Latest news with #EarningsSeason
Yahoo
13 hours ago
- Business
- Yahoo
‘Cleared for Takeoff': Truist Suggests 2 Aerospace Stocks to Buy Ahead of Earnings
Earnings season is in full swing, and investors are on the hunt for opportunities. One place where optimism is building – both on Wall Street and across the tarmac – is the aerospace sector. With commercial air travel rebounding and defense spending holding steady, several industry players appear well-positioned to deliver strong quarterly results. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Reinforcing this upbeat outlook, Truist analyst and aerospace expert Michael Ciarmoli believes investors should buckle up and prepare for takeoff. The analyst sees promising momentum in small- to mid-sized aerospace names ahead of their earnings reports. He highlights encouraging data points, such as year-over-year delivery increases from Boeing and Airbus – the world's leading aircraft manufacturers – as well as continued robust demand from the U.S. Department of Defense. 'Heading into 2Q25 earnings season we generally have a positive view of the demand backdrop across all A&D sub-sectors — comm'l aero aftermarket, comm'l aero OEM, and defense… We believe quarterly results will be solid and firmly anticipate that 2025 outlooks can be lifted. Our degree of confidence is highest in the aero aftermarket followed closely by aero OEM which seems poised to benefit from higher MAX and LEAP rates in the coming months,' Ciarmoli noted. With that setup, Ciarmoli has his eye on two small-cap aerospace stocks he believes are especially well-positioned heading into earnings. A quick scan through the TipRanks database shows that these are still flying under the radar, with Ciarmoli among the few analysts covering them. Let's dive in and see what makes these compelling choices. Astronics Corporation (ATRO) First up is Astronics, a $1.2 billion aerospace tech player that's been quietly powering the skies since 1968. Known for pushing the envelope on innovation, the company has carved out a strong niche in advanced support systems for commercial, business, and military aircraft. From cockpit lighting to power distribution and connectivity solutions, Astronics is embedded in the high-tech backbone of modern aviation. Its expertise shines, literally, in the cockpit, where it supplies lighting systems for instrument panels, as well as illumination for cabins and aircraft exteriors. The company also delivers integrated electrical power systems, including those tucked into passenger seating. Along with the lighting and power systems, Astronics provides products and solutions for connectivity and data systems, an increasingly important niche in the aircraft industry. Data systems allow aircraft cockpits to link with commercial and military applications; 'smart' sensing systems provide the information that data systems require; in-flight entertainment and connectivity are becoming ever more important for commercial carriers; and all of these are tied together by integrated engineering for turnkey solutions. Astronics backs up all its work with solutions for aircraft safety systems, ranging from onboard safety and survival kits to enhanced vision systems that allow flight crews to navigate in all conditions. Astronics works with customers across the civilian and military aviation sectors, and is known as a provider of unique or specialty technology products in various experimental aircraft programs. In a recent example, the company has been named as the supplier of the frequency converter unit for the NASA–Boeing X-66 experimental demonstrator airliner. We'll see Astronics' second-quarter results on August 6, but for now we can look back at the Q1 results. In the first quarter of this year, Astronics reported total sales revenue of $205.9 million. This was up more than 11% year-over-year, and it beat the forecast by $14 million. Sales in the key aerospace segment were up 17% y/y and hit a record level of $191.4 million. At the bottom line, Astronics had an EPS of $0.26, based on quarterly net income of $9.5 million. Looking ahead, Astronics finished the first quarter with a record-level work backlog of $673 million. Turning to Truist's Michael Ciarmoli, we find the analyst upbeat on this stock, noting that the company will see additional business as Boeing recovers from its own woes and increases production of the 737 MAX airliner series. 