Track market-moving stories before they get noisy

If you were an Oracle (ORCL +5.69%) shareholder back in September 2025, you may have prematurely declared the company the winner of the AI boom. Since the stock skyrocketed to $345 last fall, the company's share price has shed roughly 55%. Amid volatility and the steep drop, is Oracle a buy again?

Premium Feature

Moneyball Superscore

75/100

Today's Change

(

5.69

%) $

8.29

Current Price

$

154.04

Oracle's fundamentals are solid and, for the most part, continue to strengthen. The company's fiscal 2026 revenue grew 17% to over $67 billion. Net income rose 36% while Oracle's cloud infrastructure revenue jumped an impressive 75% year over year. The company's backlog totaled $638 billion at the end of the fiscal year, providing enormous future revenue visibility.

Oracle's valuation has fallen to a point that it almost looks oversold. The stock's forward P/E ratio has dropped to about 17, while the PEG ratio sits well below 1. For a rapidly growing tech company, this is more than reasonable; it's an opportunity.

Image source: The Motley Fool.

Of course, there are still many risks. Oracle is spending heavily on data centers, which has increased the company's debt and turned its free cash flow negative. These are also the reasons why the stock has plummeted in 2026.

If backlash around build-outs continues or demand weakens, Oracle would be left with a hefty bill. However, demand is still soaring, and the contracted backlog provides a level of safety that makes Oracle an enticing buy.

As of Sept. 2, Oracle is trading around $145 per share, $200 below its all-time high. The AI boom isn't slowing, and Oracle has been repriced. Potential Oracle investors have an attractive entry point here.

Catie Hogan has positions in Oracle. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.

, /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading all-in-one music and audio entertainment platform in China, today announced its public offering of US$1,000 million aggregate principal amount of its senior unsecured notes. The public offering consists of US$500 million of 5.050% notes due 2031 and US$500 million of 5.650% notes due 2036. The notes have been registered under the U.S. Securities Act of 1933, as amended, and are expected to be listed on The Stock Exchange of Hong Kong Limited.

The Company expects to receive net proceeds from the offering of approximately US$991.9 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the net proceeds from the offering for general corporate purposes, including refinancing of offshore indebtedness and share repurchases.

The joint bookrunners of the offering are J.P. Morgan Securities LLC, Goldman Sachs (Asia) L.L.C. and The Hongkong and Shanghai Banking Corporation Limited. The joint lead managers of the offering are UBS AG Hong Kong Branch, Bank of China Limited and MUFG Securities Asia Limited.

The Company has an automatic shelf registration statement on Form F-3 (including a base prospectus) on file with the U.S. Securities and Exchange Commission (the "SEC") and has filed a related preliminary prospectus supplement with the SEC for the offering of the notes. When available, the final prospectus supplement for the offering of the notes will be filed with the SEC. The offering is being made only by means of the prospectus supplement and accompanying base prospectus. Before you invest, you should read the prospectus supplement and accompanying base prospectus and other documents that the Company has filed with the SEC for more complete information about the Company and the offering. You may obtain these documents free of charge by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Company, any underwriter or any dealer participating in the offering will arrange to send an investor the prospectus if the investor requests it by calling J.P. Morgan Securities LLC located at 270 Park Ave, New York, NY 10017, USA at +1-212-834-4533, Goldman Sachs & Co. LLC, an affiliate of Goldman Sachs (Asia) L.L.C., located at 200 West Street, New York, NY 10282, USA at +1-866-471-2526 or The Hongkong and Shanghai Banking Corporation Limited, located at L17, HSBC Main Building, 1 Queen's Road Central, Hong Kong at +1-866-811-8049.

This announcement is not an offer of the securities for sale in the United States and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The securities referred to herein have not been and will not be registered under the applicable securities laws of any jurisdiction outside of the United States.

About Tencent Music Entertainment

Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading all-in-one music and audio entertainment platform in China, operating the country's highly popular and innovative music and audio apps: QQ Music, Kugou Music, Kuwo Music, WeSing and Ximalaya. TME's mission is to create endless possibilities with music and technology. Powered by its content-and-platform dual-engine strategy, TME's expansive offerings extend the value of IP beyond online streaming into offline concerts, artist merchandise, and other IP-centric experiences. TME continuously innovates to deliver a seamless experience where users can discover, listen, sing, watch, perform, and connect across diverse scenarios, while unlocking the enduring value of music and audio IP. For more information, please visit ir.tencentmusic.com. 

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations Contact
Tencent Music Entertainment Group
[email protected]  
+86 (755) 8601-3388 ext. 885034

SOURCE Tencent Music Entertainment Group

Key Takeaways Coinbase launched regulated crypto, commodity and index futures in Canada for eligible traders.Coinbase says crypto-derivatives volume is about 4.4 times spot, expanding its addressable market.The Canada rollout could boost transaction revenues and serve as a blueprint for other global markets. Coinbase Global (COIN - Free Report) continues to advance its ambition of becoming the industry’s leading “everything exchange.” Its latest strategic initiative—the launch of regulated derivatives in Canada—expands the company’s addressable market, strengthens customer engagement and supports its evolution into a comprehensive financial platform.

Through Coinbase Financial Markets, Coinbase has become the first major crypto-native platform to offer direct access to native crypto futures in Canada. Eligible traders in Canada can access 23 perpetual and dated futures linked to assets such as Bitcoin, Ethereum and Solana. The offering also includes five commodity futures covering gold, silver and oil, along with index futures such as COIN50. Nano-sized contracts and leverage of up to 10 times make these products more capital-efficient and accessible to sophisticated investors.

The launch is strategically significant as derivatives account for a substantial share of global crypto trading. Coinbase estimates that crypto-derivatives volume is approximately 4.4 times that of the spot market. Establishing a presence in Canada’s derivatives market could therefore lift trading activity and transaction revenues while reducing Coinbase’s reliance on traditional spot-market volumes. A successful rollout could also serve as a blueprint for introducing regulated derivatives in other international markets.

Overall, the derivatives launch in Canada is a positive for Coinbase. It expands the company’s product portfolio, provides exposure to a considerably larger trading pool and reinforces its strategy of building a regulated global financial platform.

What About COIN’s Peers?Circle Internet Group’s (CRCL - Free Report) international expansion strengthened its position as a global fintech powerhouse. By expanding its footprint across Europe, Asia and Latin America, Circle has gained stronger access to regulated digital markets. By accelerating global USDC adoption, Circle positions itself for sustained growth and leadership in the rapidly evolving digital financial ecosystem.

Robinhood Markets’ (HOOD - Free Report) international expansion enables it to tap into rising global retail investing demand. By establishing operations in the United Kingdom and Asia, Robinhood broadens revenue streams and reduces reliance on U.S. markets. With strategic acquisitions and regional hubs, Robinhood is well-positioned for sustained growth and a stronger presence in the global fintech landscape.

COIN’s Price PerformanceShares of COIN have lost 15% in the year-to-date period, underperforming the industry.

Image Source: Zacks Investment Research

COIN’s Expensive ValuationCOIN trades at a price-to-earnings ratio of 73.06, significantly above the industry average of 16.52.

Image Source: Zacks Investment Research

Estimate Movement for COINThe Zacks Consensus Estimate for COIN’s third-quarter and fourth-quarter 2026 earnings per share (EPS) witnessed southbound movement in the last 30 days. The same holds true for 2026 and 2027.

Image Source: Zacks Investment Research

Key Takeaways Corning's Optical Communications sales rose 32% as AI infrastructure demand boosted growth.Corning's Amazon and NVIDIA deals expand optical connectivity capacity and data-center exposure.Smartphone weakness, China risks and customer concentration could temper Corning's growth prospects. Earnings estimates for Corning Incorporated (GLW - Free Report) for fiscal 2026 and fiscal 2027 have moved up 2.51% to $3.27 and 1.66% to $4.28, respectively, over the past 60 days. The positive estimate revision depicts bullish sentiment about the stock’s growth potential.

Image Source: Zacks Investment Research

Strong AI-Related Demand, Diverse Portfolio are PositivesOptical Communications has emerged as Corning’s major growth engine. In the second quarter, the segment’s sales increased 32% year over year to $2.07 billion, while segment net income jumped 77% to $438 million. The uptick is backed by rapid AI infrastructure buildout.

Corning is expanding collaboration with some of the world’s largest tech companies. It has inked a multiyear, multibillion-dollar agreement with Amazon. Per the deal, Corning will provide optical fiber, cable and connectivity products for Amazon’s expanding U.S. data-center infrastructure. The company also announced a long-term partnership with NVIDIA to expand U.S.-based optical connectivity manufacturing capacity by 10 times and increase domestic fiber production capacity by more than 50%.

Corning’s Glass Innovations business is benefiting from its premium positioning and product innovation. The company expects Gorilla Glass sales to outperform the broader handheld market despite pressure from higher memory prices. TV manufacturers and panel makers are increasingly shifting towards larger and higher-priced televisions. This is likely to create a favorable opportunity for Corning’s Display Business.

Corning continues to enhance its financial profile under the Springboard initiative. The company has raised the ambition of its Springboard strategy, targeting an annualized sales run rate of $20 billion by the end of 2026, $30 billion by the end of 2028 and $40 billion by the end of 2030. Management expects sales to witness a 19% CAGR from the fourth quarter of 2026 through the fourth quarter of 2030, with earnings growing faster than sales.

Key ChallengesDemand softness in the handheld device market remains one of the key near-term challenges for the company. Management expects higher memory prices to push smartphone industry unit volumes down by a mid-teens percentage in 2026. Despite the company’s expectation of outperforming the market, demand for Gorilla Glass will likely be impacted by lower handset volume.

Corning maintains a sizeable presence in China, which exposes the company to geopolitical tensions and tariff- related uncertainty. The Display and consumer electronics businesses remain dependent on Chinese panel makers and manufacturing ecosystems. Escalating trade restrictions, tariff increases or supply-chain disruptions between the United States and China could adversely affect operating margins, production efficiency and customer demand. Stiff competition can limit growth potential. Competition from companies such as Amphenol (APH - Free Report) and Ciena Corporation (CIEN - Free Report) may increase pressure on pricing.

Corning's growing AI infrastructure exposure enhances growth but increases reliance on a small number of large customers. In second-quarter 2026, contract liabilities totaled $2.7B and included a $1B customer deposit tied to a long-term AI infrastructure supply agreement, highlighting concentration risk even as it supports near-term visibility.

Price PerformanceCorning shares have gained 104% in the past year compared with the communications components industry’s growth of 157.1%. The stock has outperformed the S&P 500 indexduring this period.

Image Source: Zacks Investment Research

It has underperformed its competitor, Ciena, but outperformed Amphenol. Ciena has gained 179.1%, while Amphenol has declined 28.4%.

Key Valuation Metric of GLWFrom a valuation standpoint, GLW is currently trading at a premium compared with the industry. Going by the price/earnings ratio, the company’s shares currently trade at 36.51 forward 12-month earnings, higher than 35.16 for the industry.

Image Source: Zacks Investment Research

End NoteGrowing exposure to AI infrastructure and expanding optical content per AI system are major growth drivers for Corning. Focus on product diversification and exposure to various markets such as solar, automotive and display boost resiliency in the business model. Strong demand for Gorilla Glass is a positive. However, weakness in the smartphone market, high customer concentration risks and growing geopolitical volatility remain major concerns. With a Zacks Rank #3 (Hold), Corning seems to offer a balanced investment outlook, suggesting that investors may want to exercise caution when considering the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Achieves strong Q4 and FY26 revenue growth of 25% year over year
Generates Q4 and FY26 ARR growth of 25% year over year

SAN JOSE, Calif., Sept. 03, 2026 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its fiscal fourth quarter and fiscal year ended July 31, 2026.

“AI represents one of the most significant opportunities in Zscaler's history. By connecting users, workloads, branches, and now agents directly to the applications they need without placing them on the network, we are uniquely equipped to help companies both combat the threats created by agentic AI and securely deploy AI agents and models,” said Jay Chaudhry, CEO, Chairman and Founder of Zscaler. “Our continued innovation across Zero Trust SASE, Agentic SecOps, Data Security, and Security for AI is driving increased platform adoption and creating new avenues for growth, as reflected in our strong Q4 results. As AI becomes foundational to how organizations operate, we are well positioned to extend our leadership as the cybersecurity platform for the AI era.”

“We delivered a strong fourth quarter, with revenue and ARR both growing 25% year over year, net new ARR growing 24%, and non-GAAP operating margin reaching a record 24%,” said Kevin Rubin, chief financial officer of Zscaler. “Our growth engine continues to broaden beyond users, with a strong contribution from non-seat-based solutions, continued Z-Flex momentum, record large-deal activity, and improving sales productivity. I am excited about our momentum as we enter fiscal 2027.”

