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Delivers Q4 results in line with expectations while advancing strategic investments

, /PRNewswire/ -- The Clorox Company (NYSE: CLX) today reported results for the fourth quarter and fiscal year 2026, which ended June 30, 2026.

Fourth-Quarter Fiscal Year 2026 Summary

In April 2026, the company completed the acquisition of GOJO Industries, Inc. (GOJO), which now operates as Clorox Purell and includes the Purell® brand and a portfolio of health and hygiene solutions.

The following is a summary of key fourth-quarter results. All comparisons are with the fourth quarter of fiscal year 2025 unless otherwise stated.

Net sales decreased 2% to $1.95 billion. The GOJO acquisition added about 10 points. Organic sales1 decreased 13%, primarily due to lapping the incremental shipments related to the ERP transition, which is about 13.5 points. Gross margin decreased 520 basis points to 41.3% from 46.5%, primarily driven by lower volume, impact from the inventory step-up of the GOJO acquisition, higher commodity costs and higher manufacturing and logistics costs, partially offset by cost savings. The ERP-related shipment comparison and GOJO inventory step-up each reduced gross margin by about 150 basis points. Diluted net earnings per share (diluted EPS) decreased 50% to $1.34 from $2.68 in the year-ago quarter. The decrease includes GOJO transaction-related costs primarily related to inventory step-up and integration costs, partially offset by the impact of lapping of the company's investment in its digital capabilities and productivity enhancements compared to the prior period. Adjusted EPS1 decreased 42% to $1.66 from $2.87 in the year-ago quarter, primarily due to lower net sales and lower gross margin. The impact of ERP-related shipment comparison was about 90 cents. "Our fourth-quarter results were in line with our expectations and reflect disciplined execution in a dynamic environment," said Chair and CEO Linda Rendle. "Throughout fiscal year 2026, we strengthened our business despite continued consumer and macroeconomic pressures. We expanded our portfolio through the acquisition of GOJO Industries, completed our U.S. ERP implementation, a foundational modernization of the systems and processes that underpin every aspect of our operations, while advancing our digital capabilities. Together, these actions have strengthened our foundation and position us well to navigate a challenging operating environment as we work to return to organic sales growth. We exited the year with improved execution, a stronger innovation pipeline and a clear plan to deliver superior value across our portfolio, better meeting evolving consumer needs and driving long-term growth.

As we begin fiscal year 2027, we expect the operating environment to remain challenging, with continued cost volatility and a value-seeking consumer. Even so, we are starting the year from a stronger position to execute our strategy with discipline, build on the momentum we've created and deliver greater superiority across our portfolio. We are confident that the investments we've made in our brands, capabilities and products position us to deliver long-term value for shareholders."

This press release includes certain Non-GAAP financial measures. See "Non-GAAP Financial Information" at the end of this press release for more details.  

__________________

1 Organic sales growth/(decrease) and adjusted EPS are non-GAAP measures. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.

Strategic and Operational Highlights

The following are highlights of business achievements for fiscal year 2026:

Completed the acquisition of GOJO, unlocking new growth synergies across the combined portfolio of Clorox Purell and Clorox Professional by bringing together complementary brands and capabilities to strengthen the company's health and hygiene platform. Clorox's global health and hygiene portfolio now represents more than half of net sales. Continued to invest behind value superiority and consumer-centered experiences by nearly doubling innovation across its expanded portfolio in fiscal year 2026, including the launch of Clorox PURE and Clorox Screen+ Sanitizing Wipes, expanded professional hygiene solutions from Clorox Healthcare and Purell, Fresh Step Lightweight Litter, Glad ForceFlex MaxStrength LeakGuard Trash Bags, new lip and body care offerings from Burt's Bees, as well as new flavors and scents across Clorox, Glad, Hidden Valley Ranch and Pine-Sol. Completed its U.S. ERP implementation, marking the conclusion of the company's five-year digital transformation investment, modernizing the business to optimize operations and reduce costs by leveraging end-to-end data and insights to support decision-making. Implemented a simplified operating structure to streamline leadership oversight, align resources to drive the company's strongest growth opportunities, advance portfolio optimization efforts and support faster execution across the enterprise. The company was recognized among America's Best Companies by Time Magazine, as well as America's Best Employers for Company Culture and 2026 Net Zero Leaders by Forbes. Key Segment Results

The following is a summary of key fourth-quarter results by reportable segment. All comparisons are with the fourth quarter of fiscal year 2025, unless otherwise stated.

Health and Wellness (Cleaning; Professional Products, now including Clorox Purell)             

Net sales increased 16%, driven by 10 points of higher volume and 6 points of favorable price mix. The GOJO acquisition contributed approximately 28 points to net sales growth. Organic sales declined 12%, primarily driven by the impact of lapping the incremental shipments related to the ERP transition in the year-ago quarter. Excluding the impact of these incremental shipments, organic sales would have increased in the quarter. Segment adjusted EBIT2 decreased 15%, primarily due to the impact of lapping the incremental shipments related to the ERP transition in the year-ago quarter, higher advertising investments and manufacturing and logistics costs, partially offset by the benefit of the GOJO acquisition. Household (Bags and Wraps; Cat Litter; Grilling)

Net sales decreased 18%, driven by 16 points of lower volume and 2 points of unfavorable price mix. The volume decrease is primarily due to the impact of lapping the incremental shipments related to the ERP transition in the year-ago quarter and shipment ahead of consumption in the third quarter. Segment adjusted EBIT decreased 56%, primarily due to lower net sales and higher commodity costs, partially offset by cost savings. Lifestyle (Food; Water Filtration; Natural Personal Care)

Net sales decreased 17%, driven by 14 points of lower volume and 3 points of unfavorable price mix. The volume decrease is primarily due to the impact of lapping the incremental shipments related to the ERP transition in the year-ago quarter. Segment adjusted EBIT decreased 60%, primarily due to lower net sales. International (Sales Outside the U.S.)

Net sales increased 4%, primarily driven by favorable foreign exchange rates. Organic sales grew 1%. Segment adjusted EBIT increased 17%, primarily due to higher net sales and cost savings. __________________

2 Adjusted EBIT is a non-GAAP measure. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.

Fiscal Year 2026 Summary

The following is a summary of key fiscal year 2026 results. All comparisons are to fiscal year 2025.

Net sales decreased 5% to $6.72 billion. The GOJO acquisition added about 3 points. Organic sales decreased 8%, mainly due to lapping incremental shipments related to the ERP transition in the fourth quarter, which is about 7.5 points. Gross margin decreased 290 basis points to 42.3% from 45.2% in the year-ago period, primarily driven by lower net sales and higher manufacturing and logistics costs, partially offset by cost savings. The ERP-related shipment comparison reduced gross margin by about 100 basis points. The negative impact from GOJO transaction-related costs was about 50 basis points, primarily behind inventory step-up. Diluted EPS decreased 26% to $4.81 from $6.52 in the year-ago period, which includes lapping the cyberattack insurance recovery benefit from the prior period, GOJO transaction-related costs primarily related to inventory step-up and integration costs, partially offset by lower costs related to the company's investment in its digital capabilities and productivity enhancements in the current period and the loss on sale of the VMS business in the prior period. Adjusted EPS decreased 28% to $5.53 from $7.72, primarily due to lower net sales and higher manufacturing and logistics costs, partially offset by cost savings. The ERP-related shipment comparison reduced adjusted EPS by about 90 cents. Net cash provided by operations was $612 million compared to $981 million in fiscal year 2025, representing a 38% decrease. The decrease was primarily driven by the Glad Venture Agreement termination payment. ERP Transition Impact

During the fourth quarter of fiscal year 2025, retailers placed orders in advance of the company's ERP system transition in the U.S. to minimize any potential inventory impacts during the implementation phase. The shipments of incremental inventory provided a benefit to fourth quarter 2025 net sales. These shipments added about 3.5 points of sales and about 90 cents earnings per share to fiscal year 2025. 

In fiscal year 2026, retailers drew down on this inventory during the company's ERP transition period, resulting in lower shipments. From a year-over-year sales growth perspective, the reduction in sales from this inventory drawdown translates to about 7.5 points of decline as compared to the higher base in fiscal year 2025. Similarly, this inventory drawdown reduced fiscal year 2026 earnings per share by about 90 cents. In comparison to the higher base in fiscal year 2025, this results in a year-over-year reduction of about 28% to fiscal year 2026 diluted earnings per share and about 23% to fiscal year 2026 adjusted earnings per share.

In fiscal year 2027, the company will lap the above-described inventory drawdown, which is expected to result in more than 3.5 points of benefit to net sales growth. This lap is also expected to benefit the company's adjusted EPS growth.

Fiscal Year 2027 Outlook

The following are the key drivers of the company's fiscal year 2027 outlook:

Net sales are expected to be up 13% to 14% compared to the prior year, including about 9.5 points of benefit from the GOJO acquisition. Organic sales are expected to increase about 3.5% to 4.5%, including more than 3.5 points of benefit from lapping the ERP-related drawdown in the prior fiscal year. Gross margin is expected to be about 42%, reflecting higher-than-normal inflationary headwinds and negative mix more than offsetting the benefits from cost savings. This includes about 20 basis points of negative impact primarily related to the GOJO inventory step-up. Selling and administrative expenses are expected to be about 16% of net sales. This includes about 40 basis points of negative impact from GOJO transaction-related costs. Advertising and sales promotion spending is expected to be about 10% of net sales. This assumes over 11% of net sales for its retail businesses. The company's effective tax rate is expected to be about 23%.  Diluted EPS is expected to be between $5.41 and $5.71, a year-over-year increase of 12% to 19%, respectively. This includes about 29 cents of impact from transaction-related costs associated with the GOJO acquisition, which are expected to flow through cost of goods sold as well as selling and administrative expenses. Adjusted EPS is expected to be between $5.70 and $6.00, or an increase between 3% and 8%, respectively. These growth rates include the benefit of lapping the inventory drawdown related to the ERP transition in the prior year.

Net sales (percentage change versus the year-ago period)

Fiscal year
2025 full year

Fiscal year
2026 full year

Fiscal year 2027 full year
outlook

Impact

Impact

Low

High

Net sales growth / (decrease) (GAAP)

0 %

(5) %

13 %

14 %

Add/(Subtract): Divestitures/acquisitions

5

(3)

(9.5)

(9.5)

Organic sales growth / (decrease) (non-GAAP)

5 %

(8) %

3.5 %

4.5 %

Note: Approximate impact from incremental shipments related to ERP transition

3.5 %

(7.5) %

           > 3.5%

> 3.5%

Diluted earnings per share

Fiscal year
2025 full year

Fiscal year
2026 full year

Fiscal year 2027 full year
outlook

Impact

Impact

Low

High

As estimated (GAAP)

$           6.52

$           4.81

$           5.41

$           5.71

Loss on divestiture

0.94

—

—

Acquisition and integration costs

—

0.36

0.29

0.29

Cyberattack costs, net of insurance recoveries

(0.42)

—

—

Digital capabilities and productivity enhancements investment

0.68

0.36

—

—

As adjusted (non-GAAP)

$           7.72

$           5.53

$           5.70

$           6.00

Note: Approximate impact from incremental shipments related to ERP transition

$           0.90

$          (0.90)

$              —

$

Clorox Earnings Conference Call Schedule

At approximately 4:15 p.m. ET today, Clorox will post prepared management remarks regarding its fourth-quarter and fiscal year 2026 results.

At 5 p.m. ET today, the company will host a live Q&A audio webcast with Chair and CEO Linda Rendle and Chief Financial Officer Luc Bellet to discuss the results.

Links to the live (and archived) webcast, press release and prepared remarks can be found at Clorox Quarterly Results.

For More Detailed Financial Information

Visit the company's Quarterly Results for the following: 

Supplemental unaudited volume and sales growth information  Supplemental unaudited gross margin drivers information   Supplemental unaudited cash flow information and free cash flow reconciliation  Supplemental unaudited reconciliation of earnings (losses) before income taxes to EBIT and adjusted EBIT Supplemental unaudited reconciliation of adjusted earnings per share (EPS) and adjusted effective tax rate (ETR) Note: Percentage and basis-point, or point, changes noted in this press release are calculated based on rounded numbers, except for per-share data and the effective tax rate.

About The Clorox Company

The Clorox Company (NYSE: CLX) champions people to be well and thrive every single day. Headquartered in Oakland, California since 1913, Clorox integrates sustainability into how it does business. Driven by consumer-centric innovation, the company is committed to delivering clearly superior experiences through its trusted brands including Brita®, Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®, Kingsford®, Liquid-Plumr®, PineSol® and Purell® as well as international brands such as Chux®, Clorinda® and Poett®. Visit thecloroxcompany.com to learn more.

