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EverQuote, Americas CarMart, Nvidia, Applied Materials and Inphi highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research

For Immediate Release

Chicago, IL – May 28, 2020 – Zacks Equity Research Shares of EverQuote EVER as the Bull of the Day, Americas CarMart CRMT as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nvidia NVDA, Applied Materials AMAT and Inphi Corp. IPHI.

Here is a synopsis of all five stocks:

Bull of the Day:

EverQuote is a Zacks Rank #2 (Buy) and it sports that growth divergence that I love to see. Growth investors and value investors are inherently looking for different things and when I see a weak Zacks Style Score for Value and a strong Zacks Style Score for Growth I know I am on the right path.  Let's take a deeper look at EVER in this Bull of the Day article.

Description

EverQuote, Inc. operates an online marketplace for insurance shopping in the United States. Its online marketplace offers consumers shopping for auto, home and renters, life, health, and commercial insurance. The company serves carriers, agents, and indirect distributors and aggregators. The company was formerly known as AdHarmonics, Inc., and changed its name to EverQuote, Inc. in November 2014. EverQuote, Inc. was incorporated in 2008 and is headquartered in Cambridge, Massachusetts.

Earnings History

I see a great earnings history for EVER, with four of the last four quarters all coming in ahead of the Zacks Consensus Estimate.  The company posted one outsized beat of 250% and that skews the average positive earnings surprise over the last year to 86%, but without that the number would still be north of 30%.

That tells me these are good sized beats, only one in the last four quarters was just a penny more than the consensus.

Estimate Revisions

There have been lots of negative earnings estimate revisions across the entire market. I see a mixed bag here for EVER as this quarter has seen some positive and negative revisions. The current quarter saw an increase of 2 cents over the last 30 days while the full year saw a decrease of 2 cents as well.

As things stand now, next year is looking at a loss of 4 cents, but there is a good chance that turns around.

Valuation

With estimates just sliding under the breakeven line for next year, the forward PE is NA since the number is negative. What we do see is a 22x book multiple and that is high… but so is the growth of 55% in the most recent quarter. Price to sales of 4.5x is right inline with where it should be and it could easily move to 6x or 7x as margins expand. 

The operating margin has been headed in the right direction, moving from -6% to -2.8% to -1.5% over the last three quarters. The COVID pandemic probably isn’t going to help, but as the pandemic loses steam, look for margins to turn positive and that will certainly send this stock higher.

Bear of the Day:

Americas CarMart is a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day. Retail names have been hit hard across the board, but automotive retail names are probably down even more than traditional retail. At the same time, this stock has moved from nearly $130 before the crash to a low of about $40 and is now back to roughly $85.  Let's take a deeper look at CRMT in this Bear of the Day article.

Description

America's Car-Mart operates automotive dealerships and is one of the largest automotive retailers in the United States focused exclusively on the Buy Here/Pay Here segment of the used car market. The company operates its dealerships primarily in small cities and rural locations throughout the South-Central United States, selling quality used vehicles and providing financing for substantially all of its customers.

As of May 21, 2019, it operated 144 dealerships. America's Car-Mart, Inc. was founded in 1981 and is based in Bentonville, Arkansas.

Earnings History

I see a good earnings history with the company topping the Zacks Consensus Estimate in each of the last four quarters.

Over that time period the average positive earnings surprise is 11%.

That is great to see, but the Zacks Rank cares more about earnings estimate movement.

Estimates Revision

Over the last 60 days, we have seen estimates for CRMT fall in a big way.  I see this quarter dropping from $2.34 to $1.68. Next quarter slipped from $2.31 to $1.80.

The full year moved from $8.80 to $6.64 and that is what has pushed the stock down to a Zacks Rank #5 (Strong Sell).

Valuation

I see a 12x forward earnings multiple which isn't that high, but it could be a little lower. 10% topline growth is nice to see, but the next report isn't likely to see that much growth. The price to book at 1.8x is a little rich for a retail name and the 0.7x price to sales multiple is below the 1x number which means the market is not rewarding the company for any incremental sales.

Additional content:

3 Semiconductor Stocks to Buy for the Reopening Rally

The rally from the market’s March 23 lows continues as Wall Street looks beyond the coronavirus lockdowns to the eventual recovery, which seems more realistic now that economies around the world are slowly starting to reopen.

The stock market comeback is well ahead of any actual economic resurgence. That said, many of the tech firms that have helped drive the climb have proven more resilient to the pandemic than the likes of transportation, retail, energy & oil, and more, which makes it more reasonable.