Fourth Quarter Fiscal 2026 Results

Revenue: Grew 25% year over year to $898.2 million.ARR: Grew 25% year over year to $3,771 million, of which $246 million was net new ARR during the fourth quarter of fiscal 2026. Excluding the acquisition of Red Canary, which contributed ARR of $141 million, ARR grew 20% to $3,630 million and net new ARR grew 17%.Income (loss) from operations: GAAP loss from operations was $15.5 million, or 2% of revenue, compared to $32.2 million, or 4% of revenue, in the fourth quarter of fiscal 2025. Non-GAAP income from operations was $218.4 million, or a record 24% of revenue, compared to $158.9 million, or 22% of revenue, in the fourth quarter of fiscal 2025.Net income (loss): GAAP net loss was $3.4 million, compared to $17.6 million in the fourth quarter of fiscal 2025. Non-GAAP net income was $198.2 million, compared to $146.7 million in the fourth quarter of fiscal 2025.Net income (loss) per share, diluted: GAAP net loss per share, diluted, was $0.02, compared to $0.11 in the fourth quarter of fiscal 2025. Non-GAAP net income per share was $1.19, compared to $0.89 in the fourth quarter of fiscal 2025.Cash flow: Cash provided by operations was $279.3 million, or 31% of revenue, compared to $250.6 million, or 35% of revenue, in the fourth quarter of fiscal 2025. Free cash flow was $60.8 million, or 7% of revenue, compared to $171.9 million, or 24% of revenue, in the fourth quarter of fiscal 2025, reflecting capex and internal use software of $218.5 million in the fourth quarter of fiscal 2026 versus $78.7 million in the fourth quarter of fiscal 2025.Deferred revenue: Grew 19% year over year to $2,926 million as of July 31, 2026. Full Year Fiscal 2026 Results

Revenue: Grew 25% year over year to $3,353 million. Excluding the acquisition of Red Canary, Revenue grew 20% to $3,209 million.Income (loss) from operations: GAAP loss from operations was $133.3 million, or 4% of revenue, compared to $128.5 million, or 5% of revenue, in fiscal 2025. Non-GAAP income from operations was $767.1 million, or 23% of revenue, compared to $580.1 million, or 22% of revenue, in fiscal 2025.Net income (loss): GAAP net loss was $63.2 million, compared to $41.5 million in fiscal 2025. Non-GAAP net income was $704.2 million, compared to $534.8 million in fiscal 2025.Net income (loss) per share, diluted: GAAP net loss per share, diluted, was $0.39, compared to $0.27 in fiscal 2025. Non-GAAP net income per share was $4.21, compared to $3.28 in fiscal 2025.Cash flow: Cash provided by operations was $1,130 million, or 34% of revenue, compared to $972.5 million, or 36% of revenue, in fiscal 2025. Free cash flow was $779.1 million, or 23% of revenue, compared to $726.7 million, or 27% of revenue, in fiscal 2025. Change in Non-GAAP Measures Presentation

Beginning in fiscal 2026, we adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 23% which was applied to all prior periods. This adjustment aligns with the enactment of the One Big Beautiful Bill Act. The revised tax rate will apply prospectively. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations.

Financial Outlook

For the first quarter of fiscal 2027, the company expects:

Revenue of $935 million to $939 million, approximately 19% year-over-year growth.Non-GAAP gross margin of approximately 80%Non-GAAP income from operations of $215 million to $217 million, approximately 25% to 26% year-over-year growth, representing a 23% operating margin.Non-GAAP net income per share of approximately $1.15 to $1.16, assuming approximately 170 million fully diluted shares outstanding and a non-GAAP tax rate of 21%. For the full year fiscal 2027, the company expects:

ARR of $4.396 billion to $4.426 billion, growth of approximately 16.6% to 17.4%.Revenue of approximately $3.908 billion to $3.938 billion, growth of 16.6% to 17.5%.Non-GAAP gross margin of approximately 80%Non-GAAP income from operations of $924 million to $932 million, growth of approximately 21%.Non-GAAP net income per share of $4.86 to $4.90, assuming approximately 173 million fully diluted shares outstanding and a non-GAAP tax rate of 21%.Free cash flow margin of approximately 23.0 to 23.5%. These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Guidance for non-GAAP income from operations and non-GAAP net income per share exclude, as applicable, stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets and amortization of debt issuance costs. We have not reconciled our expectations of non-GAAP income from operations and non-GAAP net income per share to their most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. For those reasons, we are also unable to address the probable significance of the unavailable information, the variability of which may have a significant impact on future results. Accordingly, a reconciliation for the guidance for non-GAAP income from operations and non-GAAP net income per share is not available without unreasonable effort.

For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the "Explanation of Non-GAAP Financial Measures" section of this press release.

Conference Call and Webcast Information

Zscaler will host a conference call for analysts and investors to discuss its fourth quarter of fiscal 2026 and outlook for its first quarter of fiscal 2027 and full year fiscal 2027 today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time).

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding our future financial and operating performance, including our financial outlook for the first quarter of fiscal 2027 and full year fiscal 2027. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to: macroeconomic influences and instability, geopolitical events, operations and financial results and the economy in general; risks related to the use of AI in our platform; our ability to identify and effectively implement the necessary changes to address execution challenges; risks associated with managing our rapid growth, including fluctuations from period to period; our limited experience with new products and subscription and support introductions and the risks associated with new products and subscription and support offerings, including the discovery of software bugs; our ability to attract and retain new customers; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products and subscriptions and support; rapidly evolving technological developments in the market for network security products and subscription and support offerings and our ability to remain competitive; length of sales cycles; useful lives of our assets and other estimates; and general market, political, economic and business conditions.

Additional risks and uncertainties that could affect our financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth from time to time in our filings and reports with the Securities and Exchange Commission ("SEC"), including our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2026, filed on May 26, 2026, as well as future filings and reports by us, copies of which are available on our website at ir.zscaler.com and on the SEC’s website at www.sec.gov. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. Additional information will also be set forth in other filings that we make with the SEC from time to time. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Use of Non-GAAP Financial Information

We believe that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. For further information regarding why we believe that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section of this press release.

About Zscaler

Zscaler (NASDAQ: ZS) accelerates digital transformation so customers can be more agile, efficient, resilient, and secure. The Zscaler Zero Trust Exchange™ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Distributed across over 200 public data centers globally and thousands of private sites at the edge, the SASE-based Zero Trust Exchange is the world’s largest in-line cloud security platform.

Zscaler™ and the other trademarks listed at https://www.zscaler.com/legal/trademarks are either (i) registered trademarks or service marks or (ii) trademarks or service marks of Zscaler, Inc. in the United States and/or other countries. Any other trademarks are the properties of their respective owners.

Investor Relations Contacts

Kim Watkins
SVP, Investor Relations & Strategic Finance
[email protected] 

Nick Gonzalez
Media Relations Contact
[email protected] 

ZSCALER, INC.Condensed Consolidated Statements of Operations(in thousands, except per share amounts)(unaudited)         Three Months Ended Year Ended July 31, July 31,  2026   2025   2026   2025 Revenue$898,185  $719,226  $3,352,523  $2,673,115 Cost of revenue(1) (2) (3) 208,964   172,240   777,629   618,178 Gross profit 689,221   546,986   2,574,894   2,054,937 Operating expenses:       Sales and marketing(1) (2)(3) 381,363   330,594   1,495,812   1,259,158 Research and development(1) (2) (3) 241,483   177,606   903,399   672,485 General and administrative(1)(3)(4) 81,867   71,028   308,950   251,754 Total operating expenses 704,713   579,228   2,708,161   2,183,397 Loss from operations (15,492)  (32,242)  (133,267)  (128,460)Interest income 35,042   33,175   136,132   125,364 Interest expense(5) (2,746)  (2,074)  (11,794)  (9,522)Other expense, net (1,900)  (762)  (8,210)  (5,673)Income (loss) before income taxes 14,904   (1,903)  (17,139)  (18,291)Provision for income taxes 18,273   15,675   46,040   23,187 Net loss$(3,369) $(17,578) $(63,179) $(41,478)Net loss per share, basic and diluted$(0.02) $(0.11) $(0.39) $(0.27)Weighted-average shares used in computing net loss per share, basic and diluted 161,872   156,496   160,219   154,404 
(1) Includes stock-based compensation expense and related payroll taxes:

Cost of revenue$22,978  $19,324  $87,469  $70,998 Sales and marketing 69,116   60,780   294,537   259,562 Research and development 93,176   69,149   341,880   257,663 General and administrative 29,938   31,542   117,762   97,311 Total$215,208  $180,795  $841,648  $685,534 
(2) Includes amortization expense of acquired intangible assets:

Cost of revenue$8,003  $3,655  $27,855  $14,975 Sales and marketing 4,277   425   15,613   1,700 Research and development —   —   —   145 Total$12,280  $4,080  $43,468  $16,820 
(3) Includes restructuring and other charges:

Cost of revenue$583  $138  $1,333  $138 Sales and marketing 3,692   —   6,501   — Research and development 617   4,783   1,799   4,783 General and administrative 627   —   627   — Total$5,519  $4,921  $10,260  $4,921                                 (4) Includes acquisition-related expenses:$923  $1,316  $5,000  $1,316                                 (5) Includes amortization of debt issuance costs:$2,045  $1,346  $8,166  $4,293 
ZSCALER, INC.Condensed Consolidated Balance Sheets(in thousands)(unaudited) July 31, July 31,  2026   2025 Assets   Current assets:   Cash and cash equivalents$928,354  $2,389,023 Short-term investments 2,545,797   1,183,386 Accounts receivable, net 1,149,073   992,181 Deferred contract acquisition costs 215,577   180,819 Prepaid expenses and other current assets 192,432   148,881 Total current assets 5,031,233   4,894,290 Property and equipment, net 753,001   543,377 Operating lease right-of-use assets 137,231   89,772 Deferred contract acquisition costs, noncurrent 402,423   328,722 Acquired intangible assets, net 214,355   47,323 Goodwill 1,218,098   417,730 Other noncurrent assets 110,373   98,674 Total assets$7,866,714  $6,419,888     Liabilities and Stockholders’ Equity   Current liabilities:   Accounts payable$47,972  $46,906 Accrued expenses and other current liabilities 133,304   93,984 Accrued compensation 234,640   181,807 Deferred revenue 2,480,501   2,054,417 Operating lease liabilities 64,894   52,497 Total current liabilities 2,961,311   2,429,611 Convertible senior notes 1,696,355   1,700,727 Deferred revenue, noncurrent 445,272   413,609 Operating lease liabilities, noncurrent 94,575   43,352 Other noncurrent liabilities 70,940   33,316 Total liabilities 5,268,453   4,620,615 Stockholders’ Equity   Common stock 163   159 Additional paid-in capital 3,874,379   2,980,591 Accumulated other comprehensive income (loss) (23,544)  8,081 Accumulated deficit (1,252,737)  (1,189,558)Total stockholders’ equity 2,598,261   1,799,273 Total liabilities and stockholders’ equity$7,866,714  $6,419,888 
ZSCALER, INC.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited)         Three Months Ended Year Ended July 31, July 31,  2026   2025   2026   2025 Cash Flows from Operating Activities       Net loss$(3,369) $(17,578) $(63,179) $(41,478)Adjustments to reconcile net loss to cash provided by operating activities:       Depreciation and amortization expense 42,933   30,260   148,544   104,361 Amortization expense of acquired intangible assets 12,280   4,080   43,468   16,820 Amortization of deferred contract acquisition costs 54,018   44,811   203,693   166,310 Amortization of debt issuance costs 2,045   1,346   8,166   4,293 Operating lease costs 22,487   15,102   82,934   62,998 Stock-based compensation expense 211,591   172,654   821,923   661,350 Accretion of investments purchased at a discount (87)  (2,061)  (4,655)  (15,923)Unrealized (gains) losses on hedging transactions, net 264   1,231   (772)  369 Deferred income taxes (20,713)  3,490   (20,387)  (14,351)Other 627   (72)  7,484   987 Changes in operating assets and liabilities, net of effects of business acquisitions:       Accounts receivable (420,031)  (376,516)  (139,989)  (256,010)Deferred contract acquisition costs (127,492)  (90,467)  (312,152)  (230,453)Prepaid expenses, other current and noncurrent assets 977   (29,390)  (28,076)  (41,572)Accounts payable 9,365   (11,415)  (10,627)  17,532 Accrued expenses, other current and noncurrent liabilities 18,243   12,213   36,417   5,180 Accrued compensation 54,003   26,690   44,590   20,997 Deferred revenue 445,776   483,041   379,873   573,052 Operating lease liabilities (23,632)  (16,815)  (67,601)  (62,009)Net cash provided by operating activities 279,285   250,604   1,129,654   972,453 Cash Flows from Investing Activities       Purchases of property, equipment and other assets (199,837)  (60,046)  (277,304)  (164,252)Capitalized internal-use software (18,684)  (18,637)  (73,207)  (81,508)Payments for business acquisitions, net of cash acquired (148,026)  —   (918,074)  (834)Purchase of strategic investments (6,171)  (38)  (10,413)  (824)Purchases of short-term investments (282,564)  (393,993)  (2,254,279)  (1,280,629)Proceeds from maturities of short-term investments 171,232   225,132   589,880   1,101,025 Proceeds from sale of short-term investments 113,097   —   290,665   — Net cash used in investing activities (370,953)  (247,582)  (2,652,732)  (427,022)Cash Flows from Financing Activities       Proceeds from issuance of common stock upon exercise of stock options —   84   3,984   3,581 Proceeds from issuance of common stock under the employee stock purchase plan 37,910   41,219   59,416   63,563 Payment of holdback amounts related to a business acquisition —   (352)  (110)  (792)Proceeds from issuance of the 2028 convertible senior notes —   1,725,000   —   1,725,000 Payments for issuance costs related to the 2028 convertible senior notes —   (24,150)  (684)  (24,150)Purchases of capped calls related to the 2028 convertible senior notes —   (196,650)  (197)  (196,650)Payments for settlement of the 2025 convertible senior notes —   (1,150,040)  —   (1,150,040)Net cash provided by financing activities 37,910   395,111   62,409   420,512 Net increase (decrease) in cash and cash equivalents (53,758)  398,133   (1,460,669)  965,943 Cash and cash equivalents at beginning of period 982,112   1,990,890   2,389,023   1,423,080 Cash and cash equivalents at end of period$928,354  $2,389,023  $928,354  $2,389,023 
ZSCALER, INC.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except percentages)(unaudited)         Three Months Ended Year Ended July 31, July 31,  2026   2025   2026   2025         Revenue$898,185  $719,226  $3,352,523  $2,673,115         Non-GAAP Gross Profit and Non-GAAP Gross Margin       GAAP gross profit$689,221  $546,986  $2,574,894  $2,054,937 Add:       Stock-based compensation expense and related payroll taxes(1) 22,978   19,324   87,469   70,998 Amortization expense of acquired intangible assets 8,003   3,655   27,855   14,975 Restructuring and other charges 583   138   1,333   138 Non-GAAP gross profit$720,785  $570,103  $2,691,551  $2,141,048 GAAP gross margin 77%  76%  77%  77%Non-GAAP gross margin 80%  79%  80%  80%        Non-GAAP Income from Operations and Non-GAAP Operating Margin       GAAP loss from operations$(15,492) $(32,242) $(133,267) $(128,460)Add:       Stock-based compensation expense and related payroll taxes(2) 215,208   180,795   841,648   685,534 Amortization expense of acquired intangible assets 12,280   4,080   43,468   16,820 Restructuring and other charges 5,519   4,921   10,260   4,921 Acquisition-related expenses 923   1,316   5,000   1,316 Non-GAAP income from operations$218,438  $158,870  $767,109  $580,131 GAAP operating margin(2)% (4)% (4)% (5)%Non-GAAP operating margin 24%  22%  23%  22%
(1) Includes acquisition-related stock-based compensation expense and related payroll taxes of $0.1 million for the fourth quarter of fiscal 2025, and $0.1 million and $0.2 million for fiscal 2026 and fiscal 2025, respectively. Acquisition-related stock-based compensation includes deferred merger consideration subject to post-combination service vesting conditions, performance stock awards, and acquisition replacement awards.