'We view ATRO as a beneficiary of ramping MAX production and see total MAX annual revenues tracking to 8-10% of total revenues in the 26/27 time period. We expect management will be in position to maintain its current 2025 revenue outlook of $820-$860M which contemplates potential downside pressures from tariffs and related uncertainty. While we have not made any changes to our model we believe we have seen enough tangible evidence in recent commercial aero bookings, top line revenue growth, and importantly aerospace segment margins that we believe this financial performance will continue for the remainder of 2025 and into 2026. With a higher degree of confidence in our margin and growth assumptions we believe ATRO's sharply discounted,' Ciarmoli opined. Ciarmoli puts a Buy rating on this stock, backing that with a $49 price target that indicates potential for a 42% upside in the coming months. (To watch Ciarmoli's track record, click here) You can file the stock firmly in the 'under the radar' camp, as Ciarmoli aside, there are currently no other analysts covering this name. (See ATRO stock forecast) TAT Technologies (TATT) The second Truist pick we're looking at is TAT Technologies, a smaller player with a $420 million market cap. TAT has a global footprint, and is a provider of critical systems like thermal controls, APUs, and landing gear for a wide range of aircraft platforms. Among TAT's key product lines are its thermal solutions. This is a vital area for aircraft technology; at high speeds and altitudes, aircraft encounter extremes of both heat and cold. TAT's industry-leading thermal solutions include high-temperature-resistant precoolers, fuel-submerged hydraulic heat exchangers, oil coolers, advanced cold plates, air cycle and vapor cycle ECS heat exchangers, power electronics cooling systems, and environmental control systems. These systems regulate temperature across the aircraft, from the fuel system to passenger accommodations. Also vital to the industry is TAT's expertise in APU MRO – the maintenance, repair, and overhaul of auxiliary power units. These APUs are found in most aircraft, and are used to provide power for systems other than propulsion. In commercial airliners, the APU is usually located in the tailcone and is used to provide power for cabin electricity and lighting, and for the aircraft's communication systems. TAT is also a leading provider of MRO facility for Embraer landing gear. Embraer is one of the world's largest makers of commercial airliners, after Airbus and Boeing, and specializes in medium-haul, narrow-body jets. TAT's expertise in Embraer landing gear systems is in high demand. The company also operates at the leading edge of aerospace technology. TAT is involved in eVTOL projects – electric vertical take-off and landing – a new tech that promises to bring a sea-change to short-range and urban air transport. Closely linked to this is TAT's work with hybrid electric aircraft and universal cooling systems. So, TAT has its fingers in many areas of the aerospace realm. That brought the company $42.1 million in revenue during 1Q25, a total that was up 23% from the prior-year period although it missed the forecast by $452,000. TAT's bottom line in the quarter came to 34 cents per share, beating expectations by 4 cents per share. For Ciarmoli, the future looks bright for this aerospace firm. The analyst notes a strong market for APU expertise, and writes of TATT, 'We expect favorable aftermarket trends coupled with recent APU share gains to continue to drive revenue growth. We model for 22% YOY growth in 2Q25 and 6 % seq'l growth. We would expect to see gross margins expand YOY on volume/mix and operating efficiencies and we anticipate a B2B >1x. Following the equity offering at the end of May we will look for updates from mgmt regarding use of proceeds and suspect some near term build of working capital to support the narrow body APU opportunity.' These comments support the analyst's Buy rating on TATT shares, and his $35 price target suggests a 9% upside potential in the next 12 months. While there are only 3 recent analyst reviews on record for TATT, they are all Buys, giving the stock its Strong Buy consensus rating. The shares have a current trading price of $32 and an average target price of $36 points toward a one-year gain of 12%. (See TATT stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
5 silly earnings season stock price moves!
