Share to Twitter Share to Linkedin Big data and analytics player Palantir’s stock (NYSE: PLTR) has already lost about 21% of its value year-to-date in 2022, underperforming the S&P 500 which is down by about 6%. The stock also remains down by almost 45% from its November 2021 highs. While high-growth software stocks have seen a sell-off, due to the prospect of rising interest rates and the broader market rotation out of pandemic winners into real economy sectors, there are some stock-specific factors that are impacting Palantir, as well. For example, investors are likely a bit concerned about the slower growth at the company’s government business over Q3 2021 and also due to its growing dependence on the U.S. market for commercial revenue growth. However, we think that Palantir stock looks like a good pick at its current market price of about $15 per share. Despite the recent concerns, Palantir’s overall growth rate is likely to remain solid. Sales are on … [Read more...] about Down 45% Since November, Is Palantir Stock A Buy?
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Share to Twitter Share to Linkedin We believe that Microsoft stock (NASDAQ: MSFT) currently appears to be an attractive pick over its industry peer Electronic Arts stock (NASDAQ: EA) , despite its comparatively higher valuation. MSFT stock trades at 13.4x trailing revenues, compared to 5.7x for EA stock. Although both the companies saw a rise in revenue over the recent quarters, the growth has been better for Microsoft, aided by robust demand for its cloud offerings, including Azure. Looking at stock returns, MSFT, with 7% returns over the last six months, has outperformed EA, which is down around 1%, and it has also outperformed the broader markets, with only a 3% rise for the S&P500 index. However, there is more to the comparison, and we believe that Microsoft stands out with higher expected returns compared to Electronic Arts, as we discuss in the sections below. We compare a slew of factors such as historical revenue growth, returns, and … [Read more...] about This Tech Giant Appears To Be A Better Pick Over Electronic Arts Stock
Share to Twitter Share to Linkedin We think that ViaSat Inc. currently is a better bet compared to Qorvo Inc. . VSAT stock trades at 1.3x trailing revenues, much lower than that of QRVO, whose P/S multiple stands at 3.3x. Does this gap in the companies’ valuations make sense? We don’t think so and we only expect ViaSat to narrow this gap. While both companies weren’t significantly hampered by the pandemic and have seen roughly similar growth over the past few years, ViaSat has posted more consistent sales growth. Both ViaSat and Qorvo are communications technology companies and have seen around 1.5x sales growth since FY ’17 (Both companies’ fiscal years end in March). ViaSat has seen sales rise from $1.6 billion in FY ’17 to $2.5 billion on an LTM basis, while Qorvo has seen sales grow from $3 billion to $4.5 billion over the same period, a growth in line with that of ViaSat. For details about ViaSat’s revenues and comparison to peers, see ViaSat … [Read more...] about Read This If You Think Qorvo Stock Is Your Best Communications Bet
Share to Twitter Share to Linkedin We think that Chipotle Mexican Grill’s stock (NYSE: CMG), currently is a similar pick compared to Texas Roadhouse’s stock (NASDAQ: TXRH). Chipotle’s stock trades at about 5.8x trailing revenues, compared to around 1.8x for Texas Roadhouse. Does this gap in the companies’ valuations make sense? We believe so. Chipotle has recorded higher revenue growth and a better growth in operating margin over the last three years. However, there is more to the comparison, which makes Chipotle and Texas Roadhouse similar bets at these valuations. Let’s step back to look at the fuller picture of the relative valuation of the two companies by looking at historical revenue growth as well as operating income and operating margin growth. Our dashboard Chipotle Mexican Grill vs Texas Roadhouse : Industry Peers; Which Stock Is A Better Bet? has more details on this. Parts of the analysis are summarized below. 1. Revenue Growth As … [Read more...] about Is Chipotle’s Stock Better Than This Peer?