(2) Includes acquisition-related stock-based compensation expense and related payroll taxes of $19.8 million and $8.2 million for the fourth quarter of fiscal 2026 and fiscal 2025, respectively, and $57.4 million and $33.1 million for fiscal 2026 and fiscal 2025, respectively.

ZSCALER, INC.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except per share amounts)(unaudited)         Three Months Ended Year Ended July 31, July 31,  2026   2025   2026   2025 Non-GAAP Net Income per Share, Diluted       Net loss$(3,369) $(17,578) $(63,179) $(41,478)Add: GAAP provision for income taxes 18,273   15,675   46,040   23,187 GAAP income (loss) before income taxes 14,904   (1,903)  (17,139)  (18,291)Add:       Stock-based compensation expense and related payroll taxes(1) 215,208   180,795   841,648   685,534 Amortization expense of acquired intangible assets 12,280   4,080   43,468   16,820 Restructuring and other charges 5,519   4,921   10,260   4,921 Acquisition-related expenses 923   1,316   5,000   1,316 Amortization of debt issuance costs 2,045   1,346   8,166   4,293 Non-GAAP net income before income taxes 250,879   190,555   891,403   694,593 Non-GAAP provision for income taxes(2) 52,684   43,830   187,193   159,757 Non-GAAP net income$198,195  $146,725  $704,210  $534,836         GAAP provision for income taxes 18,273   15,675   46,040   23,187 Add: Income tax and other tax adjustments(2) 34,411   28,155   141,153   136,570 Non-GAAP provision for income taxes(2)$52,684  $43,830  $187,193  $159,757 Non-GAAP effective tax rate(2) 21%  23%  21%  23%        Non-GAAP net income$198,195  $146,725  $704,210  $534,836 Add: Non-GAAP interest expense, net of tax related to the convertible senior notes —   183   —   1,011 Numerator used in computing non-GAAP net income per share, diluted$198,195  $146,908  $704,210  $535,847         GAAP net loss per share, diluted$(0.02) $(0.11) $(0.39) $(0.27)Stock-based compensation expense and related payroll taxes(3) 1.29   1.09   5.04   4.20 Amortization expense of acquired intangible assets 0.07   0.02   0.26   0.10 Restructuring and other charges 0.03   0.03   0.06   0.03 Acquisition-related expenses 0.01   0.01   0.03   0.01 Amortization of debt issuance costs 0.01   0.01   0.05   0.03 Income tax and other tax adjustments(2) (0.21)  (0.17)  (0.84)  (0.84)Non-GAAP interest expense, net of tax related to the convertible senior notes —   —   —   0.01 Adjustment to total fully diluted earnings per share(4) 0.01   0.01   —   0.01 Non-GAAP net income per share, diluted$1.19  $0.89  $4.21  $3.28         Weighted-average shares used in computing GAAP net loss per share, diluted 161,872   156,496   160,219   154,404 Add: Outstanding potentially dilutive equity incentive awards 706   4,457   2,959   3,949 Add: Convertible senior notes 3,925   6,211   3,925   7,269 Less: Antidilutive impact of capped call transactions(5) —   (1,580)  —   (2,210)Weighted-average shares used in computing non-GAAP net income per share, diluted 166,503   165,584   167,103   163,412  (1) Includes acquisition-related stock-based compensation expense and related payroll taxes of $19.8 million and $8.2 million for the fourth quarter of fiscal 2026 and fiscal 2025, respectively, and $57.4 million and $33.1 million for fiscal 2026 and fiscal 2025, respectively.

(2) Beginning in fiscal 2026, we adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 23%, which was applied to all prior periods. This adjustment aligns with the enactment of the One Big Beautiful Bill Act. The revised tax rate will apply prospectively. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations.

(3) The dilutive impact of acquisition-related stock-based compensation expense and related payroll taxes was $0.12 and $0.05 per share for the fourth quarter of fiscal 2026 and fiscal 2025, respectively, and $0.34 and $0.20 per share for fiscal 2026 and fiscal 2025, respectively.

(4) The sum of the fully diluted earnings per share impact of individual reconciling items may not total to fully diluted non-GAAP net income per share due to the weighted-average shares used in computing the GAAP net loss per share differs from the weighted-average shares used in computing the non-GAAP net income per share, and due to rounding of the individual reconciling items. The GAAP net loss per share calculation uses a lower share count as it excludes potentially dilutive shares, which are included in calculating the non-GAAP net income per share.

(5) We exclude the in-the-money portion of the convertible senior notes for non-GAAP weighted-average diluted shares as they are covered by our capped call transactions. Our outstanding capped call transactions are antidilutive under GAAP but are expected to mitigate the dilutive effect of the convertible senior notes, and therefore are included in the calculation of non-GAAP diluted shares outstanding. The capped calls have an antidilutive impact when the average stock price of our common stock in a given period is higher than their exercise price.

ZSCALER, INC.Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except percentages)(unaudited)         Three Months Ended Year Ended July 31, July 31,  2026   2025   2026   2025 Free Cash Flow       Net cash provided by operating activities$279,285  $250,604  $1,129,654  $972,453 Less:       Purchases of property, equipment and other assets (199,837)  (60,046)  (277,304)  (164,252)Capitalized internal-use software (18,684)  (18,637)  (73,207)  (81,508)Free cash flow$60,764  $171,921  $779,143  $726,693         Free Cash Flow Margin       Net cash provided by operating activities, as a percentage of revenue 31%  35%  34%  36%Less:       Purchases of property, equipment and other assets, as a percentage of revenue(22)% (8)% (8)% (6)%Capitalized internal-use software, as a percentage of revenue(2)% (3)% (3)% (3)%Free cash flow margin 7%  24%  23%  27%                
ZSCALER, INC.
Explanation of Non-GAAP and Other Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States of America (GAAP), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, as it has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation of our historical non-GAAP financial measures to their most directly comparable financial measures stated in accordance with GAAP has been included in this press release. There is no GAAP measure that is comparable to ARR, so we have not reconciled the ARR data included to any GAAP measure. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures and key metrics as analytical tools. Investors are encouraged to review these reconciliations, and not to rely on any single financial measure to evaluate our business.

Expenses Excluded from Non-GAAP Measures

Stock-based compensation expense is excluded primarily because it is a non-cash expense that management believes is not reflective of our ongoing operational performance. Employer payroll taxes related to stock-based compensation, which is a cash expense, are excluded because these are tied to the timing and size of the exercise or vesting of the underlying equity incentive awards and the price of our common stock at the time of vesting or exercise, which may vary from period to period independent of the operating performance of our business. Amortization expense of acquired intangible assets and amortization of debt issuance costs from the convertible senior notes are excluded because these are non-cash expenses and are not reflective of our ongoing operational performance. Acquisition-related expenses incurred with business acquisitions are excluded because these are not reflective of our ongoing operational performance. Restructuring and other charges includes severance and termination benefits in connection with a restructuring plan to streamline operations and to align people, roles and projects to our strategic priorities. These expenses are excluded because they fluctuate in amount and frequency and are not reflective of our core business operating performance.

Beginning in fiscal 2026, we adopted a long-term projected non-GAAP tax rate of 21%, reduced from the previous rate of 23% which was applied to all prior periods. This adjustment aligns with the enactment of the One Big Beautiful Bill Act. The revised tax rate will apply prospectively. We will continue to assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations.

Non-GAAP and Other Financial Measures

Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets and restructuring and other charges. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

Non-GAAP Income from Operations and Non-GAAP Operating Margin. We define non-GAAP income from operations as GAAP loss from operations excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets, restructuring and other charges and acquisition-related expenses. We define non-GAAP operating margin as non-GAAP income from operations as a percentage of revenue.

Non-GAAP Net Income per Share, Diluted. We define non-GAAP net income as GAAP net loss excluding stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets, restructuring and other charges, amortization of debt issuance costs, acquisition-related expenses and the non-GAAP provision for income taxes adjustment. We define non-GAAP net income per share, diluted, as non-GAAP net income plus the applicable non-GAAP interest expense related to the convertible senior notes divided by the weighted-average diluted shares outstanding. The weighted-average diluted shares outstanding includes the effect of potentially diluted common stock equivalents outstanding during the period and the anti-dilutive impact of the capped call transactions entered into in connection with the convertible senior notes.

Annual Recurring Revenue. ARR refers to the next 12 months of revenue from subscription contracts as of the measurement date. To establish ARR for a customer, we assume that any contract expiring during the next 12 months will be renewed under the existing terms.

Bookings. We define bookings as the total customer contract value over the entire duration of each such customer contract. This includes all recurring subscription fees committed for the full term of each such customer contract.

Free Cash Flow and Free Cash Flow Margin. We define free cash flow as net cash provided by operating activities less purchases of property, equipment and other assets and capitalized internal-use software. We define free cash flow margin as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property, equipment and other assets and capitalized internal-use software, can be used for strategic initiatives.

Key Takeaways Veeva Systems beat Q2 estimates, raised its fiscal 2027 outlook and advanced Vault CRM adoption.VEEV has more than 180 Vault CRM customers live, with commitments from 12 of the top 20 biopharmas.Veeva Systems' AI push is advancing, but market saturation and competition could constrain CRM growth. Veeva Systems Inc. (VEEV - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism, led by a solid second-quarter fiscal 2027 performance and CRM migrations, is expected to contribute further. However, market saturation remains a cause for concern.

This Zacks Rank #3 (Hold) company’s shares have gained 25.7% in the year-to-date period compared with 11.3% growth of the industry. The S&P 500 Composite has increased 10.8% during the said time frame.

The renowned provider of cloud-based software applications and data solutions for the life sciences industry has a market capitalization of $45.6 billion. The company anticipates 35% growth for the next five years and expects to maintain its strong performance in the future. It delivered a trailing four-quarter average earnings surprise of 5.7%.

Reasons Favoring VEEV’s GrowthDiversified Platform Driving Durable Growth:Veeva Systems’ long-term growth story is increasingly tied to its position at the center of life sciences digital transformation. The company operates across a broad set of markets spanning clinical development, quality management, regulatory operations, safety, commercial engagement and data analytics. Veeva Systems’ Development Cloud portfolio is particularly well-positioned as pharmaceutical companies seek integrated platforms that connect clinical data, trial operations, quality processes and regulatory functions within a unified ecosystem.  

Growth is being fueled by newer product areas that remain in the early stages of penetration, including clinical data management, randomization and trial supply management, drug safety and laboratory information management systems. Management believes these businesses have a significant runway as customers increasingly favor end-to-end platforms over fragmented point solutions.

Enterprise CRM Migrations Expanding Account Footprint: Vault CRM adoption continued to advance in the second quarter of fiscal 2027, when Veeva Systems recorded its best CRM quarter and added two top-20 biopharma selections. Management said that Veeva Systems now has 12 of the top 20 CRM commitments, with two decisions remaining, up from 10 wins in the prior quarter.

More than 180 customers are live on Vault CRM, and one top-20 customer has enabled AI across its full field force. Commercial subscription revenues rose 13% year over year to $347.4 million, with management citing growth across CRM, content, data, Crossix and Ostro. The expanding live base supports ongoing migrations and creates opportunities to attach adjacent commercial applications as customers consolidate workflows on Vault.

Strong Q2 Results: Veeva Systems exited the second quarter of fiscal 2027 with better-than-expected results, wherein both earnings and revenues beat the Zacks Consensus Estimate. The company also raised its fiscal 2027 outlook. Strong execution across Commercial Solutions and R&D and Quality Solutions, along with continued momentum in newer growth areas, remained encouraging.

Veeva Systems continued to make notable progress with Vault CRM. The platform recorded its best quarter ever, with more than 180 customers live, including five top 20 biopharmas. In August, two additional top 20 biopharmas and one large enterprise biopharma committed to Vault CRM, taking total top 20 commitments to 12 globally. A top 20 biopharma also deployed Vault CRM and Agentic Call Report across its entire U.S. field team during the quarter.

The company also advanced its AI strategy. Veeva Falcon, its agentic labor platform for clinical, regulatory and safety functions, now has five early adopters and remains on track for initial go-lives this year. Veeva Systems also acquired Copli and launched Veeva Falcon MLR to automate content reviews.

Vault AI added new standard agents, enhanced existing agents and introduced advanced tools for custom agent development in August. Management noted that customer interest in Falcon remains high, although product readiness and work with early adopters remain key near-term priorities.

Image Source: Zacks Investment Research

Factor That May Offset VEEV’s GainsMarket Saturation: The life sciences industry, Veeva Systems' primary market for its CRM solutions, is facing increasing saturation as digital transformation and CRM adoption have become widespread across pharmaceutical and biotech companies. Many large enterprises have already implemented Veeva Systems' CRM software or similar solutions, leaving fewer untapped opportunities for new customer acquisition.

Additionally, as smaller biotech firms and generics manufacturers enter the market, they may seek more cost-effective or niche CRM alternatives rather than Veeva Systems' premium offerings. This saturation, combined with heightened competition from both traditional CRM providers and emerging AI-powered platforms, could limit Veeva Systems' ability to maintain its historical CRM sales growth rates.          

Estimate TrendVeeva Systems is witnessing a positive estimate revision trend for fiscal 2027. In the past 30 days, the Zacks Consensus Estimate for fiscal 2027 earnings per share (EPS) has moved 17 cents north to $9.22.

