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Alcoa and Baxter in the Box have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – January 22, 2025 – Zacks Equity Research shares Alcoa (AA - Free Report) , as the Bull of the Day and Baxter (BAX - Free Report) , as the Bear of the Day. In addition, Zacks Equity Research provides analysis on C3.ai (AI - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) .
There are so many reasons to be excited about the stock market right now. With a new Administration comes fresh ideas and hope. That has manifested itself into a nice stock market rally on day 1. But, eventually, it’s stocks with the strongest earnings trends that beat the market over the long run. One way to uncover these stocks is by leaning on the power of the Zacks Rank. Stocks in the good graces of our Zacks Rank have the strongest earnings trends.
Today’s Bull of the Day counts itself among the few Zacks Rank #1 (Strong Buy) stocks. It’s Alcoa. Alcoa is a global industry leader in bauxite, alumina and aluminum products. We have it in our Metal Products – Distribution industry which ranks in the Top 36% of our Zacks Industry Rank.
The reason for the favorable rank comes down to analyst estimate revisions. Over the course of the last sixty days, three analysts on Wall Street have increased their earnings estimates for the stock while four have followed suit for next year. The bullish sentiment has increased our Zacks Consensus Estimate for the current year from 89 cents to 94 cents, while next year’s number is up from $2.98 to a staggering $4.27. That represents earnings growth of 354% over the current year numbers.
This is forecast to come along with some revenue growth as well. Current year revenue growth is forecast to come in 11.48% better than last year, with next year swelling another 9.4% to $12.87 billion. That means Alcoa is currently trading at 9.26x forward earnings and less than 1x sales at 0.93.
The Price, Consensus and EPS Surprise Chart on Zacks tells the story of a stock that’s seen its earnings bottom out along with its stock price, and now it’s on the march higher. Year-over-year numbers continue to impress, with growth going out to 2026. Still, earnings are much lower than when the stock was trading over $90 per share.
In the world of equities, not all stocks shine brightly in the heavens. Some inevitably find themselves in the shadows, struggling against the tides of market sentiment. Such is the case with today’s Bear of the Day, a stock currently enshrouded in bearish clouds, casting doubt on its future trajectory.
I’m talking about Zacks Rank #5 (Strong Sell) Baxter. Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. The company operates through four segments: Medical Products and Therapies, Healthcare Systems and Technologies, Pharmaceuticals, and Kidney Care.
Baxter's recent performance has been less than stellar. But what factors contribute to this bleak outlook for Baxter? A deep dive into Baxter's financials reveals some troubling signs. Earnings have been under pressure, with the company failing to meet expectations in recent quarters. The company's EPS has shown a declining trend, further exacerbating investor concerns. The lower-than-expected earnings reflect inefficiencies and challenges in the company's operations, raising questions about its ability to generate sustainable growth.
Over the last 60 days, three analysts have cut their estimates for the current year while next year has seen four analysts cut their numbers. That has sent our Zacks Consensus Estimates for the current year down from $2.96 to $1.83 with next year’s number off from $3.13 to $2.47. The good news is that that lowered consensus still represents growth of 35% year-over-year.
The Medical – Products industry ranks in the Top 35% of our Zacks Industry Rank.
Additional content:
Here's Why You Should Avoid C3.ai Stock Despite +12% Climb in 6 Months
C3.ai shares have gained 12% in the trailing six-month period compared with the Zacks Computer & Technology sector’s return of 6.6%.
The outperformance can be attributed to strong traction in its enterprise AI applications, particularly for C3 Generative AI.
In the fiscal second quarter of 2025, C3.ai closed 58 agreements, 36 of which involved pilot projects. This represents a notable increase in demand for its Enterprise AI and Generative AI offerings.
AI’s Strong Partner Base Boosts Prospects
C3.ai has been one of the prominent AI stocks in recent times thanks to strong demand for C3 Generative AI solutions and an expanding partner base that includes big cloud providers like Amazon and Microsoft.
Partnerships with hyperscalers like Google Cloud, Amazon Web Services (AWS), and Microsoft Azure have driven 62% of the company’s agreements in the second quarter of fiscal 2025. This indicates that C3.ai’s partner network is critical in driving revenues and adopting its solutions.
In the fiscal second quarter of 2025, C3.ai, in collaboration with Alphabet’s cloud business Google Cloud, closed 20 agreements, marking a 180% year-over-year increase. It was featured at Google’s Public Sector Summit in Washington, DC, while jointly hosting six executive roundtable discussions across North America and LATAM.
C3.ai is also benefiting from its expanding partnership with Microsoft. It leverages Microsoft’s Azure platform to enhance its AI offerings and reach a broader customer base across sectors.