CLX-F

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, regarding the acquisition of GOJO, and any such forward-looking statements involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, including as a result of the GOJO acquisition, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management's estimates, beliefs, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "will," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management's expectations, are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2025, as updated from time to time in the company's Securities and Exchange Commission filings. These factors include, but are not limited to: the risks arising from the integration of the GOJO business, including the ability to successfully integrate GOJO's operations, systems, controls, culture, customers, suppliers and personnel, and to realize the anticipated benefits and synergies of the acquisition, including cost savings and growth opportunities, when expected or at all; the risks of adapting to GOJO's business-to-business ("B2B") operating model, including differences in distribution channels, go-to-market strategies, margin profiles and customer requirements, increased exposure to customer concentration and consolidation among distributors, group purchasing organizations, health systems and other institutional customers in B2B channels, and potential channel conflict with the company's consumer business; the risk of increased regulatory exposure resulting from GOJO's portfolio of products subject to U.S. Food and Drug Administration oversight, including products regulated as cosmetics and over-the-counter drugs; the risk of unexpected costs or expenses resulting from the GOJO acquisition; the risk of litigation related to the GOJO acquisition, including resulting expense; the risk of impairment charges related to intangible assets acquired in connection with the GOJO acquisition; the risks related to disruption of the company's ongoing business operations and diversion of management time and resources from the GOJO acquisition; the risk that the GOJO acquisition may have an adverse effect on the company's ability to retain key personnel, customers and suppliers; unfavorable general economic and geopolitical conditions beyond the company's control, including inflation, supply chain disruptions, labor shortages, wage pressures, fuel and energy costs, interest rate fluctuations, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, terrorism, and unstable geopolitical conditions, including active armed conflicts and military hostilities in the Middle East, such as the ongoing conflict involving Iran, and rising tensions in various parts of the world, as well as macroeconomic and geopolitical volatility and uncertainty resulting from a number of these and other factors, such as actual and potential shifts in U.S. and foreign trade policies, escalating trade tensions between the U.S. and its trading partners, especially China, the potential expansion of sanctions regimes, and disruptions to global markets or transportation routes, particularly due to the imposition of U.S. and retaliatory tariffs; the impact of market and category declines, and the company's product and geographic mix on its ability to meet sales growth targets; the company's ability to successfully execute or realize the anticipated benefits of its strategic or transformational initiatives, including the ERP transition and the related timing and volume of shipment movement related to the ERP transition and the shift towards a simplified operating structure; the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences; intense competition in the company's markets; volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services; risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers; risks related to the company's use of and reliance on information technology systems, including potential and actual security breaches, cyberattacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, business, service or operational disruptions, or that impact the company's financial results or financial reporting, or any resulting unfavorable outcomes, increased costs or legal proceedings; the ability of the company to innovate and to develop and introduce commercially successful products, or expand into adjacent categories and countries; the ability of the company to successfully manage global political, legal, tax and regulatory risks, including due to regulatory uncertainty and lack of regulatory convergence among different jurisdictions; lower revenue, increased costs, other financial statement impacts or reputational harm resulting from government actions, compliance with regulations, or any material costs imposed by changes in regulation; the company's ability to maintain its business reputation and the reputation of its brands and products; dependence on key customers and risks related to customer consolidation and ordering patterns; the company's ability to attract and retain key personnel, which may continue to be impacted by challenges in the labor market, such as increasing labor costs and sustained labor shortages, as well as the company's ability to manage leadership transitions, including the previously announced CEO succession, and retain and integrate key employees of acquired businesses; changes to the company's processes and procedures as a result of its digital capabilities and productivity enhancements that may result in changes to the company's internal controls over financial reporting; risks related to the company's continued operation of the Glad business; risks related to international operations and international trade, including changing macroeconomic conditions as a result of inflation, volatile commodity prices and increases in raw and packaging materials prices, labor, energy and logistics; global economic or political instability; foreign currency fluctuations, such as devaluations, and foreign currency exchange rate controls; changes in governmental policies, including trade policy and tariffs, travel or immigration restrictions, new or additional tariffs, and price or other controls; labor claims and civil unrest; potential operational or supply chain disruptions from wars and military conflicts, including active armed conflicts and military hostilities in the Middle East, such as the ongoing conflict involving Iran, and/or Ukraine and rising tensions in various parts of the world, such as between China and Taiwan; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; widespread health emergencies; and the possibility of nationalization, expropriation of assets or other government action or inaction, including the impacts of any prolonged U.S. government shutdown; the impact of climate change and other sustainability issues on sales, operating costs, reputation or stakeholder relationships; the impact of product liability claims, labor claims and other legal, governmental or tax proceedings, including in foreign jurisdictions and in connection with any product recalls; risks relating to acquisitions, new ventures and divestitures, and associated costs, including for asset impairment charges related to, among others, intangible assets, including trademarks and goodwill, and integration costs and potential contingent liabilities related to those transactions; the accuracy of the company's estimates and assumptions on which its financial projections, including any sales or earnings guidance or outlook it may provide from time to time, are based; risks related to the company's reliance on third-party service providers, including inability to meet cost savings or efficiencies, business or systems disruptions, and other liabilities, including legal or regulatory risk; environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances; the company's ability to effectively utilize, assert and defend its intellectual property rights, and any infringement or claimed infringement by the company of third-party intellectual property rights; the effect of the company's indebtedness and credit rating, including increased indebtedness resulting from the GOJO acquisition and Glad joint venture buyout, on its business operations and financial results and the company's ability to access capital markets and other funding sources, as well as the cost of capital to the company; the company's ability to pay and declare dividends or repurchase its stock in the future; and the impacts of potential stockholder activism.

The company's forward-looking statements in this press release are based on management's current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this press release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.

Non-GAAP Financial Information

This press release contains non-GAAP financial information related to organic sales growth / (decrease), adjusted EPS, and segment adjusted EBIT for the fourth quarter of fiscal year 2026 and for fiscal year 2026; as well as organic sales growth / (decrease) and adjusted EPS outlook for fiscal year 2027. The reasons management believes these measures are useful to investors are described below. Certain non-GAAP financial measures may be considered in determining incentive compensation. Clorox defines organic sales growth / (decrease) as GAAP net sales growth / (decrease) excluding the effect of foreign exchange rate changes and any acquisitions or divestitures. Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the company was operating and expects to continue to operate throughout the relevant periods, and the company's estimate of the impact of foreign exchange rate changes, which are difficult to predict and out of the control of the company and management. However, organic sales growth / (decrease) may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments. Organic Sales, Adjusted Cost of Products Sold, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Selling and Administrative expenses, Adjusted Other Income (Expense), Adjusted Net Earnings Attributable to Clorox, and Adjusted Diluted Net Earnings Per Share are calculated in accordance with GAAP, that excludes or has otherwise been adjusted for significant items that are nonrecurring or unusual that are not indicative of the Company's underlying operations. The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. Non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments. Adjusted EBIT represents earnings (losses) before income taxes excluding interest income, interest expense and other significant items that are nonrecurring or unusual that are not indicative of the Company's underlying operations. The company uses this measure to assess the operating results and performance of its segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. Adjusted EBIT may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments. The Non-GAAP measures listed above are supplemental information that management uses to help evaluate the company's historical and prospective financial performance on a consistent basis over time. Management believes that by adjusting for certain items affecting comparability of performance over time, such as the pension settlement charge, incremental costs and insurance recoveries related to the August 2023 cyberattack, asset impairments, charges related to the digital capabilities and productivity enhancements investment, transaction and integration costs related to acquisitions, significant losses related to divestitures and other nonrecurring or unusual items, investors and management are able to gain additional insight into the company's underlying operating performance on a consistent basis over time. The reconciliation tables below refer to the equivalent GAAP measures adjusted as applicable for the following items: Acquisition and Integration Costs 

On April 1, 2026, the Company completed the previously announced acquisition of GOJO Industries. As a result of this transaction, various acquisition and integration-related costs were and will be incurred related to the acquisition and efforts to integrate the recently acquired business to the Company's systems and processes. These costs include inventory step-up charges representing expense recognition of fair value adjustments in excess of the historical cost basis of inventory obtained through the acquisition, as well as direct acquisition transaction costs and legal-entity, operational, manufacturing, and information technology integration costs.

Due to the nature, scope and magnitude of these costs and recoveries, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.

Digital Capabilities and Productivity Enhancements Investment

As announced in August 2021, the company invested in transformative technologies and processes over a five-year period beginning in fiscal year 2022 and completed during the third quarter of fiscal year 2026. The investment included replacement of the company's ERP system and transitioning to a cloud-based platform as well as the implementation of a suite of other digital technologies. The total incremental transformational investment was approximately $580 million. It is expected that these implementations will generate efficiencies and transform the company's operations in the areas of supply chain, digital commerce, innovation, brand building and more over the long term.

Of the total investment, approximately 75% represented incremental operating costs primarily recorded within selling and administrative expenses to be adjusted from reported EPS for purposes of disclosing adjusted EPS. About 70% of these operating costs were related to the implementation of the ERP, with the remaining costs primarily related to the implementation of complementary technologies.

Due to the nature, scope and magnitude of this investment, these costs were considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, ceased at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the company's underlying operating performance, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.

The following tables provide reconciliations of organic sales growth/(decrease) (non-GAAP) to net sales growth/(decrease), the most comparable GAAP measure:

Three months ended June 30, 2026

Percentage change versus the year-ago period

Health and
Wellness

Household

Lifestyle

International

Total
Company (1)

Net sales growth / (decrease) (GAAP)

16 %

(18) %

(17) %

4 %

(2) %

Add: Foreign Exchange

—

—

—

(3)

(1)

Add/(Subtract): Divestitures/Acquisitions (2)

(28)

—

—

—

(10)

Organic sales growth / (decrease) (non-GAAP)

(12) %

(18) %

(17) %

1 %

(13) %

Twelve months ended June 30, 2026

Percentage change versus the year-ago period

Health and
Wellness

Household

Lifestyle

International

Total
Company (1)

Net sales growth / (decrease) (GAAP)

— %

(11) %

(14) %

5 %

(5) %

Add: Foreign Exchange

—

—

—

(3)

—

Add/(Subtract): Divestitures/Acquisitions (2)

(8)

—

—

—

(3)

Organic sales growth / (decrease) (non-GAAP)

(8) %

(11) %

(14) %

2 %

(8) %

(1) 

Total Company includes Corporate and Other. Corporate and Other includes the results of the Better Health VMS business through the date of divestiture. 

(2) 

The divestiture impact is calculated as net sales from the Better Health VMS business after the sale date in the twelve month year-ago period. The acquisition impact is calculated as net sales from GOJO after the acquisition date in the current three and twelve month periods.

The following tables provide reconciliations of adjusted non-GAAP line items to the most comparable GAAP measure:

Reconciliation of Non-GAAP Measures

Three months ended June 30, 2026

As Reported
GAAP

Acquisition and
integration costs

Adjusted

(non-GAAP)

Cost of products sold

$            1,144

$                (30)

$            1,114

Gross profit

804

30

834

Gross margin

41.3 %

42.8 %

Selling and administrative expenses

298

(21)

277

Percent of net sales

15.3 %

14.2 %

Other (income) expense, net

(10)

—

(10)

Net earnings attributable to Clorox

163

39

202

Diluted net earnings per share

$              1.34

$              0.32

$              1.66

Reconciliation of Non-GAAP Measures

Twelve months ended June 30, 2026

As Reported
GAAP

Acquisition and
integration costs

Digital capabilities
and productivity
enhancements
investment

Adjusted

(non-GAAP)

Cost of products sold

$            3,876

$                (31)

$                 —

$            3,845

Gross profit

2,844

31

—

2,875

Gross margin

42.3 %

42.8 %

Selling and administrative expenses

1,066

(27)

(59)

980

Percent of net sales

15.9 %

14.6 %

Other (income) expense, net

(8)

—

—

(8)

Net earnings attributable to Clorox

587

44

45

676

Diluted net earnings per share

$              4.81

$              0.36

$              0.36

$              5.53

The following tables provide reconciliations of adjusted diluted earnings per share (non-GAAP) to diluted earnings per share, the most comparable GAAP measure:

Adjusted Diluted Earnings Per Share (EPS)

(Dollars in millions except per share data)

Diluted earnings per share

Three months ended

6/30/2026

6/30/2025

% Change

As reported (GAAP)

$         1.34

$         2.68

(50) %

Acquisition and integration costs (2)

0.32

—

Digital capabilities and productivity enhancements investment (4)

—

0.19

As adjusted (Non-GAAP)

$         1.66

$         2.87

(42) %

Diluted earnings per share

Twelve months ended

6/30/2026

6/30/2025

% Change

As reported (GAAP)

$         4.81

$         6.52

(26) %

Loss on divestiture (1)

—

0.94

Acquisition and integration costs (2)

0.36

—

Cyberattack costs, net of insurance recoveries (3)

—

(0.42)

Digital capabilities and productivity enhancements investment (4)

0.36

0.68

As adjusted (Non-GAAP)

$         5.53

$         7.72

(28) %

(1)

During the twelve months ended June 30, 2025, the company incurred an after tax charge of $118 related to the divestiture of the Better Health VMS business.

(2)

During the three and twelve months ended June 30, 2026, the company incurred approximately $51 ($39 after tax) and $58 ($44 after tax), respectively of costs related to the GOJO acquisition.

(3)

During the twelve months ended June 30, 2025, the company recognized approximately $70 ($53 after tax) of insurance recoveries related to the cyberattack.

(4)

During the three and twelve months ended June 30, 2026, the company incurred $0 and approximately $59 ($45 after tax), respectively, and during the three and twelve months ended June 30, 2025, the company incurred approximately $30 ($23 after tax) and $111 ($85 after tax), respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following:

Three months ended

Twelve months ended

6/30/2026

6/30/2025

6/30/2026

6/30/2025

External consulting fees (a)

$           —

$           22

$           46

$           78

IT project personnel costs (b)

—

2

3

7

Other (c)

—

6

10

26

Total

$           —

$           30

$           59

$          111

(a) 

Comprised of third-party consulting fees incurred to assist in the project management and end-to-end systems integration of this transformative investment. The company relies on consultants for certain capabilities required for these programs that the company does not maintain internally. These costs support the implementation of these programs incremental to the company's normal IT costs and will not be incurred following implementation.

(b) 

Comprised of labor costs associated with internal IT project management teams that are utilized to oversee the new system implementations. Given the magnitude and transformative nature of the implementations planned, the necessary project management costs are incremental to the historical levels of spend and will no longer be incurred subsequent to implementation. As a result of this long-term strategic investment, the company considers these costs not reflective of the ongoing costs to operate its business.

(c) 

Comprised of various other expenses associated with the company's new system implementations, including company personnel dedicated to the project that have been backfilled with either permanent or temporary resources in positions that are considered part of normal operating expenses.

The following tables provide reconciliations of adjusted EBIT (non-GAAP) to earnings (losses) before income taxes, the most comparable GAAP measure:

Reconciliation of earnings (losses) before income taxes to adjusted EBIT

Three months ended

Twelve months ended

6/30/2026

6/30/2025

6/30/2026

6/30/2025

Earnings (losses) before income taxes

$        213

$        410

$        791

$      1,078

Interest income

(1)

(2)

(8)

(9)

Interest expense

55

22

130

88

Loss on divestiture

—

—

—

118

Acquisition and integration costs

51

—

58

—

Cyberattack costs, net of insurance recoveries

—

—

—

(70)

Digital capabilities and productivity enhancements investment

—

30

59

111

Adjusted EBIT

$        318

$        460

$      1,030

$      1,316

Full year 2027 outlook
(estimated range)

Diluted earnings per share

Low

High

As estimated (GAAP)

$         5.41

$         5.71

Acquisition and integration costs (1)

0.29

0.29

As adjusted (Non-GAAP)

$         5.70

$         6.00

(1)  In fiscal year 2027, the company expects to incur approximately $46 ($35 after tax) of costs related to the GOJO acquisition.