The Zacks Consensus Estimate for third-quarter fiscal 2027 revenues is pegged at $933.8 million, indicating a 15.1% improvement from the year-ago quarter’s reported number. The consensus mark for fiscal third-quarter EPS is pegged at $2.33, implying a 14.2% improvement year over year.

Key PicksSome better-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , West Pharmaceutical (WST - Free Report) and The Cooper Companies (COO - Free Report) .

Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted earnings per share (EPS) of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.

West Pharmaceutical, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2026 adjusted EPS of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

WST has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%.

The Cooper Companies, carrying a Zacks Rank #2 at present, reported a second-quarter fiscal 2026 adjusted EPS of $1.21, which beat the Zacks Consensus Estimate by 10%. Revenues of $1.08 billion beat the Zacks Consensus Estimate by 2.6%.

COO has an estimated long-term earnings growth rate of 8.3%. COO’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.8%.

Key Takeaways SouthState gained 12% in three months, outperforming the industry and key regional bank peers.Loan growth, lower funding costs and balance sheet optimization are supporting SSB's NII momentum.Rising expenses and heavy real estate loan exposure remain key risks to SouthState's growth outlook. Shares of SouthState Bank Corporation (SSB - Free Report) have gained 12% over the past three months, outperforming the industry’s growth of 3.9%. Among its close peers, Regions Financial Corporation (RF - Free Report) shares have gained 5.3%, while shares of Flagstar Bank, National Association (FLG - Free Report) have lost 4.4% over the same period.

Price Performance
Image Source: Zacks Investment Research

Although SSB shares have outperformed the industry and peers over the past three months, the stock has witnessed volatile movements during the period. Can SSB maintain its recent pace? Let’s take a closer look.

What’s Behind SSB Stock’s Strength?Solid Organic Growth: SouthState’s organic growth remains robust, supported by healthy loan expansion and sustained revenue growth. Its loans witnessed a compound annual growth rate (CAGR) of 14.7% over the last five years (2020-2025), supported by expansion in higher-growth markets, strong loan pipelines and low-cost deposits. The uptrend continued in the first half of 2026, with loans increasing year over year. Looking ahead, continued expansion in higher-growth markets, strong loan pipelines and buyout opportunities are likely to support loan growth. Management expects loans to grow in the mid- to upper-single-digit range in 2026, with results potentially near the high end of that range.

The company’s revenues also witnessed a CAGR of 18.7% over the same period, supported by higher loans and solid non-interest income performance. The growth trend continued in the first half of 2026. Going forward, lower funding/deposit costs, along with continued loan growth, are likely to support net interest income (NII) growth, while solid non-interest income performance is expected to drive overall revenue growth.

Analysts also remain optimistic about the company’s revenue prospects. The Zacks Consensus Estimate for 2026 and 2027 revenues is pegged at $2.7 billion and $2.9 billion, respectively, indicating year-over-year growth of 1.8% and 6.1%, respectively.

Revenue Estimates
Image Source: Zacks Investment Research

NII Growth Outlook: SSB has demonstrated strong NII growth, supported by balance sheet optimization, securities restructuring and favorable deposit pricing. Its NII witnessed a 22.7% CAGR over the five years ending 2025. Although net interest margin (NIM) (Tax Equivalent or TE) declined to 3.43% in 2024 from 3.63% in 2023 due to higher funding costs, it improved to 3.95% in 2025 as funding pressures eased and the company optimized its balance sheet through initiatives such as the sale-leaseback transaction and investment portfolio repositioning.

The company continued to maintain NII growth momentum in the first half of 2026, although NIM declined during the period. The Federal Reserve has kept its interest rate steady at 3.5%-3.75% since the beginning of 2026, providing a relatively stable interest-rate environment for SSB. Looking ahead, stable funding costs are expected to support NII and NIM. Further, legacy loan repricing, potential securities restructuring and growth in average earning assets are likely to provide additional support to net interest income and margins. These factors should help SSB strengthen its core spread income and sustain earnings growth.

Strategic Initiatives to Drive Growth: SouthState has been actively expanding through strategic acquisitions, strengthening its presence in high-growth markets and enhancing its competitive positioning. In January 2025, the company acquired Independent Bank, deepening its presence in Texas and expanding into Colorado. The transaction significantly increased its scale, taking total assets to $65.1 billion and expanding its footprint across 12 of the 15 fastest-growing U.S. Metropolitan Statistical Areas. Texas and Colorado are now growing at roughly the same 10-11% pace as the Southeast franchise, excluding specialty lines.

The company has also expanded through earlier acquisitions, including Atlantic Capital in 2022 to strengthen its presence in Atlanta, CenterState Bank Corporation in 2020 and Park Sterling Corporation in 2017. These acquisitions have expanded its asset base, diversified geographic footprint and strengthened its position in attractive, high-growth markets.

Wealth Management Expansion: The company’s wealth management business has been gaining momentum and contributing to non-interest income growth. Over the last five years (ending 2025), its trust and investment services income witnessed a CAGR of 14.6%, with the growth trend continuing in the first half of 2026. The business generates fees from investment management, trust, financial planning and retirement services, while also creating opportunities to deepen client relationships.

Growth was further supported by the acquisition of Independent Bank, which added Private Capital Management (PCM) to SSB’s wealth-management platform. PCM was later merged with SouthState Advisory, strengthening the company’s wealth-management capabilities and expanding its client base. Going forward, higher client assets, new client additions and cross-selling opportunities are expected to support trust and investment services income, driving fee-income growth and further diversifying SSB’s revenue mix.

Strong Liquidity Supports Capital Distribution: SSB maintains a solid liquidity position, with cash and cash equivalents of $2.35 billion as of June 30, 2026, comfortably exceeding its $1.57-billion wholesale borrowings.

Supported by this liquidity cushion, the company has maintained a consistent capital distribution policy, increasing its dividend every year since 2020. In July 2026, the board raised the quarterly dividend by 10% to 66 cents per share. Over the past five years, the company has increased its dividend five times, delivering a five-year annualized dividend growth rate of 4.7%. Further, its current dividend yield of 2.5% compares favorably with the industry's average of 2.3%. Likewise, its peers, Regions Financial and Flagstar Bank, offer dividend yields of 3.5% and 2.3%, respectively.

Dividend Yield
Image Source: Zacks Investment Research

Apart from regular dividend hikes, SouthState also returns capital through share repurchases. In January 2026, the board authorized the repurchase of up to 5.56 million shares, with nearly 3 million shares remaining under the authorization as of June 30, 2026. Management expects the longer-term total payout ratio to remain within 40-60%, balancing dividends and share repurchases. Given its solid liquidity, consistent dividend growth and flexible capital deployment strategy, SSB's shareholder return initiatives appear sustainable and should continue to support long-term shareholder value.

What’s Hurting SSB’s GrowthElevated Expense Base: The company’s non-interest expenses witnessed a CAGR of 13.8% over the last five years through 2025, with the uptrend continuing in the first half of 2026. The higher expenses were driven by higher compensation, occupancy, information services and other operating costs. The company continues to add bankers and invest in technology and artificial intelligence, while its commercial relationship manager base grew more than 10% over three quarters, raising compensation costs. Management expects 2026 expenses to increase 4% to $1.46-$1.47 billion. Hence, rising costs could limit SSB’s operating leverage if revenue growth slows.

Expense Trend
Image Source: Zacks Investment Research

High Real Estate Loan Concentration: Loan concentration is another major hurdle for SSB, as a significant portion of its loan portfolio is tied to real estate. As of June 30, 2026, investor commercial real estate, owner-occupied commercial real estate and consumer real estate loans totaled $37.5 billion, representing nearly 74% of total loans.

SSB’s Loan Portfolio
Image Source: SouthState Bank Corporation

The high concentration exposes the company to weakness in the real estate market. Any deterioration in real estate conditions could increase the likelihood of loan defaults, pressure asset quality and weigh on SSB’s financial performance.

How to Approach SSB Stock NowThe company's solid organic growth prospects, diversified revenue streams and shareholder-friendly capital-return strategy are expected to support its long-term financial performance.

Over the past month, the Zacks Consensus Estimates for 2026 and 2027 earnings have remained unchanged. The estimates imply growth of 0.1% and 8.8% for 2026 and 2027, respectively. This indicates that the company is expected to deliver modest earnings growth in 2026, followed by stronger growth in 2027.

Estimate Revision Trend
Image Source: Zacks Investment Research

However, elevated expenses and significant exposure to real estate loans remain key near-term headwinds. Rising compensation and technology-related costs could limit operating leverage, while high real estate loan concentration increases SSB's sensitivity to weakness in property markets.

From a valuation perspective, SSB stock appears inexpensive relative to the industry. It is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 10.6X, below the industry's 10.8X. Meanwhile, Regions Financial and Flagstar Bank trade at P/E multiples of 10.8X and 13.7X, respectively.

Price-to-Earnings F12 M
Image Source: Zacks Investment Research

Given the company's growth opportunities, stable earnings outlook and capital-return initiatives, existing investors may consider retaining their positions. Those considering fresh investments may prefer to wait for a more favorable entry point, as it may take time for the company to fully realize these opportunities in the near term.

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

Key Takeaways Hilltop Holdings has gained 13.5% YTD, outperforming its industry and the broader market.HTH's NII benefits from loan demand, easing funding costs and an improving net interest margin.Hilltop Holdings faces asset-quality and mortgage risks, while its balance sheet supports performance. Shares of Hilltop Holdings Inc. (HTH - Free Report) have gained 13.5% so far this year, outperforming the industry’s 9.5% growth and the S&P 500 Index’s 10.9% rally.

If we compare the company’s price performance with its peers, Commerce Bancshares, Inc. (CBSH - Free Report) and Hancock Whitney, Corp. (HWC - Free Report) , it appears that while the HTH stock has underperformed Hancock Whitney, it has outperformed Commerce Bancshares in the same period.

Year to date, the HWC stock has gained 17.5%, while the CBSH stock has risen 10.7%.

YTD Price Performance
Image Source: Zacks Investment Research

Let us see if the Hilltop Holdings stock has more upside left despite recent strength in price. In order to understand this, we must dig deep into its fundamentals and growth prospects.

Key Strengths of Hilltop HoldingsImproving Net Interest Income (NII): Hilltop Holdings remains focused on strengthening its NII through disciplined balance-sheet mix and funding management. After declining in 2024, NII rebounded in 2025 and maintained its growth momentum in the first half of 2026, supported by healthy loan demand, a favorable rate environment and easing funding-cost pressures.

Encouragingly, the company’s net interest margin (NIM) improved to 2.98% in 2025 from 2.81% in 2024 and continued to expand during the first six months of 2026.

Given decent loan growth prospects and stabilizing funding costs, the positive NII and margin trajectory is likely to persist. We project NII to see a compound annual growth rate (CAGR) of 4.5% through 2028, while NIM is expected to expand to 3.20% in 2026.

Prudent Expense Management: Hilltop Holdings has maintained a disciplined approach to expense management, supporting operating efficiency amid an uncertain business environment. Although non-interest expenses increased in the first half of 2026, they recorded a negative CAGR of 2.3% over the six years ended 2025, reflecting continued cost-control initiatives, particularly across lower-return businesses such as PrimeLending.

Expense Trend
Image Source: Zacks Investment Research

For 2026, management expects non-variable expenses to increase only 0-2%, while variable costs are expected to move largely in line with fee revenues. We project non-interest expenses to rise marginally this year.

Solid Balance Sheet: Hilltop Holdings maintains a solid balance sheet and robust capital position, providing considerable financial flexibility. As of June 30, 2026, the company had cash and due from banks of $750.5 million, while debt, comprising short-term borrowings and notes payable, totaled $1.39 billion. Importantly, capital levels remained strong, with a common equity tier 1 capital ratio of 18.34% and a tier 1 leverage ratio of 12.73%, providing substantial cushions above regulatory requirements.

The company also maintains investment-grade credit ratings of BBB+/Baa2 with stable outlooks from Fitch Ratings and Moody’s Investors Service, respectively, supporting favorable access to wholesale funding. Further, the bank was not utilizing any of its Federal Home Loan Bank borrowing capacity at the end of June 2026, underscoring its funding flexibility.

Consistent Capital Returns: Hilltop Holdings has demonstrated a strong commitment to returning capital to shareholders, supported by its solid liquidity and capital position. The company initiated its dividend in 2016 and has increased it regularly since then, with the latest hike announced in July 2026.

In addition, the company continues to actively repurchase shares. In January 2026, HTH’s board authorized a share repurchase program of up to $125 million through January 2027, which was subsequently expanded to $200 million in July.

Given the company’s healthy earnings capacity, strong capitalization and ample financial flexibility, it appears well-positioned to sustain dividends and opportunistic share repurchases.

Hilltop Holdings’ HeadwindsWeak Asset Quality: Hilltop Holdings’ asset quality remains a major concern, particularly given its exposure to real estate-related lending and pockets of stress across select portfolios. Although provisions declined significantly in 2024, they increased substantially in 2022, 2023 and 2025, highlighting continued credit-cost volatility. Further, net charge-offs (NCOs) witnessed a CAGR of 20.4% over the six years ended 2025.

While both provisions and NCOs declined in the first six months of 2026, a challenging macroeconomic backdrop and continued exposure to real estate-related loans could keep credit costs elevated.

Mortgage Banking Weakness: Hilltop Holdings’ Mortgage Origination segment continues to face profitability challenges amid a difficult housing market. Although mortgage origination volumes increased in 2024, 2025 and the first half of 2026, the recent improvement has been supported largely by higher refinance activity, while the purchase mix has weakened.

PrimeLending has responded by reducing headcount, consolidating underperforming branches and lowering its fixed-cost base. However, the segment remains highly sensitive to mortgage rates, housing inventory and affordability trends.

Management’s 2026 origination volume outlook of $8.5-$9.5 billion remains market dependent, and subdued purchase activity could limit the benefits of ongoing cost actions. Thus, persistent pressure on mortgage volumes and margins is likely to constrain the segment’s profitability and remain a drag on Hilltop Holdings’ overall performance.

