For Immediate Release
Chicago, IL – March 15, 2017 –Zacks Equity Research highlights Applied Optoelectronics (NASDAQ: AAOI – Free Report ) as the Bull of the Day, Team Inc. (NYSE: TISI – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Macy’s (NYSE: M – Free Report ), Amazon (NASDAQ: AMZN – Free Report ) and Ares Management LP (NYSE: ARES – Free Report ).
Here is a synopsis of all five stocks:
Bull:
When identifying the Bull of the Day, I run a few models through our database to narrow my universe of potential companies. Two of the biggest factors in my search are Zacks Rank, and the consensus estimates revisions. Today’s Zacks Bull of the Day, Applied Optoelectronics (NASDAQ:AAOI – Free Report ) has a Zacks Rank #1, and their estimates have more than doubled after their most recent earnings report, and updated revenue guidance for Q1 17.
This Zacks Rank #1 (Strong Buy) designs, develops and manufactures advanced optical devices, packaged optical components, optical subsystems, laser transmitters and fiber optic transceivers. The company's products are used in fiber optic communications equipment for FTTH, point-to-point telecom, datacom and access networks and systems supporting cable television, network infrastructure. Applied Optoelectronics, Inc. is headquartered in Sugar Land, Texas.
Recent Earnings Data
The company reported Q4 16 earnings results on February 23 where they beat both the Zacks consensus earnings and revenue estimates for the third consecutive quarter. Highlights of the report include; Revenues up +60% year over year, and up 21% sequentially, GAAP gross margins improved from 29.5% in Q4 15 to 38% in Q4 16, and GAAP net income rose by +425% when compared to the year ago quarter. The big area for growth was the data center (DC) segment which saw revenues grow by +76% year over year, and +28% sequentially. According to management, Amazon accounted for almost all of the revenue growth during the quarter.
Q1 17 Improved guidance
Management announced some improvements in their Q1 17 guidance; Revenues are now expected in the range of $87 million to $91 million, above the previous estimate of $75 million. Non-GAAP gross margin in the range of 38% to 40%, above the estimated 38%. Non-GAAP fully diluted earnings per share (EPS) in the range of $0.80 to $0.88, ahead of the expected $0.79.
Management’s Take
According to Dr. Thompson Lin, founder, president, CEO, “ AOI achieved another record year driven by strong demand for our market-leading datacenter products and continued execution by the AOI team. We believe our record performance further demonstrates our growing market share in advanced optics and our team’s ability to generate manufacturing efficiencies that lead to margin improvement. Our ability to internally manufacture lasers and light engines provides us with cost-leadership advantages, a faster time to market, and the ability to quickly scale to demand. Looking ahead, as the 100G transition accelerates this year, we see the opportunity to build on our momentum and expand our market leadership .”
Bear:
Managing a company is no easy task, and it is made more difficult when unexpected hurdles wipe out most the gains you previously made. That is what is facing our Zacks Bear of the Day, Team Inc. (NYSE: TISI – Free Report ) who saw increased demand during their busy season, but then witnessed demand for their products plummet during the last two months of 2016. Further, this unexpected weakness has caused analysts to pencil in another year of uncertain market demands.
This Zacks Rank #5 (Strong Sell) is a professional full service provider of environmental engineering, consulting, monitoring and repair services. Environmental engineering, consulting and monitoring services, primarily in air quality together with on-stream leak repair and related industrial services for piping systems and process equipment, are provided by subsidiaries of the Company through its Environmental Services business segment.
Recent Earnings Data
On March 8th, management reported Q4 16 results where they significantly missed both the Zacks consensus earnings estimate (est. $0.45 vs. actual $0.08), and revenue estimate (est. $347 million vs. actual $320 million). The company posted a net loss of $12.7 million compared to a net income of $25.2 million in the year ago quarter. Also adjusted net income fell by -63.8% from Q4 15. Lastly, management also withheld earnings guidance for 2017 as they wait for a sustained pattern of market normalization.
Management’s Take
According to Ted Owen, President and CEO, “ We are obviously disappointed in our results for the quarter, especially after seeing increased demand levels during our busiest fall turnaround months of September and October. We were encouraged then that the early fall activity levels were the first signs of more normalized market activity, but that did not turn out to be the case. After the brief spike in demand for our services during the first month of the fourth quarter, demand weakened again in November and December. In spite of the soft demand in 2016, we continue to be optimistic that end markets will improve during 2017 and we are no less confident in the platform we are building as the premier industrial services company. However, until we begin to see a sustained pattern of market normalization, we will continue to withhold earnings guidance for 2017 .”
Additional content:
Luxury Retailer Neiman Marcus Reportedly Exploring a Sale
On Tuesday, Neiman Marcus, a high-end department store, is reportedly exploring potential strategic alternatives, including a sale of the company or other assets.
Neiman Marcus, which also operates the Bergdorf Goodman and MyTheresa brands, may be in talks to sell itself to Hudson’s Bay Company, the Canadian retail giant that owns other upscale retailers Saks Fifth Avenue and Lord & Taylor. According to The New York Times , Hudson’s Bay had also been discussing a possible merger with department store stalwart Macy’s (NYSE: M – Free Report ).
This announcement comes after Neiman Marcus reported a 6.8% decline in comparable sales during its recently ended quarter. Its total revenue fell 6.1% during that quarter, too, to $1.4 billion, with adjusted earnings of $126.8 million compared with $183 million in the prior year period.
Like many of its peers, the Dallas-based chain has struggled with decreased traffic, the shift to online shopping, and trying to keep up with Amazon (NASDAQ: AMZN – Free Report ), as well as a prolonged period of low fuel prices, which has hurt the spending power among its consumers in Texas; many of its 42 stores are concentrated around the state’s metropolitan areas.
Neiman Marcus actually had plans for an IPO, but abandoned those back in January. The retailer is currently owned by private equity firm Ares Management LP (NYSE: ARES – Free Report ) and Canada Pension Plan Investment Board; the acquisition went through in 2013 for $6 billion.
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report
Team, Inc. (TISI): Free Stock Analysis Report
Macy's Inc (M): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Ares Management L.P. (ARES): Free Stock Analysis Report
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