Ubiquiti Networks, Big Lots, Cisco Systems, Juniper Networks and Hewlett Packard highlighted as Zacks Bull and Bear of the Day
CHICAGO, Aug. 15, 2013 /PRNewswire/ -- Zacks Equity Research highlights Ubiquiti Networks (Nasdaq:UBNT-Free Report) as the Bull of the Day and Big Lots (NYSE:BIG-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheCisco Systems (Nasdaq:CSCO-Free Report), Juniper Networks (NYSE:JNPR-Free Report) and Hewlett Packard (NYSE:HPQ-Free Report).
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Here is a synopsis of all five stocks:
Bull of the Day:
Ubiquiti Networks (Nasdaq:UBNT-Free Report) recently crushed earnings and moved up guidance in a meaningful way. UBNT is a Zacks Rank #1 (Strong Buy). A recent earnings report was met with exuberant buying on Wall Street. The June 2013 quarter was reported on August 8, and the following day the stock jumped 28%! It was the third beat in the row, following positive earnings surprises of 5.2% and 4.5%. The most recent positive earnings surprise was a notch higher; 18.5% to be exact.
Revenue has grown dramatically over the last four quarters. Starting with the September 2012 quarter, the company posted $62M, but the next quarter saw an increase to $75M. The March 2013 quarter was another kick higher to $83M and the most recent report had revenue ramping to $101M.
It is one thing to beat earnings three quarters in a row, it is quite another to do so with a blisteringly strong quarter that included an improved outlook. UBNT raised guidance in a meaningful way, and as a result the stock has caught fire. Since the day before earnings, the stock is up approximately 33%. After reporting about $101M in revenue in the most recent quarter, management guided to a range of $116M - $122M. This range was well above the expectations on Wall Street.
Following the recent beat and earnings guidance, analysts have been busy moving their numbers higher. The Zacks Consensus Estimate for 2013 was $1.13 prior to the earnings report, but now stands at $1.46. That is a dramatic move higher. This increase in estimates is not limited to 2013. The Zacks Consensus Estimate for 2014 moved from $1.29 to $1.81 in a mega move that could certainly carry the stock higher into 2014.
Big Lots (NYSE:BIG-Free Report) ended its streak of consecutive beats at two after meeting estimates in quarter that was most recently reported. Estimates have dropped in a big way and that makes it a Zacks Rank #4 (Sell).
One big reason estimates have dropped was that the company guided to lower comparable store sales. Investors don't like to see negative numbers for this metric, but that is just what they got. A range of -2% to -4% means that revenue growth is challenged. The consolidated net sales was guided to a range of +1% to -1%. This means there will be lower sales from older stores and more sales from newer stores.
Estimates for BIG fell substantially following the most recent quarter. In April 2013 the Zacks Consensus Estimate for BIG stood at $3.18. In June, the month after the report, the estimate had slipped to $2.95. Since then it has held still. The 2014 Estimate also dropped in a big way. From $3.48 to $3.29. There has been additional weakness as the current 2014 estimate is down two pennies to $3.27.
Additional content:
Cisco Beats but Declines Afterhours
Cisco Systems (Nasdaq:CSCO-Free Report) reported fourth quarter numbers after the bell on Wednesday. EPS came in at $0.49 verse Zacks Consensus Estimate of $0.47, and Revenues of $12.42 billion, slightly beat the Zacks Estimate.
According to Zacks Expected Surprise Predictor (ESP), there has been a 100% positive analysts agreement over the past 60 days, and four consecutive quarters with an average positive surprise of 6.52% (the fourth quarter being a positive 4.26% surprise). Therefore, the ESP model indicated a small but positive surprise for the fourth quarter 2013.
The street was concerned with Juniper Networks (NYSE:JNPR-Free Report), and Hewlett Packard (NYSE:HPQ-Free Report), and their recent price discounting. Analysts were worried that the new promotions would cut into Cisco's margins. Cisco was able to deflect this competition by offering discounts; Catalysts Switch Promo, UCS discount for new users, and WAN Optimization to name a few.
Chairman and CEO John Chambers stated that, "My confidence in our ability to be the #1 IT Company is increasing. Our fourth quarter was a record on many fronts, with record revenue, and record non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share. In every case, we exceeded the midpoint of our guidance. We also generated $4 billion in operating cash flow in the quarter, another record."
While the Chairman might be high on his company, the street is actually disappointed with the results. In afterhours trading, CSCO is down over 4%. Yet, Mr. Chambers did later concede (during analyst's conference call) that his company is amidst, "what continues to be a challenging and inconsistent global macroeconomic environment." Moreover, the CEO stated that he did not see this changing anytime in the short term.
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