Condensed Consolidated Statements of Earnings

Dollars in millions, except per share data

Three months ended

Twelve months ended

6/30/2026

6/30/2025

6/30/2026

06/30/2025

(Unaudited)

(Unaudited)

(Unaudited)

Net sales

$        1,948

$        1,988

$        6,720

$        7,104

Cost of products sold

1,144

1,064

3,876

3,891

Gross profit

804

924

2,844

3,213

Selling and administrative expenses

298

296

1,066

1,124

Advertising costs

216

171

749

770

Research and development costs

32

32

116

121

Loss on divestiture

—

—

—

118

Interest expense

55

22

130

88

Other (income) expense, net

(10)

(7)

(8)

(86)

Earnings before income taxes

213

410

791

1,078

Income taxes

46

74

190

254

Net earnings

167

336

601

824

Less: Net earnings attributable to noncontrolling interests

4

4

14

14

Net earnings attributable to Clorox

$          163

$          332

$          587

$          810

Net earnings per share attributable to Clorox

Basic net earnings per share

$          1.34

$          2.70

$          4.82

$          6.56

Diluted net earnings per share

$          1.34

$          2.68

$          4.81

$          6.52

Weighted average shares outstanding (in thousands)

Basic

121,504

123,173

121,775

123,525

Diluted

121,809

123,744

122,132

124,287

Reportable Segment Information

(Unaudited)

Dollars in millions

Net sales

Net sales

Three months ended

Twelve months ended

6/30/2026

6/30/2025

% Change(1)

6/30/2026

6/30/2025

% Change(1)

Health and Wellness 

$       860

$       741

16 %

$     2,697

$     2,697

— %

Household

524

639

(18) %

1,787

2,001

(11) %

Lifestyle

280

339

(17) %

1,123

1,303

(14) %

International

281

269

4 %

1,113

1,065

5 %

Reportable segment total

$     1,945

$     1,988

$     6,720

$     7,066

Corporate and Other (2)

3

—

100 %

—

38

(100) %

Total

$     1,948

$     1,988

(2) %

$     6,720

$     7,104

(5) %

Segment adjusted EBIT

Segment adjusted EBIT

Three months ended

Twelve months ended

6/30/2026

6/30/2025

% Change(1)

6/30/2026

6/30/2025

% Change(1)

Health and Wellness 

$       206

$       243

(15) %

$       678

$       840

(19) %

Household

69

156

(56) %

192

325

(41) %

Lifestyle

38

94

(60) %

208

290

(28) %

International

27

23

17 %

113

110

3 %

Reportable segment total

$       340

$       516

$     1,191

$     1,565

Corporate and Other (2)

(22)

(56)

(161)

(249)

Interest income

1

2

8

9

Interest expense

(55)

(22)

(130)

(88)

Loss on divestiture (3)

—

—

—

(118)

Acquisition and integration costs (4)

(51)

—

(58)

—

Cyberattack costs, net of insurance recoveries (5)

—

—

—

70

Digital capabilities and productivity enhancements investment (6)

—

(30)

(59)

(111)

Earnings (losses) before income taxes

$       213

$       410

(48) %

$       791

$     1,078

(27) %

(1) 

Percentages based on rounded numbers.

(2) 

Corporate and Other includes the Better Health VMS business.

(3) 

Represents the loss on divestiture of the Better Health VMS business of $118 after tax for the twelve months ended June 30, 2025.

(4) 

Represents expenses related to the company's acquisition and integration of GOJO of $51 ($39 after tax) and $58 ($44 after tax) for the three and twelve months ended June 30, 2026, respectively.

(5) 

Represents insurance recoveries related to the cyberattack of approximately $70 ($53 after tax) for the twelve months ended June 30, 2025.

(6) 

Represents expenses related to the company's digital capabilities and productivity enhancements investment of $0 and $59 ($45 after tax) for the three and twelve months ended June 30, 2026, respectively, and $30 ($23 after tax) and $111 ($85 after tax) for the three and twelve months ended June 30, 2025, respectively. 

Condensed Consolidated Balance Sheets

Dollars in millions

6/30/2026

6/30/2025

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

143

$

167

Receivables, net

791

821

Inventories, net

777

523

Prepaid expenses and other current assets

113

97

Total current assets

1,824

1,608

Property, plant and equipment, net

1,512

1,267

Operating lease right-of-use assets

401

333

Goodwill

1,945

1,229

Trademarks, net

989

502

Other intangible assets, net

606

64

Other assets

517

558

Total assets

$

7,794

$

5,561

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Notes and loans payable

$

1,086

$

4

Current maturities of long-term debt

1

—

Current operating lease liabilities

86

87

Accounts payable and accrued liabilities

1,600

1,828

Total current liabilities

2,773

1,919

Long-term debt

3,981

2,484

Long-term operating lease liabilities

366

305

Other liabilities

405

351

Deferred income taxes

17

20

Total liabilities

7,542

5,079

Commitments and contingencies

Stockholders' equity

Preferred stock

—

—

Common stock

131

131

Additional paid-in capital

1,312

1,319

Retained earnings

386

432

Treasury stock

(1,582)

(1,404)

Accumulated other comprehensive net (loss) income

(157)

(157)

Total Clorox stockholders' equity

90

321

Noncontrolling interests

162

161

Total stockholders' equity

252

482

Total liabilities and stockholders' equity

$

7,794

$

5,561

SOURCE The Clorox Company

Key Takeaways DaVita's Q2 treatment growth may benefit from better mortality trends and clinic transfers.DVA's Q2 RPT may improve as deductible headwinds ease and reimbursement increases support pricing.DaVita's Q2 payor mix pressure and spending on technology may limit margin expansion. DaVita Inc. (DVA - Free Report) is scheduled to report second-quarter 2026 results on Aug. 4, after the closing bell.

In the last reported quarter, the company’s earnings per share (EPS) of $2.87 surpassed the Zacks Consensus Estimate by 19.1%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed once, delivering an earnings surprise of 2.4%, on average.

Let’s check out the factors that have shaped DVA’s performance prior to this announcement.

Factors Likely to Affect DaVitaDaVita's second-quarter 2026 performance is likely to have reflected stronger treatment volumes and improving reimbursement dynamics following the seasonally weaker first quarter. Management's improved treatment growth expectations, supported by better-than-expected mortality trends and patient transfers from Fresenius clinic closures, are expected to have supported volume growth in the quarter. DVA expects roughly half of the transfer-related benefit to materialize in the second quarter, supporting year-over-year treatment growth in the to-be-reported quarter.

Revenue per treatment (RPT) is expected to have improved sequentially as the typical first-quarter headwind from patient deductibles and co-insurance eased. Normal reimbursement increases are also likely to have supported pricing. However, a less favorable commercial payor mix, driven by higher enrollment in lower-tier Affordable Care Act bronze plans with greater patient responsibility, may have partially offset these benefits.

Cost discipline is also expected to have remained an important factor in shaping second-quarter results. Patient care costs are likely to have benefited from continued labor productivity improvements that exceeded expectations in the first quarter. However, general and administrative expenses are expected to have remained elevated due to ongoing investments in technology and digital infrastructure.

Integrated kidney care is also expected to have remained an important factor in the to-be-reported quarter. Management highlighted continued improvement in clinical outcomes and higher savings under the Comprehensive Kidney Care Contracting program. However, the segment is unlikely to have provided a meaningful earnings contribution in the quarter despite continued operational progress.

However, certain headwinds are likely to have persisted. Despite the seasonal improvement in RPT, a less favorable commercial payor mix is likely to have continued to weigh on reimbursement, limiting margin expansion in the second quarter of 2026.

DVA’s Estimate PictureFor second-quarter 2026, the Zacks Consensus Estimate for revenues is pegged at $3.53 billion, implying an improvement of 4.5% from the prior-year quarter’s reported figure.

The consensus estimate for EPS is pegged at $4.01, indicating an uptick of 35.9% from the prior-year period’s reported number.

What Our Model Suggests About DaVitaPer our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.

Earnings ESP: DVA has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

DVA’s Share Price PerformanceOver the past three months, DaVita’s shares have gained 55.8% compared with Medical - Outpatient and Home Healthcare’s 22% rise. DVA’s shares have also outperformed the Zacks Medical sector’s gain of 8.3% and the S&P 500’s growth of 3.1%.

Three Months Price Comparison
Image Source: Zacks Investment Research

DaVita’s peers like Aveanna Healthcare Holdings Inc. (AVAH - Free Report) , LifeStance Health Group, Inc. (LFST - Free Report) and Addus HomeCare Corporation (ADUS - Free Report) have underperformed it. AVAH, LFST and ADUS’ shares have gained 41.6%, 44.2% and 15.3%, respectively, over the past three months.

Shares of Corning Inc. rose on Monday after Truist Securities upgraded the optical networking and specialty glass maker to Buy from Hold, arguing that the stock's steep decline in July has created a more attractive entry point for investors.

Corning shares GLW gained 5.6% to $146.12 on Monday after closing 2.2% higher on Friday.

The move came after the stock suffered a nearly 46% decline in July, marking its worst monthly performance in 24 years after the company's third-quarter guidance failed to meet Wall Street expectations.

The July selloff made Corning one of the worst-performing stocks in the S&P 500 during the month, with shares ending lower in 16 of 22 trading sessions.

Despite the sharp correction, the stock remains up 61% year to date and has gained 130% over the past 12 months.

Truist sees attractive entry point after selloffTruist analyst Matthew Niknam upgraded Corning to Buy while lowering his price target to $175 from $205.

The revised target still implies about 27% upside from Friday's closing price.

In a note to clients, Niknam said the recent decline has improved the stock's risk-reward profile.

“Simply put, we have waited for a more reasonable entry point to get more constructive, and we now have one post a ~45% pullback in July,” Niknam wrote.

The analyst said the upgrade is supported by continued customer spending in Corning's optical segment, expectations for accelerating revenue growth over the coming years, improving operating margins, and a projected 30% compound annual earnings growth rate through 2029.

Truist also noted that customer demand remains strong across artificial intelligence, data center infrastructure, and fiber-to-the-home deployments.

The firm highlighted Corning's recently introduced Photonics MAP as an additional long-term growth catalyst.

Corning currently trades at 32 times Truist's 2027 earnings estimates and 24 times its 2028 estimates.

AI sentiment remains a key riskCorning has become one of the major beneficiaries of the artificial intelligence infrastructure investment theme, with its Optical segment accounting for roughly 45% of company sales.

However, Truist cautioned that investor sentiment around AI spending remains an important risk.

“Fears around durability of the ‘AI trade’ and sustainability of elevated hyperscaler capex could weigh on sentiment, given the Optical segment (~45% of sales) is driving the lion’s share of GLW’s forward growth,” Niknam wrote.

The stock's sharp decline in July reflected concerns over AI-related valuations after the company issued guidance that largely matched expectations but failed to exceed investors' elevated forecasts.

Other analysts remain constructive but cautiousUBS also maintained a positive stance on Corning, reiterating its Buy rating while lowering its price target to $196 from $228.

Analyst Joshua Spector said the recent selloff appeared overdone, with only modest revisions to earnings estimates reflecting a more conservative outlook for fiber capacity expansion and the timing of the company's photonics business.

Morgan Stanley, however, maintained an Equal Weight rating while lowering its price target to $165 from $180.

The firm said Corning's second-quarter results largely met expectations but noted that sold-out conditions limit additional upside.

Analysts also pointed out that much of Corning's business operates under long-term contracts, leaving limited room for further pricing gains or earnings-per-share expansion.

For the third quarter, Corning expects adjusted earnings between $0.85 and $0.89 per share on revenue of $4.9 billion to $5.0 billion.

Wall Street is expecting earnings of $0.87 per share on revenue of approximately $4.99 billion. The company previously reported second-quarter earnings of $0.78 per share on revenue of $4.74 billion, exceeding analysts' estimates.

Key Takeaways ConocoPhillips is expected to post higher Q2 earnings and revenues from year-ago levels.COP's Q2 EPS estimate of $2.96 implies 108.5% growth, with revenues seen rising 19% to $17.54B.Higher oil prices may aid COP, but volatility, unhedged output and Qatar's shut-in could weigh on results. ConocoPhillips (COP - Free Report) is set to report second-quarter 2026 results on Aug. 6, before the opening bell.

Let us delve into the factors that are likely to have influenced the performance of the leading independent exploration and production player. However, before that, it would be worth reviewing COP’s performance in the previous quarter.

Highlights of COP’s Q1 Earnings & Surprise HistoryIn the last reported quarter, COP’s earnings of $1.89 per share beat the Zacks Consensus Estimate of $1.73, driven by lower costs and improved operational efficiency. 

ConocoPhillips’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 1.03%. This is depicted in the graph below: 

The upstream player beat earnings estimates in three of the trailing four quarters and missed once, delivering an average surprise of 5.78%. This is depicted in the graph below.

COP’s Estimate TrendThe Zacks Consensus Estimate for second-quarter earnings per share of $2.96 has witnessed one upward and four downward revisions in the past 30 days. The consensus estimate implies an increase of 108.5% from the year-ago reported number.

The Zacks Consensus Estimate for revenues of $17.54 billion indicates a 19% improvement from the year-ago reported figure.

Factors to Consider for COPConocoPhillips is expected to have sustained a stable performance during the second quarter, driven by higher commodity prices. According to the U.S. Energy Information Administration, the West Texas Intermediate spot price for April and May 2026 was $100.32 and $102.13 per barrel, respectively, before falling to $84.81 in June. These prices marked a significant increase from the $63.54, $62.17 and $68.17 per barrel reported in the corresponding period of 2025. The pricing environment is expected to have supported the company's upstream earnings.

However, geopolitical tensions in the Middle East likely resulted in significant price volatility during the second quarter, adding uncertainty to ConocoPhillips' operating environment. In addition, the company remains unhedged on its oil and LNG production. While this strategy allows it to fully benefit from higher commodity prices, it also leaves earnings more exposed to downside price movements. Further, Qatar’s production shut-in may have affected its LNG operations in the region, potentially weighing on overall performance.

These factors are anticipated to have affected volume and pricing dynamics, potentially hampering COP’s performance in the to-be-reported quarter.

COP's Earnings WhispersOur proven model does not predict an earnings beat for COP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that's not the case here, as you will see below.

Earnings ESP: COP has an Earnings ESP of -1.33%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #4 (Sell).

Stocks to ConsiderHere are some other energy firms that you may want to consider, as they have the right combination of elements to post an earnings beat this reporting cycle.

Cheniere Energy (LNG - Free Report) currently has an Earnings ESP of +3.69% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Energy is scheduled to release second-quarter earnings on Aug. 6. The Zacks Consensus Estimate for LNG’s earnings is pegged at $2.80 per share, implying a 61.6% decline from the prior-year reported figure.

Occidental Petroleum (OXY - Free Report) currently has an Earnings ESP of +5.33% and a Zacks Rank #3.

Occidental Petroleum is scheduled to release second-quarter 2026 earnings on Aug. 5. The Zacks Consensus Estimate for OXY’s earnings is pegged at $1.96 per share, indicating a 402.6% increase from the prior-year reported figure.

Excelerate Energy (EE - Free Report) currently has an Earnings ESP of +11.04% and a Zacks Rank #3.

Excelerate Energy is scheduled to release second-quarter 2026 earnings on Aug. 5. The Zacks Consensus Estimate for EE’s earnings is pegged at 35 cents per share, implying a 2.9% increase from the prior-year reported figure.

Key Takeaways Zions Bancorporation increased its quarterly dividend by 6.7% to 48 cents per share.ZION expanded its 2026 share repurchase target to $300 million with a new $75 million authorization.Zions Bancorporation strengthened capital, funding and loan growth while advancing strategic expansion. Zions Bancorporation National Association (ZION - Free Report) maintains a disciplined capital distribution strategy, focusing on returning value to shareholders through regular increases in dividends and new share repurchase plans.

Last month, the company increased its quarterly cash dividend by 6.7% to 48 cents per share. Over the past five years, ZION has raised its dividend five times, with an annualized growth rate of 5.2%. The company has a payout ratio of 27% and currently offers a dividend yield of 2.58%.

