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Thursday, April 3, 2025
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Cisco Systems, Inc. (CSCO), Caterpillar Inc. (CAT) and CME Group Inc. (CME), as well as two micro-cap stocks EVI Industries, Inc. (EVI) and Franklin Financial Services Corp. (FRAF). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
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You can read today's AWS here >>> Tariff Policies Send Pre-Market Futures Down -4%
Today's Featured Research Reports
Cisco’s shares have outperformed the Zacks Computer - Networking industry over the past year (+31.4% vs. +30.2%). The company’s business model has evolved with subscription revenues accounting for more than half of its total revenues. Increase in recurring revenue base bodes well for investors. Splunk acquisition enhances its recurring revenue base.
The buyout significantly expands Cisco’s portfolio of software-based solutions, contributing more than $4 billion in ARR and makes it one of the largest software companies in the world. The launch of AI-powered Hypershield, which combines security and networking, strengthened Cisco’s security portfolio.
However, it has been suffering from sluggish networking sales, primarily due to lackluster demand from telecommunication and cable services providers, as well as stiff competition. Cisco’s prospects are further challenged in the AI-driven networking space due to stiffening competition.
(You can read the full research report on Cisco here >>>)
Shares of Caterpillar have declined -5.8% over the past year against the Zacks Manufacturing - Construction and Mining industry’s decline of -8.6%. The company’s Energy & Transportation segment has shown improved performance, helping offset weaker volumes in Resource Industries and Construction Industries segments in the past few quarters.
This trend will continue in 2025, which, along with its solid 2024-end backlog of $30 billion, should support its top line. Weakness in the 10-ton and above excavator market in China and tariff impact remain concerns. Going forward, the Construction Industries segment is set to gain from increased construction activities in the United States and globally.
Resource Industries will be supported by rising commodity demand, driven by energy transition. The Energy & Transportation segment will gain on strong demand across all applications. Focusing on aftermarket parts and service-related revenues, which generate high margins, will also aid growth.
(You can read the full research report on Caterpillar here >>>)
CME’s shares have outperformed the Zacks Securities and Exchanges industry over the past year (+29.5% vs. +28.2%). The company’s strong market position, driven by varied derivative product lines, bodes well. Efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives and a stable global presence are encouraging.
While higher electronic trading volume adds scalability, product innovation and a growing proportion of volume from customers outside the United States have been driving results. Solid liquidity supports wealth distribution to shareholders.
However, escalating expenses due to higher technology costs are likely to put pressure on its margins. Also, its diversified product portfolio is significantly exposed to volatile interest rates, stricter government regulations and limited credit availability in unstable capital and credit markets.
(You can read the full research report on CME here >>>)
Shares of EVI have underperformed the Zacks Industrial Services industry over the past year (-22.5% vs. -8.6%). This microcap company with market capitalization of $224.12 million have seen operating cash flow declined 79.9% YoY. SG&A expenses are rising faster than revenues, pressuring margins and scalability. Liquidity remains tight, with just $3.9 million in cash.
Nevertheless, EVI Industries is poised for accelerated growth through its transformative acquisition of Girbau North America, which is expected to be immediately accretive to earnings. The deal expands EVI’s North American footprint and enhances operational scale, OEM relationships, and strategic sourcing.
Since 2016, EVI has delivered robust multi-year growth — 31% revenue CAGR, 19% net income CAGR — driven by disciplined M&A, decentralized operations, and reinvestment in sales and service. Regional expansion continues with recent Midwest acquisitions, adding $85M in pro forma revenues. EVI benefits from industry tailwinds in healthcare, hospitality and sustainability trends.
(You can read the full research report on EVI here >>>)
Franklin Financial’s shares have outperformed the Zacks Banks - Northeast industry over the past year (+54.3% vs. +18.5%). This microcap company with market capitalization of $157.77 million offers a compelling investment case supported by robust 11.2% loan growth driven by commercial real estate and residential lending, alongside a 15.7% rise in average loan balances.
Strong deposit expansion of 18.1% enhances funding stability, with 85% of deposits insured or collateralized. The Wealth Management division boosts noninterest income and diversification, with AUM up 6.4%. A strategic $4.3 million securities restructuring enhances long-term profitability despite short-term earnings drag.
Asset quality remains exceptional, with NPAs (Non-Performing Assets) at 0.01% and ACL (Allowances for Credit Losses) at 1.26%. Investments in technology and Salesforce integration improve operational efficiency, while capital strength (13.85% risk-based ratio) supports shareholder returns via dividends and buybacks. Franklin is well-positioned for sustainable growth and margin expansion.
(You can read the full research report on Franklin Financial here >>>)
Other noteworthy reports we are featuring today include Lennar Corp. (LEN), Teva Pharmaceutical Industries Ltd. (TEVA) and EMCOR Group, Inc. (EME).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>