CHICAGO, Oct. 27, 2014 /PRNewswire/ -- Zacks Equity Research highlights Ambaraella (Nasdaq:AMBA-Free Report) as the Bull of the Day and Pier One (NYSE:PIR-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onPfizer Inc. (NYSE:PFE-Free Report), Teva Pharmaceutical Industries Limited (NYSE:TEVA-Free Report) and Ligand Pharmaceuticals Inc. (Nasdaq:LGND-Free Report).
Here is a synopsis of all five stocks:
Ambaraella (Nasdaq:AMBA-Free Report) is the company that makes the chip that allows for ultra HD photos and videos, many of which are coming from the popular GoPro cameras. While the GoPro IPO provided a halo affect for the coming holiday season, AMBA stands to benefit as much if not more than GPRO. For that reason, GPRO is the Bull of the Day today.
Yesterday I highlighted STLD as the Bull of the Day after they raised guidance. In that same vein, I want to review the guidance from AMBA in their most recent earnings report.
The Company reported EPS of $0.29 on $47M in revenue. Both numbers topped the Zacks Consensus Estimate. Again, I want to focus on the guidance and the this company gives it on the conference call.
AMBA guided next quarter revenue to a range of $60M - $64M when the consensus was much closer to $51M. At the midpoint, that is 32% ahead of the number that was just reported and more than 21% ahead of where analysts were expecting the next quarter to come in.
Ambarella develops semiconductor processing solutions for video that enable high-definition (HD) video. The company's system-on-a-chip designs integrated HD video processing, image processing, audio processing, and system functions onto a single chip for delivering video and image quality. Ambarella was founded in 2004 and is headquartered in Santa Clara, California.
Pier One (NYSE:PIR-Free Report) was the bear of the day a little over two months ago after they missed earnings and fell to a Zacks Rank #5 (Strong Sell). Tracey Ryniec wrote a great article at that time as she highlighted the lower guidance and general beating shares were taking. Since that time, the company reported and missed again. PIR is again a Zacks Rank #5 (Strong Sell), and it is the Bear of the Day.
Pier 1 Imports is engaged in the retail sale of decorative home furnishings, furniture, gifts, and related products. As of March 1, 2014, it operated 1,072 stores, including 991 stores in the United States and 81 stores in Canada under the Pier 1 Imports name. Pier 1 Imports was founded in 1970 and is headquartered in Fort Worth, Texas.
The company guided lower for the second consecutive quarter, this time moving the expected range of EPS from $1.14- $1.22 down to $0.95-$1.05. Along with an earnings miss, guiding lower has a way of really crushing the stock. PIR traded lower by nearly 18% in the session following the most recent miss.
Following the poor results and weak guidance, several brokerages lowered target prices and cut their respective ratings on the stock. Wells Fargo downgraded the stock from Outperform to Market Perform while BB&T cut their rating from Buy to Hold.
Telsey Advisory Group, a boutique shop that is led by the former Bear Stearns Managing Director Dana Telsey, specializes in retail stocks and they lowered their target price to $15 from $17. The firm believes that while the bar was lowered for a number of strategic initiatives as it completes its transition into a mature omnichannel retailer, there could be hope for the stock if management is able to stabilize gross margins.
Additional content:
Will Pfizer Disappoint This Earnings Season?
Pfizer Inc. (NYSE:PFE-Free Report) is scheduled to report third-quarter 2014 results before the opening bell on Oct 28. Last quarter, the company delivered a positive earnings surprise of 3.57%. Let's see how things are shaping up for this announcement.
Factors Influencing this Quarter
We believe that the strong performance of the Pharmaceuticals segment led by products like Lyrica, Xalkori, Inlyta, Eliquis and Xeljanz will aid results in the third quarter. Eliquis' label expansion for the treatment of deep vein thrombosis (DVT), pulmonary embolism (PE) and prevention of recurrent DVT and PE, both in the U.S. and the EU, will further boost the drugs sales this quarter. However, revenues will continue to be hit by the genericization of several products.
The company also acquired InnoPharma, Inc. during the quarter. The acquisition added 10 approved generic products along with a pipeline of more than 30 injectable and ophthalmic products to Pfizer's portfolio. The acquisition has strengthened Pfizer's injectable business (read more: Pfizer Eyes InnoPharma, Acquisition to Boost Injectables Biz).
The approved products from the InnoPharma deal will significantly add to Pfizer's top line. Pfizer has made an upfront payment of $225 million for the acquisition. Also the company is investing heavily on its pipeline which will affect the bottom line.
Earnings Whispers?
Our proven model however does not conclusively show that Pfizer is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Positive Zacks ESP: This is because the Most Accurate estimate stands at 56 cents per share, while the Zacks Consensus is lower at 55 cents. This results in an ESP of +1.82%.
Zacks Rank #4 (Sell): Pfizer's positive ESP when combined with a Zacks Rank #4 makes surprise prediction difficult.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements –- a positive Zacks Earnings ESP and a Zacks Rank #1, 2 or 3 –- to post an earnings beat this quarter.
Teva Pharmaceutical Industries Limited (NYSE:TEVA-Free Report) has an earnings ESP of +5.79% and carries a Zacks Rank #2 (Buy). It is scheduled to report its third-quarter results on Oct 30.
The earnings ESP for Ligand Pharmaceuticals Inc. (Nasdaq:LGND-Free Report) is +30.00% and it carries a Zacks Rank #2. The company is scheduled to release its third-quarter results on Oct 27.
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