Tesla Motors, Conn's, Facebook, Apple and Twitter highlighted as Zacks Bull and Bear of the Day
CHICAGO, Sept. 5, 2014 /PRNewswire/ -- Zacks Equity Research highlights Tesla Motors (Nasdaq:TSLA-Free Report) as the Bull of the Day and Conn's (Nasdaq:CONN-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onFacebook (Nasdaq:FB-Free Report), Apple (Nasdaq:AAPL-Free Report) and Twitter (NYSE:TWTR-Free Report).
Here is a synopsis of all five stocks:
Tesla Motors (Nasdaq:TSLA-Free Report) has become an investor favorite, and for good reason too. The security has been an excellent investment, and given its strong growth potential, many believe that more gains could definitely be ahead for this company.
In fact, shares of TSLA have probably already been star performers for many portfolios this year, thanks to its over 60% YTD return. This has given Tesla an extremely lofty PE, with our site putting the forward PE multiple just under 3,000.
Yet even with this extreme valuation and recent run up, there is still plenty of reason to be bullish on TSLA in the near term. This is particularly true when investors take a closer look at recent earnings estimate revision activity for this increasingly in-focus stock.
Estimates for the current year and next year have been moving higher in recent sessions for Tesla Motors. The real number to focus in on though is the projected earnings for next year, as there is a tremendous growth rate in these numbers.
Analysts are actually looking for just nine cents in profit for the current year, but a whopping $2.14/share in earnings for the 2015 fiscal year. This represents an EPS growth rate of over 2,000% and clearly TSLA will have its hands full meeting these incredible expectations.
The retail industry is always a tough business thanks to intense competition and low margins. And even with the economy coming back a little as of late, many businesses in this sector have continued to struggle. Take for example Conn's (Nasdaq:CONN-Free Report), a Texas-based retailer that has been having a year to forget to say the least.
Conn's is a retailer that is zeroed in on the South and Southwest regions of the U.S., focusing in on the home appliance, home office, and general 'big ticket' items. The company has less than 100 stores, so it still has plenty of room for expansion, though it has definitely run into some roadblocks as of late.
These issues largely stem from Conn's focus on credit sales which have powered the company's growth for years. However, in the most recent earnings report, customers' bad debts really weighed on the earnings results and led CONN management to slash their earnings expectations for the full year as well.
This drastically reduced forecast, along with ongoing worries regarding customer credit led to a monumental crash in shares of CONN, sending the stock lower by almost 30% in a single day. Thanks to this and an earlier weak earnings report, CONN is now down over 60% YTD, easily making it one of the worst stocks in the retail space. And given how analysts have been cutting their estimates for CONN lately, we could definitely see this bearish trend continue.
Additional content:
Facebook's Oculus Partners with Samsung for Virtual Reality Headset
Oculus VR, which Facebook (Nasdaq:FB-Free Report) acquired in March this year, is providing software to Samsung's Gear VR, a virtual reality headset that uses the Korean handset maker's newly announced Note 4.
Per Bloomberg, Oculus is also discussing collaboration opportunities with Sony. However, unlike Samsung, Sony is a direct competitor of Oculus through its Project Morpheus. Hence, the chances of a potential deal between the two are significantly low, in our view.
Facebook completed the Oculus acquisition in July. Per CEO Mark Zuckerberg, virtual reality is the most promising form of social computing following mobile phones. Oculus intends to enable people to experience events together instead of individuals playing games separately.
In July, Oculus bought RakNet, which develops a game-networking engine that is open source in nature. This open source feature, in turn, enables other developers to see it, add to it as well as use it for free.
Facebook's move into the emerging virtual reality market, a bold step in our view, is projected to bear fruit over the next 5 to 10 years. If Oculus' technology succeeds in gaining mass adoption, it will help Facebook dominate the virtual reality market in the long haul.
Facebook will enjoy a first mover's advantage, much like what Apple (Nasdaq:AAPL-Free Report) enjoyed in the smartphone market from 2007 to 2012. Facebook expects to focus on delivering Oculus technology as software and services rather than hardware, which is reflected in the recent Samsung partnership.
Facebook has gained significant traction in its mobile ad business within a very short span of time. This, combined with the massive user base and its ability to track personal details over time, makes it a formidable force in the online ad market.
Moreover, new products like Slingshot and FAN will help the company to grow ad revenues amid intensifying competition from Twitter (NYSE:TWTR-Free Report).
Currently, Facebook has a Zacks Rank #2 (Buy).
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