CHICAGO, April 29, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includethe Herbalife Ltd (NYSE:HLF-Free Report), Twitter Inc. (NYSE:TWTR-Free Report), Facebook (Nasdaq:FB-Free Report), LinkedIn (NYSE:LNKD-Free Report) andApple(Nasdaq:AAPL-Free Report).
Herbalife Ltd (NYSE:HLF-Free Report), reported earnings after the bell today, posting an EPS of $1.50, and Revenues at $1.26 billion. These numbers beat both the Zacks Consensus Earnings Estimate of $1.29, and Zacks Consensus Revenue Estimate of $1.234 billion.
The major cloud hanging over Herbalife has been the accusations by Mr. Ackman, stating that the company is essentially a giant pyramid scheme. As of a few days ago, the FBI, DOJ, SEC, FTC, and two attorney generals are investigating Herbalife for an array of issues. Moreover, a recent ABC undercover investigation showed distributors claiming that Herbalife products can cure brain tumors, and a woman claiming that Herbalife helped her get pregnant. Since the investigation was announced on March 12, the company's stock price has dropped about 37%. None of this is good news for the company going forward.
On the positive side, HLF has increased their 2014 guidance to a range between $6.10 and $6.30, significantly above the current Zacks Consensus Estimate of $6.04. Moreover, management increased guidance on net sales for 2014, rising from 10% to between 10% and 12%. Both are very encouraging for investors.
With this quarter's earnings beat, it makes four out of five consecutive quarters with positive earnings growth. But this might all be for not, if the company is found guilty, then all these great growth numbers are basically pointless.
In afterhours trading, Herbalife has been both in the positive and negative ranges. As of 3:45 cst, it is up just over 2.0% on elevated volume.
Will Twitter's (TWTR) Earnings Disappoint Again?
Twitter Inc. (NYSE:TWTR-Free Report) is set to report first-quarter 2014 results on Apr 29. Last quarter, Twitter disappointed by reporting a loss of $1.41 per share, which was significantly wider than the Zacks Consensus Estimate of a loss of 10 cents.
Let's see how things are shaping up for this quarter.
Investors are expected to keenly follow Twitter's user growth rate, engagement and monetization in the first quarter. Last quarter, revenues surged 116.2% year over year and 44.0% quarter over quarter to $242.7 million. User engagement in the form of favorites and reTweets improved more than 35.0% on a year-over-year basis.
Growth Factors This Past Quarter
Per eMarketer, Twitter's maturing user base is a major concern for its growth abilities. In such a scenario, user engagement gains significant importance in order to limit churn rate to other social sites such as Facebook (Nasdaq:FB-Free Report)and LinkedIn (NYSE:LNKD-Free Report).
Twitter continues to launch new features that are aimed at driving user engagement. The company allowed Vine application users to send private text messages along with videos to their network contacts as well as outsiders.
However, we note that Twitter's recent new features that are similar to Facebook have failed to impress users. On the other hand, the introduction of photo tagging feature for Apple's (Nasdaq:AAPL-Free Report) iOS and Google's Android and an expected music service are the key near-term growth drivers.
Our proven model does not conclusively show that Twitter 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.
Zacks ESP: The Most Accurate estimate stands at loss of 26 cents per share that coincides with the Zacks Consensus Estimate. Hence, the difference is of 0.00 %.
Zacks Rank: Twitter's Zacks Rank #2 (Buy) when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
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