Image Source: Zacks Investment Research

Apart from dividends, Zions has been actively returning capital through share repurchases. Recently, the board authorized an additional $75 million common share repurchase program for the third quarter of 2026, bringing the 2026 repurchase target to $300 million.

During the second quarter of 2026, the company repurchased 1.2 million common shares for $75 million. This, together with regular dividend payouts, brought total capital distribution to $142 million in the quarter.

Zions has been pursuing strategic growth initiatives to strengthen its core operations. In March 2026, the company agreed to acquire the agency lending business of Basis Investment Group, expanding its real estate financing capabilities and capital markets platform. The deal is expected to enhance Zions' presence in high-growth Western markets and support long-term revenue growth through a broader range of commercial real estate lending solutions.

As of June 30, 2026, Zions' loans and leases totaled $62.5 billion, up 3% year over year, while total deposits increased 4% to $76.6 billion. The total borrowed funds declined 53% to $3.2 billion, primarily due to lower short-term FHLB advances, highlighting the company's improving funding profile. Further, ZION maintains an investment-grade BBB+ long-term issuer credit rating from S&P Global Ratings, reflecting its strong credit profile and ability to meet its financial obligations even during periods of economic stress.

The company’s estimated Common Equity Tier 1 (CET1) capital ratio improved to 11.8% as of June 30, 2026, from 11.0% a year earlier, while the Tier 1 risk-based capital ratio and total risk-based capital ratio were 11.9% and 14.0%, respectively. The Tier 1 leverage ratio improved to 9.4%, underscoring the company's solid capital strength and ability to withstand economic uncertainty.

Thus, Zions’ consistent dividend hikes, active share repurchases, and disciplined payout strategy indicate strong capital management and financial stability. Thus, the company is well-positioned to sustain enhanced capital distribution activities and reinforce investor confidence in its long-term prospects.

Zions’ Price PerformanceOver the past six months, shares of Zions Bancorporation have gained 9.2%, outperforming the industry's 1% growth.

Image Source: Zacks Investment Research

Currently, ZION carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Banks’ Capital Return StrategyKeyCorp (KEY - Free Report) follows a disciplined capital distribution strategy through dividends and share repurchases. In July 2026, the company declared a quarterly common cash dividend of 20.5 cents per share. The dividend will be paid out on Sept. 15, 2026, to shareholders of record as of Sept. 1.

During the second quarter of 2026, KEY repurchased $341 million of its common shares while maintaining a strong Common Equity Tier 1 (CET1) ratio of 11.2%.

Management reaffirmed its commitment to delivering shareholder value through a balanced capital return strategy, supported by a resilient balance sheet and solid capital generation.

First Horizon Corporation (FHN - Free Report) has a disciplined capital distribution strategy in place. Last month, the company's board declared a quarterly cash dividend of 17 cents per common share. This will be paid out on Oct. 1, 2026, to shareholders of record as of Sept. 11.

During the second quarter of 2026, FHN repurchased approximately 3.5 million common shares for $69 million.

Supported by solid earnings and healthy profitability, the company remains committed to returning capital to shareholders while investing in long-term growth initiatives.
 

Key Takeaways Akamai is expected to post year-over-year revenue growth in second-quarter 2026 results.AKAM expanded API security and AI security offerings by partnering with Arrow Electronics to widen reach.AKAM faces pressure from legacy delivery weakness, higher investments and softer enterprise spending. Akamai Technologies, Inc. (AKAM - Free Report) is set to report second-quarter 2026 results on Aug. 6, after the closing bell. It pulled off a trailing four-quarter earnings surprise of 7.54% on average, beating estimates on the previous three occasions and matching once.

The company is expected to record year-over-year revenue growth, supported by strength in its cybersecurity and cloud businesses. However, higher investments and continued weakness in its legacy content delivery business are likely to have weighed on margins and profitability.

Factors at PlayDuring the second quarter of 2026, Akamai introduced Security Posture Center and Code-to-Runtime Mapping to strengthen its API Security offerings. The enhanced capabilities are expected to have boosted demand for the company's API security solutions by improving API visibility and threat protection, supporting incremental revenue growth.

Akamai expanded its go-to-market reach through a partnership with Arrow Electronics during the quarter under review. The collaboration is expected to have broadened its distribution network, expanded its enterprise reach and strengthened sales opportunities for its cybersecurity and cloud solutions.

During the quarter, the company further enhanced its artificial intelligence (AI) security portfolio with the launch of Agentic Security Framework. The new solution is expected to have encouraged early enterprise adoption of AI security capabilities, reinforcing Akamai's position in the fast-growing market for secure AI-driven applications, making a positive impact on revenues.

However, Akamai's performance during the to-be-reported quarter is likely to have remained under pressure with continued weakness in its legacy content delivery business and higher investments in cloud infrastructure, AI and security offerings. Uncertain macroeconomic conditions and cautious enterprise spending might have limited its customer demand and affected its bottom line.

For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $1.09 billion, indicating year-over-year growth from $1.04 billion. The consensus estimate for adjusted earnings per share is pegged at $1.58, indicating a decline from $1.73 reported a year ago.

Earnings WhispersOur proven model does not predict an earnings beat for Akamai for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.96%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Akamai carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to ConsiderHere are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Sandisk Corporation (SNDK - Free Report) has an Earnings ESP of +4.13% and sports a Zacks Rank #1 at present. It is set to release its fourth-quarter fiscal 2026 numbers on Aug. 5.

The Earnings ESP for Motorola Solutions, Inc. (MSI - Free Report) is +0.52%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report second-quarter 2026 numbers on Aug. 5.

The Earnings ESP for Analog Devices, Inc. (ADI - Free Report) is +2.37%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report third-quarter fiscal 2026 numbers on Aug. 19.

, /PRNewswire/ -- Building on a track record of delivering advanced sensing technologies for the Space Development Agency's (SDA) proliferated low Earth orbit architecture, Leidos (NYSE: LDOS) was selected by Sierra Space to provide infrared sensing payloads, onboard signal-processing capabilities and mission support for the for the Accelerated Missile Defense Tranche 3 (AMDT3) Tracking Layer.

Sierra Space will integrate Leidos' infrared sensing payloads into 18 missile warning and tracking satellites that will provide persistent detection and tracking of hypersonic and other advanced missile threats from low Earth orbit. Together, Sierra Space and Leidos are combining proven satellite integration and flight-tested sensing technologies to field operational capability for one of the nation's highest priorities in missile defense.

"AMDT3 will build upon proven technologies to accelerate global missile defense capability," said Cindy Gruensfelder, president of Leidos Defense. "Leidos has already demonstrated these technologies on orbit, and with Sierra Space, we will rapidly transition that proven capability into an operational missile defense constellation that will help protect the nation against advanced missile threats."

Leidos' payloads combine infrared sensing with onboard digital signal processing that enables mission-relevant tracking data to be generated directly aboard the satellite, reducing latency and allowing actionable tracking information to be delivered faster to the warfighter. The company will also provide ground support equipment, mission expertise, operations support and sustainment throughout the program.

The AMDT3 award extends Leidos' contributions across SDA tranches 0, 1 and 2, reflecting the customer's continued confidence in the company's proven performance and rapid execution. Leidos' four Tranche 0 payloads have successfully operated on orbit since 2023, producing tracks of real-world events. Leidos is also delivering 14 missile warning and tracking sensors for Tranche 1 and 16 for Tranche 2, plus two dedicated missile defense sensors for Tranche 2.

As SDA expands the tracking layer to provide greater global coverage and enhanced missile defense capabilities, Leidos' flight-proven technologies will help deliver the resilient, proliferated sensing architecture needed to support homeland defense, theater operations and the broader objectives of Golden Dome for America.

The AMDT3 award advances Leidos' NorthStar 2030 strategy by expanding the company's position in space sensing, onboard digital processing and integrated national security technologies while continuing its evolution from technology demonstration to operational missile defense capability.

About Leidos

Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations. Headquartered in Reston, Virginia, with approximately 50,000 global employees, Leidos reported annual revenues of approximately $17.2 billion for the fiscal year ended January 2, 2026. For more information, visit www.leidos.com.

Certain statements in this announcement constitute "forward-looking statements" within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management's current beliefs and expectations and are subject to significant risks and uncertainties. These statements are not guarantees of future results or occurrences. A number of factors could cause our actual results, performance, achievements, or industry results to be different from the results, performance, or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, the "Risk Factors" set forth in Leidos' Annual Report on Form 10-K for the fiscal year ended January 2, 2026, and other such filings that Leidos makes with the SEC from time to time. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Leidos does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Media Contact:

Philip Carder
(571) 926-6698
[email protected]

SOURCE Leidos Holdings, Inc.

Key Takeaways Atlassian to report fiscal Q4 results on Aug. 6 with revenue guidance of $1.653-$1.661B.TEAM's cloud, AI offerings and enterprise adoption are expected to support quarterly growth.TEAM may face pressure from softer IT spending, competition and continued investment costs. Atlassian (TEAM - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 6, 2026.

Atlassian projects fiscal fourth-quarter revenues between $1.653 billion and $1.661 billion. The Zacks Consensus Estimate for revenues is pegged at $1.66 billion, suggesting growth of 19.8% from the year-ago reported figure.

For the fiscal fourth quarter, the Zacks Consensus Estimate for NET’s second-quarter earnings is pegged at $1.48 per share, suggesting growth of 51% from the same quarter last year. The consensus mark has been revised upward in the past 30 days.

Atlassian surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise being 21.47%.

Factors to Consider Before TEAM’s Q4 EarningsThe growing adoption of Atlassian’s cloud-based offerings, driven by the ongoing digital transformation of enterprises and the rising popularity of hybrid work environments, is likely to have favored the company’s to-be-reported fiscal fourth-quarter performance. Continued migration from on-premises deployments to the cloud and healthy demand from enterprise customers are expected to have remained key growth drivers.

Strong demand for Atlassian’s core collaboration offerings, including Jira and Confluence, along with increasing adoption of AI-powered workflow solutions such as Rovo and Teamwork Collections, is likely to have acted as a major catalyst in the to-be-reported quarter. The company’s strategy of embedding generative AI capabilities across its platform is expected to have encouraged greater customer engagement and product expansion.

Growing enterprise adoption is likely to have supported the company’s fiscal fourth-quarter results. Atlassian has been witnessing stronger traction among large organizations as customers expand platform usage, standardize on its cloud offerings and increasingly adopt higher-value solutions across multiple business functions.

The continued shift toward subscription-based offerings is expected to have remained a tailwind in the to-be-reported quarter. The company’s recurring revenue model, coupled with expanding cloud adoption and cross-selling opportunities, is likely to have supported top-line growth while improving the overall quality of revenues. Atlassian’s investments in product innovation, AI-powered automation and strategic acquisitions are likely to have strengthened its competitive position during the fiscal fourth quarter.

However, Atlassian’s fiscal fourth-quarter performance might have been affected by softening enterprise IT spending amid persistent macroeconomic uncertainty. Slower customer additions, an increasingly competitive collaboration software market and continued investments in sales, marketing and research and development are likely to have remained near-term headwinds.

What Our Model SaysOur proven model does not conclusively predict an earnings beat for Atlassian this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

TEAM currently has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to ConsiderHere are a few companies worth considering in the broader Zacks Computer and Technology sector, as our model indicates that these possess the right combination of factors to exceed earnings expectations in their upcoming releases:

SanDisk Corporation (SNDK - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, it has an Earnings ESP of +4.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SanDisk’s fourth-quarter earnings is pegged at $34.24 per share, indicating a year-over-year surge of 11,707%. Earnings estimates for the quarter have been revised upward by 5.7% over the past 60 days. Shares of SanDisk have soared 457.3% year to date (YTD).

Western Digital Corporation (WDC - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, it has an Earnings ESP of +3.22% and flaunts a Zacks Rank #1.

The Zacks Consensus Estimate for Western Digital’s fourth-quarter earnings is pegged at $3.35 per share, calling for a year-over-year increase of 101.8%. Earnings estimates for the quarter have been revised upward by 3 cents in the past 30 days. Shares of Western Digital have surged 217.5% YTD.

MKS Inc. (MKSI - Free Report) is scheduled to report second-quarter 2026 results on Aug. 5. Currently, it has an Earnings ESP of +2.64% and carries a Zacks Rank #2.

The Zacks Consensus Estimate for MKS’ second-quarter earnings is pegged at $2.93 per share, calling for a year-over-year jump of 65.5%. Earnings estimates for the quarter have been revised northward by a penny in the past 30 days. Shares of MKS have rallied 83.5% YTD.

Key Takeaways MKTX beat Q2 earnings estimates despite lower revenues and a year-over-year decline in adjusted EPS.MarketAxess saw emerging markets trading volume rise 12%, while Eurobonds trading volume also increased.MKTX faced weaker high-grade and high-yield trading volumes, higher expenses and lower commission revenues. MarketAxess Holdings Inc. (MKTX - Free Report) reported second-quarter 2026 adjusted earnings per share of $1.95, which beat the Zacks Consensus Estimate by 3.7%. However, the bottom line decreased 2.5% year over year.

Total revenues were $218.4 million, which fell 0.5% year over year. However, the top line beat the consensus mark by 0.5%.

The quarterly results were aided by solid growth in emerging markets and Eurobonds trading volumes. Increased information services, technology services and post-trade services revenues also contributed to the upside. The gains were partly offset by higher expenses and lower commission revenues, along with weaker high-grade and high-yield trading volumes.

MarketAxess’ Quarterly Operational UpdateCommission revenues declined 3% year over year to $186.9 million. The metric missed the Zacks Consensus Estimate of $188.9 million and our estimate of $196.2 million. Information services revenues of $16.1 million grew 23% year over year. The metric beat the consensus mark of $14.1 million and our estimate of $13.2 million. Post-trade services revenues increased 5% year over year to $11.6 million, while technology services revenues rose 8% to $3.8 million.

Total expenses were $128.5 million, which rose 1% year over year in the quarter due to higher technology and communications costs, professional and consulting fees, and marketing and advertising. The metric was lower than our estimate of $138.3 million.

MarketAxess’ net income fell 4% year over year to $68.3 million but came in higher than our estimate of $67.1 million. The net income margin of 31.3% deteriorated 110 basis points year over year.

MarketAxess’ Trading VolumesThe high-grade trading volume of MarketAxess was $461.1 billion in the second quarter, which declined 4% year over year and lagged the Zacks Consensus Estimate of $473.4 billion. The ADV of the same product category totaled $7.4 million, which fell 4% year over year and missed the Zacks Consensus Estimate of $7.6 million.

High-yield trading volume of $96.7 billion fell 8% year over year, while ADV declined 8% to $1.6 billion. Other credit trading volume rose 2% year over year to $40.7 billion, whereas ADV for the same product category increased 2% to $657 million.

Trading volume and ADV of emerging markets rose 12% each on a year-over-year basis to $279 billion and $4.5 billion, respectively. The Eurobonds’ trading volume rose 2% and ADV improved 1% on a year-over-year basis.