AI Expands U.S. Government Partnerships With AI Solutions
C3.ai continues to build momentum in the public sector, particularly within the U.S. government.
Building on this momentum in December 2024, C3.ai, in partnership with ECS, secured a task order from the U.S. Army’s Program Manager for Intelligence Systems & Analytics to modernize information collection management processes.
The task order focuses on deploying the AI-driven C3 AI Decision Advantage application to optimize intelligence operations and reduce soldier workload.
The company’s federal business also saw strong growth in the second quarter of fiscal 2025, securing new and expanded agreements with the U.S. Department of Defense, the U.S. Air Force, the U.S. Navy, the U.S. Army, the U.S. Marine Corps, the Defense Logistics Agency, the Chief Digital Artificial Intelligence Office, and the National Science Foundation.
AI Offers Solid Top-Line Growth Guidance
C3.ai’s strong adoption of C3 Generative AI solutions and increased demand for its Enterprise AI software has been noteworthy.
For third-quarter fiscal 2025, C3.ai expects revenues between $95.5 million and $100.5 million.
For fiscal 2025, C3.ai expects revenues between $378 million and $398 million.
Earnings Estimate Shows Mixed Trend
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $97.97 million, indicating growth of 24.96% from the figure reported in the year-ago quarter.
The consensus mark for loss is pegged at 25 cents per share, which remained unchanged over the past 30 days. The figure indicates a year-over-year decline of 92.31%.
The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $388.16 million, indicating 29.57% growth year over year.
The consensus mark for loss is pegged at 63 cents per share, which has increased by a penny over the past 30 days. The figure indicates a year-over-year decline of 34.04%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
What Should Investors Do with AI Stock?
Despite strong demand for C3 Generative AI solutions and an expanding partner base, C3.ai is suffering from stiff competition in the enterprise AI sector. This intense competition clouds C3.ai’s efforts to gain a stronger foothold in the market.
As a result, C3.ai has made plans to invest aggressively in its offerings to secure market share. However, this strategy is expected to keep margins under pressure in the near term, making the stock risky for investors.
AI is also suffering from macroeconomic uncertainties, which are impacting its development, adoption, and integration across industries.
We point out that C3.ai stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, AI is trading at 9.09X, higher than the sector’s 7X.
AI currently carries a Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at present.
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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Alcoa and Baxter in the Box have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – January 22, 2025 – Zacks Equity Research shares Alcoa (AA - Free Report) , as the Bull of the Day and Baxter (BAX - Free Report) , as the Bear of the Day. In addition, Zacks Equity Research provides analysis on C3.ai (AI - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
There are so many reasons to be excited about the stock market right now. With a new Administration comes fresh ideas and hope. That has manifested itself into a nice stock market rally on day 1. But, eventually, it’s stocks with the strongest earnings trends that beat the market over the long run. One way to uncover these stocks is by leaning on the power of the Zacks Rank. Stocks in the good graces of our Zacks Rank have the strongest earnings trends.
Today’s Bull of the Day counts itself among the few Zacks Rank #1 (Strong Buy) stocks. It’s Alcoa. Alcoa is a global industry leader in bauxite, alumina and aluminum products. We have it in our Metal Products – Distribution industry which ranks in the Top 36% of our Zacks Industry Rank.
The reason for the favorable rank comes down to analyst estimate revisions. Over the course of the last sixty days, three analysts on Wall Street have increased their earnings estimates for the stock while four have followed suit for next year. The bullish sentiment has increased our Zacks Consensus Estimate for the current year from 89 cents to 94 cents, while next year’s number is up from $2.98 to a staggering $4.27. That represents earnings growth of 354% over the current year numbers.
This is forecast to come along with some revenue growth as well. Current year revenue growth is forecast to come in 11.48% better than last year, with next year swelling another 9.4% to $12.87 billion. That means Alcoa is currently trading at 9.26x forward earnings and less than 1x sales at 0.93.
The Price, Consensus and EPS Surprise Chart on Zacks tells the story of a stock that’s seen its earnings bottom out along with its stock price, and now it’s on the march higher. Year-over-year numbers continue to impress, with growth going out to 2026. Still, earnings are much lower than when the stock was trading over $90 per share.
Bear of the Day:
In the world of equities, not all stocks shine brightly in the heavens. Some inevitably find themselves in the shadows, struggling against the tides of market sentiment. Such is the case with today’s Bear of the Day, a stock currently enshrouded in bearish clouds, casting doubt on its future trajectory.
I’m talking about Zacks Rank #5 (Strong Sell) Baxter. Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. The company operates through four segments: Medical Products and Therapies, Healthcare Systems and Technologies, Pharmaceuticals, and Kidney Care.