Analyzing HTH’s Earnings Estimates & ValuationThe Zacks Consensus Estimate for Hilltop Holdings’ 2026 earnings is pegged at $2.59 per share, which indicates a year-over-year decline of 1.9%. The estimate for 2027 earnings is $2.51, suggesting a decline of 3.1%. Over the past 30 days, the 2026 earnings estimate has been revised higher, while the 2027 estimate has been unchanged.

Earnings Estimate Revision
Image Source: Zacks Investment Research

Hilltop Holdings has a 12-month forward price-to-earnings (P/E) ratio of 15.19X, above the industry’s 10.82X. This indicates that its shares are trading at a premium than the broader industry.

P/E (F12M) Ratio
Image Source: Zacks Investment Research

Commerce Bancshares has a P/E (F12M) ratio of 12.95X, while Hancock Whitney’s forward price/earnings ratio is 10.73X. This implies that the HTH stock is relatively more expensive than its close peers.

How to Approach the HTH Stock NowWeak asset quality and subdued mortgage origination volumes remain key headwinds for Hilltop Holdings’ growth. Moreover, analysts remain cautious about the company’s earnings growth prospects, while its stretched valuation warrants some caution.

Nevertheless, prudent expense management and a solid balance sheet should continue to support Hilltop Holdings’ financial performance. Stabilizing funding costs, improving net interest margins and decent loan demand are also likely to sustain NII growth.

Given these factors, HTH appears well-positioned despite near-term challenges. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Teradyne stock lost 15.4% in a month amid customer concentration, timing, mobile and margin pressures. AI demand fueled more than 60% of Teradyne's Q2 revenues, strengthening data-center prospects. Teradyne expects Q3 revenues of $1.20-$1.30B and non-GAAP EPS of $1.85-$2.15. Teradyne (TER - Free Report) shares have plummeted 15.4% over the past month, underperforming the Zacks Computer & Technology sector and the Zacks Electronics - Miscellaneous Products industry’s 2.4% and 12.9% decreases, respectively.

TER shares have also underperformed its peers, which include Vertiv (VRT - Free Report) , Cohu (COHU - Free Report) and KLA Corporation (KLAC - Free Report) . The companies are also expanding their footprint in the AI infrastructure space. Vertiv, Cohu and KLA shares have lost 4.9%, 13.4% and 11.9%, respectively, over the past month.

The underperformance can be attributed to customer concentration, program timing, muted mobile demand, memory-driven margin dilution, higher operating spending and currency exposure.

TER Stock Performance
Image Source: Zacks Investment Research

Despite these headwinds, Teradyne is benefiting from strong AI-related demand, which is driving significant investments in cloud AI build-out as customers accelerate production of a wide range of AI accelerators, networking, memory and power devices. These factors are helping Teradyne fend off competitors such as Vertiv, Cohu and KLA.

Teradyne Rides on Strong Datacenter GrowthTeradyne is benefiting from accelerating AI-driven data-center investments, which are expanding demand across semiconductor test, networking, storage, product test and robotics. This momentum is strengthening Teradyne’s prospects in the broader data-center infrastructure ecosystem. More than 60% of Teradyne’s second-quarter 2026 revenues were AI-driven, underscoring the success of its wafer-to-AI-data-center strategy.

A key driver of Teradyne’s momentum is the acceleration in semiconductor capital expenditures, especially in wafer fabrication equipment (WFE). As WFE CapEx is forecasted to approach $250 billion by the end of the decade, this is expected to drive 5% to 10% annual growth in wafer production and 15% to 20% compound annual growth in total transistor production. The increase in wafer and transistor production directly boosts demand for automated test equipment.

Teradyne’s leadership in both SOC and memory test solutions, especially for high-bandwidth memory (HBM) and DRAM, ensures it is well-placed to capitalize on this growth. The company’s memory business also saw revenues exceed $200 million for the third consecutive quarter in the second quarter of 2026, driven by strong demand for HBM and DRAM and a revival in NAND testing.

Growth is being reinforced by Quantifi Photonics and the Multilane Test Products JV, which expand Teradyne’s exposure to optical and high-speed interconnect testing. The company expects the Co-Packaged Optics testing market alone to reach $300-$700 million by 2028. Robotics is also benefiting as AI data-center construction boosts automation demand in electronics manufacturing and semiconductor production.

Teradyne Rides on Strong UltraFLEXplus DemandTeradyne is benefiting from the growing demand for its UltraFLEXplus system, which has been specifically designed to address the complex testing requirements of high-performance processors and networking devices. UltraFLEXplus enables customers to reduce test development times, driving up high-efficiency volume production.

Teradyne’s expanding portfolio has been noteworthy. The company recently launched three new instruments for its UltraFLEXplus semiconductor test platform to address growing AI and data-center computing requirements. The UltraPin5000-EM offers expanded vector memory and faster pattern loading for complex AI devices, while UltraPort-PCIe6 supports PCIe Gen6 testing at 64 Gbps across 32 lanes.

The UltraVS64-HP delivers up to 1,280 amps per instrument to test increasingly power-intensive compute devices. Together, the products expand UltraFLEXplus capabilities across advanced digital, high-speed interface and power testing, supporting semiconductor manufacturers from wafer probe through final device validation.

TER Initiates Positive Q3 GuidanceTeradyne’s expanding portfolio and strong demand for AI-related applications are expected to drive the company’s top-line growth.

For the third quarter of 2026, Teradyne expects revenues in the range of $1.20-$1.30 billion. The Zacks Consensus Estimate for third-quarter 2026 revenues is pegged at $1.27 billion, suggesting a 64.67% year-over-year increase.

For the third quarter, the company’s non-GAAP earnings are expected to be between $1.85 and $2.15 per share. The consensus mark for earnings is pegged at $2.03 per share, which has been unchanged over the past 30 days. This indicates growth of 138.82% on a year-over-year basis.

TER Trades at a PremiumTeradyne shares are currently overvalued, as suggested by its Value Score of D.

Teradyne stock is trading at a premium with a forward 12-month Price/Sales of 9.35X compared with the Computer & Technology sector’s 6.03X.

TER's Valuation
Image Source: Zacks Investment Research

What Should Investors Do With TER Stock?Teradyne’s robust, diversified portfolio, which meets the rising demand for AI-driven technologies, is consistently contributing to its growth prospects. These factors have justified its premium valuation.

TER stock currently sports a Zacks Rank #1 (Strong Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Clean Harbors shares have risen 9.9% in three months as 2026 earnings are projected to climb 33.5%.CLH benefits from strong hazardous waste demand, acquisitions and higher incinerator utilization.Clean Harbors faces stiff competition & foreign-currency risks, and offers no quarterly dividend. Shares of Clean Harbors, Inc. (CLH - Free Report) have had a decent run over the past three months. The stock has gained 9.9% compared with the industry’s 2.3% growth. The Zacks S&P 500 composite declined 0.3% during that period.

                                                                       Image Source: Zacks Investment Research

CLH has a Growth Score of B. This style score condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.

The company’s third-quarter 2026 earnings are expected to increase 47.5% year over year. Its 2026 earnings are projected to rise 33.5%. Revenues are anticipated to grow 7.6% in 2026.

Factors That Bode Well for CLH’s SuccessWaste Demand Supports Top Line: Clean Harbors benefits from sustained demand for hazardous waste disposal, recycling and environmental services, supported by reshoring, per and polyfluoroalkyl substances work and long-term customer relationships. Growing industrial activity, environmental requirements and sustainability needs drive this strong demand for Clean Harbors’ services. The company reported that Environmental Services generated revenues of $1.46 billion, up 7.7% from the year-ago quarter, while Technical Services revenues rose 18% year over year during the second quarter of 2026.

CLH also reported that incinerator utilization increased to 91% from 86% a year earlier and Safety-Kleen Environmental Services revenues advanced 11% year over year during the same period. Management expects positive demand trends across segments to continue in the second half of 2026.

Acquisitions Pave the Way to Expansion: CLH’s acquisition strategy continues to broaden its service portfolio and geographic reach. Past acquisitions of HEPACO and Noble Oil Services expanded Environmental Services’ Field Services division and increased Safety-Kleen’s oil collection presence in the southeastern United States, respectively. In the first half of 2026, the company acquired Terra Nova Solutions to enhance its technical and field services businesses, including drum collection, wastewater treatment, tank cleaning and vacuum services. CLH announced an agreement to acquire EnviroServe and Depot Connect International to strengthen its Technical Services and Field Services businesses, while supporting increased throughput across its disposal and recycling portfolio.

Strong Cash Position Supports Financial Flexibility: CLH had $408.4 million of cash and cash equivalents and $108.4 million of short-term marketable securities at the end of the second quarter of 2026. It generated $245.5 million of operating cash flow in the first six months of 2026, up from $209.6 million a year earlier. The company’s current ratio of 2.13 at the end of the second quarter of 2026 indicates that current assets remained above current liabilities. This solid cash position allows the company to innovate and expand further, giving it robust financial flexibility.

Consistent Buybacks Support Capital Allocation Strategy: The company has consistently returned capital through share buybacks over the years. It repurchased shares worth $51.1 million in 2023, $55.2 million in 2024 and $250 million in 2025. This consistency persisted as, in the first six months of 2026, it repurchased another $52.1 million of common stock. This consistency continues to generate shareholder value.

Risks to CLH StockStiff Competition Raises Cost Pressure: Clean Harbors faces stiff rivalry from large national providers and smaller regional firms across environmental and industrial services. Maintaining differentiation requires continued spending on its network, capabilities and service offerings. As a result, CLH faces the challenge of balancing costs while maintaining steady profitability.

Foreign-Currency Risks: Clean Harbors faces foreign-exchange risk from its Canadian operations. In the first six months of 2026, foreign-currency translation resulted in a $17.7 million loss against a $24.7 million gain a year earlier, while exchange-rate movements reduced cash by $4.7 million. Continued U.S.-Canadian dollar volatility could pressure reported results and increase earnings variability.

Absence of Dividend Makes Stock Unattractive: CLH does not offer quarterly dividends. Investors therefore depend on share-price appreciation for returns, which is not guaranteed. This makes the shares less suitable for investors seeking recurring cash income.

Clean Harbors has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to ConsiderA couple of better-ranked stocks in the broader Business Services sector are Bright Horizons Family Solutions Inc. (BFAM - Free Report) and CBIZ, Inc. (CBZ - Free Report) .

Bright Horizons Family Solutions carries a Zacks Rank #2 (Buy) at present. It has a long-term earnings growth expectation of 13.9%.

BFAM delivered a trailing four-quarter earnings surprise of 7.6%, on average.

CBIZ also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 11.6%.

CBZ beat earnings estimates in three of the last four quarters and missed once, with an average earnings surprise of 8.9%.

Key Takeaways Redwire's backlog hit $542.1M, up 64.5%, while 2026 revenue guidance remains $450M-$500M.Defense Tech revenue reached $61.9M as adjusted EBITDA improved to $14.1M from a $15M loss.RDW faces negative free cash flow, weak Space profitability and a 4.88X forward sales multiple. Redwire Corporation (RDW - Free Report) enters the second half of 2026 with faster Defense Tech growth, record backlog and a much stronger balance sheet. Those gains improve the growth case, but investors are still paying a premium sales multiple.

The decision depends on execution. Space profitability remains uneven and free cash flow is negative, leaving little room for disappointment if growth or margins slow.

RDW's Backlog Supports a Stronger Growth CaseContracted backlog reached $542.1 million as of June 30, 2026, up 64.5% year over year. Redwire also recorded more than $350 million of bookings during the first half, expanding funded demand for the back half.

Management reaffirmed full-year 2026 revenue guidance of $450 million to $500 million and said visibility to the midpoint had moved into the 90% range. That supports expectations for stronger second-half revenues if program timing and backlog conversion stay on track.

Redwire's Defense Tech Business Is Scaling FastDefense Tech revenues reached $61.9 million in the second quarter versus $5.1 million a year earlier. Segment adjusted EBITDA improved to $14.1 million from a $15 million loss, adding both scale and profit contribution.

Redwire received repeat Stalker orders, secured a high eight-figure multi-year Penguin Mk3 contract and delivered nearly 200 Octopus intelligence, surveillance and reconnaissance payloads year to date, up more than 15%. AeroVironment, Inc. (AVAV - Free Report) also develops autonomous and counter-uncrewed-aircraft systems, while Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) develops unmanned tactical aerial platforms. Both provide relevant context for investor interest in defense autonomy.

RDW Still Faces Uneven Profitability and Cash BurnSpace remains the weaker segment. First-half 2026 Space adjusted EBITDA was a $5.7 million loss compared with positive $8.5 million a year earlier, with higher research and development spending weighing on results.

Redwire reported negative free cash flow of $48 million for the first six months. First-half research and development expense rose to $25.1 million, and management indicated inventory would likely increase further in the third quarter to support faster uncrewed aerial system deliveries. Those investments may delay a cleaner cash-flow profile.

Redwire's Balance Sheet Improves but Dilution MattersTotal liquidity ended the second quarter at $607.8 million. Total debt fell 75% year over year to $48.9 million, reducing balance-sheet pressure and giving Redwire more flexibility to fund growth.

Common shares outstanding increased to 249.2 million as of June 30, 2026, from 191.9 million at the end of 2025, and the June at-the-market facility still had $350.4 million of unused capacity. Further equity issuance could extend the trade-off between funding flexibility and dilution.

RDW's Valuation Leaves Little Room for MisstepsRDW trades at 4.88X forward 12-month sales per share, above the Zacks sub-industry level of 2.38X and its five-year median of 1.38X. That premium raises the execution bar.

Backlog growth and Defense Tech profitability help support the valuation, but the multiple leaves less room for delays, weaker Space results or slower cash-flow improvement. Investors are paying for continued progress rather than a discounted recovery.

RDW's Neutral View Favors PatienceThe key question is whether Redwire can convert record backlog and Defense Tech momentum into more consistent consolidated profitability and free cash flow. The stronger balance sheet helps, but dilution and execution risks remain.

The stated Neutral view favors patience. Defense growth is encouraging, yet the premium sales multiple, weak Space profitability and ongoing cash burn argue for clearer evidence of sustained execution before the risk-reward improves.

RDW Stock Price MovementIn the past six months, Redwire shares have risen 11.3% against the industry’s decline of 17.3%.