The total credit trading volume of $1 trillion rose 1% year over year. Total credit ADV inched up 0.3% to $16.9 billion. Total rates’ trading volume and ADV of this product category each declined 19% on a year-over-year basis.

MarketAxess’ Balance Sheet (As of June 30, 2026)MarketAxess exited the second quarter with cash and cash equivalents of $245.8 million, which fell from the 2025-end level of $519.7 million. Total assets of $2.4 billion rose 25.2% from the figure at 2025-end.

The company had $112 million in outstanding borrowings under its credit facility at the end of the second quarter. Total stockholders’ equity of $1.2 billion rose 8.1% from the 2025-end level.

MarketAxess’ Cash FlowsNet cash provided by operating activities was $26.8 million in the second quarter of 2026 compared with $103.7 million in the prior-year quarter. The free cash flow declined 21.3% year over year to $88.9 million in the second quarter of 2026.

MarketAxess’ Capital Deployment UpdateAs of July 29, 2026, $205 million remained available under the board-authorized share repurchase program.

The board declared a quarterly cash dividend of 78 cents per share, which will be paid out on Sept. 2, 2026, to its shareholders of record as of Aug. 19.

MKTX has entered into a definitive agreement to be acquired by Intercontinental Exchange, Inc.

MKTX’s Zacks RankMKTX currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Peers Perform?Here are some stocks from the broader finance space that have also reported their quarterly results: RenaissanceRe Holdings Ltd. (RNR - Free Report) , Aon plc (AON - Free Report) and The Hartford Insurance Group, Inc. (HIG - Free Report) . Here's how they have performed:

RenaissanceRe reported second-quarter 2026 operating income of $12.92 per share, which surpassed the Zacks Consensus Estimate by 12.9%.  The bottom line also improved 5.1% year over year. Total operating revenues declined 6.7% year over year to $2.64 billion. The quarterly earnings benefited from lower expenses, higher net investment income and an improved total combined ratio. However, RNR’s upside was partly offset by lower net premiums earned, weaker underwriting results in the Casualty & Specialty segment and lower fee income.

Aon reported second-quarter 2026 adjusted earnings of $3.81 per share, which surpassed the Zacks Consensus Estimate by 1.1%. The bottom line advanced 9% year over year. Total revenues of $4.2 billion grew 2% year over year. AON’s quarterly results were supported by strong organic revenue growth, healthy client retention, operating margin expansion and disciplined execution. Solid performance across the Commercial Risk, Reinsurance and Health Solutions businesses was partly offset by weakness in Wealth Solutions.

Hartford delivered second-quarter fiscal 2026 earnings per share of $3.42, up 6% year over year and above the Zacks Consensus Estimate of $3.12 by 9.6%. Revenues came in at $5.23 billion, which improved 6.8% year over year. HIG’s quarterly results benefited from higher investment income, premium growth in Business Insurance and improving Personal Insurance profitability. Strong new business expansion in Small Business and favorable pricing trends supported results. However, the upside was partly offset by an increased expense level, higher catastrophe losses and weaker Employee Benefits profitability.

Key Takeaways Dutch Bros' Q2 EPS is projected to rise 11.5% YoY to 29 cents, while revenues are seen up 26.1% to $524.2M.BROS may benefit from same-shop sales growth, food rollout and stronger digital engagement in Q2.Higher coffee costs, food rollout expenses and build-to-suit lease costs may pressure BROS' margins. Dutch Bros Inc. (BROS - Free Report) is scheduled to report second-quarter 2026 results on Aug. 5.

BROS’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.6%.

Trend in the Estimate Revision of BROSThe Zacks Consensus Estimate for second-quarter earnings per share (EPS) is pegged at 29 cents, indicating a rise of 11.5% from 26 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $524.2 million. The metric suggests a rise of 26.1% from the year-ago quarter’s figure.

Let us take a look at how things might have shaped up in the quarter to be reported.

Factors Likely to Shape BROS’ Quarterly ResultsDutch Bros’ second-quarter 2026 performance is likely to have benefited from sustained transaction growth, healthy customer demand and continued same-shop sales momentum. The company expects system same-shop sales growth to approach 5% for the quarter, supported by underlying brand strength and transaction growth beyond the unusually successful limited-time offering that aided first-quarter results.

The continued expansion of Dutch Bros’ food platform is likely to have supported second-quarter sales. The program had reached 485 system shops by the end of the first quarter, with attachment rates tracking in the low teens and ahead of initial expectations. Shops offering food continued to generate an approximately 4% comparable-sales lift, while the platform strengthened the morning beverage occasion. Further rollout during the quarter is likely to have supported same-shop sales, transactions and morning-daypart demand.

Strength in company-operated shop revenues and franchising and other revenues is expected to have driven the second-quarter top line. The Zacks Consensus Estimate for company-operated shop revenues is pegged at $485.5 million, up from $380.5 million reported in the prior-year quarter. The consensus estimate for franchising and other revenues is pegged at $38.7 million, compared with $35.3 million a year ago.

Digital engagement and menu innovation may also have supported second-quarter results. Continued adoption of Order Ahead, stronger in-app offer effectiveness and expanded rewards segmentation are likely to have encouraged repeat visits and strengthened customer engagement. The May launch of Myst Energy Refreshers may have provided an additional transaction catalyst by broadening Dutch Bros’ customized energy platform and addressing additional customer occasions.

Pricing and shop expansion are expected to have provided second-quarter top-line support. Dutch Bros carried approximately 1.5 percentage points of pricing into the quarter, benefiting average ticket. The company entered the period with its shop-opening cadence ahead of schedule, while new-shop productivity remained in line with record system-wide AUVs. Strong early performance at converted Clutch Coffee Bar locations and continued openings across existing and new markets may have further expanded the revenue base.

However, elevated input costs are likely to have pressured profitability in the second quarter. Coffee-cost pressure is expected to become more pronounced as 2026 progresses, while expenses associated with the continued food rollout are likely to have weighed on the cost of goods sold. In addition, higher rental expenses stemming from the shift toward build-to-suit leases are expected to have constrained company-operated shop margins in the to-be-reported quarter.

What Our Model Says About BROS StockOur proven model does not conclusively predict an earnings beat for Dutch Bros this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.

Earnings ESP for BROS: Dutch Bros currently has an Earnings ESP of -4.68%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dutch Bros’ Zacks Rank: The company currently has a Zacks Rank #2.

Stocks Poised to Beat on EarningsIn the to-be-reported quarter, Sweetgreen’s earnings are expected to register a 35% year-over-year increase. SG’s earnings missed estimates in each of the trailing four quarters, with the average miss being 42.4%.

CAVA Group, Inc. (CAVA - Free Report) currently has an Earnings ESP of +20.30% and a Zacks Rank of 3.

In the to-be-reported quarter, CAVA’s earnings are expected to increase 6.3% year over year. CAVA’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, with the average surprise being 16.6%.

Brinker International, Inc. (EAT - Free Report) currently has an Earnings ESP of +0.12% and a Zacks Rank of 3.

In the to-be-reported quarter, Brinker earnings are expected to register a 23.3% year-over-year decline. EAT’s earnings surpassed estimates in all of the trailing four quarters, with the average surprise being 6.8%.

Key Takeaways MACOM Technology is expected to post Q3 EPS of $1.34 and revenues of about $335.1 million.MTSI's data center business was projected to grow nearly 35% sequentially on 800G and 1.6T demand.Industrial & Defense growth, higher utilization and better yields may support further margin expansion. MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) is set to report third-quarter fiscal 2026 results before market open on Aug. 6.

The Zacks Consensus Estimate for third-quarter earnings is pinned at $1.34 per share, indicating a 48.9% year-over-year increase. The consensus estimate for the bottom line has remained unchanged over the past 60 days.

The Zacks Consensus Estimate for MACOM Technology’s third-quarter revenues is pegged at approximately $335.1 million, suggesting a 32.9% jump from the year-ago quarter’s sales of $252.1 million.

MACOM Technology’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 1.78%.

Let’s see how things are shaping up for the upcoming quarterly results.

Factors Likely to Have Shaped MTSI’s Q3 PerformanceMACOM Technology’s third-quarter performance is likely to have benefited from strong growth across the data center business. During the last earnings call, management projected nearly 35% sequential growth in this segment, supported by rising deployments of 800G and 1.6T optical connectivity products, strong demand for photodetectors and increasing production of pluggable optical modules. The company also raised its fiscal 2026 data center growth outlook from more than 40% to more than 60%, reflecting strong customer demand.

Industrial & Defense (I&D) is likely to have remained another bright spot. MACOM Technology’s revenues from this segment reached record levels in the previous quarter, backed by healthy defense spending, growing radar and electronic warfare programs, and increasing demand from the company's top defense customers. Management expected this business to post nearly 10% sequential growth in the third quarter, supported by a healthy pipeline of production programs and modernization projects.

Telecom may also have contributed, although at a slower pace. Management had guided for low single-digit sequential growth, supported by improving cable infrastructure demand and ongoing activity in satellite communication programs. While major LEO production ramp-ups are expected to contribute more meaningfully in fiscal 2027, current low-rate production programs are likely to have provided incremental revenues during the to-be-reported quarter.

Operational execution is also expected to have remained a tailwind in the third quarter. Higher factory utilization, improving manufacturing yields and expanding production capacity are expected to have supported another quarter of gross margin expansion. Management had guided for adjusted gross margin of 59-60%, operating margin near 30%, and adjusted EPS between $1.31 and $1.37.

Q3 Earnings Whispers for MACOM TechnologyOur proven model does not conclusively predict an earnings beat for MTSI this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

MACOM Technology currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to ConsiderHere are a few companies worth considering in the broader Zacks Computer and Technology sector, as our model indicates that these possess the right combination of factors to exceed earnings expectations in their upcoming releases:

SanDisk Corporation (SNDK - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, it has an Earnings ESP of +4.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SanDisk’s fourth-quarter earnings is pegged at $34.24 per share, indicating a year-over-year surge of 11,707%. Earnings estimates for the quarter have been revised upward by 2.8% over the past 30 days. Shares of SanDisk have soared 411.7% year to date (YTD).

Western Digital Corporation (WDC - Free Report) is scheduled to report fourth-quarter fiscal 2026 results on Aug. 5. Currently, it has an Earnings ESP of +3.22% and sports a Zacks Rank #1.

The Zacks Consensus Estimate for Western Digital’s fourth-quarter earnings is pegged at $3.35 per share, calling for a year-over-year increase of 101.8%. Earnings estimates for the quarter have been revised upward by a penny in the past 30 days. Shares of Western Digital have surged 216.2% YTD.

MKS Inc. (MKSI - Free Report) is scheduled to report second-quarter 2026 results on Aug. 5. Currently, it has an Earnings ESP of +1.59% and carries a Zacks Rank #2.

The Zacks Consensus Estimate for MKS’ second-quarter earnings is pegged at $2.94 per share, calling for a year-over-year jump of 66.1%. Earnings estimates for the quarter have been revised upward by a penny in the past seven days. Shares of MKS have rallied 86.1% YTD.

Key Takeaways BorgWarner to report Q2 results on Aug. 5, with EPS seen at $1.26 and revenues at $3.58 billion.BWA's partnerships and Eldor acquisition support electrified propulsion despite soft vehicle production.BorgWarner expects battery sales to fall again in 2026, weighing on growth despite margin guidance. BorgWarner Inc. (BWA - Free Report) is slated to release second-quarter 2026 results on Aug. 5, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) and revenues is pegged at $1.26 and $3.58 billion, respectively.

For the second quarter, the consensus estimate for BorgWarner’s earnings has moved a penny over the past 30 days. Its bottom-line estimates imply growth of 4.1% from the year-ago reported numbers.

The Zacks Consensus Estimate for BWA's quarterly revenues implies a year-over-year decline of 1.5%. The company's earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 11.08%. This is depicted in the graph below:

Q1 HighlightsBorgWarner’s adjusted earnings of $1.24 per share in the first quarter of 2026 beat the Zacks Consensus Estimate of $1.16 by 6.83%. Revenues of $3.53 billion topped the Zacks Consensus Estimate of $3.47 billion by 1.74% and increased 0.5% year over year.

Things to NoteBorgWarner’s partnerships with FinDreams Battery and onsemi, along with the Eldor hybrid systems acquisition, continue to strengthen its electrified propulsion portfolio across batteries, power electronics, and ignition systems. Its battery energy storage systems are cell-chemistry and form-factor independent, allowing the company to expand beyond mobility into stationary and data center applications.

Even though global vehicle production remains soft, BorgWarner still expanded its adjusted operating margin by 50 basis points to 10.5% in the first quarter of 2026 while adjusted EPS rose 12%, thanks to aggressive cost controls, operational discipline, and the exit from weaker charging businesses. The company expects full-year adjusted operating margin guidance in the range of 10.7-10.9% despite inflation and lower battery sales compared to 10.7% in 2025.

Partnership with FinDreams Battery and onsemi, along with a resilient margin forecast for full-year 2026, are likely to have bolstered the company’s performance in the to-be-reported quarter.

However, BorgWarner’s battery segment remains a major weak spot. The company expects battery sales to decline again in 2026 because of lower North American EV incentives and weaker European EV demand. The battery business alone represents a roughly 150-basis-point headwind to annual sales growth. Also, despite diversification efforts, over 80% of BorgWarner’s sales still come from the light vehicle market. The company expects weighted vehicle production to remain flat to down 3% in 2026.

Weakness in the battery segment and a decline in vehicle production are likely to have impacted BorgWarner’s performance in the second quarter.

Let’s have a look at our estimates for BWA’s segmental performance.

We expect Turbos & Thermal Technologies revenues to be $1.41 billion, suggesting a 5% year-over-year decline. For the Drivetrain & Morse Systems segment, we project sales of $1.46 billion, indicating a 2.4% year-over-year increase. We expect PowerDrive Systems sales to be $611 million, suggesting a rise of 5.2% year over year. For the Battery & Charging Systems segment, we project sales of $92.7 million, indicating a 41.7% year-over-year decline.

Earnings WhispersOur proven model does not conclusively predict an earnings beat for BorgWarner for the quarter to be reported, as it does not have the right combination of the two key ingredients. A positive Earnings ESP, combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is not the case here.

Earnings ESP: BWA has an Earnings ESP of +0.62%. This is because the Most Accurate Estimate is pegged higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Releases From Auto SpaceGeneral Motors Company (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.

Genuine Parts Company (GPC - Free Report) reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.

Key Takeaways Shake Shack's Q2 revenue estimate implies 17.2% growth, while EPS is projected to fall 29.6%.Smoky BBQ and Clubhouse launches drove traffic and ticket growth, supporting same-Shack sales.Digital guest counts and app downloads rose over 35%, while new openings likely aided revenues. Shake Shack Inc. (SHAK - Free Report) is scheduled to report second-quarter 2026 results on Aug. 5, before the opening bell.

SHAK’s earnings topped the Zacks Consensus Estimate in three of the trailing four quarters, and missed on the remaining one occasion, with an average surprise being negative 15.5%.

