Tailored Brands, Motorcar Parts of America, Cadence Design Systems, Red Hat and Splunk highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – Dec 21, 2017 – Zacks Equity Research highlights Tailored Brands TLRD as the Bull of the Day and Motorcar Parts of America MPAA as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Cadence Design Systems, Inc. CDNS, Red Hat, Inc. RHT and Splunk Inc. SPLK.

Here is a synopsis of all five stocks:

Bull of the Day:

Tailored Brands, formerly known as Men’s Wearhouse, is a men’s specialty apparel retailer. It owns Men's Wearhouse, Jos. A. Bank and some other brands and serves customers through 1,400 locations in the U.S. and Canada as well as e-commerce websites.

The company had acquired Jos. A. bank in 2014 and had to take a large write-down on the investment. However, after two years of store closings, job cuts and changes in the marketing strategy, Jos. A. Bank is finally getting back on track.  

Excellent Third Quarter Results

The retailer delivered better-than earnings of $0.75 per share, beating the Zacks Consensus Estimate of $0.54 by 39%.

This was the second consecutive quarter of positive comparable sales for the retail segment as a whole despite an unfavorable 70 basis point impact from the hurricanes.

"We are encouraged by the progress we are making on our strategic initiatives to grow our custom business and enhance our online and in-store omni-channel capabilities.  These initiatives are part of our strategy to deliver a superior customer experience in order to increase market share and drive long-term sustainable growth," said the CEO.

Shares jumped about 12% after the report.

Partnership with Macy’s Terminated

In May, Macy’s and Tailored Brands announced their plan to wind down the tuxedo rental partnership established in 2015.

The company recently announced that in addition to closing all 170 tuxedo shops at Macy's, it expects approximately net 20 store closures in 2017 as it continues to review of its real estate portfolio.

Rising Estimates

After strong results, analysts have raised estimates for the company. Zacks Consensus Estimates for the current and next year are $2.08 per share and $2.14 per share, up from $1.82 and 1.93 respectively, before the results.

The company has delivered an average positive earnings surprise of 7.7% in the past four quarters.

Bottom Line

The stock has top Zacks Style Scores, “A” for Growth, Value as well for VGM. Dividend yield is quite attractive at 3.41%. Further, with an expected long-term earnings growth rate of 16.5%, the stock is worth a look.

Bear of the Day:

Headquartered in Torrance, CA, Motorcar Parts of America is a supplier for remanufactured and new parts, which are sold in more than 25,000 outlets in the U.S. and Canada. Its products include starters, alternators, master cylinders, hub assemblies and bearings, brake power boosters, and turbochargers.

Shares Plunge After Weak Results

The company reported adjusted net income of $9.7 million, or $0.50 per diluted share, compared with $12.4 million, or $0.64 per diluted share, in the same period a year earlier. Adjusted EPS also missed the Zacks Consensus Estimate of $0.55.

"The first half of fiscal 2018 was a challenging period, even though we achieved market share gains.   As widely reported by industry observers, we are experiencing industry softness and related headwinds,” said the CEO.

Falling Estimates

Analysts have slashed their estimates for the company after weak results.  Zacks Consensus Estimates for the current and next fiscal year have fallen to $2.13 per share and $2.49 per share from $2.35 and $2.66 respectively, before the results.

Bottom Line

The stock has fallen to a Zacks Rank #5 (Strong Sell) after weak results. Further, it has Style Scores of “F” for Growth, “C” for both Value and Momentum, and “D” for VGM.

Additionally, the “Automotive - Replacement Parts” industry is currently 241 out 265 Zacks Industries (bottom 9%) suggesting near-term weakness. It’s better to avoid this stock as of now.

Additional Content:

3 Enterprise Software Stocks to Buy Now

2017 has been the year of the tech stock. Across nearly every industry of the technology sector, shares have soared on the back of increased demand and shifting consumer habits. Interestingly, one of the most in-demand segments of the tech market this year has been enterprise software, largely due to widespread adoption of new technologies by large businesses and corporations.

As we head into the New Year, enterprise software companies look poised for another strong run. Cloud computing is continuing to get more affordable, and the advent of artificial intelligence presents new uses for large chunks of data. This could help enterprise tech firms become the hottest stocks in the tech sector throughout 2018.

With that said, check out these three enterprise software stocks to buy now:

1.       Cadence Design Systems, Inc.

Cadence is a leading designer of electronic design automation software and produces solutions for semiconductors, computer systems, and consumer electronics, among other things. Cadence shares have been on a strong two-year run, including a 73.5% surge in 2017 alone. The stock is currently a Zacks Rank #2 (Buy).

Based on our current consensus estimates, Cadence is expected to finish its current fiscal year with earnings growth of 15.5%. The company’s earnings are projected to swell an additional 7.9% next year. The stock’s P/E of 31.31 is a bit bloated, but it actually comes in lower than the “Computer – Software” industry’s average, so investors could be getting a comparatively decent price for CDNS right now.

2.       Red Hat, Inc.

Red Hat is a leading provider of open-source software and enterprise IT solutions, including cloud computing. The company has a strategic partnership with Amazon Web Services unit and is rapidly growing its cloud offerings. Red Hat just surpassed earnings estimates again and remains a Zacks Rank #2 (Buy).

Shares of the software firm actually slipped in the wake of the company’s earnings and revenue beat, but we think this could be an opportunity to buy on the dip. Subscription revenue for app development and emerging tech, a key growth catalyst for the company, was up 44%. And guidance for the upcoming quarter was higher than analyst expectations.

3.       Splunk Inc.

Splunk provides a software platform, which collects and indexes data and enables users to search, correlate, analyze, monitor and report on this data, all in real time. The stock is up over 64% this year and is currently sporting a Zacks Rank #2 (Buy).

Splunk is an exciting pick for growth investors and currently rocks an “A” grade in the Growth category of our Style Scores system. The company is expected to expand its earnings by 41.9% in the current fiscal year. Its earnings are also expected to grow at an annualized rate of 29% over the next three to five years. What’s more, management is expanding its cash flow by 15% right now.

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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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.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Splunk Inc. (SPLK) : Free Stock Analysis Report
 
Motorcar Parts of America, Inc. (MPAA) : Free Stock Analysis Report
 
Red Hat, Inc. (RHT) : Free Stock Analysis Report
 
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
 
Tailored Brands, Inc. (TLRD) : Free Stock Analysis Report
 
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