Baxter's recent performance has been less than stellar. But what factors contribute to this bleak outlook for Baxter? A deep dive into Baxter's financials reveals some troubling signs. Earnings have been under pressure, with the company failing to meet expectations in recent quarters. The company's EPS has shown a declining trend, further exacerbating investor concerns. The lower-than-expected earnings reflect inefficiencies and challenges in the company's operations, raising questions about its ability to generate sustainable growth.
Over the last 60 days, three analysts have cut their estimates for the current year while next year has seen four analysts cut their numbers. That has sent our Zacks Consensus Estimates for the current year down from $2.96 to $1.83 with next year’s number off from $3.13 to $2.47. The good news is that that lowered consensus still represents growth of 35% year-over-year.
The Medical – Products industry ranks in the Top 35% of our Zacks Industry Rank.
Additional content:
Here's Why You Should Avoid C3.ai Stock Despite +12% Climb in 6 Months
C3.ai shares have gained 12% in the trailing six-month period compared with the Zacks Computer & Technology sector’s return of 6.6%.
The outperformance can be attributed to strong traction in its enterprise AI applications, particularly for C3 Generative AI.
In the fiscal second quarter of 2025, C3.ai closed 58 agreements, 36 of which involved pilot projects. This represents a notable increase in demand for its Enterprise AI and Generative AI offerings.
AI’s Strong Partner Base Boosts Prospects
C3.ai has been one of the prominent AI stocks in recent times thanks to strong demand for C3 Generative AI solutions and an expanding partner base that includes big cloud providers like Amazon and Microsoft.
Partnerships with hyperscalers like Google Cloud, Amazon Web Services (AWS), and Microsoft Azure have driven 62% of the company’s agreements in the second quarter of fiscal 2025. This indicates that C3.ai’s partner network is critical in driving revenues and adopting its solutions.
In the fiscal second quarter of 2025, C3.ai, in collaboration with Alphabet’s cloud business Google Cloud, closed 20 agreements, marking a 180% year-over-year increase. It was featured at Google’s Public Sector Summit in Washington, DC, while jointly hosting six executive roundtable discussions across North America and LATAM.
C3.ai is also benefiting from its expanding partnership with Microsoft. It leverages Microsoft’s Azure platform to enhance its AI offerings and reach a broader customer base across sectors.
AI Expands U.S. Government Partnerships With AI Solutions
C3.ai continues to build momentum in the public sector, particularly within the U.S. government.
Building on this momentum in December 2024, C3.ai, in partnership with ECS, secured a task order from the U.S. Army’s Program Manager for Intelligence Systems & Analytics to modernize information collection management processes.
The task order focuses on deploying the AI-driven C3 AI Decision Advantage application to optimize intelligence operations and reduce soldier workload.
The company’s federal business also saw strong growth in the second quarter of fiscal 2025, securing new and expanded agreements with the U.S. Department of Defense, the U.S. Air Force, the U.S. Navy, the U.S. Army, the U.S. Marine Corps, the Defense Logistics Agency, the Chief Digital Artificial Intelligence Office, and the National Science Foundation.
AI Offers Solid Top-Line Growth Guidance
C3.ai’s strong adoption of C3 Generative AI solutions and increased demand for its Enterprise AI software has been noteworthy.
For third-quarter fiscal 2025, C3.ai expects revenues between $95.5 million and $100.5 million.
For fiscal 2025, C3.ai expects revenues between $378 million and $398 million.
Earnings Estimate Shows Mixed Trend
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $97.97 million, indicating growth of 24.96% from the figure reported in the year-ago quarter.
The consensus mark for loss is pegged at 25 cents per share, which remained unchanged over the past 30 days. The figure indicates a year-over-year decline of 92.31%.
The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $388.16 million, indicating 29.57% growth year over year.
The consensus mark for loss is pegged at 63 cents per share, which has increased by a penny over the past 30 days. The figure indicates a year-over-year decline of 34.04%.
C3.ai, Inc. price-consensus-chart | C3.ai, Inc. Quote
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
What Should Investors Do with AI Stock?
Despite strong demand for C3 Generative AI solutions and an expanding partner base, C3.ai is suffering from stiff competition in the enterprise AI sector. This intense competition clouds C3.ai’s efforts to gain a stronger foothold in the market.
As a result, C3.ai has made plans to invest aggressively in its offerings to secure market share. However, this strategy is expected to keep margins under pressure in the near term, making the stock risky for investors.
AI is also suffering from macroeconomic uncertainties, which are impacting its development, adoption, and integration across industries.
We point out that C3.ai stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, AI is trading at 9.09X, higher than the sector’s 7X.
AI currently carries a Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 >>
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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.