Over the last few trading sessions we have seen the power of the Nvidia halo. The halo is the coming to us in the form of investments NVDA has made in some smaller companies that are partners and or customers.
Cerence was announced as a partner for large language modeling and as a result the stock jumped from $8 before the announcement to a high of $27.50 yesterday morning.
NanoX Imaging and SoundHound AI are among the companies that NVDA holds stock in. They both saw positive stock moves following the announcements about the investment.
Yesterday, a new partnership was announced just prior to the Consumer Electronics Show which is better known as "CES" which starts today in Las Vegas. The CEO of Nvidia is slated to make the keynote address to kick things off (this article was written before the speech).
Other companies that have partnered with Nvidia has seen their share price move dramatically higher following news like this. ARBE could be the next big mover thanks to the Nvidia Halo.
Arbe Robotics Ltd. provides D Imaging Radar Chipset Solutions. The company is empowering automakers, tier-1 suppliers, autonomous ground vehicles, commercial and industrial vehicles and a wide array of safety applications with advanced sensing and paradigm-changing perception. Arbe Robotics Ltd., formerly known as Industrial Tech Acquisitions Inc., is based in Tel Aviv, Israel.
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.
Arbe Roboticshas an OK earnings history with the company topping the Zacks Consensus Estimate in 2 of the last 4 quarters.
The most recent earnings print saw the company post a loss of 13 cents when a loss of 11 cents was expected.
Over the last four quarters the average earnings surprise works out to be -22.7%.
Earnings estimate revisions is what the Zacks Rank is all about.
Estimates are moving higher for ARBE.
Following the recent miss, the estimates for this quarter have increased.
The consensus has moved from a loss of $0.11 to a loss of $0.10 over the last 60 days.
Next quarter has held still at a loss of $0.10.
The full year 2024 estimate is up from a loss of $0.42 to a loss of $0.40.
Next year increased from a loss of $0.42 to a loss of $0.39.
All of the estimate moves have come in the last 60 days.
For the calendar year 2024, the company is expected to post revenue of $1M. As of yesterday, analysts were calling for topline growth of 600% to $7M.
Granted this is a very small revenue estimate, but the partnership with NVDA could mean hundreds of millions of dollars in future revenues. That sort of potential was not lost on investors yesterday and there is a very good chance this stock continues to move higher.
This is where the rubber meets the road. The valuation is skewed wildly to the upside right now as the company is basically just getting started. There is no PE as the company is losing money and the price to sales is astronomically high due to low sales and a big move in the stock price. Price to book stood at 12x before the big move in the stock and could easily continue to run higher.
With a lack of valuation metrics, this stock leans heavily on the speculative side of things. Investors would probably be better off watching tape on this one and comparing it to other recent NVDA partners moves than looking at things like its current ratio or return on assets.
Looking at the daily trading chart we can see that there were 3 major drawdowns in the session. The first send the stock from the $3.85 range to the lows of the day at $3.50 around 11:30 AM EST. Just after 1:00 PM EST a draw down from the $4.40 range took the stock down to $4.00. Finally just before the 3:00 PM hour we saw a repeat as the stock dropped from $4.50 to $4.00. The takeaway from this is that the selling can be very violent for a short period of time so drawn downs of 10% found support and that could be prevalent again today as well.
Caesars Entertainment is a Zacks Rank #5 (Strong Sell) that operates a wide range of entertainment and hospitality businesses, primarily in the casino and resort sectors.
The company owns and operates casinos, hotels, and resorts, offering various gaming experiences, entertainment options, dining, and nightlife. Caesars is known for its flagship brands like Caesars Palace in Las Vegas, as well as other properties across the U.S. and internationally.
While the brand is one of the more popular names in Vegas, the stock is trading near 2024 lows. Investors should stay away after A streak of earnings misses and falling estimates
Caesars Entertainment, based in Reno, Nevada, is a diversified gaming and hospitality giant with roots dating back to 1973 when it was founded by the Carano family. The company primarily generates revenue through its expansive gaming operations, which include mobile and online gaming as well as sports betting.
Operating under renowned brands such as Caesars, Harrah's, Horseshoe, and Eldorado, the company has a significant presence in the United States and five other countries.
CZR is valued at $7 billion and has a Forward PE of 26. The stock holds Zacks Style Scores of "B" in Value, but "F" in Growth.
October brought the fourth straight EPS miss, with the company posting a surprise miss of 120%. Caesars reported Q3 quarterly sales of $2.90 billion, slightly below the analyst consensus estimate of $2.92 billion, missing by 0.82%. The sales represent a 3.14% decline compared to the $2.99 billion reported in the same period last year.
Caesars wasn't the only name that struggled as several major Las Vegas casino operators reported financial results that fell short of expectations, highlighting operational weaknesses.
MGM Resorts saw a significant revenue decline in its Las Vegas operations, with notable drops in table games earnings. Wynn Resorts experienced reduced casino revenue despite growth in entertainment and retail sales, while Las Vegas Sands faced a decrease in total quarterly revenue due to ongoing renovations and lower-than-expected property income.
These challenges reflect issues such as decreased casino patronage, operational disruptions, and changing consumer behavior, impacting the financial performance of these operators.
With earnings and industry weakness, analysts are lowering their estimates for Caesars.
