For Immediate Release

Chicago, IL – November 16, 2022 – Zacks Equity Research shares CarParts.com PRTS as the Bull of the Day and Catalent CTLT asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Datadog DDOG, NetEase NTES and Baidu BIDU.

Here is a synopsis of all five stocks.

Bull of the Day:

CarParts.com is a Zacks Rank #1 (Strong Buy) and it sports a C for Value and a B for Growth.  This company just posted a good beat and has seen a solid move higher.  Let’s explore more about this company in this Bull of The Day article.

Description

CarParts.com Inc. offers e-commerce automotive aftermarket, providing collision, engine and performance parts and accessories. CarParts.com Inc., formerly known as U.S. Auto Parts Network Inc., is headquartered in Torrance, California.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For PRTS, I see four straight beats of the Zacks Consensus Estimate.  That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).

The average positive earnings surprise over the course of the last year works out to be 101%.

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher.

Over the last 60 days, earning estimates have moved up for ZS.

This quarter has moved from a loss of 14 cents to a loss of 13 cents.

Next quarter has increased from $0.00 to $0.03.

The full fiscal year 2022 has increased from a loss of $0.11 to a loss of $0.03.

Next fiscal year has seen the estimate move from -$0.12 to -$0.05.

Positive movement in earnings stock is a Zacks Rank #1 (Strong Buy).

Valuation

The valuation for this name is low, but since the company isn’t making money there is no forward PE to lean on.  The price to book is 2.4x which is below the 3x level that value investors need to see. Price to sales comes in at 0.42x and has room to grow.  I see margins increasing in each of the last two quarters and with revenue growth slated to come in at 13%, this name looks very attractive.

Bear of the Day:

Catalent is a Zacks Rank #5 (Strong Sell) and recently missed earnings.  Despite the recent earnings miss, the lower stock price has made the valuation that much more attractive. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.

Description

Catalent, Inc. develops and manufactures solutions for drugs, protein-based biologics, cell and gene therapies, and consumer health products. The Softgel and Oral Technologies segment provides formulation, development, and manufacturing services for soft capsules for use in a range of customer products, such as prescription drugs, over-the-counter medications, dietary supplements, and analytical development and testing services. The Oral and Specialty Delivery segment offers formulation, development, and manufacturing across a range of technologies along with integrated downstream clinical development and commercial supply solutions. The Clinical Supply Services segment offers manufacturing, packaging, storage, distribution, and inventory management for drugs and biologics, and cell and gene therapies in clinical trials. The company was incorporated in 2007 and is headquartered in Somerset, New Jersey.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

In the case of CTLT, I have three beats of the  Zacks Consensus Estimate and one miss.  This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower.  For CTLT I see annual estimates moving lower.

The current fiscal year consensus number moved from $3.81 to $3.35 over the last 60 days.

The next year has moved from $4.53 to $3.86.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions.  That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).

Additional content:

Markets Cool but Stay in the Green, Led by China Stocks

Markets were so enthused about another cooler inflation metric yesterday that not Russian rockets flying to Poland, nor further fallout from the FTX crypto collapse could keep the major indices from closing in the green. While off session highs, the Dow gained +0.17% on the day. The S&P 500, which sees all 11 sectors positive month-to-date thus far, was up +0.88% today. The Nasdaq earned +162 points, +1.45%, and is the only major average higher for the week thus far. The small-cap Russell 2000 beat the field, +1.50% on the day.

BlockFi Lending Co., which had been wavering to such an extent that FTX was planning to buy it out for $240 million, may be preparing to file for bankruptcy, as per a report in the Wall Street Journal Wednesday. Obviously, with FTX -$8 billion in the hole, this buyout is not going to happen. We may yet see that what the Fed “broke” by rising interest rates so aggressively over the past few months is, above all else, the crypto market. With a bit of luck, we may see this contagion contained, but keep an eye for a string of hardships in the crypto markets going forward.

Two are dead in the NATO member country Poland after reports of Russian missile strikes, which were ostensibly supposed to have been aimed at Ukrainian power plants at the onset of cold winter months, flew astray and landed across the border. For Russia’s part, they deny the charge and blame this story on false news reporting out of Poland. NATO allies, including the U.S., have independently verified the air strike.

Ukraine aside, the global economy hasn’t looked stronger in months, and much of this has to do with China reportedly lowering their Covid restrictions and bringing more factories, shipping facilities, etc. back on line. As investors begin to unwind some of their risk-off positions, we’re seeing many tech and e-commerce companies in China among the best-performing stocks of the day: Datadog and NetEase are +10%, while Baidu grew +9%.

Wednesday morning, we get a bevy of new economic information: Retail Sales, Import/Export Prices and Industrial Production/Capacity Utilization — all for October — look for modest gains across the board, with the exception of Industrial Production, which is expected to drift down moderately. We also await key tech stock reports after the close; if we are to see a continuing narrative of strong retail performance and something of a bounceback in semis, we may wish to seek them here.

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