Earnings season is moving along swimmingly. All things considered, this summer's reporting period could have really sucked. Every CEO could've blamed Trump trade tensions for misses in any parts of the business. Meanwhile, the results could've straight up not justified the valuations we are seeing in a hot market. About 135 S&P 500 (^GSPC) companies, or 29% of the index's market cap, have reported earnings at the time of this writing. Sales and earnings have increased by a solid 6.5% and 7.2%, respectively. The average stock price has increased 1% post-results. But sometimes Mr. Market gets it wrong during earnings season, in my view. The market will overly punish a company for something perceived as a big deal in the moment but minor in the grand scheme. Or, it won't reward a company enough for strong results that feed into a long-term investment case. Here are five reactions this week from earnings that left me scratching my head. IBM What more could the market want from Big Blue? Software and infrastructure sales are up 10% and 14%, respectively. The company increased its full-year operating margin expectations. CFO Jim Kavanaugh told me the company is finding added cost savings, lifting the margin outlook. Further, IBM has an AI story to tell — and it's a good one! "I think you're starting to see the beginnings of scale of generative AI, which is accelerating. Last quarter, we did about six billion dollars [of AI business]. Now we're over seven and a half billion," Kavanaugh added. IBM shares finished Thursday's session (morning after earnings) down 6%. "We would recommend opportunistic purchases for defensive-minded investors ($310 12-month target), although post-report selling may persist for a short period," Stifel analyst David Grossman called out. AT&T AT&T's (T) stock barely finished in the green on Wednesday's earnings day. Similar to IBM, what else could investors have been looking for? The company gained postpaid phone subscribers in the second quarter, while rival Verizon lost customers (though T-Mobile stole the telecom show — see below). Free cash flow — always an important metric for a telecom — rose $400 million year over year. And AT&T called out a $6.5 billion to $8 billion cash tax savings from 2025 to 2027 as a result of the One Big Beautiful Bill Act. "We are investing $23 to $24 billion on a go forward basis each year into our network. Historically, we would have had to amortize that capital and take those deductions over time. The bonus depreciation provisions in the bill allow us to expense those immediately," AT&T CFO Pascal Desroches told me. Expect the company to spend a good chunk of these savings on stock buybacks. The stock got slapped with a top pick call by JPMorgan on Thursday. "Long-term, we believe AT&T convergence playbook, accelerating fiber build to 50m+ organic locations, owner economics, and go-to-market scale will allow the company to derive industry-leading unit economics," JPMorgan analyst Sebastiano Petti said. Chipotle I get why Chipotle's (CMG) stock got shredded by 13% post-results. Chipotle is valued as a growth stock, and growth took a hit in the second quarter. But I don't believe there's anything fundamentally wrong. The company is still aggressively opening new stores and has a very devoted customer base. I fancy it just needs to market its value proposition, which it plans to do more of in the third quarter. Overlooked on the earnings call is Chipotle noting that sales have returned to growth in July. It's planning to release limited-time offerings in 2026 at a faster pace. And I like how the company is doubling down on restaurant technology. "2Q was also CMG toughest lap for 2024 share gains, and, even if there is the opportunity for more ownership of recent trends/urgency in tone, we believe it is indeed building/increasingly deploying a marketing/innovation toolbox that will drive growing confidence in a more stable same-store sales trajectory into 2H and beyond," Citi analyst Jon Tower wrote. T-Mobile T-Mobile's (TMUS) stock gained a solid 5.8% on Thursday after reporting on Wednesday post-market close. I think that is 5% less than the quarter deserved. The telecom giant easily beat analyst estimates. It gained the most net new customers compared to its competitors. T-Mobile CEO Mike Sievert told me on Yahoo Finance that the company's steady value messaging is helping it gain market share. "T-Mobile's value proposition to customers is elegantly simple. Best network, lowest price," MoffettNathanson senior analyst Craig Moffett said. The company also hiked its full-year operating profit margin guidance. Next catalysts for the company: the upcoming closure of the US Cellular acquisition, a greater pace of stock buybacks thanks to the Trump tax bill, and perhaps more acquisitions. Alphabet You have to be kidding me here. Alphabet (GOOG, GOOGL) is trading at only 19.3 times forward earnings (the S&P 500 is at 24 times), and the stock goes up just 1% on Thursday post-earnings? Did anyone listen to the earnings call? I did: The company said revenue growth accelerated throughout the business. Sales increased 14% year over year in the second quarter, a brisker pace compared to the 12% in the first quarter. Cloud business is rocking (positive read-through to Amazon (AMZN) and Microsoft (MSFT) earnings next week). Alphabet said it's not losing key AI talent to the giant wallet of Meta (META). The discussion around AI and search was very bullish. YouTube is crushing it. "AI (beast) mode it's time to close the valuation gap," KeyBanc analyst Justin Patterson said. Yahoo Finance's Invest Conference Is Coming Up! Join me and the Yahoo Finance newsroom for our annual Invest conference, taking place in New York City, November 12-13. We just added several new speakers to an already awesome lineup. More on the way. Learn more about the conference and register today! Trust, you will want to be in this room ahead of 2026. Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email
Yahoo
2 days ago
- Business
- Yahoo
5 silly earnings season stock price moves!
