Friday, August 9, 2024
The Zacks Research Daily features the best research from our team of analysts. Today’s Research Daily includes new research reports on 16 major stocks, including Mastercard Incorporated (MA), Advanced Micro Devices, Inc. (AMD) and Intuit Inc. (INTU), as well as micro-cap stock United-Guardian, Inc. (UG). Zacks Microcap research is unique because our research content on these small and little-known companies is the only one of its kind in the country.
These research reports were handpicked from the approximately 70 reports published today by our team of analysts.
You can All today’s research reports can be found here >>>
MasterCard Shares have outperformed the Zacks Financial Transaction Services industry over the past year (+14.7% vs. +11.7%). The company’s numerous acquisitions are helping it expand addressable markets and develop new revenue streams. It reported strong second-quarter 2024 results thanks to stable consumer spending and solid cross-border volumes.
The accelerated adoption of digital and contactless solutions provides the company with the opportunity to accelerate its transition to digital mode. The company is well positioned to benefit from its steady cash generation capabilities. A strong capital position enables MA to pursue acquisitions and prudently deploy capital through share repurchases and dividend payments.
However, high operating costs could weigh on margins. High discounts and incentives could weigh on net sales. In addition, the company is overvalued at current levels compared to the industry. Therefore, caution should be exercised with the stock.
(You can Read the full Mastercard research report here >>>)
Shares of AMD have gained +23.7% over the past year, while the Zacks Electronics and Semiconductor industry average has gained +46.4%. The company’s second-quarter 2024 results benefited from robust data center and customer revenues, which fully offset weakness in the gaming and embedded segments.
The data center benefited from solid adoption of AMD Instinct GPUs and strong growth in sales of 4th generation AMD EPYC CPUs. At the end of Q2 2024, AMD had more than 900 public cloud instances available, with Netflix and Uber opting for 4th generation EPYC public cloud instances. In the data center AI business, MI300 quarterly revenues exceeded $1 billion for the first time.
The customer pipeline for enterprise and cloud AI remains robust. AMD and its partners, including Microsoft, Oracle, DELL, HPE, Lenovo, and Supermicro, have Instinct platforms in production. AMD expects third quarter 2024 revenue of $6.7 billion (+/- $300 million), representing year-over-year growth of approximately 16% on average.
(You can Read the full AMD research report here >>>)
Intuitive Shares have outperformed the Zacks Computer Software industry over the past year (+24.8% vs. +20.7%). The company is benefiting from strong revenue growth driven by its Online and Consumer Group businesses. Strong momentum in international online sales and solid income from professional tax have been key growth drivers.
The TurboTax Live offering is also driving growth in the consumer tax business. Momentum at QuickBooks Capital remains positive. In addition, the company’s strategy to transition its business to a cloud-based subscription model will help it generate stable revenues over the long term.
Additionally, the company was able to increase its revenue through growth in the desktop ecosystem, but higher costs and expenses due to increased investments in marketing and development teams are likely to continue to negatively impact results in the near future.
(You can Read the full research report on Intuit here >>>)
Shares of United Guardian have outperformed the Zacks Medical Products industry over the past year (+44.5% vs. +6.3%). This microcap company with a market cap of $51.31 million reported a significant 27% year-over-year increase in revenues to $3.25 million in the first quarter of 2024. The improvement was driven by a 146% increase in cosmetic ingredient sales, primarily from ASI.
United-Guardian has a strong financial position with $7.1 million in cash and little debt. Strategic moves include the launch of Natrajel for sexual wellness and the discontinuation of low-growth industrial products in favor of a focus on higher-margin segments. UG’s market strength in cosmetic ingredients and medical lubricants is supported by a global customer base, with 83% of ASI’s sales coming internationally.
An efficient supply chain and cost management further strengthen operational stability, with only a slight increase in operating costs. In addition, the company benefits from the Medicare Part D manufacturer rebate program, which can reduce the financial burden.
(You can Read the full research report on United Guardian here >>>)
Other notable reports we’re featuring today include Intercontinental Exchange, Inc. (ICE), CSX Corporation (CSX), and The Bank of New York Mellon Corporation (BK).