The stay-at-home stocks, such as Netflix and Zoom, have outperformed, as have the blue-chips like Amazon, Apple, and more. And it’s not hard to imagine that the broader tech space that drove the historic bull market, which the coronavirus ended, will be the star of the near-term comeback and the next decade.

The semiconductor industry has and looks poised to continue to help underpin the technological revolution. With this in mind, we screened for strong chip stocks that investors might want to consider buying for the coronavirus rally and beyond.

Nvidia

Nvidia is a GPU giant that has proven for years its strength in the booming gaming market and its more recent expansion into data centers and cloud computing has really grabbed Wall Street’s full attention. NVDA topped our Q1 estimates on May 21, with revenue up 39%, driven by an 80% climb in data center revenue, which crossed the $1 billion threshold for the first time. And NVDA’s new Ampere architecture is set to play a key role within the AI-focused chips and cloud computing.

Back on April 27, Nvidia closed its $7 billion acquisition—its largest ever—of Mellanox Technologies to help bolster its data center business and more. Nvidia’s earnings estimates have turned far more positive since its Q1 beats to help it earn a Zacks Rank #2 (Buy) right now. Our Zacks estimates call for its revenue to jump 42% and 30%, respectively in Q2 and full-year fiscal 2021. Meanwhile, NVDA’s adjusted earnings are projected to surge 54% and 34% over this same stretch.

NVDA shares have surged 44% in 2020, against its industry’s 3% pop. And a recent pullback has Nvidia resting about 5% off its new highs. Along with this climb has come a stretched valuation picture. But Wall Street might continue to scoop up stocks that can grow in this environment, especially ones with longer-term potential. On top of that, Nvidia pays a dividend, is part of a highly-ranked Zacks industry, and boasts a strong balance sheet.

Applied Materials

Applied Materials is a leading semiconductor equipment firm that stands to benefit from the growth of big-data, artificial intelligence, and other new technologies. And AMAT is focused on figuring out what’s next as classic Moore's law scaling slows. The company did fall slightly short of our Q2 fiscal 2020 estimates in mid-May. Still, its revenue popped 12% and its adjusted EPS figure jumped 27%.

Peeking ahead, AMAT’s Q3 sales are projected to jump 18%, with its full-year revenue projected to climb 14%. Meanwhile, its adjusted earnings are expected to climb 28% in Q3 and over 25% this year. CEO Gary Dickerson also helped boost Wall Street confidence about its pandemic outlook, saying that “while the situation remains fluid, based on the visibility we have today, our supply chain is recovering, and underlying demand for our semiconductor equipment and services remains robust.”   

AMAT, which is a Zacks Rank #2 (Buy) right now, has seen its stock price soar 40% since the market’s March 23 lows. Despite this recent run, AMAT stock rests 15% below its 52-week highs. Applied Materials is also trading at a discount compared to its industry in terms of forward 12-month sales, at 2.9X vs. 6.6X. And AMAT’s 1.56% dividend yield tops its highly-ranked industry’s 1.23% average.

Inphi Corp.

Inphi makes semiconductor components and optical subsystems for networking OEMs, as well as cloud computing and telecom companies. IPHI is a leader in data movement interconnects between and inside data centers and helps “move big data fast, around the globe.” Inphi’s Q1 results impressed Wall Street on May 7, with revenue up 70%. Higher demand for cloud and telecom products helped drive sales, as did the inclusion of eSilicon, which it officially purchased in January.

Inphi’s record top-line growth came on top of the year-ago period’s 37% expansion. The firm was already benefiting from a data center boom, the transition to 5G, and more. And CEO Ford Tamer expects the “significant paradigm shifts” caused by the coronavirus, from remote work to e-commerce, might encourage “further acceleration of bandwidth upgrades.” IPHI shares surged after its release, with the stock now up over 60% in 2020 and 250% in the past two years.

IPHI's strong earnings revision activity helps it earn a Zacks Rank #2 (Buy). Looking ahead, our Zacks estimates call for Inphi’s adjusted FY20 earnings to surge 66%, on 66% higher revenue. The Santa Clara, California-based firm is projected to follow up this growth with double-digit sales and earnings growth in FY21.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
 
Americas CarMart, Inc. (CRMT) : Free Stock Analysis Report
 
EverQuote, Inc. (EVER) : Free Stock Analysis Report
 
Inphi Corporation (IPHI) : Free Stock Analysis Report
 
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