Monday, December 23, 2024
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including ServiceNow, Inc. (NOW), Advanced Micro Devices, Inc. (AMD) and Sanofi (SNY), as well as two micro-cap stocks Team, Inc. (TISI) and United-Guardian, Inc. (UG). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
ServiceNow’s shares have outperformed the Zacks Computers - IT Services industry over the past year (+56.5% vs. +16.0%). The company has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation.
It had 2020 total customers with more than $1 million in annual contract value (ACV) at the end of third quarter, which represents 14% year-over-year growth in customers.ServiceNow had 15 deals greater than $5 million in net new ACV and six deals of more than $10 million. It closed 96 deals greater than $1 million net new ACV.
ServiceNow had 44 new Now Assist customers spending more than $1 million in ACV, including six with more than $5 million and two with more than $10 million. It is also riding an expanding partner base. However, NOW is suffering from persistent inflation, stiff competition and a challenging macroeconomic environment.
(You can read the full research report on ServiceNow here >>>)
Shares of AMD have outperformed the Zacks Computer - Integrated Systems industry over the past two years (+84.8% vs. +73.6%). The company is benefiting from portfolio strength and an expanding partner base. Its portfolio strength is noteworthy, with robust data center demand and accretive acquisitions.
AMD expects fourth-quarter 2024 revenues to be $7.5 billion (+/-$300 million). At the mid-point of its revenue guidance, AMD expects revenues to grow 10% sequentially and 22% year over year, driven by strong growth in the data center and the client segment.
Exiting third-quarter 2024, AMD’s public cloud instances increased 20% year over year to more than 950, with Microsoft, AWS, Uber and Netflix deploying it at scale. Acquisitions of ZT Systems and Silo AI expands AMD’s portfolio. AMD and its partners, including Microsoft, Oracle, DELL, HPE, Lenovo and Supermicro, have instinct platforms in production.
(You can read the full research report on AMD here >>>)
Sanofi’s shares have gained +0.9% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +4.9%. The company’s Dupixent has become the key top-line driver as it enjoys strong demand across all approved indications and geographies. Sanofi possesses a leading vaccine portfolio that drives the top line.
Several new drugs have been launched in the past couple of years that have become significant contributors to Sanofi's top-line growth. Sanofi has also accelerated its mid- and late-stage pipeline this year. It has also been active on the M&A front.
However, generic erosion of Aubagio in all key markets and lower sales from mature products are hurting sales. Other headwinds include the weak performance of diabetes drugs and regular negative pipeline developments.
(You can read the full research report on Sanofi here >>>)
Shares of Team have outperformed the Zacks Building Products - Maintenance Service industry over the past six months (+85.9% vs. -3.4%). This microcap company with market capitalization of $66.92 million demonstrated resilience in third-quarter 2024, with revenue rising 1.96% year over year to $210.8 million, driven by robust demand for Inspection and Heat Treating and steady performance in Mechanical Services.
Operational improvements yielded a $3.2 million operating income, reversing a prior-year loss, while gross margins improved. A significant legal victory vacating a $222 million judgment strengthened financial stability, and investments in advanced technology position the company for growth.
However, high debt, rising interest costs, ongoing net losses, and declining equity reflect financial strain. Litigation risks, stagnant revenue in key segments, and reliance on cost-cutting amid sector volatility further pressure profitability. Team’s diversified, high-margin services provide resilience, but substantial challenges remain.
(You can read the full research report on Team here >>>)
United-Guardian’s shares have outperformed the Zacks Medical - Products industry over the past year (+31.3% vs. +12.7%). This microcap company with market capitalization of $44.47 million delivered robust financial results in third-quarter 2024, with a 17.2% year-over-year net sales increase, driven by a 68% surge in cosmetic ingredients sales.
Cosmetics now drive profitability, leveraging strong global demand, offsetting declines in other segments and solidifying the company’s focus on high-margin products. A resilient balance sheet with $2.4 million in cash, minimal liabilities and a consistent quarterly dividend of 25 cents underscore financial stability. Investment income grew 63.5% year over year to $0.3 million, adding flexibility.