Image Source: Zacks Investment Research

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

It has been about a month since the last earnings report for Aptiv PLC (APTV - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is APTIV PLC due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Aptiv PLC before we dive into how investors and analysts have reacted as of late.

Aptiv Q2 Earnings Beat EstimatesAptiv PLC reported mixed second-quarter 2026 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

APTV’s adjusted earnings of $1.63 per share topped the Zacks Consensus Estimate of $1.42 by 14.8% and increased 24.4% from the year-ago quarter, aided by stronger operating profitability, lower interest expense and a reduced share count.

Revenues of $3.27 billion missed the consensus mark of $3.32 billion by 1.4% but rose 2.3% year over year. Adjusted revenue growth was 2%, while non-automotive revenues increased 12%.

The company reported results excluding its Electrical Distribution (EDS) segment, which completed its spin-off into a new publicly traded company, Versigent, on April 1, 2026.

APTV’s Regional Growth MixNorth American adjusted revenues advanced 10% despite flat regional vehicle production. Asia-Pacific revenues grew 6%, including a 5% increase in China, even as Chinese vehicle production declined 3%.

Europe remained a headwind, with adjusted revenues falling 8% against a 1% production decline. Revenues in South America, Aptiv’s smallest region, decreased 4%. The regional results reflected strength in North America and Asia-Pacific, partly offset by weak European demand.

Aptiv’s Engineered Components Leads GrowthEngineered Components revenues increased 4.8% year over year to $1.80 billion. Adjusted revenue growth was 3%, with automotive revenues flat and non-automotive revenues up 11%. North American demand was the primary growth driver.

The segment’s adjusted EBITDA rose 17.5% to $403 million. Its adjusted EBITDA margin expanded to 22.4% from 21.4%, benefiting from higher volumes, operating execution and favorable timing of customer recoveries, despite stranded costs following the Electrical Distribution Systems spin-off.

APTV’s Intelligent Systems Stays FlatIntelligent Systems revenues were $1.50 billion, compared with $1.51 billion in the prior-year quarter. Adjusted revenues were flat as a 12% increase in non-automotive business and 10% growth in Software and Services were offset by a 3% decline in automotive revenues.

Adjusted EBITDA decreased 8.3% to $210 million, while the segment margin contracted to 14% from 15.2%. Increased engineering investments and stranded costs more than offset performance initiatives during the quarter.

Aptiv’s Margins ExpandAdjusted EBITDA increased 12.1% to $613 million. The adjusted EBITDA margin expanded 160 basis points to 18.7% on a continuing operations basis, supported by higher volumes and favorable foreign-currency effects, partly offset by increased commodity costs.

Adjusted operating income rose 15.4% to $473 million, and the corresponding margin improved to 14.4% from 12.8%. GAAP operating income increased to $367 million from $325 million. Interest expense declined to $62 million from $92 million, while tax expense increased to $52 million from $16 million.

APTV’s Product Expansion Gains PaceAptiv secured about $5 billion in new commercial awards, comprising $2.4 billion in Intelligent Systems and $2.5 billion in Engineered Components. The company won its first commercial Gen 8 Radar award and expanded into robotics through a perception-systems award.

Non-automotive progress included robotics, drones, energy storage and commercial vehicles. Aptiv also reported a commercial drone win in July and continued collaborating with NVIDIA on production-ready edge Artificial Intelligence platforms. Software and Services growth further supported the company’s diversification beyond automotive markets.

Aptiv’s Cash Flow & Capital MovesCash provided by continuing operations totaled $137 million, down from $326 million a year ago. Free cash flow was $12 million compared with $219 million, reflecting capital expenditures and costs associated with separating the EDS business.

Aptiv ended June with $761 million in cash and cash equivalents and $5.33 billion in long-term debt. The company repurchased 4.1 million shares for $250 million during the quarter, bringing first-half repurchases to $325 million. About $1.8 billion remained under its authorization.

APTV Trims Its Q3 & 2026 OutlookFor the third quarter, Aptiv expects revenues to be in the range of $3.12-$3.22 billion.

APTV’s adjusted earnings are projected to be between $1.25 and $1.35 per share. Its adjusted EBITDA is projected between $545 million and $575 million, with a margin of 17.7%.

For 2026, revenues are forecast at $12.6-$12.8 billion, below the prior range of $12.8-$13.2 billion.

Adjusted earnings are expected between $5.60 and $5.80 per share compared with the previous outlook of $5.70-$6.10.

Customer-mix pressures, particularly in China, production changes, launch delays and software timing prompted the revised forecast.

How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -16.2% due to these changes.

VGM ScoresCurrently, APTIV PLC has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise APTIV PLC has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry PlayerAPTIV PLC is part of the Zacks Technology Services industry. Over the past month, SLB (SLB - Free Report) , a stock from the same industry, has gained 16.5%. The company reported its results for the quarter ended June 2026 more than a month ago.

SLB reported revenues of $8.97 billion in the last reported quarter, representing a year-over-year change of +5%. EPS of $0.55 for the same period compares with $0.74 a year ago.

For the current quarter, SLB is expected to post earnings of $0.62 per share, indicating a change of -10.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SLB. Also, the stock has a VGM Score of C.

A month has gone by since the last earnings report for Healthpeak (DOC - Free Report) . Shares have lost about 3.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Healthpeak due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Healthpeak Q2 FFO Beat Estimates on Leasing & Senior Housing GainsHealthpeak Properties reported second-quarter 2026 FFO, as adjusted, of 46 cents per share, which topped the Zacks Consensus Estimate of 44 cents by 4.6%. The figure was unchanged year over year. Total revenues of $771.6 million rose 11.1% year over year and beat the consensus mark of $726.2 million by 6.3%.

The results reflected solid leasing across outpatient medical and lab properties, along with stronger senior housing operations. Combined new and renewal lease executions totaled 1.6 million square feet, while total same-store adjusted NOI increased 1.8%.

Leasing Activity Supports Portfolio DemandOutpatient medical leasing remained the largest contributor. New lease executions totaled 327,000 square feet, while renewal leases reached 916,000 square feet. Total outpatient medical occupancy improved 20 basis points sequentially to 90.7%.

Lab leasing also advanced, with 222,000 square feet of new leases and 159,000 square feet of renewal leases. Total lab occupancy increased 80 basis points sequentially to 78.5%.

Healthpeak also entered into additional leases after the second quarter-end and reported a substantial pipeline under signed letters of intent.

Same-Store Mix Shows Uneven TrendsOutpatient medical same-store adjusted NOI grew 2.5% year over year to $189.1 million. Same-store cash real estate revenues increased 3.2%, while same-store cash operating expenses rose 4.4%. Same-store occupancy was 91.9%, down 50 basis points year over year.

Lab same-store adjusted NOI declined 3.2% to $114.2 million as revenues fell 2.1%. Same-store occupancy was 90.3%, down 410 basis points.

Senior housing was the standout, with same-store adjusted NOI rising 19.2% to $32.1 million. Occupancy in that portfolio increased 260 basis points to 88.6%.

Segment Results Reflect Senior Housing GrowthOutpatient medical adjusted NOI slipped 1.8% to $198 million, while lab adjusted NOI was nearly flat at $142.6 million.

Senior housing adjusted NOI increased 25.4% to $45.9 million. Janus Living, Healthpeak’s senior housing spin-off, generated second-quarter revenues of $216 million, up 45%, while adjusted EBITDAre rose 34% to $79 million. Healthpeak owned a 73.6% equity interest in Janus Living as of June 30, 2026.

Costs Rise With Expanded OperationsProperty operating expenses increased 20.6% year over year to $333.1 million. Depreciation and amortization rose to $283.4 million from $265.9 million, while general and administrative expenses increased to $22.5 million from $20.8 million.

Interest expense climbed 22.9% to $92.3 million.

Healthpeak Advances Capital RecyclingThe largest transaction was the sale of a 49% interest in an 86-property outpatient medical portfolio to Brookfield in July 2026. The portfolio was valued at $2.1 billion, and the deal generated approximately $1.025 billion in proceeds. Healthpeak retained a 51% interest and will continue to provide asset and property management services.

After quarter-end, Healthpeak used the Brookfield transaction proceeds to repay $650 million of senior notes and around $375 million of commercial paper borrowings.

Healthpeak generated $1.4 billion of proceeds from outpatient medical recapitalizations, seller financing loan repayments and dispositions during the second quarter and through Aug. 3, bringing year-to-date proceeds to $1.75 billion.

Healthpeak Strengthens LiquidityAvailable liquidity totaled $4.13 billion as of June 30. Cash and cash equivalents were $1.63 billion, up from $467.5 million at the end of 2025. Net Debt to Adjusted EBITDAre improved to 4.7X from 5.4X in the preceding quarter.

Healthpeak Raises Its 2026 FFO OutlookManagement increased its 2026 FFO, as adjusted, guidance to $1.73-$1.77 per share from $1.71-$1.75.

Total same-store cash adjusted NOI growth is now expected between 0% and 1.5% compared with the prior range of a 1% decline to 1% growth.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a flat trend in estimates review.

VGM ScoresAt this time, Healthpeak has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook Healthpeak has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerHealthpeak belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Welltower (WELL - Free Report) , has gained 0.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Welltower reported revenues of $3.54 billion in the last reported quarter, representing a year-over-year change of +39.1%. EPS of $0.61 for the same period compares with $1.28 a year ago.

Welltower is expected to post earnings of $1.64 per share for the current quarter, representing a year-over-year change of +22.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Welltower has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

It has been about a month since the last earnings report for Zeta Global Holdings (ZETA - Free Report) . Shares have added about 12.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Zeta due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Zeta Q2 Earnings Beat EstimatesZeta Global Holdings reported impressive second-quarter 2026 results.

Earnings of 21 cents per share beat the Zacks Consensus Estimate of 20 cents by 5%. GAAP earnings improved to 3 cents per share as the company generated net income of $8.2 million compared with a net loss of $12.8 million a year ago.

Revenues surged 43.5% year over year to $442.8 million, surpassing the consensus estimate of $420.2 million by 5.4%. Growth reflected strong AI adoption, customer expansion and higher platform usage. Super-scaled customers and their average revenue per user each increased 17%.

The stock gained 6% since the earnings release on Aug. 4 in response to the better-than-expected results and as guidance was strong. For the third quarter of 2026, Zeta expects revenues between $469 million and $472 million, implying growth of 39-40%. The midpoint increased by $10 million from the prior outlook.

Adjusted EBITDA is projected between $115 million and $116 million, representing growth of 47-49%. The corresponding margin is expected between 24.4% and 24.7%.

Management raised its 2026 revenue guidance to $1.811-$1.824 billion from a prior midpoint of $1.785 billion. The revised range indicates growth of 39-40%, or 24-25% excluding M&A and political candidate revenues.

Adjusted EBITDA is now expected between $404.1 million and $406.3 million. Free cash flow guidance increased to $254.8-$255.8 million, while GAAP earnings guidance rose to 9-11 cents per share.

ZETA Benefits From Broad-Based Revenue GrowthSecond-quarter revenues increased from $308.4 million in the year-ago period. Excluding acquisitions, revenues rose 28%, marking the company’s 21st consecutive quarter of more than 20% growth after excluding M&A and political candidate revenues.

Demand was broad-based across industries. Eight of Zeta’s top 10 verticals posted more than 20% trailing-12-month growth. Consumer and retail, financial services, automotive and healthcare accelerated from the preceding quarter.

The total sales pipeline expanded more than 60% year over year and increased by more than $100 million over the past 90 days. Pipeline creation per seller more than doubled, while average contract values for deals won increased more than 40%.

Zeta’s Customer Metrics Exceed Long-Term ModelThe number of super-scaled customers, which generate at least $1 million in trailing-12-month revenues, reached 197. This compares with 168 a year earlier and 189 in the first quarter, marking seven consecutive quarters of sequential growth.

Super-scaled customer average revenue per user reached $1.8 million, up from $1.6 million a year ago. Both customer-count growth and ARPU growth exceeded the ranges in Zeta’s 2028 model.

Customers using more than one use case increased 90% year over year, while those employing at least five channels rose more than 50%. Cross-sell and upsell deals won advanced 43%, reflecting traction from the One Zeta sales initiative and Marigold cross-selling.

ZETA’s AI Adoption Supports Platform ExpansionMore than 40% of super-scaled customers became monthly active Athena users within 130 days of its enterprise launch. Among all customers, the 20% that comprehensively adopted Zeta’s AI tools generated roughly 70% of revenues.

Within the super-scaled group, the 50% of customers with comprehensive AI adoption accounted for 75% of revenues. These AI-intensive users grew four times faster than customers still in the early stages of adoption.

Athena engagement is increasingly voice-based, with 83% of customer interactions conducted through spoken commands. Management also noted that 90% of new code generated during the quarter was automated, helping accelerate product development.

Zeta Delivers Margin and Cash Flow GainsAdjusted EBITDA increased 56% year over year to $91.7 million. Adjusted EBITDA margin expanded 170 basis points to 20.7%, reflecting integration savings and restructuring benefits from Marigold.

Operating expenses totaled $425.8 million compared with $313.5 million a year ago. Cost of revenues was $181 million, while selling and marketing, general and administrative, and research and development expenses were $104 million, $75.9 million and $42.2 million, respectively.

Operating cash flow rose 65% to $69.2 million. Free cash flow advanced 73% to $58 million, while free cash flow margin improved 220 basis points to 13.1%.

Zeta ended the quarter with cash and cash equivalents of $310 million and long-term borrowings of $197.5 million. The company also repurchased $29.9 million of shares during the quarter.

How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.

VGM ScoresAt this time, Zeta has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Zeta has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Key Takeaways BioMarin will receive royalties on Yuviwel sales, turning a patent dispute into a royalty stream.BMRN gets 20% U.S. royalties and 18% in the EU, Brazil and South Korea through May 2030.Yuviwel reached 8 million euros in second-quarter revenue and enrolled more than 220 patients by July 31. For BioMarin Pharmaceutical (BMRN - Free Report) , the FDA approval of Ascendis Pharma’s (ASND - Free Report) Yuviwel in February had created a problem — a new entrant targeting the same achondroplasia market as Voxzogo, its key revenue driver. But a recent settlement between the two companies has changed the economics of that competition in a meaningful way.

