boasts a strong brand developed over many years, the retail and department store industry continues to face intense competition. The rise of e-commerce and changing consumer behaviors have put significant pressure on traditional brick-and-mortar stores like Kohl's.
Until Kohl's can address its growth issues in a material and sustainable way, the stock remains an unattractive option for investors. The combination of declining sales, poor stock performance, and an unjustifiably high valuation suggests that investors should steer clear of Kohl's for the foreseeable future.
CrowdStrike has been one of the most prolific security software providers in recent times thanks to its Falcon platform. However, a faulty Falcon update on Jul 19 resulted in a global IT outage. CRWD shares dropped 11% on Jul 19 and have been on a downward spiral since then.
The blue screen of death (BSOD) outage reportedly impacted 8.5 million Windows machines. In its preliminary Post Incident Review (PIR), CRWD has blamed the BSOD outage on a bug in the Rapid Response Content, which somehow went undetected during validation checks.
Losses from the massive IT outage are now expected between $400 million and $1.5 billion, per cyber analytics firm Cybercube, as cited by Reuters. Insurer Parametrix estimates insured losses between $540 million and $1.08 billion for Fortune 500 companies, excluding Microsoft.
Apart from the staggering losses, recovery from the IT outage is expected to take several days. CRWD's software runs at the kernel level of a computer, which helps it to detect cyberattacks more efficiently. However, computers affected by the bug are required to be rebooted manually to safe mode by an administrator and then delete the affected file. This is expected to be a time-consuming process.
The incident has significantly impacted CrowdStrike's reputation and brand value. CRWD is taking correctional measures as per the PIR, including enhanced software testing procedures, as well as a plan to conduct validation exercises through third-party. However, prospects don't look bright as the reputational damage can result in customer exodus, thereby hurting top-line growth.
Since the incident, CRWD shares have declined more than 15%. Year-to-date, shares of this Zacks Rank #5 (Strong Sell) company have gained 1.1%, underperforming the Zacks Computer & Technology sector's return of 18.6%.
3 Better Bets Than CRWD Stock
Here, we have picked three security stocks that are better bets than CrowdStrike. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
Okta is benefiting from an expanding clientele, driven by the strong adoption of its Identity Threat Protection solution. It exited the first quarter of fiscal 2025 with the total customer count increasing 6% year over year to 19,100.
Okta's expanding portfolio has been a key catalyst. Its Okta AI, a suite of AI-powered capabilities embedded across both Workforce Identity Cloud and Customer Identity Cloud, empowers organizations to harness the power of AI to build better experiences and protect against cyberattacks.
For fiscal 2025, Okta expects revenues between $2.53 billion and $2.54 billion, indicating year-over-year growth of 12%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $2.53 billion, indicating year-over-year growth of 11.91%.
OKTA expects fiscal 2025 non-GAAP earnings between $2.35 and $2.40 per share. The consensus mark for earnings is pegged at $2.40 per share, up 5.3% over the past 60 days.
CyberArk Software is benefiting from the rising demand for cyber security and privileged access security solutions due to the long list of data breaches and increasing digital transformation strategies.
CyberArk's security platforms simplify security infrastructure for organizations by protecting against, detecting and responding to cyber-attacks before the security of vital systems is compromised. This reduces the total cost of ownership, thereby giving the organization a competitive edge. CYBR's strategic mix shift toward software-as-a-service and subscription-based solutions is driving top-line growth.
For 2024, CyberArk expects revenues in the range of $928-$938 million, up from the previous guidance range of $920-$930 million. The Zacks Consensus Estimate for revenues is currently pegged at $935.16 million, suggesting 24.38% growth over 2023.
CYBR carries a Zacks Rank #2 at present and has a Growth Score of A. The consensus mark for 2024 earnings has been steady at $2.04 per share over the past 60 days.
Zscaler is benefiting from a strong portfolio. Its Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access are well poised to gain adoption amid the thriving remote work culture.
Portfolio expansion through acquisitions with the likes of Avalor, Canonic Security and ShiftRight is noteworthy. Avalor acquisition expands Zscaler's Zero Trust Exchange data, incorporating more than 150 pre-built integrations to empower customers in proactively identifying and predicting critical vulnerabilities while enhancing operational efficiencies. Canonic Security improved ZS' focus on protecting against attacks that target software-as-a-service. ShiftRight buyout boosted its cloud security offerings.
For fiscal 2024, Zscaler forecasts revenues in the range of $2.14-$2.142 billion, up from the previous guidance of $2.118-$2.122 billion. Calculated billings are now expected in the range of $2.603-$2.606 billion, up from the earlier guidance of $2.55-$2.57 billion.
The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $2.14 billion, indicating 32.39% year-over-year growth. The consensus mark for fiscal 2024 earnings is pegged at $2.99 per share, up 9.5% over the past 60 days.
Zscaler has a Zacks Rank #2 at present and a Growth Score of A.
