CHICAGO, Jan. 17, 2014 /PRNewswire/ -- Zacks Equity Research highlights Finisar (Nasdaq: FNSR-Free Report) as the Bull of the Day and SodaStream (Nasdaq: SODA-Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis onYahoo Inc. (Nasdaq: YHOO-Free Report), Google (Nasdaq: GOOG-Free Report) and Baidu (Nasdaq: BIDU-Free Report).
Here is a synopsis of all five stocks:
Finisar (Nasdaq: FNSR-Free Report) is a $2.3 billion provider of fiber optic subsystems that enable high-speed data networks. The stock became a Zacks #1 Rank Strong Buy last May below $13 and proceeded to march on up to $26 by October.
But going into November, a weaker spending outlook from the likes of Cisco and telecom giants like AT&T, took nearly 25% off FNSR shares.
What could possibly turn this around? Two things: another great FNSR earnings report and a reassessment of the cap-ex outlook.
On December 5, Finisar recorded a 13% EPS beat and gave guidance that propelled 4 covering analysts to all raise estimates, taking the current fiscal year consensus up 15% from $1.09 to $1.26. And they also bumped next year's EPS estimates 15%, from $1.22 to $1.41.
Since then, shares fell from the high $50s to around $50 where they attempted to hold the line. But this week came the blindside that every investor hates: the preannouncement.
SODA management revealed on Monday that the outlook isn't getting any better, owing to a number of factors, including a challenging US holiday season, lower sell-in prices, increased production costs, as well as unfavorable product mix and, of course, foreign exchange. Yada, yada, yada.
But the headline from Briefing.com at 7:40am ET said it all as the stock dropped 26% from $50 to $37: SodaStream sees FY13 adj. net income $52.5 mln from $65 mln vs. $63 mln consensus.
As a fresh round of downward earnings estimate revisions (EER) piled in this week, the stock slipped to a Zacks #5 Rank Strong Sell on Thursday. Here's what Oppenheimer analysts had to say...
"We now forecast 2013 adjusted EPS of $2.45, down from our prior estimate of $3.05 and up only slightly from the prior year's $2.39. We are also reducing our 2014 adjusted EPS estimate to $3.00, which is up 22% over our revised 2013 forecast but down sharply from our prior estimate of $3.70."
Yahoo COO Stepping Down
De Castro was hired by Yahoo's high-profile chief executive officer, Marissa Mayer with the aim of turning around Yahoo's sagging core advertising business. Prior to this, De Castro worked with Google (Nasdaq: GOOG-Free Report). Marissa Mayer had roped him in for a whopping $58.0 million in the hope that his expertise would help revive Yahoo's advertising sales.
De Castro was probably fired because he failed to deliver results. But Yahoo hasn't officially said anything either regarding the reason for the expulsion, or regarding the identity of the replacement. But considering the fact that it is a key position, it should be filled quickly.
Yahoo has recaptured its position as one of the world's most-visited online properties, but its revenues aren't responding as yet. Mayer has stepped up investments in key technologies both on the product side and the technical side, but investors have been told to be patient about resultant revenues.
Mayer has also overhauled the company's e-mail platform and acquired more than two dozen companies, including Tumblr Inc. for more than $1 billion last year. It has hired leading journalists to bolster news and media content. The departure of the COO at this juncture could therefore indicate trouble.
Though De Castro's hiring turned out to be a misstep, Mayer will likely be given more rope as stockholders have made an enormous amount of money since the time she joined the company. Though Yahoo managed to be profitable under Mayer, it struggled to register sales growth.
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