Earnings season is moving along swimmingly. All things considered, this summer's reporting period could have really sucked. Every CEO could've blamed Trump trade tensions for misses in any parts of the business. Meanwhile, the results could've straight up not justified the valuations we are seeing in a hot market. About 135 S&P 500 (^GSPC) companies, or 29% of the index's market cap, have reported earnings at the time of this writing. Sales and earnings have increased by a solid 6.5% and 7.2%, respectively. The average stock price has increased 1% post-results. But sometimes Mr. Market gets it wrong during earnings season, in my view. The market will overly punish a company for something perceived as a big deal in the moment but minor in the grand scheme. Or, it won't reward a company enough for strong results that feed into a long-term investment case. Here are five reactions this week from earnings that left me scratching my head. IBM What more could the market want from Big Blue? Software and infrastructure sales are up 10% and 14%, respectively. The company increased its full-year operating margin expectations. CFO Jim Kavanaugh told me the company is finding added cost savings, lifting the margin outlook. Further, IBM has an AI story to tell — and it's a good one! "I think you're starting to see the beginnings of scale of generative AI, which is accelerating. Last quarter, we did about six billion dollars [of AI business]. Now we're over seven and a half billion," Kavanaugh added. IBM shares finished Thursday's session (morning after earnings) down 6%. "We would recommend opportunistic purchases for defensive-minded investors ($310 12-month target), although post-report selling may persist for a short period," Stifel analyst David Grossman called out. AT&T AT&T's (T) stock barely finished in the green on Wednesday's earnings day. Similar to IBM, what else could investors have been looking for? The company gained postpaid phone subscribers in the second quarter, while rival Verizon lost customers (though T-Mobile stole the telecom show — see below). Free cash flow — always an important metric for a telecom — rose $400 million year over year. And AT&T called out a $6.5 billion to $8 billion cash tax savings from 2025 to 2027 as a result of the One Big Beautiful Bill Act. "We are investing $23 to $24 billion on a go forward basis each year into our network. Historically, we would have had to amortize that capital and take those deductions over time. The bonus depreciation provisions in the bill allow us to expense those immediately," AT&T CFO Pascal Desroches told me. Expect the company to spend a good chunk of these savings on stock buybacks. The stock got slapped with a top pick call by JPMorgan on Thursday. "Long-term, we believe AT&T convergence playbook, accelerating fiber build to 50m+ organic locations, owner economics, and go-to-market scale will allow the company to derive industry-leading unit economics," JPMorgan analyst Sebastiano Petti said. Chipotle I get why Chipotle's (CMG) stock got shredded by 13% post-results. Chipotle is valued as a growth stock, and growth took a hit in the second quarter. But I don't believe there's anything fundamentally wrong. The company is still aggressively opening new stores and has a very devoted customer base. I fancy it just needs to market its value proposition, which it plans to do more of in the third quarter. Overlooked on the earnings call is Chipotle noting that sales have returned to growth in July. It's planning to release limited-time offerings in 2026 at a faster pace. And I like how the company is doubling down on restaurant technology. "2Q was also CMG toughest lap for 2024 share gains, and, even if there is the opportunity for more ownership of recent trends/urgency in tone, we believe it is indeed building/increasingly deploying a marketing/innovation toolbox that will drive growing confidence in a more stable same-store sales trajectory into 2H and beyond," Citi analyst Jon Tower wrote. T-Mobile T-Mobile's (TMUS) stock gained a solid 5.8% on Thursday after reporting on Wednesday post-market close. I think that is 5% less than the quarter deserved. The telecom giant easily beat analyst estimates. It gained the most net new customers compared to its competitors. T-Mobile CEO Mike Sievert told me on Yahoo Finance that the company's steady value messaging is helping it gain market share. "T-Mobile's value proposition to customers is elegantly simple. Best network, lowest price," MoffettNathanson senior analyst Craig Moffett said. The