Bill Holdings is growing organically and through acquisition. In 2022, Bill Acquired Finmark, "a leading financial planning software provider that simplifies financial planning and cash flow insights for SMBs." Bill also made strategic acquisitions in Divvy (spend & expense software) and Invoice2go.
BILL's niche market, a vast array of products, and aggressive acquisition strategy are working. The company has achieved double-digit top-and-bottom-line growth for five consecutive quarters.
In addition, BILL tends to smash Wall Street EPS expectations. The company has delivered positive earnings surprises in the past four quarters, with an average EPS surprise of 29.84% (versus Zacks Consensus Estimates).
DeepSeek Rattles US Equity Markets, but is it Bullish for Software?
"DeepSeek," an open-source Chinese AI model, is the buzzword currently among Wall Street circles. According to DeepSeek, its "DeepSeek-R1" model can outperform the most popular large language models (LLMs), such as Meta Platform's"Llama" and OpenAI and Microsoft'sChatGPT. In addition, DeepSeek claims that its large language model was could be trained with a fraction of the expensive NvidiaGPUs used in other LLMs, sending shockwaves through Wall Street.
Though investors are still analyzing the fallout from DeepSeek and waiting for the smoke to clear, many wonder if AI will be commoditized. Software companies that leverage AI, like Bill Holdings, should benefit dramatically if this is the case. Currently, the software group ranks an impressive 47 out of the 250 industries tracked by Zacks (top 19%). Meanwhile, software stocks such as Twilio and Snowflake exhibited standout relative strength during Monday's equity bloodbath – a bullish sign.
In addition to robust relative strength, BILL shares are breaking out of a bull flag pattern after finding support at the rising 50-day moving average.
Software is a rare bright spot in an otherwise weak tech sector. As a result, stocks like BILL Holdings may benefit as money flows out of chip stocks.
Zacks Rank #5 (Strong Sell) stock Baidu is a Chinese technology company that offers multiple internet services. With a focus on mainland China users, Baidu is best known for its search engine dominance (owns ~54% market share in China). However, the company has branched out into several other offerings. Baidu also offers cloud computing, artificial intelligence, autonomous driving, and online services like video streaming (iQIYI), an online encyclopedia (Baidu Baike), and even a popular discussion forum (Baidu Tieba). Like America's Alphabet,Baidu strikes to be a one-stop destination for Chinese and global internet users.
Zacks Consensus Estimates suggest that Wall Street analysts expect BIDU to produce negative earnings growth until at least 2026
Advertising, Baidu's "bread and butter," has been falling precipitously in recent quarters, and that decline is expected to continue. Below are some of the reasons for the company's tepid earnings growth, including:
1. Macroeconomic Challenges: China's economy has been plagued by a devasting recession for several years, intensified by COVID-19, declining population growth, and an unprecedented real estate bear market.
2. Changing Online Consumption: A trend has emerged where global internet users prefer short-form video content over long-form content. China's ByteDance (owner of TikTok, known as Douyin in China), is dominating the short-form video market domestically. Presently, Baidu does not have an answer to this competition, and its search-based advertising has taken a hit as a result. In the US, Meta Platforms has unveiled its "Reels," while Google has debuted "YouTube Shorts."
3. AI and Cloud Computing: Though Baidu has invested many resources in these businesses, the company has yet to bear fruit.
DeepSeek, China's alleged "ChatGPT killer," threw cold water on US equities Monday. Though US stocks like Nvidiaand Microsoftplunged on the news, the action in Chinese equities was less than inspiring. For example, the iShares China Large Cap ETFgained less than a percent Monday – a tepid response if you believe China has flipped the AI game on its head overnight. In addition, BIDU is exhibiting relative weakness compared to other Chinese tech juggernauts like Alibabaand JD.com.
Baidu faces significant challenges, from macro pressures in China to increasing competition in key markets like short-form video and AI. Slowing earnings growth and relative weakness in the tech sector underscore the uphill battle it faces in maintaining relevance.