Trend in the Estimate Revision of SHAKThe Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at 31 cents per share, down 29.6% year over year. In the past 30 days, earnings estimates for the to-be-reported quarter have been revised downward by 3 cents.

The Zacks Consensus Estimate for revenues is pegged at $417.8 million, indicating 17.2% growth from the prior-year actual.

Let us take a look at how things might have shaped up in the quarter to be reported.

Factors Likely to Shape SHAK’s Quarterly ResultsShake Shack’s second-quarter performance is likely to have benefited from continued momentum in same-Shack sales, supported by positive traffic trends, menu innovation and targeted marketing investments. Management noted that the company entered the quarter with improving sales momentum, aided by the successful launch of its Smoky BBQ platform, including the BBQ Boneless Baby Back Rib Sandwich, which drove strong guest response early in the quarter.

Menu innovation is expected to have remained a key traffic driver. The company highlighted strong nationwide performance from the Clubhouse Pimento Cheeseburger and Chicken Sandwich introduced in March, while management indicated that the BBQ menu platform significantly exceeded expectations in May and was driving both traffic and ticket growth. Continued beverage innovation and a robust pipeline of limited-time offerings are also likely to have supported guest engagement in the quarter.

Digital engagement and expansion are likely to have supported second-quarter growth. Digital-channel guest count and app downloads rose more than 35%, while higher visit frequency lifted digital customer lifetime value by roughly 20%. Meanwhile, contributions from new restaurants likely aided revenues after Shake Shack raised its 2026 company-operated opening target to 60-65 locations.

On the profitability front, Shake Shack’s earnings are expected to decline year over year, as persistent commodity inflation, particularly higher beef costs, likely remained a headwind. Higher expenses related to restaurant expansion, repairs and maintenance, and sales-driving initiatives may also have partly offset productivity gains.

Nonetheless, continued improvements in labor productivity, supply-chain efficiencies and process optimization are likely to have provided some support. These initiatives might have helped mitigate elevated beef costs and contributed to restaurant-level margin expansion in the quarter to be reported.

What Does the Zacks Model Unveil for SHAK Stock?Our proven model doesn’t predict that Shake Shack is likely to beat earnings estimates this quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.

SHAK’s Earnings ESP: Shake Shack has an Earnings ESP of -3.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Shake Shack’s Zacks Rank: The company has a Zacks Rank #5 (Strong Sell) at present.

Stocks Poised to Beat on EarningsHere are a few stocks from the Zacks Retail-Wholesale sector, which, according to our model, have the right combination of elements to post an earnings beat this reporting cycle.

Sweetgreen, Inc. (SG - Free Report) has an Earnings ESP of +11.54% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the to-be-reported quarter, Sweetgreen’s earnings are expected to register a 35% year-over-year increase. SG’s earnings missed estimates in each of the trailing four quarters, with the average miss being 42.4%.

CAVA Group, Inc. (CAVA - Free Report) currently has an Earnings ESP of +20.30% and a Zacks Rank of 3.

In the to-be-reported quarter, CAVA’s earnings are expected to increase 6.3% year over year. CAVA’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, with the average surprise being 16.6%.

Brinker International, Inc. (EAT - Free Report) currently has an Earnings ESP of +0.12% and a Zacks Rank of 3.

In the to-be-reported quarter, Brinker earnings are expected to register a 23.3% year-over-year decline. EAT’s earnings surpassed estimates in all of the trailing four quarters, with the average surprise being 6.8%.

Key Takeaways BAH shares gained 11.9% in a month as earnings, contract execution and estimates improved.National Security backlog rose 15.2%, while quarterly funding climbed 17% and book-to-bill hit 1.5.Civil revenues fell 16.4%, while modest growth guidance and 2.7 leverage support a measured view. Shares of Booz Allen Hamilton Holding Corporation (BAH - Free Report) have gained 11.9% over the past month, offering investors a sharp rebound after a difficult stretch. The move follows improving earnings signals and stronger contract activity.

Image Source: Zacks Investment Research

The question is whether better execution and national security demand can extend the recovery. Weakness in the Civil and Commercial business, investment requirements and leverage still argue for a measured view.

Why BAH’s One-Month Rally MattersThe recent gain contrasts with BAH’s 9.5% decline over the past three months and 36.5% drop over the past 52 weeks. That divergence suggests expectations may be improving, but it does not erase the caution reflected in the longer-term trend.

A one-month rebound can become more durable when earnings estimates, contract awards and operating performance move in the same direction. BAH has shown progress in those areas, though the recovery remains early.

BAH’s Earnings Momentum Supports the MoveBooz Allen’s fiscal first-quarter adjusted earnings beat the Zacks Consensus Estimate by 21.5%. Earnings of $1.81 per share rose 22.3% year over year, while adjusted EBITDA increased 7.4% and the adjusted EBITDA margin expanded 130 basis points to 11.9%.

Management credited strong contract execution for profit above expectations. Positive estimate revisions add another favorable signal, indicating that analysts have become more constructive about near-term earnings.

National Security Demand Could Help BAHNational Security revenues increased 1.3% year over year to $2.03 billion. Funded backlog rose 15.2%, quarterly funding climbed 17% and the quarterly book-to-bill ratio reached 1.5, providing support for management’s expectation of better second-half growth.

New defense, intelligence, cyber and advanced technology work could strengthen that trajectory. CACI International Inc (CACI - Free Report) also targets national security missions through software and technology capabilities, making it a relevant peer for assessing federal demand. Leidos Holdings, Inc. (LDOS - Free Report) serves national security customers with digital and mission solutions, including cyber and intelligence work.

Civil Weakness Could Cap BAH’s UpsideCivil and Commercial revenues fell 16.4% to $772 million. Management expects another sequential double-digit decline, which could keep consolidated revenue growth uneven even if National Security improves.

Contract roll-offs, fewer program starts and smaller follow-on awards remain the main pressure points. The mix shift has not prevented margin expansion, but persistent top-line weakness would make continued profit growth harder to sustain.

BAH’s Valuation Leaves Room for DebateBAH trades at 10.91X forward earnings, below its sub-industry, sector and five-year median. That discount may appeal to value-focused investors, particularly if earnings and backlog trends continue to improve.

The lower multiple also reflects real concerns. Fiscal 2027 revenue guidance calls for growth of only 0-4%, planned capital expenditures total about $220 million and the net leverage ratio stands at 2.7. Strategic investment could support future growth, but it also raises execution demands.

BAH’s Mixed Signals Favor a Balanced ViewThe bottom line is that BAH’s rebound has support from better profitability, estimate revisions and national security demand, but Civil weakness and modest revenue guidance limit the case for chasing the stock after its recent gain.

BAH currently carries a Zacks Rank #3 (Hold), along with a Value Score of A, Growth Score of A, Momentum Score of A and VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Style Scores point to favorable value, growth and momentum characteristics, while the neutral Zacks Rank suggests investors may prefer to wait for clearer evidence that the recovery can broaden and persist.

Key Takeaways Sandisk expects fiscal Q4 revenues of $7.75B-$8.25B and non-GAAP EPS of $30-$33.AI infrastructure growth is supporting enterprise SSD demand, a richer product mix and higher shipments.Multiyear agreements aim to improve revenue visibility, pricing stability and reduce NAND cyclicality. Sandisk (SNDK - Free Report) is set to report its fourth-quarter fiscal 2026 results on Aug. 5.

For the to-be-reported quarter, SNDK expects revenues between $7.750 billion and $8.25 billion, driven by both higher bit shipments and improved pricing.  The Zacks Consensus Estimate for revenues is pegged at $8.3 billion, suggesting 336.64% growth from the figure reported in the year-ago quarter.

Sandisk expects non-GAAP earnings between $30 and $33 per share. The consensus mark for earnings is pegged at $34.24 per share, up 2.8% over the past 30 days. SNDK reported earnings of 29 cents per share in the year-ago quarter.

Consensus Estimate Trend
Image Source: Zacks Investment Research

SNDK’s earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 380.92%. 
 

Let us see how things have shaped up for the upcoming announcement.

Key Factors to Note Ahead of SNDK’s Q4 ResultsSandisk's fourth-quarter fiscal 2026 results are expected to have benefited from continued strength in the Data Center business, supported by surging enterprise SSD demand and favorable NAND pricing. Enterprise SSD momentum is likely to have remained strong as hyperscale customers expanded AI infrastructure, while the company began recognizing revenue from its QLC-based Stargate storage platform, complementing its successful TLC SSD portfolio.

AI-driven inference workloads are expected to have remained a key growth catalyst. Technologies such as KV cache, Retrieval-Augmented Generation (RAG) and increasingly agentic AI require high-capacity, low-latency NAND flash, making enterprise SSDs an essential part of next-generation AI infrastructure. As hyperscalers optimized inference architectures, demand for scalable NAND storage continued to strengthen, supporting higher enterprise SSD shipments and a richer product mix during the to-be-reported quarter.

The Edge segment is also expected to have contributed positively, supported by increasing storage content in premium smartphones and AI PCs. Sandisk highlighted that on-device AI capabilities are driving higher storage requirements and greater adoption of high-performance NAND solutions. Continued demand from PCs, smartphones, automotive and IoT markets likely to have supported revenue growth while enabling Sandisk to prioritize higher-value customer engagements.

Sandisk Shares Outperform Sector & PeersSandisk shares have jumped 411.7% year to date (YTD), outperforming the Zacks Computer and Technology sector’s appreciation of 11.7%. The company has outperformed its storage peers, including Western Digital (WDC - Free Report) , Seagate (STX - Free Report) and Micron Technology (MU - Free Report) , over the same time frame, shares of which have returned 216.2%, 210.9% and 188.3%, respectively.

SNDK Stock’s Price Performance    
Image Source: Zacks Investment Research

Sandisk shares are trading at a premium, as suggested by a Value Score of D. In terms of the forward 12-month price-to-sales (P/S), Sandisk is trading at 3.90X, higher than the Zacks Computer-Storage Devices industry’s 3.31X and Micron’s 3.89X. However, SNDK shares are trading at a lower multiple compared with Western Digital’s 10.09X and Seagate’s 9.99X.

SNDK Stock’s Valuation
Image Source: Zacks Investment Research

Strong AI Demand to Aid SNDK’s ProspectsSandisk’s biggest long-term catalyst is the rapid expansion of AI inference workloads. The company expects inference, reasoning models, agentic AI, KV Cache and RAG applications to require significantly more high-performance NAND storage. As hyperscalers build AI infrastructure, enterprise SSD demand is expected to remain a major growth driver for years.

Sandisk has significantly strengthened its enterprise SSD business with industry-leading TLC SSDs while expanding into high-capacity QLC solutions through its Stargate platform. The company expects both product families to play complementary roles in AI data centers, increasing SNDK’s exposure to its fastest-growing end market.

Sandisk continues to benefit from rising storage requirements in AI PCs, premium smartphones, automotive systems, robotics and IoT devices. The company believes NAND is becoming increasingly important across virtually every major technology platform, providing diversified long-term demand drivers beyond the data center. Sandisk believes its advanced NAND architecture enables industry-leading performance while allowing mid-to-high-teens annual bit growth through technology migrations rather than expensive greenfield capacity additions.

The company’s new business models (NBMs) are expected to reduce the historical cyclicality of the NAND industry. These multiyear agreements provide committed demand, supply assurance, financial guarantees and a combination of fixed and variable pricing, giving Sandisk greater revenue visibility, pricing stability and more durable margins over several years. The company expects the proportion of contracted business to increase over time.

ConclusionSandisk appears well positioned ahead of its fourth-quarter fiscal 2026 results, supported by robust AI-driven enterprise SSD demand, favorable NAND pricing and expanding adoption of its TLC and QLC storage solutions. The company’s growing exposure to AI infrastructure, disciplined supply strategy and multiyear customer agreements are enhancing revenue visibility and reducing business cyclicality. While its premium valuation may limit near-term upside, sustained momentum in data-center storage and diversified demand across AI PCs, smartphones and automotive markets reinforce Sandisk's long-term growth prospects, making the upcoming earnings release an important catalyst for the stock.

Sandisk currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Celestica is benefiting from AI networking demand and hyperscaler spending, boosting growth prospects.CLS is expanding manufacturing capacity and partnering on AI infrastructure to support future demand.CLS saw higher 2026 and 2027 earnings estimates as AI compute and ATS businesses gain momentum. Celestica, Inc. (CLS - Free Report) shares have gained 20.1% in the past six months compared with the Electronics - Manufacturing Services industry’s growth of 26.7%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.

Image Source: Zacks Investment Research

The company has underperformed its peers like Jabil, Inc. (JBL - Free Report) and Sanmina Corporation (SANM - Free Report) . Shares of Jabil have jumped 33.4%, and shares of Sanmina have risen 27.3%.

Celestica Gains From Solid AI Traction, Hyperscaler SpendingCelestica is benefiting from robust demand for next-generation Ethernet switches from hyperscalers. The company continues to see strong adoption of 800G networking solutions. It is also preparing for the commercial ramp of 1.6-terabit switch programs in the latter half of 2026. Demand for legacy 400G products has remained resilient in recent quarters.

Growing investments in AI infrastructure are driving expansion of Celestica's AI compute business. Management expects this momentum to continue throughout the remainder of 2026 and into 2027, positioning AI compute as one of the company's fastest-growing businesses. These factors are driving growth in Celestica’s Connectivity & Cloud Solutions segment.

Conditions are also improving in the semiconductor manufacturing industry. This presents a solid growth opportunity for Celestica’s Advanced Technology Solutions segment. Stronger demand for wafer fabrication equipment combined with momentum in industrial, healthcare and aerospace markets is expected to drive higher ATS revenues.

In addition to strong revenue growth, Celestica expects profitability to improve as well. A richer mix of engineering-intensive programs, particularly within its High-Performance Solutions portfolio, supports operating margin expansion.

Celestica continues to invest aggressively in manufacturing capacity to meet rising customer demand. The company is expanding facilities across North America and Asia, including Thailand, Japan and the United States. Focus on diversifying operations and boosting supply chain reliability gives it a competitive edge against other players such as Jabil and Sanmina.

Strategic Collaboration With Industry Leaders is a TailwindAdvanced Micro Devices (AMD - Free Report) is expanding its AI infrastructure portfolio with the upcoming Helios platform to strengthen its position in the hyperscale AI market. Celestica is a key manufacturing and design partner in this initiative. Celestica is providing a scale-up networking switch that serves as the backbone of AMD’s Helios rack architecture.

Celestica’s partnership with OpenAI provides an important long-term growth opportunity. The company will manufacture advanced AI racks developed in collaboration with Broadcom to support OpenAI's custom accelerator roadmap. Initial deliveries are expected later in 2026, with mass production scheduled for 2027. The partnership strengthens Celestica's presence in the rapidly expanding AI infrastructure market.

Estimate Revision TrendEarnings estimates for Celestica for 2026 and 2027 have increased over the past 60 days.