company also hiked its full-year operating profit margin guidance. Next catalysts for the company: the upcoming closure of the US Cellular acquisition, a greater pace of stock buybacks thanks to the Trump tax bill, and perhaps more acquisitions. Alphabet You have to be kidding me here. Alphabet (GOOG, GOOGL) is trading at only 19.3 times forward earnings (the S&P 500 is at 24 times), and the stock goes up just 1% on Thursday post-earnings? Did anyone listen to the earnings call? I did: The company said revenue growth accelerated throughout the business. Sales increased 14% year over year in the second quarter, a brisker pace compared to the 12% in the first quarter. Cloud business is rocking (positive read-through to Amazon (AMZN) and Microsoft (MSFT) earnings next week). Alphabet said it's not losing key AI talent to the giant wallet of Meta (META). The discussion around AI and search was very bullish. YouTube is crushing it. "AI (beast) mode it's time to close the valuation gap," KeyBanc analyst Justin Patterson said. Yahoo Finance's Invest Conference Is Coming Up! Join me and the Yahoo Finance newsroom for our annual Invest conference, taking place in New York City, November 12-13. We just added several new speakers to an already awesome lineup. More on the way. Learn more about the conference and register today! Trust, you will want to be in this room ahead of 2026. Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Sign in to access your portfolio
Globe and Mail
6 days ago
- Business
- Globe and Mail
Meta Platforms and Atlassian have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release Chicago, IL – July 23, 2025 – Zacks Equity Research shares Meta Platforms META as the Bull of the Day and Atlassian TEAM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Opendoor Technologies Inc. OPEN and Carvana Co. CVNA. Here is a synopsis of all four stocks. Bull of the Day: Set to report its quarterly results on Wednesday, July 30, Meta Platforms stock could be the highlight of the Q2 earnings season. Notably, Meta has now surpassed the Zacks EPS Consensus for 10 consecutive quarters, as illustrated by the green arrows in the Price, Performance, and Surprise chart below, on the way to gains of more than +300% in the last three years. Outperforming the broader market in 2025, META is up +20% year to date with its impressive EPS surprise streak expected to continue along with considerable expansion on the top and bottom lines. Furthermore, Meta's AI infrastructure expansion is a reason to believe the social media giant could steal the spotlight regarding standouts of the Q2 earnings season. Meta's Q2 Expectations With Meta reaping major rewards from its aggressive push into generative AI, the company's Q2 sales are thought to have increased 14% to $44.69 billion compared to $39.07 billion a year ago. Plus, Q2 earnings are expected to stretch 12% to $5.80 per share from EPS of $5.16 in the prior year quarter. More intriguing, the Zacks ESP (Expected Surprise Prediction) suggests Meta could once again surpass earnings expectations with the Most Accurate and recent estimates among Wall Street having Q2 EPS pegged at $5.90 and nearly 2% above the underlying Zacks Consensus. Meta's AI Infrastructure Expansion Of course, the benefiting metrics to support Meta's AI expansion could help lead to a post-earnings pop. To that point, Meta has gone all out on a bold strategy that combines massive AI infrastructure investment, elite talent acquisition, and cutting-edge model development. Supporting Meta's push toward 'superintelligence' are several AI data centers and systems that are on the horizon with the capability to enhance reasoning and coding, interacting at human-like levels. Prometheus: A 1-gigawatt facility in Ohio, launching in 2026. Hyperion: A 5-gigawatt campus in Louisiana, which is one of the world's largest AI data centers. Titan Clusters: Additional multi-gigawatt AI supercomputing data centers planned across North America and Europe. AI's Expanding Social Role It's noteworthy that Meta's Advantage+ Ads use AI to optimize targeting and performance with minimal manual input. Leading to more advertising revenue for Meta is that advertisers are seeing higher ROI from the monetization of AI across Meta's massive user base. Powering smart replies, content recommendation, and moderation, Meta AI is embedded in Facebook, Instagram, WhatsApp, and Messenger, reaching 700+ million monthly active users. It's also worth mentioning that Meta's "LLaMA" large language models (LLMs) are open-source