Rather than continue fighting a competitor that had already entered the market, BioMarin has found a way to make the competitor pay it. Under the settlement, Ascendis will pay BioMarin royalties on Yuviwel sales in the United States, European Union, Brazil and South Korea, effectively giving BMRN an economic interest in a drug that could otherwise take share from Voxzogo.

BMRN Turns a Patent Dispute Into a Royalty StreamWhen Voxzogo secured FDA approval in 2021, it became the first FDA-approved therapy for achondroplasia, the most common form of dwarfism. The drug is a C-type natriuretic peptide (CNP) analog administered once daily as a subcutaneous injection. CNP is a naturally occurring signaling molecule involved in bone growth.

When Ascendis launched Yuviwel in April, its entry was a significant challenge for BioMarin, as Voxzogo had previously been the only approved treatment for achondroplasia. Like Voxzogo, Yuviwel is also a CNP therapy but is administered once weekly. The ASND drug is designed to provide continuous exposure to active CNP, potentially offering a more convenient dosing profile than the BMRN drug.

BioMarin had alleged that Yuviwel infringed its intellectual property covering CNP technology, triggering patent disputes across the United States, Brazil, Denmark, Germany and South Korea, including before the U.S. International Trade Commission. But instead of continuing to fight, both companies have settled their disputes with a licensing deal.

Per the settlement terms, BioMarin will grant Ascendis a non-exclusive, worldwide license to certain patents covering Yuviwel and related products, allowing Ascendis to research, develop, manufacture and commercialize the drug across current and potential indications.

In return, Ascendis will pay BioMarin royalties equal to 20% of annual net sales in the United States and 18% in the European Union, Brazil and South Korea, from the first commercial sale in each territory through May 20, 2030. The U.S. royalty is also applied retroactively to Yuviwel's first commercial sale. All pending lawsuits between the two companies will also be dismissed.

Competitive Threat for BMRN Still RemainsThe settlement changes the competitive equation for BioMarin. Previously, every dollar of Yuviwel sales represented a potential dollar of revenue at risk for Voxzogo. Under the new agreement, Yuviwel sales can also generate revenues for BioMarin through royalties. This means that while greater adoption of Yuviwel could still put pressure on Voxzogo, BMRN will now participate in the growth of its competitor.

The opportunity is becoming more meaningful as Yuviwel gains traction. Ascendis generated €8 million in Yuviwel revenues in the second quarter of 2026, its first quarter of launch, and had enrolled more than 220 patients through July 31. More than 100 healthcare providers had prescribed the drug, with more than 65% of enrollments approved for reimbursement. Ascendis is also preparing for further expansion, with its EU filings under review and additional studies underway.

Still, the settlement does not eliminate the competitive risk for BioMarin. Royalties are only a partial offset to any erosion in Voxzogo sales, and the economics will ultimately depend on how quickly Yuviwel penetrates the market and how much of that growth comes at Voxzogo’s expense.

BioMarin’s Voxzogo could have another potential competitor by this time next year. Recently, BridgeBio Pharma (BBIO - Free Report) has submitted a regulatory filing with the FDA for infigratinib, an FGFR3 inhibitor that could become the first approved oral therapy for achondroplasia. The company expects a U.S. launch in mid-2027, subject to approval.

The arrival of another potentially differentiated therapy underscores that BioMarin’s competitive challenge is unlikely to end with Yuviwel. The company may have found a clever way to monetize one threat, but it will still need to defend Voxzogo as the achondroplasia market becomes increasingly competitive.

BMRN’s Price Performance, Valuation & EstimatesShares of BioMarin have risen 13% year to date, significantly outperforming the industry’s 11% growth.

Image Source: Zacks Investment Research

From a valuation standpoint, the company is currently trading at a premium to the industry. Based on the price-to-sales (P/S) ratio, the stock trades at 3.06 times forward 12-month sales per share, higher than the industry average of 1.94 times.

Image Source: Zacks Investment Research

Movements in EPS estimates for 2026 and 2027 have been mixed over the past 30 days.

Image Source: Zacks Investment Research

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

Zuckerberg's Q2 message was blunt about AI transforming Meta's business, yet the stock sits more than 25% below its all-time high while legal storms and a historic capex surge squeeze free cash flow to a fraction of last year's levels.…

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Meta (NASDAQ:META | META Price Prediction) has spent 2026 climbing out of a hole. The stock is down 12.2% year to date and down 21.43% over the past year, but Mark Zuckerberg’s Q2 message was unambiguous: “AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities.”

With shares near $595.72 and the 52-week high sitting at $788.22, the question is whether AI monetization can carry META back to record territory.

Our 24/7 Wall St. price target for Meta is $790.61 over the next 12 months, implying 33.34% upside. Our recommendation is buy, with confidence at 90%, our high-conviction tier.

24/7 Wall St. Price Target Summary Metric Value Current Price $595.72 24/7 Wall St. Price Target $790.61 Upside 33.34% Recommendation BUY Confidence Level 90% Why the Stock Sold Off, and What Changed Meta’s Q2 2026 report was a mixed picture. Revenue of $60.80 billion rose 27.96% and beat consensus, but diluted EPS of $6.18 missed the $7.2214 estimate as $2.40 billion in legal charges and $1.18 billion in severance from an 8,000-employee reduction weighed on the quarter.

Operating margin compressed to 31%. The stock has clawed back 3.92% over the past month as investors refocus on ad growth: impressions rose 14% and average price per ad rose 12%, with Advantage Plus products crossing a $75 billion annual run rate.

Why Bulls See a Breakout Ahead The bull case rests on AI compounding across ad ranking, creative tools, and net-new revenue lines. Susan Li disclosed that user-understanding models, GEM ad ranking, and sequence learning together drove an 8.3% increase in ad clicks and a 15.7% uplift in conversions on Facebook.

Meta business agents are already used by more than 1 million businesses weekly, and Meta AI daily interactions jumped 60% after the MuseSpark integration.

Analyst enthusiasm is broad, with 47 Buy and 8 Strong Buy ratings. Our bull-case path reaches $858 .41, a new all-time high, if enterprise AI monetization and Ray-Ban Meta glass sales ramp faster than expected.

What Could Go Wrong The bear case starts with CapEx. Meta guided full-year 2026 capital spending to $130 to $145 billion, and Q2 free cash flow collapsed to $784 million from $8.55 billion a year earlier. That spending has to be absorbed by power, cooling, and networking suppliers on the other side of the trade (we profiled seven of them in a free report here: 7 Stocks Powering the AI Boom).

Long-term debt has climbed to $83.66 billion, and youth-related U.S. trials scheduled for 2026 could produce material losses. Bulls counter that FCF pressure reflects front-loaded infrastructure investment while unit economics remain intact; operating cash flow was still $31.86 billion. Our bear-case path lands at $693.77, still above today’s price.

How Meta Compares to Alphabet and Amazon Alphabet (NASDAQ:GOOGL) is the cleanest ad and AI comparison. Alphabet trades at a forward P/E of 17 with an analyst target of $428.07, meaningfully cheaper than Meta’s forward multiple. Meta commands the higher multiple because its ad growth of nearly 28% is outpacing Alphabet’s 24.2% quarterly revenue growth.

Amazon (NASDAQ:AMZN) shares the AI-infrastructure capex story. Amazon carries a forward P/E of 22 with an operating margin of just 13.7%, versus Meta’s Family of Apps margins that run north of 40% in normalized quarters. This peer set makes our 24/7 Wall St. price target look reasonable rather than aggressive.

Company Forward P/E Analyst Target Meta ~15 $754.77 Alphabet 17 $428.07 Amazon 22 $327.67 Bottom Line on Meta’s Setup Our 24/7 Wall St. price target is $790.61 with a buy recommendation and 90% confidence. The scale tips on AI-driven ad efficiency that is already translating into double-digit conversion lifts.

The bull thesis strengthens if Q3 revenue lands in the upper half of the $61 to $64 billion guide and CapEx growth flattens into 2027. The thesis weakens if legal charges recur next quarter and free cash flow fails to recover.

Year 24/7 Wall St. Price Target 2026 $649 2027 $809 2028 $948 2029 $1,087 2030 $1,218 These projections assume Meta continues executing on AI monetization while scaling its infrastructure buildout. Significant upside or downside could come from the pace of enterprise AI adoption and the outcome of pending youth-safety litigation.

Contact [email protected] for any questions or corrections.

Microsoft's Xbox unit said Thursday that it will impose monthly cloud gaming time limits for Game Pass subscribers after years of unlimited access, as the company seeks to find a better balance between usage and costs.

Players will be able to pay for additional hours beyond the caps, which go into effect in November.

Across product organizations, Microsoft executives have been devising ways to charge customers based on usage to better reflect rising costs. Demand is climbing for the software company's finite amount of computing power — not unlike its technology peers — and clients of artificial intelligence products such as GitHub Copilot and the Microsoft 365 Copilot increasingly pay based on how much they use.

"We're introducing this model because the cost of providing cloud gaming grows as more people use it and play for longer," Xbox said in a blog post. "Moving to monthly limits allows us to keep offering the service while continuing to invest in its reliability and performance. We understand that for some players the practical result is a higher cost."

Users with high-end Game Pass Ultimate subscriptions, which cost $22.99 per month, will have access to 15 hours of cloud gaming. Game Pass Premium account holders, who pay $14.99 per month, will have 10 hours of cloud-based playtime, while Game Pass Essential, which costs $9.99 a month, includes five hours, according to the blog post.

Inside Xbox, new CEO Asha Sharma has been busy evaluating business model changes to return the division to growth and boost profitability. In July, Xbox said it would test ad-supported game streaming.

Just 4% of Game Pass subscribers spend more time each month streaming games through the cloud, Microsoft said. The company did not specify fees for extra hours.

Those who don't subscribe to Game Pass will be able to buy cloud gaming time to stream games they already own, Xbox said.

watch now

Key Takeaways Verizon's consumer strategy is driving user growth while reducing acquisition and retention costs.Verizon targets $9 billion in savings as adjusted EBITDA rose 7.2% to $13.7 billion in Q2.Verizon sees AI infrastructure potential, while high capex, debt and competition remain concerns. Verizon Communications Inc. (VZ - Free Report) has gained 23.3% year to date compared with the Wireless National industry’s growth of 118.2%. The stock has outperformed the Zacks Computer & Technology sector during this period.

Image Source: Zacks Investment Research

The company has outperformed its peers like AT&T Inc. (T - Free Report) and T-Mobile US, Inc. (TMUS - Free Report) . Shares of AT&T have gained 4.4%, while T-Mobile has declined 7.8% during this period.

VZ Gains on Customer-Oriented Strategy, Cost Efficiency and AI FocusVerizon's new consumer strategy is driving user growth. The company introduced a broad loyalty program alongside its simplified Simplicity wireless plan. The strategy is designed to reduce customer friction, improve retention and attract new customer segments. The company has reported a 15% year-over-year decline in consumer promotional acquisition costs and a 17% reduction in promotional retention costs in the second quarter. Such an approach is expected to boost operating margin over time.

Verizon's transformation program is also improving profit. The company is targeting at least $9 billion in combined operating and capital expense savings. For that, VZ has taken several initiatives focused on lowering the cost to serve customers, improving productivity and streamlining customer interactions. The overall cost structure is already improving, backed by these initiatives. Second-quarter adjusted EBITDA increased 7.2% year over year to $13.7 billion, while the adjusted EBITDA margin reached 40.1%.

The company is increasing investment in improving its network to deliver reliable services. VZ is integrating AI to identify and resolve network issues. It recently acquired AWS-3 spectrum to enhance network capacity and customer experience.

 Verizon's entry into the rapidly expanding AI infrastructure market will likely bring long-term benefits. The company is leveraging its extensive long-haul and metro fiber networks to serve hyperscalers, cloud providers and enterprises. VZ has already signed a dark-fiber agreement with Google worth more than $1 billion. The company expects to sign additional agreements in upcoming quarters.

Stiff Competition, Elevated Debt Burden are ConcernsVerizon operates in highly competitive wireless and broadband markets. Here, pricing, promotions, network quality and customer experience can significantly influence subscriber trends. The company faces competition from other major players, such as AT&T and T-Mobile.

Verizon's new Simplicity plans, Verizon One offering and expanded loyalty program are intended to improve customer retention without materially increasing promotional spending. However, aggressive responses from competitors could slow subscriber growth, pressure margins and reduce the benefits of Verizon's improving customer economics.

Verizon remains a capital-intensive business. The company expects 2026 capital expenditures of approximately $16-$16.5 billion, while continuing to invest in fiber, wireless infrastructure and spectrum. It also spent about $3.2 billion to acquire 82 AWS-3 spectrum licenses. High capex can impact free cash flow in the near term.

Its net unsecured debt-to-adjusted EBITDA ratio stood at 2.5 times at the end of the second quarter. At the end of second-quarter 2026, total unsecured debt stood at $136.5 billion, while net unsecured debt totaled $128.7 billion. Verizon is working to reduce leverage, but a substantial debt burden can limit financial flexibility.

Estimate Revision Trend of VZVZ’s earnings estimates for 2026 and 2027 have increased over the past 60 days.

Image Source: Zacks Investment Research

Key Valuation Metric of VZFrom a valuation standpoint, VZ appears to be trading relatively cheaper compared to the industry but trading above its mean. Going by the price/earnings ratio, the company’s shares currently trade at 9.65, lower than 37.6 for the industry.

Image Source: Zacks Investment Research

End NoteVerizon's growth outlook is increasingly supported by a combination of improving wireless and broadband subscriber trends. Beyond its traditional telecom operations, the company's extensive fiber assets provide an opportunity to capitalize on the rapid buildout of AI infrastructure. Focus on cost optimization is a positive. However, despite an improving outlook, intense competition continues to impact margins. High debt burden remains a concern. With a Zacks Rank #3 (Hold), VZ appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Qualcomm plans a Japan Robotics Center to advance robotics, physical AI and ecosystem collaboration.QCOM's Snapdragon, automotive and AI expansion supports diversification beyond the smartphone market.Qualcomm faces margin pressure, falling estimates and revenue risks from Apple's in-house modem shift. Qualcomm Incorporated (QCOM - Free Report) is expanding its presence in Japan’s robotics and physical AI market through a new long-term investment initiative aimed at accelerating innovation, commercialization and global expansion.