Share to Twitter Share to Linkedin Key Takeaways: Equity Index Futures Bounce Back From an Overnight Selloff as Investors Try to Hang on to the Gains Stocks Fell on Tuesday as Interest Rates and Oil Prices as well as a Rare Miss by Goldman Sachs Investors Are Forced to Re-Evaluate Valuations When Interest Rates Rise Stocks are looking to rebound on Wednesday from Tuesday’s selloff as equity index futures are pointing higher. Futures fell overnight but rebounded with European markets. London’s FTSE 100, Germany’s DAX, the French CAC 40, and the Stoxx 600 traded higher. However, there’s a number of earnings announcements for investors to sort through on Wednesday. Financial companies continue to dominate the reports, but there are other companies of note. Starting with the financials, Morgan Stanley MS (MS) and Bank of America BAC (BAC) both beat on earnings estimates despite missing on revenues while U.S. Bancorp TBBK (USB) missed on top … [Read more...] about Rising Interest Rates May Be Leading To Revaluations In Stock, Bond, And Housing Markets
The higher one climbs, the harder one falls. Such is the fate for stocks that are trading at ridiculously high price-to-earnings ratios. This is especially the case in the context of the ongoing market sell-off, where the S&P 500 has now declined 8.3% from all-time highs. These three companies -- an electric vehicle (EV) maker, a videoconferencing leader, and a struggling biotech -- already have their growth potential maxed out in their stock prices, if not more. Today, let's look at why investors should be in no hurry to buy their dips. Image source: Getty Images. 1. Tesla Nowadays, many investors view Tesla ( NASDAQ:TSLA ) as a revolutionary company at the forefront of innovation in the EV industry. Its financials seem to suggest so as well. In its third-quarter update, the company said its sales increased by 45% compared with last year, to $8.7 billion. As its revenue increased, so did its profits. Tesla's gross margin came in at 23.5% versus … [Read more...] about These 3 Stocks Are Trading at Ludicrous P/E Ratios. Should Investors Avoid Them?
Share to Twitter Share to Linkedin The stock price of iRhythm Technologies , a healthcare company that provides ambulatory electrocardiogram and cardiac monitoring products, has seen a rise of 20% over the last one month (twenty-one trading days). This can be attributed to Novitas, a Medicare Administrative Contractors (MACs), doubling certain Medicare rates for cardiac monitoring in 2022. The rate for monitoring between two days to seven days was increased to $223 vs. $103 last year, while the rates for cardiac monitor usage between seven to fifteen days are now set to $233, vs. $115 last year. [ 1 ] This comes as a big relief for iRhythm, which saw its stock price see a steep fall last year from levels of over $235 in early January to as low as $42 in August. After the recent announcement on new rates, IRTC stock surged nearly 40% from levels of $102 on January 7 earlier this month, to levels north of $140 by January 11, before cooling off a little … [Read more...] about Will IRhythm Technologies Stock Continue To See Higher Levels After A 20% Rally In A Month?
Share to Twitter Share to Linkedin 3M Company is scheduled to report its Q4 2021 results on Tuesday, January 25. We expect 3M to likely post revenue and earnings above the street expectations, driven by a rebound in the overall economic activity. The company should continue to see robust demand outlook for its home improvement and personal safety products. That said, the chip shortage for the automotive industry may impact 3M’s automotive business. Furthermore, our forecast indicates that 3M’s valuation is around $197 per share, which is more than 10% above the current market price, implying the stock has some more room for growth. Our interactive dashboard analysis on 3M’s Pre-Earnings has additional details. (1) Revenues expected to be above the consensus estimates Trefis estimates 3M’s Q4 2021 revenues to be around $8.8 billion, up 2% y-o-y, and slightly above the $8.6 billion consensus estimate. All of 3M’s segments have seen steady growth … [Read more...] about 3M Stock To Trade Higher Post Q4?
Share to Twitter Share to Linkedin Crocs (NASDAQ: CROX) , a company designing, manufacturing, and marketing footwear for men, women, and children under the Crocs brand, has declined 21% over the last five trading days (one week) and currently stands near $107. It should be noted that the broader S&P500 returned a 5% decline during the same period. The stock fell sharply despite posting a strong guidance update. Some investors speculated that Crocs overpaid for the acquisition of casual footwear brand Hey Dude for $2.5 billion - funded by $2 billion in cash and $450 million in the company’s shares. The uncertainty related to the Omicron variant and the ongoing supply chain issues also likely impacted the company’s stock negatively during this period. However, we believe that the addition of Hey Dude shoes will bring much-needed diversity to the company’s sales, which are dominated by the popular foam clogs (82% of total revenues in recent Q3). As people spent … [Read more...] about What’s Happening With Crocs Stock?
Representative Image Stocks are sliding at the open on Wall Street Monday, extending a recent run of losses that have left the S&P 500 at 6-month lows. The benchmark index is down 1.5% in the opening minutes of trading, while the Nasdaq Composite is down 1.7% and the Dow Jones Industrial Average lost 1%. The energy and raw materials sectors are leading the decline. Mining concern Freeport McMoRan is down 4.6% and General Motors is down almost 4%. Investors have been growing increasingly worried about how aggressively the Federal Reserve, which holds a policy meeting this week, might act to cool rising inflation. Shares were mostly lower in Europe and Asia on Monday after Wall Street logged its worst week since the pandemic began in 2020. Shares fell in Paris, London and Frankfurt but rose in Tokyo. Shanghai was little changed. Close Investors have been growing increasingly worried about how aggressively the Federal Reserve, which holds a policy meeting … [Read more...] about Stocks slide at open on Wall Street; S&P 500 at 6-month low