Image Source: Zacks Investment Research

Key Valuation Metric of CLSFrom a valuation standpoint, CLS is currently trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 22.62 forward 12-month earnings, higher than 20.71 for the industry.

Image Source: Zacks Investment Research

End NoteThe growing proliferation of AI-based applications and generative AI tools across industries presents a solid growth opportunity for Celestica. Growing collaboration with major technology giants like AMD, OpenAI and Broadcom is propelling innovation. Investment in expanding manufacturing capacity to support growing AI infrastructure-related demand will likely reap long-term benefits. Upward estimate revision shows growing investors’ confidence regarding the stock’s growth potential. Owing to these factors, with a Zacks Rank #1 (Strong Buy), Celestica appears to be a strong investment option at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are the earnings estimates, what experts are saying ahead of the report and the key items to watch.

SpaceX Q2 Earnings EstimatesAnalysts expect SpaceX to report second-quarter revenue of $6.93 billion, according to data from Benzinga Pro.

Analysts expect a quarterly loss of 26 cents per share.

With the company newly public, there are not figures from last year’s second quarter.

SpaceX had revenue of $18.7 billion in fiscal 2025 and reported a net loss of $4.9 billion.

What Experts are SayingSpaceX has attracted many analyst ratings and price targets since going public, along with commentary from top market experts.

"Investors won’t be focused on what the company earned over the past three months, but will likely be looking years down the road," Freedom Capital Markets Chief Market Strategist Jay Woods said in a weekly newsletter.

Woods highlights capital spending as one of the biggest items to watch in the earnings report and in commentary from company management.

"This is expected to be less about the numbers and more about Elon Musk’s vision, his capital spending plans and whether Wall Street is willing to continue funding one of the market’s most ambitious growth stories."

Woods said to look for spending on Starship, Starlink and AI infrastructure and the expected capital returns. Specifically, the market expert said investors should also look for updates on Starlink subscriber growth, government contracts and Starship’s commercialization timeline.

The market expert also said investors should be aware of a lock-up expiration of around 911 million shares on Aug. 6. Those shares held by employees and early investors will be eligible to be sold, adding to the supply of shares available. SpaceX is unlikely to hit other milestones that would unlock more shares yet.

"For one of the year’s most anticipated IPOs, the first earnings report could set the tone for the rest of 2026."

Here are some recent analyst ratings on SpaceX stock and their price targets:

Macquarie: Maintained Outperform rating, with price target $250 HSBC: Initiated with Hold rating, with price target $115 Piper Sandler: Initiated with Neutral rating, with price target $156 Needham: Maintained Buy rating, raised price target from $200 to $250 Evercore ISI: Initiated with Outperform rating, with prices target $230 Key Items to WatchAs the first earnings report as a public company, this could mark a turning point in the SpaceX storyline. The company’s IPO prospectus featured large focus on total addressable market sizes for items like space, AI and more.

Musk is likely to give more details on timelines for some items, including trips to the Moon and Mars.

Those items don’t exactly spark great ideas on the company’s future.

Expect Musk to be overly positive on the company’s future, as he has already warned short sellers betting against the company. With the stock price down, Musk is likely to find more ways to get investors excited about the company’s future.

SpaceX Stock Price ActionSpaceX stock is up 1.9% to $110.37 on Monday versus a 52-week trading range of $104.83 to $225.64. SpaceX stock is down 31.4% from its initial market debut and shares are down 51.1% from their market highs.

Imagen: Shutterstock

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Alphabet (GOOG +4.78%) (GOOGL +5.24%) stock jumped 5.1% through 12:55 p.m. ET Monday after analysts at Morgan Stanley reassured investors about the company's prospects amid record levels of investment in AI infrastructure.

Image source: Alphabet.

Alphabet Q2 earnings Alphabet reported strong earnings last week, beating expectations with profits of $9.11 per share -- triple what analysts expected. Surprisingly, Alphabet stock sold off after the report and, in fact, continued to trade below its pre-earnings price all the way through Friday.

Earnings beat notwithstanding, investors were spooked by Alphabet's announcement that it was doubling down on AI spending and raising its forecast for capital investment this year to a mind-bending $195 billion to $205 billion.

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What Morgan Stanley said about Alphabet's spending But according to Morgan Stanley -- that's OK.

All four of the big AI hyperscalers are spending gobs of money on AI investment. Amazon (AMZN +4.62%) is spending even more than Alphabet -- $220 billion from $200 billion -- while Meta (META +6.15%) has a $130 billion to $145 billion budget, and Microsoft (MSFT +5.23%) is spending about $190 billion.

Total cloud capital expenditure in 2027 could exceed $1.2 trillion this year, says MS. But all this investment is driving huge cloud revenue growth, with Google Cloud Platform growing 82% year over year.

The best news, says the analyst, is that "strong operating cash flow, equity and debt financing, leasing strategies, custom chips, and infrastructure efficiencies are helping fund capex while easing free cash flow pressure," leaving Alphabet with still $53.3 billion in positive FCF over the past 12 months. For now, the analyst isn't worried about how much money Alphabet is spending.

Let's see if Morgan Stanley feels the same next year, when AI spending leaves Alphabet with a free cash flow loss.

Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Microsoft (MSFT +5.23%) recently reported its fourth-quarter fiscal 2026 results, and investors couldn't have been more impressed. Shares surged by double-digit percentages in the two days after the company's results were released.

Investor enthusiasm came as Microsoft reported $100 billion in sales from its Azure cloud computing company for the year, and its Copilot subscriptions rose by nearly 50%.

The growth was spurred by Microsoft's massive uptick in artificial intelligence (AI) infrastructure spending, proving that big investments are paying off for some tech companies.

Meta and Alphabet haven't been so lucky. Here's how Microsoft is converting its AI investments into revenue while its competitors aren't seeing the same results.

Image source: The Motley Fool.

Microsoft's big AI investments are paying off Microsoft had two major highlights from its latest results, the first of which was the $100 billion in Azure cloud revenue for the fiscal year, an impressive 33% increase from 2025.

As a cloud company, Microsoft rents out its capacity to enterprises and other companies, rather than using its AI data capacity solely for its own services. That's in contrast to Meta, which mostly uses its artificial intelligence infrastructure for AI tools within its services. Meta recently started charging developers for access to Muse Spark, but it's nowhere near the size of Microsoft's cloud business.

Azure's sales growth shows that when Microsoft invests directly in AI data center capacity, it can dramatically increase sales. Because Microsoft and Meta have fundamentally different businesses, shareholders are highly skeptical that Meta can recoup its AI costs, while they've been mostly positive recently about Microsoft's AI investments.

This leads us to the second highlight for Microsoft, its 30 million paid Copilot seats. That's a nearly 50% increase from the end of April, when the company had over 20 million paid seats.

Paid AI subscribers are one of the most direct ways to show shareholders that AI spending is working, because they indicate that customers see value in the AI services being offered and are willing to pay for them.

Microsoft's free-cash-flow situation is different, too Shareholders often consider how much free cash flow a company has -- the cash left over after paying for its operations and maintaining its assets -- because it's a good indicator of a company's overall financial health.

Record AI spending is decimating the free cash flow of many tech companies, with Meta's plunging 91% in the most recent quarter to just $784 million. And Alphabet's free cash flow has plummeted, falling to negative $5.9 billion in the second quarter, down from positive free cash flow of about $25 billion in the year-ago quarter.

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Microsoft's capital expenditures (capex) of $175 billion (adjusted from $190 billion, due to an accounting change) are certainly weighing on the company's free cash flow, but it's not as bad as its peers'. Free cash flow is down just 23% from the year-ago quarter and is still relatively high at $19.6 billion.

I still believe Alphabet's AI spending could eventually pay off for the company, because it's in a similar position as Microsoft. It rents out cloud services to customers with Google Cloud and charges for its AI agent through Google Gemini. But its stock has been punished lately, in part because of its evaporating free cash flow.

What Microsoft shareholders should be looking for Microsoft indicated that its capex spending will continue, with management saying on the earnings call that it will exceed $50 billion in Q1.

While investors rewarded Microsoft for its Azure growth, rising Copilot subscriptions, and modest free-cash-flow declines (relative to peers), the company will need to keep the good times coming.

Tech investors have already shown they're not willing to let companies spend without regard to growth, which means Microsoft shareholders will want to keep a close eye on Azure sales growth and Copilot subscription increases.

Any slowdown in these two areas, as capex spending increases, would indicate that Microsoft's AI spending isn't yielding the results it wants. Meta's and Alphabet's share price declines over the past few months are a good reminder that investors are keeping a close eye on AI returns on investment.

by Todd Bishop on Aug 3, 2026 at 10:38 amAugust 3, 2026 at 10:51 am

GeekWire Illustration Microsoft and Amazon both saw their stocks surge again Monday, riding a post-earnings tech wave across the stock market that pushed Amazon past $3 trillion in value for the first time.

The gains follow earnings reports last week in which both companies’ cloud platforms exceeded expectations. Microsoft said Azure grew 43%, passing $100 billion in annual revenue for the first time. Amazon said AWS grew 37%, its fastest pace in 18 quarters.

Microsoft and Amazon are now the world’s fourth and fifth most valuable companies, respectively. The three ahead of them (Nvidia, Alphabet and Apple) are all headquartered in the Bay Area, although each has sizeable engineering centers in the Seattle region.

Amazon rose 4.6% in intraday trading to $284.15 as of publication time, after touching an all-time high of $287.20 earlier in the session, giving it a market value of $3.06 trillion.

Microsoft climbed 5.2% to $488.97, worth $3.63 trillion. Its rally began Thursday, when it added nearly $450 billion in market value, the largest one-day gain by any company on record.

The rallies came despite AI spending plans that have unsettled investors for much of the year. Microsoft went into earnings near a one-year low, after a $357 billion wipeout to start the year.

It’s all still coming at a huge cost. Microsoft spent a record $41 billion on capital projects last quarter and told investors to expect more than $50 billion in the current quarter. Amazon raised its 2026 forecast to about $220 billion from $200 billion, citing rising memory chip prices.

In one sign of the impact of the spending, Microsoft’s free cash flow fell 23% last quarter. Amazon’s free cash flow turned negative for the first time since 2023.

But cloud growth and other signs of demand for AI seem to have appeased investors for now.

Amazon CEO Andy Jassy told investors the spending reflects unmet demand: “Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027 too. In fact, the demand we already have for 2028 is striking.”

The gains come as both companies operate with fewer people. Amazon confirmed 16,000 more corporate job cuts in January, bringing the total to 30,000 since October, along with more recent reductions in its robotics and artificial general intelligence groups.

Microsoft cut 4,800 jobs in July, revamping its salesforce and overhauling Xbox.

Key Takeaways AMD expects double-digit sequential Data Center growth, led by EPYC CPUs and Instinct AI accelerators.Server CPU revenues are projected to rise more than 70% year over year on Turin demand and share gains.Cloud expansions, ROCm gains and Meta's planned GPU deployment may support Data Center growth. Advanced Micro Devices (AMD - Free Report) is expected to have benefited from strong Data Center revenues in the second quarter of 2026, the results of which are scheduled to be released on Aug. 4, 2026. Click here to know how AMD’s overall second-quarter performance is likely to be.

AMD’s Data Center Revenues to Ride on Strong EPYC DemandAMD's Data Center business is expected to have benefited from continued strength in EPYC server CPUs and Instinct AI accelerators. The company guided for double-digit sequential growth in the Data Center segment, driven by more than 70% year-over-year growth in server CPU revenues as hyperscalers and enterprise customers expanded AI infrastructure deployments.

Demand for EPYC processors is expected to have benefited from accelerating AI adoption, particularly inferencing and agentic AI workloads, which require additional CPU compute for orchestration, data movement and accelerator head-node functions. Per AMD, every major cloud provider has been expanding its EPYC footprint, while enterprise adoption continued to strengthen across financial services, healthcare, industrial and digital infrastructure customers.

The company also projected server CPU revenue to grow more than 70% year over year in the to-be-reported quarter, reflecting continued market-share gains and robust demand for fifth-generation EPYC Turin processors. AMD faces stiff competition from Intel (INTC - Free Report) in the server CPU market. Intel continues to emphasize AI-optimized Xeon processors for inference workloads, extensive software compatibility and a broad OEM ecosystem. Intel is also investing in AI accelerators and integrated CPU-GPU solutions, while leveraging its long-standing presence in enterprise data centers to defend its installed base.

The Data Center AI business is also expected to have contributed meaningfully to second-quarter performance. The business is likely to have benefited from continued customer engagement, growing production deployments and expanding demand for Instinct GPUs across cloud, enterprise and sovereign AI customers. This has been helping AMD steer off competition from the likes of NVIDIA (NVDA - Free Report) and Broadcom (AVGO - Free Report) .

Cloud customer momentum is expected to have remained another tailwind in the to-be-reported quarter. AMD expanded EPYC-powered cloud instances with AWS, Google Cloud, Microsoft Azure and Tencent, while Meta committed to deploying up to 6 gigawatts of AMD Instinct GPUs and adopting sixth-generation EPYC processors. These partnerships, together with ongoing software improvements through ROCm and strong MLPerf benchmark results, are expected to have reinforced AMD's competitive position in AI infrastructure and supported continued Data Center growth in the second quarter.

The Zacks Consensus Estimate for second-quarter Data Center revenues is pegged at $6.497 billion, indicating impressive year-over-year growth of 100.5%.

AMD Faces Stiff Competition in Data CenterBroadcom is emerging as one of AMD's biggest competitors in AI infrastructure through its custom AI accelerator (XPU) business. Broadcom expects AI semiconductor revenues to reach $56 billion in fiscal 2026 and exceed $100 billion in fiscal 2027, supported by multi-generation custom AI chip programs with Google, Meta, OpenAI and other hyperscalers. Broadcom is also strengthening its networking leadership with 100-terabit and upcoming 200-terabit Ethernet switches, co-packaged optics, high-speed SerDes and AI fabrics that support massive AI clusters.

NVIDIA continues to dominate AI infrastructure through its integrated hardware, networking and software ecosystem. NVIDIA reported $75 billion in Data Center revenue in the first quarter of fiscal 2027, driven by rapid adoption of Blackwell systems across hyperscalers, AI cloud providers, enterprises and sovereign AI deployments. Beyond GPUs, NVIDIA is widening its competitive moat through its full-stack platform that combines Grace CPUs, Blackwell GPUs, NVLink, Spectrum-X Ethernet, InfiniBand networking and CUDA software.

Client & Gaming Expected to Support AMD’s Q2 ResultsAMD’s Client & Gaming segment is expected to post modest sequential growth in the second quarter of 2026, supported by continued strength in the client business. Gaming revenues are also expected to contribute to second-quarter growth. Overall, AMD guided for modest sequential growth in the Client & Gaming segment in the second quarter.

The Zacks Consensus Estimate for second-quarter Client & Gaming revenues is pegged at $3.824 billion, indicating sequential growth of 6%.