Research Director
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a respected total earnings expert. He is frequently quoted in print and electronic media and publishes the weekly Earnings development And Result preview Reports. If you would like to be notified by email every time Sheraz publishes a new article, please click here>>>
Today’s required reading
Mastercard (MA) benefits from accretive takeovers that hurt increased costs
Strong product portfolio and partner base improve AMD’s prospects
Intuit (INTU) benefits from product updates and higher subscription numbers
Selected reports
Intercontinental (ICE) relies on acquisitions despite high costs
According to the Zacks analyst, Intercontinental Exchange will grow through a series of acquisitions and cost synergies, which in turn will provide the company with good growth opportunities. However, rising expenses will weigh on margins.
CSX dividend payouts improve prospects despite cost concerns
The Zacks analyst is impressed with the company’s efforts to reward its shareholders, but high operating costs, primarily due to increased labor costs, are weighing on the bottom line.
Higher interest rates support BNY Mellon (BK), rising costs cause concern
According to the Zacks analyst, BNY Mellon’s global presence, higher interest rates and a strong balance sheet should help. Higher expenses, rising financing costs and a concentration of fee income are problematic, however.
TC Energy (TRP) plans growth projects worth 34 billion Canadian dollars to increase profits
The Zacks analyst believes TC Energy’s growth projects valued at C$34 billion should support earnings and dividend payouts, but is concerned about the company’s massive C$49.1 billion debt.
Aspen (AZPN) benefits from solid business pipeline and ACV growth
According to the Zacks analyst, Aspen’s performance is driven by strong business pipeline activities with healthy growth trends in annual contract value (ACV). The dynamic macro environment is a concern.
Credit and deposit growth support Synovus (SNV), high costs plague
According to the Zacks analyst, Synovus’ revenue should continue to benefit from rising loan and deposit levels. However, continued investments in technology are keeping profits under pressure.
Firdapse drives Catalyst (CPRX) sales, overdependence a problem
According to the Zacks analyst, Firdapse has boosted Catalyst’s sales due to high demand. However, the over-reliance on Firdapse sales and the lack of other pipeline candidates are worrying
New upgrades
Acquisition of ADESA and cost containment aid Carvana (CVNA)
According to the Zacks analyst, the acquisition of ADESA’s US business can help Carvana improve the quality and quantity of resale vehicles. The lower reconditioning and transportation costs are also a good sign.
Burlington Stores’ (BURL) 2.0 and Store Growth Plan bode well
According to the Zacks analyst, Burlington Stores’ Initiative 2.0, which aims to better execute the off-price model, looks encouraging. The company’s long-term store growth goal is also on track.
Investments and assets in Appalachia benefit National Fuel Gas (NFG)
According to the Zacks analyst, National Fuel Gas’s systematic investments to further strengthen its midstream operations and its strong presence in the Appalachian region will boost its performance.
New downgrades
Rising costs and competition are hurting Avis Budget (CAR)
According to the Zacks analyst, Avis Budget’s rising expenses due to high fleet costs are likely to keep its bottom line under pressure. Increasing competition from other players is another disadvantage.
Weakness in the gas supply sector hurts MRC Global (MRC)
According to the Zacks analyst, MRC Global is struggling with the weak performance of the gas utility sector due to ongoing customer inventory shortages and delayed project activity. Foreign exchange issues are another problem.
Low construction starts and rising costs in Boise Cascade (BCC)
According to the Zacks analyst, weaker housing starts for multifamily homes and lower demand for repairs and remodeling are clouding Boise Cascade’s prospects. Increased costs and expenses are also additional headwinds.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
Intercontinental Exchange Inc. (ICE): Free Stock Analysis Report
Mastercard Incorporated (MA): Free Stock Analysis Report
The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report
CSX Corporation (CSX): Free Stock Analysis Report
Intuit Inc. (INTU): Free Stock Analysis Report
United-Guardian, Inc. (UG): Free Stock Analysis Report
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