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Tencent Holdings, SunPower and Fitbit highlighted as Zacks Bull and Bear of the Day

Mutual Fund Report for TRMCX

For Immediate Release

Chicago, IL – Feb 27, 2018 – Zacks Equity Research highlights Tencent Holdings TCEHY as the Bull of the Day, SunPower Corporation SPWR as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fitbit, Inc. FIT.

Here is a synopsis of all three stocks:

Bull of the Day:

Over the past few years, several notable Chinese internet stocks have exploded in popularity, creating a new sub-industry for many investors here in the U.S. looking to add exposure to China’s growing tech infrastructure to their portfolios. Of these, Tencent Holdings has emerged as one of the strongest options right now.

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Tencent is one of the world’s largest internet and technology companies. Its services include social networks, instant messaging, music, e-commerce, mobile gaming, and much more. Its major messaging platforms, Tencent QQ and WeChat, are dominant in the industry, and its investments in AI, cloud computing, and retail have set the company up for continued growth.

Earnings estimates for Tencent have moved higher recently, helping the stock earn a Zacks Rank #1 (Strong Buy). This improved outlook, on top of the company’s strong growth catalysts, make TCEHY a top Chinese internet pick.

Latest Outlook

Tencent is slated to announce its latest quarterly earnings results in late March. Based on our current consensus estimates, the company is projected to post adjusted earnings of 29 cents per share and total revenues of $11.00 billion. These results would represent year-over-year growth of 52.6% and 71.4%, respectively.

Tencent’s projected Q4 results are expected to lift the company’s full-year earnings per share to $1.06, up 47.2% on a year-over-year basis. Looking ahead, our consensus estimates are calling for Tencent to expand its bottom line by an additional 34.0% in fiscal 2018. What’s more, the company is expected to improve its earnings at an annualized rate of 27.2% over the next three to five years.

Tencent owes its growth prospects to a number of new initiatives. For example, it plans to expand its brick-and-mortar shopping operations through a stake in Carrefour’s China unit. Along with local retailer Yonghui Superstores, Tencent recently signed a term sheet for an undisclosed stake in Carrefour China.

Tencent’s partnership with Yonghui would allow the social media and mobile gaming giant to pair its technology with the domestic retailer’s shopping expertise in order to improve Carrefour’s mobile payments and data analysis. Tencent previously signaled its intention to enter the Chinese retail market with its $638 million investment in Yonghui.

Bear of the Day:

There is plenty of room for expansion in the renewable energy industry, but many firms have struggled to find consistent profitability and growth. This causes uncertainty, and with uncertainty comes volatility. With this in mind, investors might consider avoiding SunPower Corporation right now.

SunPower designs and manufactures high-efficiency silicon solar cells and solar panels based on an all-back contact cell design. SunPower's solar cells and panels generate electricity from sunlight for residential, commercial and remote power applications.

After the company’s Q4 report saw lower-than-expected revenues and shaky guidance, analysts have soured on SunPower’s near-term prospects, dragging the stock down to a Zacks Rank #5 (Strong Sell).

Latest Earnings and Outlook

SunPower reported its fourth-quarter results on Feb. 14. The company posted adjusted earnings of 25 cents per share, surpassing the Zacks Consensus Estimate of 18 cents. However, total revenues of $824 million missed our consensus estimate of $838 million. Revenues were also down about 24.9% from the year-ago period.

For the full fiscal year, SunPower generated adjusted revenues worth $2.13 billion, lagging our consensus estimate of $2.14 billion. On a year-over-year basis, full-year revenues fell 21.2%.

On a non-GAAP basis, the company expects adjusted revenues in the range of $300 to $350 million for first-quarter 2018. SunPower currently anticipates adjusted revenues for 2018 to lie in the range of $1.8 to $2.2 billion.

SunPower will also be affected by a recent import tariff on solar cells and modules imposed by the Trump administration. The company just announced plans to reduce its workforce by 3% due to the tariff. SunPower expects to incur restructuring charges of $20 million to $30 million.

Additional content:

Fitbit (FIT) Plummets on Q4 Earnings Miss, Guidance

Fitbit, Inc.just released its fourth-quarter and full year 2017 financial results, posting an adjusted loss of $0.02 per share and revenues of $570.8 million. Currently, Fitbit is a Zacks Rank #3 (Hold) and is down nearly 11% to under $5 per share in after-hours trading shortly after its earnings report was released.

FIT:

Missed earnings estimates. The company posted an adjusted loss of $0.02 per share, missing the Zacks Consensus Estimate of break-even earnings.

Missed revenue estimates. The company saw revenue figures of $570.8 million, falling well short of our consensus estimate of $587.03 million.

Fitbit revenues fell from $573.8 million in the year-ago period. The company did note that it sold 5.4 million wearable devices in the quarter, with the average selling price up 20% year-over-year. This was driven by higher prices for its new Ionic smartwatches.

Looking ahead to fiscal 2018, Fitbit expects “limited revenue from new product introduction.” The company now projects sales will fall between 15% and 20%.

“In 2018 we’ll focus on managing down expenses, continuing to expand in the smartwatch category and supporting our engaged global community on their health and fitness journeys,” CEO James Park said in a statement.

Fitbit Inc. manufactures and markets wearable fitness-tracking devices. The Company's product consists of Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit Charge HR, Fitbit Surge and Aria. It also offers accessories which include bands and clips, charging cables and Fitbit apparel. Fitbit Inc. is headquartered in San Francisco, California.

Check back later for our full analysis on FIT’s earnings report!

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

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Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

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.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report
 
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