AMD’s Embedded Expected to Accelerate in Q2AMD expects the Embedded segment to rebound in the second quarter of 2026 with double-digit sequential and year-over-year revenue growth. The improvement is expected to have been driven by strengthening demand across multiple end markets following the return to year-over-year growth in the first quarter. Continued momentum in embedded computing, supported by increasing adoption of embedded x86 products, strong design-win activity and expanding opportunities across adaptive computing, communications, aerospace & defense, and industrial markets.

The Zacks Consensus Estimate for second-quarter Embedded revenues is pegged at $948 million, indicating year-over-year growth of 15%.

Zacks RankAMD currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tilray Brands (TLRY +4.51%) has become much more diverse in recent years. It's become more than just a cannabis producer, as acquisitions in beverages have significantly broadened its opportunities and grown its operations. It's also been expanding into international markets.

Last week, the company reported its year-end numbers for fiscal 2026, and what was surprising was where the bulk of its revenue growth came from. It wasn't from beverages or even from the Canadian cannabis market. Instead, its distribution business was responsible for the vast majority of its growth.

Image source: Getty Images.

Tilray's distribution business grew by 21% last year Tilray has four main segments, including beverages, cannabis, distribution, and wellness. It's largely known for being a cannabis producer, and it's been becoming a bigger player in the beverage industry due to acquisitions in recent years. Investors may overlook its distribution business, as it may seem less exciting, since it centers on the sale of pharmaceutical and wellness products in overseas markets, with the German-based CC Pharma being a key part of that. But it was the distribution business that generated much of Tilray's growth last year.

The company's net revenue totaled $915.5 million for the fiscal year ending May 31, which was up 11% from the previous year. While it achieved growth across all of its segments, the biggest increase was easily in its distribution business, which remains its largest. Revenue of more than $327 million in that segment grew by 21%, whereas its other business units generated just single-digit growth.

CEO Irwin Simon says the company is poised for further growth and that "Across Europe, we have built one of the industry's most comprehensive medical cannabis and pharmaceutical distribution platforms."

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Is Tilray Brands stock worth buying today? Tilray's stock has been rising in recent days, as the results have led to some increased bullishness. However, it's still down close to 50% since the beginning of the year. The growth is encouraging, but what's disappointing is that its beverage business grew by just under 6%, despite being a key focus for Tilray in recent years.

Plus, this remains an unprofitable business, as Tilray incurred an operating loss of $63 million during the fiscal year. Due to its ongoing challenges, investors may still be better off avoiding the cannabis stock, as it has a lot of work to do before it can prove it's a safe investment to hang on to.

Key Takeaways Altria's domestic cigarette shipments fell 3.2% in Q2, or 4.5% excluding trade inventory moves.Higher pricing lifted smokeable net revenues 0.7% and adjusted OCI 2.4% despite lower volumes.Marlboro pricing drove gains, partly offset by smokers trading down to the lower-priced Basic brand. Altria Group, Inc. (MO - Free Report) continues to rely on pricing to support its smokeable products business as cigarette volumes continue to decline. The second quarter of 2026 showed that this strategy remained effective, even as lower shipment volumes continued to weigh on the business.

The smokeable products segment reported domestic cigarette shipment volume fell 3.2% year over year in the second quarter. Excluding trade inventory movements, the decline was estimated at 4.5%, compared with an estimated 5% decline for the overall U.S. cigarette industry. Despite lower shipments, smokeable products net revenues increased 0.7%, while net revenues net of excise taxes rose 2%, driven by higher net pricing.

Adjusted operating companies income (“OCI”) increased 2.4% and adjusted OCI margin expanded 30 basis points to 64.8%. The benefits of higher pricing and refunds of taxes and duties on imported cigarettes more than offset the effects of lower shipment volumes, increased promotional investments, a greater mix of discount products and higher costs.

Pricing remained an important support for Altria's smokeable business during the quarter. Smokeable price realization was 4.5%, driven by strong net pricing for Marlboro. However, the benefit was partly offset by a greater mix of the lower-priced Basic brand as some adult smokers traded down amid discretionary income pressures.

Overall, the quarter demonstrated that pricing continued to help offset the financial impact of lower cigarette shipment volumes. Although changing consumer purchasing patterns and a growing mix of discount products remain challenges, higher pricing continued to support revenue growth and profitability in the smokeable products business.

How Altria Compares With Philip Morris and TPBPhilip Morris International Inc. (PM - Free Report) also demonstrated the strength of pricing in its combustible business in the second quarter of 2026. While helping international combustibles net revenues grow 6.4% organically despite unfavorable geographic mix, Philip Morris reported nearly 10% pricing variance in the quarter. Strong pricing, coupled with stable category share, supported profitability, highlighting how Philip Morris continues to offset mix-related pressures through disciplined pricing.

Turning Point Brands, Inc. (TPB - Free Report) continues to rely on disciplined margin management to navigate a changing tobacco landscape. In the first quarter of 2026, Turning Point Brands expanded Zig-Zag gross margin by 300 basis points through favorable product mix despite weaker sales. Turning Point Brands also offset part of its cost pressures through tariff refunds, helping support overall profitability.

Altria’s Price Performance, Valuation & EstimatesShares of Altria have gained 4.9% in the past six months compared with the industry’s growth of 3.2%.

Image Source: Zacks Investment Research

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 11.78X, down from the industry’s average of 15.7X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for MO’s 2026 and 2027 earnings implies year-over-year growth of 5.2% and 3%, respectively.

Image Source: Zacks Investment Research

Altria currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Hilton's fee-heavy model lifted franchise and licensing fees 8.5% to $808 million in the second quarter.Hilton's record pipeline reached 541,300 rooms, with 6% to 7% net unit growth expected in 2026 and beyond.HLT trades at 32.3X forward earnings as regional weakness and rising interest expense raise execution risks. Hilton Worldwide Holdings Inc. (HLT - Free Report) combines improving travel demand, a record development pipeline and a fee-heavy business model that supports earnings and cash generation.

The trade-off is price. Hilton’s valuation sits above industry and market benchmarks, while regional weakness, renovation costs and rising interest expense leave less room for execution missteps.

Hilton’s Fee Model Keeps Growth Capital-LightHilton expands mainly through management, franchise and licensing agreements, allowing hotel owners to fund most property investment. In the second quarter of 2026, franchise and licensing fees rose 8.5% year over year to $808 million, while base and other management fees increased 2.1% to $99 million.

That structure supports cash generation without requiring Hilton to own most new hotels. The company returned $966 million through buybacks and dividends during the quarter and expects approximately $3.5 billion in total capital returns during 2026.

HLT’s Pipeline Supports Durable Unit ExpansionHilton ended June with a record pipeline of 541,300 rooms across 132 countries and territories. Almost half were under construction, and management expects net unit growth of 6% to 7% in 2026 and beyond.

More than 70% of second-quarter signings came from international markets. Conversions represented 36% of openings, while newer brands are expected to drive more than half of future net unit growth. Marriott International (MAR - Free Report) and Hyatt Hotels Corporation (H - Free Report) are relevant peers because both also compete for owners and emphasize capital-efficient network expansion.

Hilton’s Premium Valuation Raises the BarHLT trades at 32.3X forward 12-month earnings, above 21.3X for its Zacks sub-industry, 16.4X for the Zacks Consumer Discretionary sector and 20.3X for the S&P 500.

The multiple also exceeds Hilton’s five-year median of 29.3X. Sustained fee growth, unit expansion and RevPAR gains may support that premium, but the current price leaves limited tolerance for weaker demand or slower earnings growth.

HLT Faces Regional and Financing RisksMiddle East and Africa RevPAR fell 29.5% year over year in the second quarter, while China RevPAR declined 2.2%. Hilton also expects renovations and closures at three owned hotels to reduce 2026 Adjusted EBITDA by approximately $20 million to $25 million.

Debt reached $13.4 billion at June 30, with a weighted average interest rate of 5.03%. Second-quarter interest expense rose to $183 million from $151 million, and the expiration of a $1.6 billion interest-rate swap increased exposure to floating benchmark rates.

Hilton’s Earnings Outlook Offers Mixed SignalsSecond-quarter adjusted earnings of $2.29 per share matched the Zacks Consensus Estimate. Revenues of $3.34 billion missed the consensus mark by 0.6%, though they increased 6.5% year over year.

Management raised full-year system-wide RevPAR growth guidance to 3% to 3.5% compared with the prior expectation of 2%-3% range. Still, the current-year earnings estimate has edged 0.3% lower over the past four weeks, indicating a more measured near-term outlook.

Hilton’s Hold Signal Matches a Balanced SetupHilton’s operating growth remains credible, but its premium valuation and financial risks support patience rather than an aggressive entry. Investors may want clearer evidence that fee growth and unit expansion can offset regional volatility and higher financing costs.

The stock currently carries a Zacks Rank #3 (Hold). Its Value Score of D, Growth Score of D and Momentum Score of D, together with a VGM Score of F, do not signal a favorable combination across the major investing styles. These measures support a balanced stance while Hilton works to convert its pipeline and demand recovery into sustained earnings growth.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Shopify expects Q2 revenue growth in the high-20% range, supported by broad-based GMV gains.Payments, Shop Pay, B2B, offline commerce and enterprise wins are expected to drive Shopify's growth.Shopify faces margin pressure from revenue mix, rising AI costs, credit losses and a premium valuation. Shopify (SHOP - Free Report) is set to report second-quarter 2026 results on Aug. 5.

For the to-be-reported quarter, Shopify expects revenue growth in the high-20% range year over year.

The Zacks Consensus Estimate for revenues is currently pegged at $3.43 billion, suggesting growth of 28.11% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at 39 cents per share, unchanged over the past 30 days and indicating 11.43% growth from the figure reported in the year-ago quarter.

Consensus Estimate Trend
Image Source: Zacks Investment Research

SHOP’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, matched once and missed once, the earnings surprise being 7.38%, on average. 
 

Let’s see how things have shaped up prior to this announcement.

Key Factors to Note for SHOP’s Q2Shopify’s second-quarter 2026 results are expected to have benefited from sustained growth in Gross Merchandise Volume (GMV) across merchant sizes, geographies and sales channels. Continued strength in North America and Europe, rising international adoption and balanced contributions from new merchants and same-store sales are likely to have supported revenues. Momentum among large merchants, including enterprise brands migrating from legacy commerce systems, is also expected to have driven Shopify Plus subscriptions, variable platform fees and merchant solutions revenues.

Higher adoption of Shopify Payments and Shop Pay is likely to have been another major growth driver. In the first quarter, Shopify Payments processed $67 billion of GMV, up 41% year over year, while penetration expanded 3% to 67%. Shop Pay GMV grew 59%, supported by more than 70% growth outside the United States. Continued payments adoption in recently entered European markets, Mexico and other international regions is expected to have boosted Merchant Solutions revenues in the to-be-reported quarter.

Shopify’s expanding omnichannel portfolio is also expected to have aided growth. Offline GMV increased 33% in the first quarter, while B2B GMV surged 80%, reflecting demand for unified online, physical retail and wholesale capabilities. The Shop app, which recorded 70% GMV growth, and Shop Campaigns are likely to have supported customer discovery and merchant sales. AI-driven traffic to Shopify stores increased eightfold, while orders originating from AI-powered searches rose nearly 13-fold, indicating growing contributions from emerging shopping channels.

However, Shopify’s second-quarter profitability is expected to have faced pressure from the faster growth of lower-margin Merchant Solutions revenues compared with Subscription Solutions revenues. Shopify projected gross profit dollar growth in the mid-20% range, below expected revenue growth in the high 20s, primarily due to revenue mix and continued payments strength. Moreover, rising technology and credit-related costs might also have weighed on margins.

Increased merchant use of Sidekick is expected to have driven higher large-language-model infrastructure expenses, a trend Shopify expects to continue. Transaction and loan losses increased to $116 million in the first quarter from $75 million in the year-ago quarter, reflecting expansion of Shopify Capital, credit and payments products. The allowance for uncollectible loans also rose as the company expanded its merchant financing portfolio, increasing potential exposure to merchant defaults. Moreover, reduced foreign-exchange support is likely to have been headwind.

SHOP Shares Outperform SectorSHOP shares have dropped 27.2% year to date (YTD), underperforming the Zacks Computer & Technology sector’s rise of 11.7%.

Shopify has outperformed peers including Wix.com (WIX - Free Report) and Commerce.com (CMRC - Free Report) but lagged Amazon (AMZN - Free Report) . YTD, Amazon shares have returned 17.6% while Wix.com and Commerce.com shares have dropped 47% and 24%, respectively.

SHOP Stock’s Price Performance
Image Source: Zacks Investment Research

Moreover, the Value Score of F suggests a stretched valuation for Shopify at this moment.

SHOP stock is trading at a premium with a forward 12-month price/sales of 9.11X compared with the sector’s 6.28X, Amazon’s 3.26X, Wix.com’s 1.33X and Commerce.com’s 0.72X.

Shopify’s Current Valuation
Image Source: Zacks Investment Research

AI Push, Expanding International Footprint to Aid SHOPShopify’s long-term prospects are supported by its expanding role across the entire commerce lifecycle. The company is moving beyond storefront and checkout services toward product discovery, advertising, payments, financing, B2B, point-of-sale and international commerce. The company’s unified platform allows merchants to manage online, offline, wholesale and cross-border operations through a single system. The number of merchants generating more than $100 million in annual GMV has nearly doubled over the past two years, highlighting Shopify’s growing appeal to large enterprises.

AI represents another significant long-term opportunity. Sidekick’s weekly active merchant base increased roughly fourfold year over year, with merchants using it to create applications, automate workflows and modify storefronts. Shopify’s catalog contains more than one billion structured products with current pricing and inventory information, enabling AI platforms to surface more relevant products. Integrations with ChatGPT, Microsoft Copilot, Google and Meta, along with Shopify’s role in developing the Universal Commerce Protocol, should strengthen its position in agentic commerce.

International expansion and deeper monetization of Shopify Payments offer additional upside. Shopify currently provides Payments in 39 countries and sees opportunities to increase penetration in existing regions and launch in additional markets. Localization through regional currencies, payment methods, merchant financing and language recommendations should reduce barriers to adoption. Strong growth in B2B, Shop Pay, the Shop app and offline commerce could further increase the number of services used by each merchant and strengthen Shopify’s recurring revenue base.

However, Shopify operates in a highly competitive and rapidly evolving commerce market. The company must continue investing in AI, payments, security, infrastructure and international localization to remain competitive against commerce platforms, marketplaces and specialized software providers. Increasing reliance on AI also creates uncertainty regarding infrastructure costs, product adoption and the ability to generate returns sufficient to offset growing model-compute expenses.

ConclusionShopify’s second-quarter results are likely to reflect robust GMV growth, increasing adoption of Shopify Payments and Shop Pay, enterprise merchant wins and continued momentum across B2B, offline and international commerce. AI-driven tools and emerging shopping channels provide additional growth opportunities.

Shopify currently has a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock ahead of the second-quarter earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.