CHICAGO, Oct. 22, 2013 /PRNewswire/ -- Zacks Equity Research highlights Yelp (NYSE: YELP-Free Report) as the Bull of the Day and Crocs (Nasdaq: CROX-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheImmunoGen, Inc. (Nasdaq: IMGN-Free Report), Sanofi (NYSE: SNY-Free Report) and Eli Lilly and Company (NYSE: LLY-Free Report).
Here is a synopsis of all five stocks:
Yelp (NYSE: YELP-Free Report) has been getting a series of good reviews from Wall Street. Those good reviews come in the form os higher earnings estimates and that has helped make the stock the Bull of the Day as a Zacks Rank #1 (Strong Buy).
One critical factor in a stock beating earnings is to have strong topline growth. YELP has been able to produce consistent beats on top and that has translated into a recent beat on the bottom line as well.
The last three quarters saw the company hit positive revenue surprises of 2.2%, 3.4% and 3.2% respectively. The most recent quarter also saw a bottom line surprise of 75% as the company came in three cents ahead of the Zacks Consensus Estimate.
Yelp operates an online urban city guide that helps people find places to eat, shop, drink, relax, and play based on the informed opinions of a community of locals in the know. It offers information relating to restaurants, shopping, food, nightlife, arts and entertainment. The company serves customers in the United States, Canada, the United Kingdom, Ireland, France, Germany, Austria, the Netherlands, Spain, Italy, Switzerland, Finland, and Belgium. Yelp was founded in 2004 and is headquartered in San Francisco, California.
Of the last five reports, the company has posted two earnings beats, two misses and reported in line one time. That isn't exactly a stellar record, but as the company moves towards profitability, investors would be wise to take a deeper look at the stock.
Crocs (Nasdaq: CROX-Free Report) has been a Zacks Rank #5 (Strong Sell) longer than any other stock. That is due to declining estimates and an earnings miss. With earnings right around the corner, will Crocs get going on the right footing?
Two Time Bear
Over the last 4 months, Crocs has been the Bear of the Day two times. This makes three, and since the new format of bear of the Day that is a record that no one really wants to have.
The June 14 Bear of the Day article telegraphed a bad quarter was in the offing. The company tripped up in reporting $0.48 in earnings when Wall Street was looking for $0.64. That means they came in $0.16 below estimates for a 25% negative earnings surprise.
The August 8 Bear of the Day article talked more potential pressure in margins for the footwear maker.
Croc makes and distributes footwear, apparel and accessories. It designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin, called Croslite. As of December 31, 2012, it operated 121 kiosks located in malls and other high foot traffic areas; 287 retail stores; 129 outlet stores; and 43 Web stores. The company was founded in 1999 and is headquartered in Niwot, Colorado.
The company is expected to report earnings again on October 30 after the close. The Zacks Consensus Estimate is calling for earnings of $0.17 on revenue of $292M. Last year, the company reported $296M in revenue and $0.49 in earnings, so investors should be ready for the headline shock of lower revenue and earnings.
The four most recent earnings adjustments have all been lower, with analysts coming in with earnings estimates of $0.15 to $0.19. It should be noted that the high end estimate is coming from the analyst that has been the most accurate of late. Still, the majority of analysts have been lowering their numbers as the quarter ended and just ahead of the earnings report date.
With low expectations, CROX is finding that it has a similar valuation. Many value investors will tell you that just because something looks good on the valuation metrics, doesn't mean it won't get cheaper.
Positive Data on Immunogen/Sanofi Candidate
ImmunoGen, Inc. (Nasdaq: IMGN-Free Report) announced positive interim results from an ongoing phase I study (n=34) of SAR566658. The results were presented at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics.
SAR566658 is being developed for the treatment of ovarian, breast, and other epithelial cancer forms. Data from the study revealed that SAR566658 was generally well tolerated. Moreover, the data showed that SAR566658 was capable of inducing objective responses and sustained stable disease in heavily pre-treated patients suffering from CA6-positive cancer.
ImmunoGen mentioned in its press release that limited adverse events normally associated with cytotoxic chemotherapy was observed during the study. The candidate was evaluated at doses bet 10-240 mg/m2 in this portion of the study for 3 weeks. The recommended dosage was identified as 190. SAR566658 is now being assessed at the recommended dose in the extension phase of the study.
ImmunoGen has an agreement with Sanofi (NYSE: SNY-Free Report) for the development of SAR566658, and the initiation of clinical testing. SAR566658 has been developed using ImmunoGen's Targeted Antibody Payload (TAP) technology. Two more compounds, SAR3419 and SAR650984, developed through the TAP technology, are currently in clinical trials, also in collaboration with Sanofi.
SAR3419 is currently in a phase II study being developed for the treatment of non-Hodgkin lymphoma. Meanwhile, SAR650984 is currently being developed in a phase I study for the treatment of blood cancer including multiple myeloma.
We are encouraged by ImmunoGen's association with companies of the likes Sanofi and Eli Lilly and Company (NYSE: LLY-Free Report). The company is expected to ink more deals in the future for further pipeline development.
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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