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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The Progressive and Kohl's have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 26, 2024 – Zacks Equity Research shares The Progressive (PGR - Free Report) as the Bull of the Day and Kohl's (KSS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CrowdStrike (CRWD - Free Report) , Okta (OKTA - Free Report) , CyberArk Software (CYBR - Free Report) and Zscaler (ZS - Free Report) .
Here is a synopsis of all six stocks:
Bull of the Day:
The Progressive has been a standout stock in the market leading insurance sector, delivering exceptional performance both in the short term and over the long haul. With a strong growth outlook, a top Zacks Rank, and a discounted valuation, Progressive stock is well-positioned to continue its impressive run.
Investors seeking a reliable, growth-oriented stock might consider Progressive as a key component of their portfolios.
The Progressive Stock Relative Strength
Progressive stock has exhibited remarkable strength throughout the year, significantly outperforming the broader market.
This robust performance is not a recent phenomenon; Progressive has consistently delivered outstanding returns over the long term. Over the past 15 years, the stock has compounded at an annual rate of 18.8%, nearly 13xing investors' money during that period.
This track record of consistent growth underscores Progressive's resilience and its ability to thrive in various market conditions.
Steadily Rising Earnings Revisions Trend
Progressive's impressive business performance is reflected in its Zacks Rank #1 (Strong Buy) rating. The company's earnings estimates have seen steady upward revisions over the past year, with analysts unanimously raising their forecasts across timeframes. This positive trend highlights the confidence analysts have in Progressive's growth prospects and increases the odds of a near-term rally.
The company's earnings per share (EPS) are projected to grow at an impressive annual rate of 23.8% over the next three to five years. This robust growth forecast is driven by Progressive's strong underwriting performance, innovative product offerings, and efficient cost management. As the company continues to capitalize on its competitive advantages, investors can expect sustained earnings growth.
Discounted Valuation at Progressive
Despite its strong performance and promising growth outlook, Progressive is currently trading at a relatively discounted valuation. The stock's one-year forward earnings multiple stands at 17.9x, which is below the market average of 22.9x and below its five-year median of 20.6x. This attractive valuation provides a margin of safety for investors, reducing downside risk while offering substantial upside potential.
Additionally, Progressive's PEG ratio is a mere 0.75, indicating that the stock is undervalued relative to its expected growth. This low PEG ratio suggests that Progressive offers exceptional value for growth-oriented investors, making it an appealing choice in today's market.
Bottom Line
The Progressive Corporation stands out as a top-performing stock with a strong growth outlook, favorable earnings revisions, and a discounted valuation. Its track record of consistent long-term growth, combined with its impressive short-term performance, makes it a compelling investment opportunity.
As the company continues to execute its growth strategy and capitalize on its competitive advantages, investors can expect Progressive to deliver sustained returns. For those looking to add a reliable, growth-oriented stock to their portfolios, Progressive should be at the top of the list.
Bear of the Day:
Kohl's, a specialty department store chain with 1,100 locations across the United States, has struggled significantly in recent years due to deteriorating business fundamentals.
The company's lackluster performance is underscored by a Zacks Rank #5 (Strong Sell) rating, falling sales growth, and a relatively high valuation despite its challenges. Given this setup, investors should approach Kohl's stock with caution and consider avoiding it altogether.
Falling Sales Growth at Kohl's
One of the most alarming signs for any company is negative sales growth over an extended period. Unfortunately for Kohl's, the company has experienced a 15% decline in sales over the past five years.
This downward trend is particularly concerning in the retail industry, where sustained growth is crucial for long-term success. As sales continue to fall, it becomes increasingly difficult to justify holding the stock until there is a significant turnaround.
Deep Underperformance for Kohl's Stock
Kohl's stock has been a severe underperformer over the past decade, significantly lagging behind the broader market.
This underperformance is not just a relic of the past; recent performance has been equally dismal. Year-to-date, Kohl's stock is down 29% and is currently trading near its recent lows. This consistent downward trend highlights the ongoing challenges the company faces in a highly competitive retail environment.
Kohl's Valuation Remains Elevated
Despite its weakening business fundamentals, Kohl's stock continues to trade at a relatively premium valuation. The stock's one-year forward earnings multiple is 14.4x, which is above its 10-year median of 11.1x and significantly higher than the industry average of 9x.
This elevated valuation is hard to justify given the company's declining sales and overall poor performance. Investors typically seek bargains in struggling companies, but Kohl's current valuation suggests it is far from being a bargain.
Bottom Line
While Kohl's boasts a strong brand developed over many years, the retail and department store industry continues to face intense competition. The rise of e-commerce and changing consumer behaviors have put significant pressure on traditional brick-and-mortar stores like Kohl's.
Until Kohl's can address its growth issues in a material and sustainable way, the stock remains an unattractive option for investors. The combination of declining sales, poor stock performance, and an unjustifiably high valuation suggests that investors should steer clear of Kohl's for the foreseeable future.
