Restoration Hardware, Equinix, Polycom, AT&T and Microsoft highlighted as Zacks Bull and Bear of the Day

CHICAGO, Sept. 13, 2013 /PRNewswire/ -- Zacks Equity Research highlights Restoration Hardware (NYSE: RH-Free Report) as the Bull of the Day and Equinix (Nasdaq: EQIX-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onthePolycom Inc. (Nasdaq: PLCM-Free Report), AT&T Inc. (NYSE: T-Free Report) and Microsoft Corp. (Nasdaq: MSFT-Free Report)

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Here is a synopsis of all five stocks:

Bull of the Day:

Ready for a high-growth home goods retailer that just went on sale? Then it's time to check out the high-end story at Restoration Hardware (NYSE: RH-Free Report).

The $2.6 billion luxury home furnishings retailer offers a private-label assortment that is rich in fashion but reasonably priced for its target clientele. It is a true multi-channel retailer that sells its furniture, lighting, decor, bathware, and outdoor and garden products through 71 retail locations that it calls "design galleries" and 13 outlet stores, which together account for 55% of sales.

Rounding out the customer engagement is a strong e-commerce platform that accounts for the remaining 45% of sales, which include child and baby products.

RH reported earnings this week and continued its strong performance with impressive second-quarter fiscal 2013 results. The company's adjusted quarterly earnings of 49 cents a share handily surpassed the Zacks Consensus Estimate of 42 cents and jumped 48% year over year.

But the stock got slammed down 12% after the report because including one-time items the company actually reported a loss. There may have also been some investor uncertainty about another company decision: eliminating the splashy and expensive fall catalog. It seems this struck many as having a potential negative effect on revenues.

Bear of the Day:

Equinix (Nasdaq: EQIX-Free Report) is a global provider of network-neutral data centers and Internet exchange services for enterprises and network providers. But a slow-down in the build-out of data centers, high debt and the company's conversion to a REIT structure have taken EPS estimates down considerably in the past month since its 2nd-quarter report.

Through its 90+ International Business Exchange, or IBX, data centers across 31 strategic markets in the U.S., Europe, Middle East and Africa and the Asia-Pacific, Equinix customers can directly interconnect critical traffic exchange requirements. The company is integral to global communications and has the billing addresses to prove it.

While some customers, such as AOL, Google, AT&T and MSN, may build and operate their own data centers for their large infrastructure deployments, these customers still rely on Equinix IBX centers for their critical inter-connection relationships.

British Telecom, Cable & Wireless, Comcast, Level 3, NTT, Qwest, SingTel, Sprint and Verizon are other large customers. With this kind of global enterprise business, it's easy to see how Equinix grew quarterly revenues from $213 million in the June quarter of 2009 to $525 million recently.

It may not be as easy to see how the company supported a 50X multiple with the stock was trading above $200 on forward estimates of $4.65. But you know what happens when those estimates get taken down. And that's part of what took the stock down since July to trade in the $170's.

Additional content:

Polycom Boosts Shareholder Wealth

Yesterday, videoconferencing equipment manufacturer Polycom Inc. (Nasdaq: PLCM-Free Report) announced that its board of directors has approved a $400 million share buy-back program of its common stocks. The company is expected repurchase 20% of its outstanding common shares through this program. The new capital return program will be funded through $150 million in cash and $250 million in loan.

For loan financing, Polycom will launch a modified Dutch auction self-tender offer on Sep 13, 2013 which will expire on Oct 30, 2013. The price range of these tenders will be $10 to $11.50 per share. Shareholders will decide how many share to sell at what price within this price range. Polycom expects to purchase approximately 23 million shares of its common outstanding stocks at the mid-point of this price range. 

Polycom's business model is currently undergoing a transition from hardware-centric to cloud and software-centric. Meanwhile, Polycom has made several product enhancements for its popular RealPresence platform. Recently, Polycom entered into a strategic agreement with AT&T Inc. (NYSE: T-Free Report) to offer cloud-based video conferencing services to different organizations, which will be accretive for its long-term growth.

Further, Polycomis one of the most vital business partners of Microsoft Corp. (Nasdaq: MSFT-Free Report) and provides hardware for Microsoft's video chat and VoIP software, Lync, which can be used to replace traditional phone systems. Lync-compatible voice devices have become a major growth driver for Polycom.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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