Despite an 11% dip in pharmaceutical sales, recovery efforts aim to stabilize the segment. Geographic and product diversification, supported by stable investment income, ensures resilience, positioning United-Guardian to capitalize on growth opportunities in high-demand markets.
(You can read the full research report on United-Guardian here >>>)
Other noteworthy reports we are featuring today include Fiserv, Inc. (FI), The Cigna Group (CI) and The PNC Financial Services Group, Inc. (PNC).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Growing Customer Base & Partnerships Aid ServiceNow (NOW)
Strong Product Portfolio & Partner Base Aid AMD's Prospects
Dupixent to Remain Sanofi's (SNY) Key Top-Line Driver
Featured Reports
Fiserv (FI) Gains From Skytef Buyout, Amid High Competition
Per the Zacks analyst, the Skytef acquisition strengthens Fiserv's distribution network and point-of-sale. High competition from other players is an overhang.
Cigna (CI) Benefits from Growing Membership, High Costs Hurt
Per the Zacks analyst, Cigna gains from improving membership leading to solid performances of Evernorth Health Services and Cigna Healthcare businesses. However, rising costs are a concern.
Branch Expansion Aids PNC Financial (PNC) Amid High Costs
Per the Zacks analyst, PNC Financial's branch network expansion across the United States is likely to support its financials. Yet, rising expenses continue to put pressure on its bottom line.
New Customers, Robust Omnipod 5 Sales Aid Insulet (PODD)
The Zacks analyst is bullish about solid new customer gains and increasing volume growth through the U.S. pharmacy channel of Insulet. Also, the robust global uptake of Omnipod 5 seems encouraging.
Industrial Precision Unit Aids Nordson (NDSN), High Debt Ails
Per the Zacks analyst, Nordson's Industrial Precision Solutions segment is driven by solid demand for nonwoven and industrial coating product lines. However, high debt obligation remains a concern.
BlackBerry (BB) Gains from Strength in IoT & Secure Comms
Per the Zacks analyst, momentum in the Secure communications and IoT businesses along with sale of Cylance unit bode well. However, tough backdrop in the automotive space is concerning.
Delek (DK) Bolsters Financial Position Through Asset Sale
The Zacks analyst believes that proceeds from Delek US Holdings' retail division sale have strengthened its balance sheet but is worried over the weak refining margins weighing on profitability.
New Upgrades
Sprouts Farmers' (SFM) Omnichannel Offering to Propel Sales
Per the Zacks analyst, Sprouts Farmers' assortment of better-for-you products, focus on providing hassle-free shopping through omnichannel offering & a network of fresh distribution centers bode well.
Investments, Appalachian Assets Aid National Fuel Gas (NFG)
Per the Zacks analyst, National Fuel Gas' systematic investment to further strengthen its midstream operations and strong presence in the Appalachian region will boost its performance.
Solid Retail Segment to Fuel Urban Outfitters' (URBN) Sales
Per the Zacks analyst, Urban Outfitters gains from its strong Retail segment, which saw a 3.2% increase in total net sales in the third quarter, with comparable net sales rising by 1.5%.
New Downgrades
Regulations, Seasonality of Business Ail MDU Resources (MDU)
Per the Zacks analyst, MDU Resources' operations are likely to be adversely impacted by government regulations. Seasonality of business operations can reduce demand and lower earnings.
Spectrum Brands (SPB) Struggles With Multiple Headwinds
Per the Zacks analyst, Spectrum Brands has been grappling with geopolitical and macroeconomic uncertainty for a while. The company reported soft bottom-line results in fourth-quarter fiscal 2024.
Lingering Macro Risks & High Costs Ail Mohawk's (MHK) Growth
Per the Zacks analyst, higher mortgage rates, sticky inflation and political uncertainties are marring the prospects of Mohawk. Also, high labor, materials and freight costs add to the headwinds.
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Sanofi (SNY) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
The PNC Financial Services Group, Inc (PNC) : Free Stock Analysis Report
Cigna Group (CI) : Free Stock Analysis Report
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
Team, Inc. (TISI) : Free Stock Analysis Report
Fiserv, Inc. (FI) : Free Stock Analysis Report
United-Guardian, Inc. (UG): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