Over the last 90 days, numbers have been taken down 74% for the current quarter, going from $0.27 to $0.05.
For the current year, we see the losses increasing, with earnings estimates going from -$0.68 to -$1.28. Next year also sees a 28% drop, going from $1.70 to $1.23.
2024 was a long year for investors in CZR. The stock dropped about 30% and has started the year around the 2024 lows.
While the fundamental story needs work, the technical side looks bad as well. The stock is trading below all its moving averages; the first positive sign for the bulls would be a move over the 21-day MA, currently at $35.
From there, the resistance area is the 200-day at $38. However, the stock has just seen a "Death Cross," which is when the 50-day falls below the 200-day MA. This is typically a negative signal.
Caesars Entertainment faces significant challenges that make it an unattractive investment at this time. Despite its strong brand presence and diverse operations in the gaming and hospitality sectors, the company is grappling with a streak of earnings misses, declining revenues, and reduced earnings estimates.
Despite the weakness in package volumes, FedEx Corp. shares gained in double digits in 2024, outperforming its industry. To combat the resultant top-line weakness, FDX has been cutting costs. Driven by its cost-cut initiatives, FDX shares gained 11.2% in 2024 in contrast to its industry's and rival United Parcel Service's 11% and 19.8% decline, respectively.
Given the stock's outperformance and the company's continued cost reduction efforts to drive bottom-line growth, investors might wonder if they should buy FDX stock as we enter 2025. Let us delve deeper to answer the question.
Last month, FedEx reported lower-than-expected revenues for the second quarter of fiscal 2025 (ended Nov. 30, 2025), highlighting its struggle due to sustained weakness in U.S. industrial production. Revenues also declined on a year-over-year basis. Average daily shipments fell 8% year over year.
Due to the continued uncertainty around the demand environment, FDX trimmed its earnings per share outlook for fiscal 2025. The company also predicts adjusted earnings per share of $19-$20 compared with the prior forecast of $20-$21. This was the second time in three months that FDX had trimmed its fiscal 2025 earnings per share outlook.
While releasing its second-quarter fiscal 2025 results, FDX also lowered its fiscal 2025 revenue growth outlook as the company continues to struggle due to the normalization of volume and pricing trends in the post-COVID scenario. FDX now expects revenues to be flat year over year compared with the prior view of low single-digit percentage growth.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Due to weak shipping demand, earnings estimates have moved south for FDX stock.
In view of the top-line struggles as highlighted above, FDX is aggressively slashing expenses. FedEx is realigning its costs under a company-wide initiative called DRIVE. Driven by the initiatives (that include reducing flight frequencies, parking aircraft and cutting staff), FDX delivered a sequential improvement in savings in the fiscal second quarter versus the first.
Mainly due to the cost cuts, FDX reported better-than-expected earnings per share in the second quarter of fiscal 2025. The bottom line also improved on a year-over-year basis. DRIVE resulted in cost reductions of $1.8 billion in fiscal 2024, with a further $2.2 billion expected by fiscal 2025-end versus the fiscal 2023 base line.
FDX's Freight division has been struggling for quite some time and has contributed to the company's top line struggle. In the first half of fiscal 2025, segmental revenues declined 7% year over year. Weakness pertaining to U.S. industrial production continues to hurt less-than-truckload industry demand.
Given this top-line weakness, FDX recently announced that it intends to spin off its freight trucking division into a separate company. The move will help it focus on its core delivery business as it restructures operations. The separation will create two independent publicly listed companies.
Both companies will pursue their growth strategies and will maintain the strategic advantages of cooperation on key commercial, operational and technology initiatives. Customers of both businesses will continue to enjoy the same superior service, speed and coverage as before.
After the spin-off, scheduled to take place within the next 18 months, FedEx Freight will keep operating under its current name. Freight was undervalued within FedEx, according to many market watchers and so the decision to make it an independent company via the spin-off is likely to create value for shareholders. The separation is likely to help FDX achieve a premium valuation for its Freight operations like Old Dominion Freight Line and other key operators in the less-than-load space. The announcement of the plan to spin off its freight business found favor with investors.
Going by the forward 12-month price/earnings ratio, the company's shares are currently trading at levels lower than its industry. FDX currently has a Value Score of A.
The company's efforts to reward its shareholders are commendable. In June 2024, FedEx raised its quarterly dividend by 10% to $1.38 per share (or $5.52 annually). Dividend stocks like FDX are generally safe bets for creating wealth, as these payouts act as a hedge against economic uncertainty. FDX is also active on the buyback front. Despite near-term challenges, it is worth noting that the company has the brand and the network to continue generating steady cash flows in the long run.
Amid the positives and the optimism surrounding the announcement of the spin-off of FDX's freight division, we note that since the process is likely to take 18 months to complete, any near-term impact of the transaction on the stock is unlikely. There is no clarity on how the financials of the independent entity will shape up.
Other headwinds like below-par shipping demand also lead us to believe that it is not at all advisable to buy this Zacks Rank #3 (Hold) stock currently. Declining earnings estimates also do not help matters. Investors should monitor the company's developments closely for an appropriate entry point. For those who already own the stock, it will be prudent to stay invested. The stock's current Zacks Rank supports our thesis.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
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Arbe Robotics Ltd. (ARBE) : Free Stock Analysis Report
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