regarding their AI capabilities that understand and generate human-like processes, which has attracted developers and startups to build on the technology. Overlapping the scale of potential that Meta is creating is that AI chatbots and virtual assistants are being used for a variety of companionship roles, as friends, therapists, and even romantic partners… Meta's EPS Growth & Positive Revisions Correlating with the strong YTD price performance for META, EPS revisions have continued to trend higher across the board for Meta's current reporting quarter (Q2), Q3, fiscal 2025 as a whole, and FY26. Even better, and indicative of more upside in Meta's stock ahead of its Q2 report, is that these EPS revisions are nicely up in the last week. Meta's annual earnings are now expected to increase 7% this year and are projected to rise another 9% in FY26 to a whopping $27.89 per share. Most mind-blowing, following the pandemic, FY26 EPS projections would reflect 176% growth with Meta's earnings at $10.09 a share in 2020. Meta's Reasonable P/E Valuation Despite a lofty price tag of over $700 a share, Meta stock is still the second cheapest company among its 'Magnificent 7' big tech peers in terms of P/E valuation. At just under 28X forward earnings, META is only above Alphabet's GOOGL 19.2X but is the next closest of the Mag 7 to the benchmark S&P 500's average, with Tesla TSLA having the most stretched P/E premium among the group at 185.5X. Bottom Line Meta Platforms stock has continued to create the eustress that led to some investors taking profits too soon, and optimistically, META looks poised to keep running past $700 a share as its Q2 results approach next week. Keeping this in mind, in addition to sporting a Zacks Rank #1 (Strong Buy) and landing the Bull of the Day, META checks an 'A' Zacks Style Scores grade for Growth and Momentum. Bear of the Day: Despite being a global leader and innovator in the enterprise collaboration and workflow software space, Atlassian has faced increased competition from a growing number of notable competitors, including Microsoft, ServiceNow and Making matters worse is that Atlassian's stock has been under increased pressure due to heavy insider selling, slower growth, and disappointing guidance. Unfortunately, with TEAM shares down nearly 20% this year, more risk appears to be ahead as Atlassian stock still trades at a somewhat stretched valuation. Heavy Insider Selling Notably, cause for concern has been raised after Atlassian's founders, Scott Farquhar and Michael Cannon-Brookes, reportedly sold millions of dollars' worth of TEAM shares earlier in the month. More concerning, over the last year, insiders have now dumped over 4 million TEAM shares worth $800 million, with no insider purchases made during this period. Atlassian's Soft Revenue Guidance Although Atlassian was most recently able to surpass expectations for its fiscal third quarter in early May, slower growth from the comparative period further caught investors' attention as the company's guidance for Q4 revenue of $1.35-$1.36 billion was below most analysts' expectations of $1.42 billion. This comes as Atlassian's rapid sales growth has previously justified the earnings premium investors have paid in the past, although it's noteworthy that the company has been public since 2015. Also worth mentioning is that Atlassian emphasized that it's trading short-term revenue upside for long-term platform adoption, especially by bundling its AI assistant Rovo into Premium and Enterprise subscriptions at no extra cost. Still, while AI is a strategic priority, it's also driving up Atlassian's expenses and dimming margins. Atlassian's Lofty Valuation Amid concerns that Atlassian can maintain its growth trajectory, TEAM is still trading at almost $200 a share and 47.3X forward earnings. While tech stocks can often command a premium to the benchmark S&P 500, which is at 24X, Atlassian stock trades noticeably above its Zacks Internet-Software Industry average of 29.1X as well. In terms of price-to-sales, Atlassian's forward P/S ratio of 8.3X is also stretched compared to its industry average of 6.3X and the S&P 500's 5.4X. Bottom Line While the strategic move to ramp up AI integration in its collaboration and workflow software services will hopefully pay off down the line, it may be best to avoid Atlassian's stock at the moment. To that point, there are more viable investment options to consider as it relates to internet-software stocks, with Microsoft being a prime example as a more refined leader and an emerging competitor