Chicago, IL – February 13, 2025 – Zacks Equity Research shares Allegiant Travel Company ALGT as the Bull of the Day and A-Mark Precious Metals' AMRK as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Super Micro Computer, Inc. SMCI, Alphabet Inc. GOOGL and NVIDIA Corp. NVDA.
Here is a synopsis of all five stocks:
Among the Zacks Rank #1 (Strong Buy) list, Allegiant Travel Company is a stock that stands out in terms of growth, value, and momentum.
Operating a low-cost passenger airline, Allegiant’s stock looks poised for more upside after impressively exceeding its Q4 earnings expectations last Tuesday. Landing the Zacks Bull of the Day, Allegiant stock is of interest for short-term gains but appears to be headed for long-term success as well.
Headquartered in Las Vegas, Allegiant Air has become one of the fastest-growing airlines in the United States by creating a niche that centers around strategic expansion into underserved markets. This has propelled the company ahead of other low-budget carriers such as Spirit Airlines, which serves markets with more direct competition from the larger carriers and have higher operating costs.
Furthermore, Allegiant is known for its positive customer experience by offering free seat selections and a more straightforward fee structure as opposed to Spirit Airlines. Allegiant also has a reputation for efficient operations, including quick turnaround times and high aircraft utilization rates, which helps maximize revenue.
Allegiant posted Q4 adjusted earnings of $2.10 per share, beating the Zacks EPS Consensus of $1.88 and flying from $0.11 a share in the prior-year quarter. On the top line, Q4 sales increased 3% year over year to $627.11 million and edged estimates of $624.8 million.
Notably, Allegiant expects Q1 EPS at $1.50-$2.50 with the current Zacks Consensus at $1.96 or 244% growth from $0.57 a share in the comparative period (Current Qtr below). Allegiant’s annual earnings are expected to rebound and soar to new peaks of $7.55 per share compared to EPS of $2.48 last year, with its previous record being $7.31 a share in 2023. Plus, Zacks projections call for Allegiant’s EPS to expand another 28% in FY26.
Sales forecasts call for low-double-digit growth in FY25 and FY26 with projections edging toward $3 billion. However, most intriguing and indicative of more short-term upside in ALGT is that FY25 and FY26 EPS estimates have soared over the last 60 days and are up 16% and 6% in the last week respectively.
With Allegiant stock trading at a reasonable 11.1X forward earnings multiple, now appears to be an ideal time to get in on the company’s expansion and appealing EPS growth. To that point, it wouldn’t be surprising if ALGT starts to rally based on a very compelling trend of positive earnings estimate revisions.
Disappointing results for A-Mark Precious Metals' fiscal second quarter makes its stock one to avoid after releasing its Q2 report last Friday.
Operating as a full-service precious metals trading company, A-Mark has been vulnerable to a weaker business environment with reduced demand and higher operating costs impacting its profitability. Considering such, AMRK lands a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
A-Mark's Q2 EPS of $0.55 dropped from $0.90 per share in the comparative quarter and missed expectations of $0.86 by -36%. This was despite Q2 sales of $2.74 billion rising from $2.07 billion in the prior period and edging estimates of $2.66 billion.
Still, the company’s operating efficiency has to be called into question as A-Mark has missed earnings expectations for six consecutive quarters with an average EPS surprise of -42.03% in its last four quarterly reports.
A-Mark's stock could be a value trap for investors who aren’t keeping up with the company’s financial performance and blindly rely on its valuation with AMRK at a “cheap” 8.1X forward earnings multiple.
Taking away from A-Mark's P/E discount relative to the consumer discretionary sector is that its fiscal 2025 EPS estimates have noticeably declined over the last seven months after dropping 20% in the last week to $2.83 from $3.54.
Harvesting gold, silver, and platinum, A-Mark’s operations may be appealing down the line but for now, it may be best to avoid AMRK. To that point, A-Mark needs to show it can get back on track in regards to reaching its earnings potential as declining EPS estimates point to more downside risk ahead.
Super Micro Computer, Inc. recently issued strong revenue guidance for fiscal 2026 and aims to meet regulatory obligations by Feb. 25. Should one invest in Supermicro stock now or wait? Let’s see –
Late Tuesday, Super Micro released its preliminary fiscal second-quarter results ending on Dec. 31, which missed its previous guidance. The San Jose, CA-based company expects fiscal second-quarter revenues between $5.6 billion and $5.7 billion, below the prior forecast range of $5.5-6.1 billion at the midpoint.
Super Micro also trimmed the full fiscal 2025 revenue outlook. The company expects revenues between $23.5 billion and $25 billion for the full year, below the prior estimate of $26-30 billion. However, CEO Charles Liang expects the company to perform much better in 2026 and achieve revenues of $40 billion, way above the present consensus of $29.2 billion.
Next year, revenues are estimated to grow due to strong demand for Super Micro’s data center solutions. Liang expects over 30% of new data centers to use Super Micro’s direct-liquid cooling (“DLC”) technology in the next 12 months, driving sales up. DLCs are popular for addressing AI data centers’ heat issues.
With Alphabet Inc. increasing their artificial intelligence (AI) and cloud services, Super Micro certainly faces challenges in the AI data center sector. However, Super Micro’s collaboration with NVIDIA Corp. through the Blackwell platform has enhanced its AI data center capabilities. This synergy boosted Super Micro’s AI computing power, curtailed operational expenses, lured more clients to its data centers, and bolstered its market position.
AI data centers are increasingly focused on reducing their carbon footprint. Super Micro uses renewable energy sources and energy-efficient technologies in its operations, which gives the company a competitive edge as environmental norms tighten worldwide.
Super Micro, late Tuesday, said that management expects to file the 10-Q report for the quarter ending in September and the 10-K report for the fiscal year ending June 30 with the SEC by the Feb. 25 deadline and avoid getting delisted from the Nasdaq Stock Exchange. Super Micro has appointed a new independent auditor promptly to file reports and restore investors’ trust.
Super Micro’s strong next-year revenue growth projections, partnership with NVIDIA, sustainable practices and new auditor appointment bode well for the stock, making it advisable to hold for long-term gains. The company also showcases strong profitability, with its return on equity of 34%, surpassing the industry average of 20.4%.
From a valuation perspective, the Super Micro stock also appears more reasonably priced, given its recent business performance. This is because SMCI stock’s price/earnings ratio is 14.01, lower than the Computer- Storage Devices industry’s average of 21.94. However, new investors should consider investing post Feb. 25, for better financial insight.
Super Micro stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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