In the dynamic world of investing, finding the right balance between risk and reward is like walking a tightrope. While the promise of quick profits can be alluring, it is equally important to anchor your portfolio with stable, long-term investments.
Rather than chasing after high-risk, high-reward stocks that often make headlines, investors should meticulously assess market dynamics and develop a well-thought-out investment strategy. The emphasis should be on well-established companies with a proven record and resilience to weather economic downturns.
For long-term stability and consistent growth, market experts are inclined toward highly reputable companies with substantial market capitalization, commonly known as blue-chip companies such as Walmart Inc., Costco Wholesale Corp. and The Home Depot, Inc.. These industry giants showcase financial resilience and have a history of delivering robust returns to shareholders.
Blue-chip companies are less susceptible to sudden stock price fluctuations, making them a reliable choice for experienced and novice investors. For those seeking regular income, blue-chip companies provide steady dividend payouts, adding to their stability.
These companies boast a winning combination of established market positions, strong brand recognition, loyal customer bases and extensive market penetration. These traits give them a distinct competitive advantage, make them investor favorites and unlock growth opportunities. By investing in blue-chip stocks, investors can build a well-diversified portfolio.
Walmart has been working to strengthen its already formidable presence in the market. The company has embarked on a series of strategic e-commerce initiatives, encompassing acquisitions, partnerships and significant improvements in its delivery and payment systems. Walmart is committed to elevating its merchandise offerings, ensuring a diverse and appealing product assortment. Innovation extends to its supply chain, wherein the company is enhancing capacity and introducing cutting-edge solutions.
As of last Friday's session, Walmart's market capitalization stood at $761.2 billion. This Zacks Rank #2 (Buy) company has a trailing four-quarter earnings surprise of 9.3%, on average. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Walmart's current financial-year sales and earnings per share (EPS) suggests growth of 4.8% and 11.7%, respectively, from the year-ago reported numbers. The company pays out a quarterly dividend of about 21 cents per share (83 cents annualized). WMT's payout ratio is 34, with a five-year dividend growth rate of 2.9%. (Check WMT's dividend history here)
Costco has navigated market ups and downs effectively, driven by strategic investments, a customer-centric approach, merchandise initiatives and a strong emphasis on memberships. By identifying untapped markets and tailoring offerings to customer preferences, Costco has deepened its market presence. The company's high membership renewal rates, efficient supply chain management and bulk purchasing power ensure competitive pricing and foster strong customer loyalty.
Costco has a market cap of $417.1 billion. This Zacks #2 Ranked company has a trailing four-quarter earnings surprise of 2%, on average.
The Zacks Consensus Estimate for Costco's current financial-year sales and EPS implies growth of 7.2% and 11.8%, respectively, from the year-ago period's actuals. The company pays out a quarterly dividend of $1.16 per share ($4.64 annualized). COST's payout ratio is 28, with a five-year dividend growth rate of 13.2%.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Headquartered in Atlanta, GA, Home Depot stands as another distinguished blue-chip stock, dominating the home improvement retail sector. Its consistent expansion in Professional and Do-It-Yourself segments, fortified by an extensive product lineup and digital innovations, underpins its remarkable success. The company's interconnected retail strategy and robust technological infrastructure have amplified web traffic, leading to growth in digital sales. As mortgage rates decline, it could potentially stimulate homebuying activity and drive demand for renovation and remodeling projects.
Home Depot has a market cap of $411.7 billion. This Zacks Rank #2 company has a trailing four-quarter earnings surprise of 2.3%, on average.
The Zacks Consensus Estimate for Home Depot's current financial-year sales calls for growth of 3.9% from the year-ago period's reported number. The company pays out a quarterly dividend of $2.25 ($9.00 annualized) per share. HD's payout ratio is 60, with a five-year dividend growth rate of 11.2%.
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