to Atlassian. Additional content: After a 42% Rally, Is Opendoor the Next Carvana (and a Buy)? Opendoor Technologies Inc. shares have strengthened as retail investors piled on to the meme stock, hoping for a recovery similar to Carvana Co. despite housing market headwinds. Is now a good time to invest in OPEN stock, and can it rebound like Carvana? Let's explore this. Why Opendoor's Shares Jumped As an iBuying platform, Opendoor's business model involves purchasing homes from sellers online, renovating them, and then reselling at higher prices. The online home flipper's business was successful during the real estate boom, but it struggled post-pandemic as homeowners who bought houses cheaply were hesitant to sell. Rising interest rates and a sluggish housing market did little to boost Opendoor's business, and its shares have fallen 96% from their peak in 2021. However, recently, Opendoor's shares gained momentum as retail investors showed interest through social media platforms. Opendoor's shares jumped 42.7% on Monday as interest in the stock increased on Reddit's WallStreetBets Page and other sites. EMJ Capital founder Eric Jackson is also optimistic about the stock and expects Opendoor to trade at $82 a share soon. Currently, Opendoor is trading below $4 per share. Reasons to Be Bullish on Opendoor Stock Opendoor's first-quarter results have been encouraging, as the company announced a gross profit of $99 million on total revenues of $1.2 billion. Its net loss for the quarter was $63 million, down from a $80 million net loss a year earlier. It posted an adjusted EBITDA loss of $30 million but expects an adjusted EBITDA profit between $10 million and $20 million in the second quarter. Opendoor's efforts to adopt a real estate agent-assisted business model could prove to be advantageous, as it offers higher profit margins and greater capital efficiency. If mortgage rates decline and housing demand rises, Opendoor could see further recovery. Is Opendoor Stock the Next Carvana? Numerous individuals are drawing parallels between Opendoor's present recovery and the turnaround achieved by Carvana, which experienced a similar rebound following its bankruptcy in 2022. However, before Carvana stock's downfall, the company was consistently reporting quarterly revenue growth. Eventually, Carvana capitalized on the favorable market conditions in 2023 and 2024, reduced expenditures, and increased profits through the sale of pre-owned vehicles. Can Opendoor repeat the same success? Unlike Carvana, Opendoor is not bankrupt; instead, its business model is questionable. Few companies have managed to successfully scale home-flipping, with many withdrawing from the iBuying market. On the other hand, the used car sales industry is a well-established business. Therefore, comparing Carvana and Opendoor is not accurate. Here's How to Trade Opendoor Stock Now A potential shift in its business model, along with changes in broader housing market trends, may lead to a recovery for Opendoor, prompting stakeholders to hold onto their shares. However, new entrants should invest at their own risk since Opendoor's current share price is not supported by its underlying financial performance. Moreover, if tariffs rise, the resulting higher prices would complicate the process of reducing interest rates, thereby exerting pressure on Opendoor's business. Additionally, Opendoor has a 242.6% debt-to-equity ratio, much higher than the Internet - Software industry's average of 16.4%, indicating greater financial risk and more susceptibility to economic downturns. For now, Opendoor has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Media Contact Zacks Investment Research 800-767-3771 ext. 9339 provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged for information about the performance numbers displayed in this press release. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Opendoor Technologies Inc. (OPEN): Free Stock Analysis Report Atlassian Corporation PLC (TEAM): Free Stock Analysis Report Carvana Co. (CVNA): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report
Wall Street Journal
7 days ago
- Business
- Wall Street Journal
Alphabet and Tesla Earnings, Home Sales and More: Still to Come This Week
Earnings season rolls on, with the first two of the Magnificent Seven, Tesla and Alphabet, set to report later Wednesday. Plus, new economic data will shed light on how tariffs are affecting consumer and business spending, while investors watch for further trade-deal announcements. 🔎 Here's what to watch for:
