Thursday, August 15, 2024

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Booking Holdings Inc. (BKNG), Palo Alto Networks, Inc. (PANW) and Deere & Company (DE), as well a micro-cap stock FONAR Corporation (FONR). 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 >>>

Booking Holdings shares have gained +2.0% over the year-to-date period against the Zacks Internet - Commerce industry’s gain of +9.2%. The company is witnessing sluggishness in its agency business remains a concern. The declining trend in agency bookings is a major headwind. Also, geopolitical tensions and market uncertainties rermain concerning for the company.

Nevertheless, Booking Holdings reported impressive second-quarter 2024 results, wherein both earnings and revenues grew year over year. Revenue growth was driven by growing leisure travel demand. Substantial improvement in its booking trends was a major tailwind.

Strong momentum across its merchant and advertising, and other businesses contributed well to top-line growth. The growing alternative accommodation business was a tailwind for the company. Solid growth in rental car and airline ticket units was a positive. The uptick in booked room nights is contributing well to the gross bookings growth.

(You can read the full research report on Booking here >>>)

Palo Alto Networks shares have outperformed the Zacks Internet - Software industry over the year-to-date period (+14.1% vs. +12.3%). The company has been benefiting from continuous deal wins and the increasing adoption of its next-generation security platforms, attributable to the rise in the hybrid work environment and the heightened need for stronger security.

PANW’s strong back-to-back quarterly performances reflect its sustained focus on product innovation, a shift in its business model to subscription-based services, platform integration and continued investments in the go-to-market strategy. The normalization of the supply chain is also aiding growth across the Products, Services and Subscription segments.

However, softening IT spending amid macroeconomic headwinds might hurt its near-term prospects. Forex headwinds and higher marketing and sales expenses are likely to continue hurting its profitability. Also, high acquisition-related expenses are denting margins.

(You can read the full research report on Palo Alto Networks here >>>)

Shares of Deere have declined -10.8% over the year-to-date period against the Zacks Manufacturing - Farm Equipment industry’s decline of -13.3%. The company has been witnessing inflated material and labor costs over the past few quarters. These are likely to persist and put a dent in the company’s margins in the forthcoming quarters. Higher SG&A and R&D expenses add pressure to margins.

Deere has been facing supply-chain issues, resulting in delivery delays and less efficient factories. Low commodity prices will weigh on farm income and influence farmers’ investment decision-making. The company’s pricing actions and efforts to lower costs will somewhat offset these headwinds.

Deere's long-term growth prospects however remain strong, owing to consistent investments in new products and markets. Focus on launching products equipped with the latest technology will drive the margins. Increased infrastructure spending will drive demand for its construction equipment.

(You can read the full research report on Deere here >>>)

FONAR’s shares have gained +0.9% over the past year against the Zacks Medical - Products industry’s gain of +7.6%. This microcap company with market capitalization of $104.42 million has shown strong financial performance for the nine months ending Mar 31, 2024, with total revenues up 5.6% and net income rising 25.3%, reflecting effective cost management. Adoption of SwiftMR technology positions FONAR competitively.

Strategic expansion, a robust balance sheet, and a diversified revenue stream strengthen its market position. Yet, a 44.6% decline in third-quarter fiscal 2024 net income, rising SG&A expenses and decreased cash flow from operations signal potential operational challenges. Increased competition, reliance on HMCA and regulatory risks are key concerns.

Despite economic uncertainties and limited revenue diversification, FONAR’s legacy in MRI technology and continued R&D investment provide a solid foundation for future growth. Inventory management issues and sector-specific vulnerabilities persist.

(You can read the full research report on FONAR here >>>)

Other noteworthy reports we are featuring today include Motorola Solutions, Inc. (MSI), Eni S.p.A. (E) and Sun Life Financial Inc. (SLF).

Director of Research

Sheraz Mian

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>>>

Today's Must Read

Booking Holdings (BKNG) Benefits From Strong Travel Demand

Palo Alto (PANW) Rides on Shift to Subscription Services

Deere (DE) Gains from Pricing Efforts Amid Low Demand

Featured Reports

Motorola (MSI) Rides on Holistic Growth, Solid Order Trends
Per the Zacks analyst, Motorola is likely to benefit from a holistic growth model backed by the diligent execution of operational plans and healthy growth dynamics led by solid order trends.

Eni's (E) Focus on Renewables and Upstream Discoveries Aids
Eni's diversification into renewable energy and its focus on expanding upstream operations should drive long-term growth. However, its significant exposure to debt concerns the Zacks analyst.

Sun Life Financial (SLF) to Grow on Solid Asia Business
Per the Zacks analyst, Sun Life is set to grow given focus on Asia operation, growing asset management businesses and scaling-up and integration of U.S. operations. Yet, escalating expenses ail.

Chemed (CHE) Gains from Improved Metrics, Cost Woes Worry
Per the Zacks analyst, Chemed's VITAS sees improved ADC and admissions due to strong hiring and retaining clinical staff, and the benefits of Covenant buyout. Yet, macroeconomic issues escalate cost.

Axsome's (AXSM) Marketed Drugs Drive Growth Amid Competition
Per the Zacks analyst, Axsome's lead drug, Auvelity, approved for treating major depressive disorder is driving sales. The addition of Sunosi bodes well too. However, stiff competition remains a woe.

New Upgrades

Steady Contract Inflows & Favorable Budget Aid Leidos (LDOS)
Per the Zacks analyst, steady contract wins for Leidos' products should boost its future revenues. Favorable budgetary amendments done by U.S. administration also bode well for the stock.

Aspen (AZPN) Rides on Solid Business Pipeline & ACV Growth
Per the Zacks analyst, Aspen's performance is driven by strong business pipeline activities with healthy Annual Contract Value (ACV) growth trends. The dynamic macro environment is a concern

New Downgrades

Delta Air's (DAL) Prospects Hurt by High Operating Costs
High fuel and labor expenses at Delta Air Lines bother the Zacks analyst. Weakness pertaining to pricing power represents another headwind.

High Capex & Stretched Balance Sheet to Ail Adient (ADNT)
Per the Zacks analyst, the need for substantial investments may adversely impact Adient's near-term profits and cash flows. A high long-term debt-to-capital ratio is also concerning.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Eni SpA (E) : Free Stock Analysis Report

Deere & Company (DE) : Free Stock Analysis Report

Motorola Solutions, Inc. (MSI) : Free Stock Analysis Report

Sun Life Financial Inc. (SLF) : Free Stock Analysis Report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

Fonar Corporation (FONR): Free Stock Analysis Report

Booking Holdings Inc. (BKNG) : Free Stock Analysis Report

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