Additional content:
Forget CrowdStrike (CRWD - Free Report) : 3 Quality Security Stocks to Buy Instead
CrowdStrike has been one of the most prolific security software providers in recent times thanks to its Falcon platform. However, a faulty Falcon update on Jul 19 resulted in a global IT outage. CRWD shares dropped 11% on Jul 19 and have been on a downward spiral since then.
The blue screen of death (BSOD) outage reportedly impacted 8.5 million Windows machines. In its preliminary Post Incident Review (PIR), CRWD has blamed the BSOD outage on a bug in the Rapid Response Content, which somehow went undetected during validation checks.
Losses from the massive IT outage are now expected between $400 million and $1.5 billion, per cyber analytics firm Cybercube, as cited by Reuters. Insurer Parametrix estimates insured losses between $540 million and $1.08 billion for Fortune 500 companies, excluding Microsoft.
Apart from the staggering losses, recovery from the IT outage is expected to take several days. CRWD's software runs at the kernel level of a computer, which helps it to detect cyberattacks more efficiently. However, computers affected by the bug are required to be rebooted manually to safe mode by an administrator and then delete the affected file. This is expected to be a time-consuming process.
The incident has significantly impacted CrowdStrike's reputation and brand value. CRWD is taking correctional measures as per the PIR, including enhanced software testing procedures, as well as a plan to conduct validation exercises through third-party. However, prospects don't look bright as the reputational damage can result in customer exodus, thereby hurting top-line growth.
Since the incident, CRWD shares have declined more than 15%. Year-to-date, shares of this Zacks Rank #5 (Strong Sell) company have gained 1.1%, underperforming the Zacks Computer & Technology sector's return of 18.6%.
3 Better Bets Than CRWD Stock
Here, we have picked three security stocks that are better bets than CrowdStrike. These stocks have a favorable combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Per the Zacks proprietary methodology, stocks with this favorable combination offer good investment opportunities.
Okta is benefiting from an expanding clientele, driven by the strong adoption of its Identity Threat Protection solution. It exited the first quarter of fiscal 2025 with the total customer count increasing 6% year over year to 19,100.
Okta's expanding portfolio has been a key catalyst. Its Okta AI, a suite of AI-powered capabilities embedded across both Workforce Identity Cloud and Customer Identity Cloud, empowers organizations to harness the power of AI to build better experiences and protect against cyberattacks.
For fiscal 2025, Okta expects revenues between $2.53 billion and $2.54 billion, indicating year-over-year growth of 12%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $2.53 billion, indicating year-over-year growth of 11.91%.
OKTA expects fiscal 2025 non-GAAP earnings between $2.35 and $2.40 per share. The consensus mark for earnings is pegged at $2.40 per share, up 5.3% over the past 60 days.
Okta currently sports a Zacks Rank #1 and has a Growth Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
CyberArk Software is benefiting from the rising demand for cyber security and privileged access security solutions due to the long list of data breaches and increasing digital transformation strategies.
CyberArk's security platforms simplify security infrastructure for organizations by protecting against, detecting and responding to cyber-attacks before the security of vital systems is compromised. This reduces the total cost of ownership, thereby giving the organization a competitive edge. CYBR's strategic mix shift toward software-as-a-service and subscription-based solutions is driving top-line growth.
For 2024, CyberArk expects revenues in the range of $928-$938 million, up from the previous guidance range of $920-$930 million. The Zacks Consensus Estimate for revenues is currently pegged at $935.16 million, suggesting 24.38% growth over 2023.
CYBR carries a Zacks Rank #2 at present and has a Growth Score of A. The consensus mark for 2024 earnings has been steady at $2.04 per share over the past 60 days.
Zscaler is benefiting from a strong portfolio. Its Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access are well poised to gain adoption amid the thriving remote work culture.
Portfolio expansion through acquisitions with the likes of Avalor, Canonic Security and ShiftRight is noteworthy. Avalor acquisition expands Zscaler's Zero Trust Exchange data, incorporating more than 150 pre-built integrations to empower customers in proactively identifying and predicting critical vulnerabilities while enhancing operational efficiencies. Canonic Security improved ZS' focus on protecting against attacks that target software-as-a-service. ShiftRight buyout boosted its cloud security offerings.
For fiscal 2024, Zscaler forecasts revenues in the range of $2.14-$2.142 billion, up from the previous guidance of $2.118-$2.122 billion. Calculated billings are now expected in the range of $2.603-$2.606 billion, up from the earlier guidance of $2.55-$2.57 billion.
The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $2.14 billion, indicating 32.39% year-over-year growth. The consensus mark for fiscal 2024 earnings is pegged at $2.99 per share, up 9.5% over the past 60 days.
Zscaler has a Zacks Rank #2 at present and a Growth Score of A.
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.