As part of the initiative, the company plans to establish the Qualcomm Japan Robotics Center, which will support collaborative research, development and ecosystem engagement with startups, academic institutions and industry participants. The initiative is also expected to provide developers and robotics companies with access to Qualcomm’s products, technical expertise and enablement resources. In addition, the company plans to support flagship physical AI projects that demonstrate the potential of advanced robotics and intelligent automation.

The initiative should strengthen Qualcomm’s position in the fast-growing robotics, edge AI and industrial automation markets. Increased adoption of intelligent robotics could also drive demand for the company’s computing and AI platforms, supporting its diversification beyond the smartphone market over the long term.

Snapdragon, AI & Automotive: QCOM’s Key Growth DriversQualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio. Leveraging processors with multi-core CPUs with cutting-edge features, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast with superb power efficiency, brilliant camera capabilities and state-of-the-art security solutions. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity, and state-of-the-art security solutions.

The company is also foraying deeper into the realm of AI capabilities within the laptop and desktop business with the launch of the Snapdragon X chip for mid-range AI desktops and laptops. The strategy is aimed at moving beyond the slowing smartphone industry, which is its primary breadwinner. In addition to diversifying its revenue stream, this is likely to further extend QCOM’s AI footprint.

Qualcomm is gaining traction in the vehicle-to-everything (V2X) communication systems market with the buyout of Autotalks. With seamless access to Autotalks’ comprehensive V2X expertise, it has been able to offer an extensive suite of automotive-qualified global V2X solutions for installation in vehicles, as well as two-wheelers and roadside infrastructure. The company’s V2X chipsets offer production-ready standalone solutions that are purpose-built for global applications, resulting in direct communication becoming more pervasive.

Price PerformanceQCOM shares have gained 6.4% over the past year compared with the industry’s growth of 43.9%. It has underperformed peers like Hewlett Packard Enterprise Company (HPE - Free Report) and Broadcom Inc. (AVGO - Free Report) . While Broadcom is up 20%, Hewlett Packard has surged 123.8% over this period. 

One-Year QCOM Stock Price Performance

Image Source: Zacks Investment Research

Waning Margins Hurt QCOMA combination of factors has led to the soft performance by the chip manufacturing firm. Qualcomm's margins have declined over the years due to high operating expenses and R&D (research & development) costs. The company expects softness in the handset market and a weaker overall mix of devices to continue in the near future. The shift in the share among original equipment manufacturers at the premium tier has reduced the near-term opportunity to sell integrated chipsets from the Snapdragon platform.

In addition, Qualcomm faces stiff competitive pressures from rivals Broadcom and Hewlett Packard. Aggressive competition from low-cost chip manufacturers and established players in the mobile phone chipset market is also likely to hurt Qualcomm's profits. Although the global smartphone market is expected to maintain its momentum over the next three to four years, a large share of this growth is likely to come from low-cost emerging markets, which may weigh on Qualcomm's margins.

Image Source: Zacks Investment Research

Apple’s In-House Modem Lowers Revenue ProjectionApple’s accelerating transition toward internally developed modems remains a major concern for Qualcomm. The company expects the faster-than-expected shift to in-house modems to lead to lower revenues from the fiscal fourth quarter. The resulting loss of premium handset chipset volumes is likely to weigh on QCT revenues and cash flows while increasing pressure on the company to offset the shortfall through Snapdragon gains at Android OEMs and continued expansion in automotive and IoT. Although Qualcomm’s licensing franchise provides some insulation, Apple’s vertical integration represents a meaningful long-term overhang on the company’s handset business.

Estimate Revision TrendEarnings estimates for Qualcomm for fiscal 2026 have moved down 11.1% to $10.54 over the past year, while the same for fiscal 2027 has declined 17.9% to $10.06. The downward estimate revision indicates that investors are bearish about the stock’s growth potential.

Image Source: Zacks Investment Research

End NoteQualcomm is likely to benefit from robust automotive and Snapdragon traction as it aims to build Japan’s open robotics ecosystem to accelerate edge AI innovations. A strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers.

However, with declining earnings estimates, the stock is witnessing negative investor sentiment. Moreover, stiff competition and softness in key end markets are likely to put pressure on the bottom-line growth. High R&D costs erode its profitability to a large extent. It also faces reduced chip orders and near-term uncertainty in memory supply.

With a Zacks Rank #3 (Hold), Qualcomm appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Pfizer's 95-program pipeline is increasingly focusing on obesity and oncology to rebuild growth.Berobenatide is in phase III, with Pfizer targeting its first potential approvals in 2028.Oncology remains a key pipeline engine, with late-stage candidates spanning several cancer types. Pfizer’s (PFE - Free Report) R&D pipeline is becoming an increasingly important part of the investment story as the company is trying to revive growth after the sharp decline in COVID-19 product revenues and address several upcoming patent expirations. As of Aug. 4, 2026, Pfizer had 95 pipeline programs. The pipeline spans oncology, internal medicine, inflammation & immunology and vaccines. Though Pfizer's pipeline is broad, the most important assets are concentrated in obesity and oncology.

Let's break it down.

Berobenatide: Pfizer's Biggest New Growth OpportunityThe most important emerging asset in Pfizer's pipeline is arguably berobenatide, its monthly GLP-1 receptor agonist, added from last year’s Metsera acquisition. The candidate is being developed in phase III for chronic weight management.

Pfizer's earlier oral GLP-1 program, danuglipron, failed to establish the company as a major oral obesity player. Berobenatide represents a different approach. Berobenatide is a long-acting injectable peptide GLP-1, whereas danuglipron was an oral small-molecule GLP-1.

The currently available and highly popular weight loss GLP therapies, Eli Lilly’s (LLY - Free Report) Zepbound and Novo Nordisk’s (NVO - Free Report) Wegovy, are weekly injections. On the other hand, Pfizer’s berobenatide starts off as a weekly injection and then switches to a monthly injection. Berobenatide is designed for monthly maintenance dosing.

Pfizer plans 10 phase III studies for berobenatide for obesity and obesity-related comorbidities, including knee osteoarthritis and obstructive sleep apnea. Three phase III studies on berobenatide have already begun. Pfizer is targeting the first of a series of potential approvals for berobenatide in 2028. Pfizer is also evaluating berobenatide in combination with an amylin-based therapy, PF'3945, in phase II studies.

Oncology Remains Pfizer's Strongest Pipeline EnginePfizer is also advancing its oncology clinical pipeline across areas such as breast, thoracic, gastrointestinal and blood cancers. Several oncology candidates have entered late-stage development, such as atirmociclib (a selective CDK4 inhibitor for HR-positive/HER2-negative breast cancer), sigvotatug vedotin (an antibody-drug conjugate for first-line metastatic non-small cell lung cancer) and mevrometostat (an EZH2 inhibitor being developed in combination with enzalutamide for prostate cancer). A regulatory application seeking approval of sasanlimab for BCG-naïve, high-risk non-muscle invasive bladder cancer is also under review in the EU.

One of Pfizer's more strategically interesting oncology programs is PF-08634404, a dual PD-1/VEGF inhibitor in-licensed from Chinese biotech 3SBio in 2025. Pfizer has initiated nine studies, including two pivotal phase III studies for PF-08634404 in first-line metastatic colorectal cancer and first-line NSCLC, and additional phase II studies in small-cell lung cancer and gastroesophageal cancers. Pfizer aims to establish PF-08634404 as a potential backbone therapy across multiple tumor types.

Dual PD-1/VEGF inhibitors have been designed to overcome the limitations of single-target cancer therapies like Merck’s (MRK - Free Report) blockbuster PD-L1 inhibitor, Keytruda.

Pfizer is also working on expanding the labels of approved cancer products like Padcev, Tuksya and Elrexfio, among others.

ConclusionThe 95-program pipeline provides plenty of shots on goal, but the key question for PFE investors is whether berobenatide plus the next generation of oncology drugs can generate enough new revenues to offset declining COVID sales, patent expirations and other portfolio pressures.

PFE’s Price Performance, Valuation and EstimatesPfizer stock has risen 16.6% so far this year compared with an increase of 14.6% for the industry.

Image Source: Zacks Investment Research

From a valuation standpoint, Pfizer appears attractive relative to the industry. Going by the price/earnings ratio, Pfizer’s shares currently trade at 9.84 forward earnings, significantly lower than 18.79 for the industry. However, the stock is trading above its five-year mean of 9.25.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2026 earnings per share has risen from $2.96 to $2.98, while that for 2027 has risen from $2.85 to $2.94 over the past 30 days.

Image Source: Zacks Investment Research

Pfizer has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medicus Pharma Ltd. (NASDAQ:MDCX) secured on Wednesday an exclusive, sublicensable global license from Pfizer Inc. (NYSE:PFE) to develop, manufacture, and commercialize PF-08046031 (CD228V), an early clinical-stage antibody-drug conjugate targeting melanotransferrin.

• Medicus Pharma stock is testing key support levels. What’s behind MDCX weakness?

Melanotransferrin is a protein that in humans, is encoded by the MF12 gene. The protein is a cell-surface glycoprotein found on melanoma (a type of skin cancer) cells.

The co-development agreement grants Medicus full rights to utilize CD228V for the treatment, prevention, diagnosis, control and maintenance of all human diseases and disorders.

Financial Commitments and Billion-Dollar MilestonesTo obtain the license, Medicus paid a $12 million non-refundable upfront fee to Pfizer and must pay another $15 million on the first anniversary.

Read Next

To support initial progress, Pfizer delivered a $2 million development funding payment to Medicus, which must be applied solely toward executing the CD228V development plan.

Pfizer stands to gain development, regulatory, and sales milestone payments exceeding $1 billion if all target benchmarks across multiple indications are achieved. The pharmaceutical company is also eligible for low double-digit tiered royalties on annual net sales of CD228V products throughout the royalty term.

Operational Roles and Licensing TermsAlthough Pfizer maintains patent ownership and participates in co-development oversight, Medicus retains sole authority and financial responsibility for manufacturing, regulatory approval, and commercialization efforts.

Pfizer holds the right to review budgets, receive progress reports, and elect to fund product development following the initiation of the first pivotal trial.

Additionally, Pfizer will receive a portion of specified proceeds in events involving sublicensing, strategic transactions, or a change of control at Medicus.

Unless terminated early, the contract remains effective on a product-by-product and country-by-country basis until the applicable royalty terms expire.

MDCX Stock Price Activity: Medicus Pharma shares were down 32.24% to 18 cents at the time of publication on Thursday, according to Benzinga Pro data.

Image via Shutterstock

Read Next

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

A month has gone by since the last earnings report for Merck (MRK - Free Report) . Shares have added about 18.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Merck due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Merck & Co., Inc. before we dive into how investors and analysts have reacted as of late.

Q2 Earnings & Sales Beat EstimatesMerck reported an adjusted loss of 13 cents per share for the second quarter of 2026, narrower than the Zacks Consensus Estimate of a loss of 26 cents. In the year-ago quarter, the company reported adjusted earnings of $2.13 per share.

Including acquisition and divestiture-related costs, restructuring costs, income and losses from investments in equity securities and certain other items, loss was 54 cents per share in the second quarter versus earnings of $1.76 per share in the year-ago quarter.

Adjusted as well as reported earnings included a charge of $2.31 per share recorded in the quarter related to the acquisition of Terns Pharmaceuticals, which was completed during the period.

Revenues in the second quarter increased 5% year over year on a reported basis and 4% excluding foreign exchange (Fx) to $16.61 billion. Sales beat the Zacks Consensus Estimate of $16.33 billion. Higher sales of oncology drugs, including Keytruda and contributions from new products like Winrevair, Welireg and Capvaxive, and the Animal Health segment were partially offset by lower sales of Gardasil and some other vaccines.

Quarter in DetailThe Pharmaceutical segment generated revenues of $14.76 billion, up 5% year over year (4% excluding FX). Pharmaceutical segment revenues beat the Zacks Consensus Estimate of $14.28 billion.

All sales growth numbers discussed below exclude FX impact.

Oncology DrugsCombined sales of Keytruda and Keytruda Qlex increased 4% to $8.37 billion. The reported figure topped the Zacks Consensus Estimate of $8.06 billion.

Sales of Keytruda benefited from rapid uptake across earlier-stage indications and continued strong momentum in metastatic indications.

Keytruda sales in the second quarter included $463 million in sales of Keytruda Qlex, the subcutaneous formulation of Keytruda, compared to $128 million in the previous quarter as patient adoption has increased since the permanent J-code was established in April.

Merck is seeing an increase in usage of Keytruda in tumors that primarily affect women, including cervical and breast cancers, as well as Keytruda in combination with Padcev in first-line, locally advanced or metastatic urothelial cancer.

Merck said on the conference call that Keytruda’s U.S. growth will moderate as penetration peaks in several indications. The comparison will also be impacted by a $250 million wholesaler purchase benefit in the third quarter of 2025.

On the conference call, Merck’s CEO Robert Davis said that the Keytruda exclusivity transition will create a shallow decline followed by a fast return to growth.

Alliance revenues from Lynparza declined 2% to $365 million in the quarter. Lenvima alliance revenues increased 6% to $283 million, driven by higher U.S. demand, partly offset by lower net pricing.

Welireg sales surged 67% to $271 million, reflecting higher demand in the United States for certain previously treated advanced renal cell carcinoma patients and continued launch uptake across international markets, particularly Japan. Favorable wholesaler purchasing patterns in the United States also aided performance.

VaccinesIn vaccines, sales of HPV vaccines — Gardasil and Gardasil 9 — rose 3% to $1.17 billion. Higher demand in the Asia Pacific and Europe, along with favorable tender timing in Europe, supported the franchise. These gains were partly offset by lower demand and unfavorable timing of CDC purchases in the United States. Gardasil/Gardasil 9 sales missed the Zacks Consensus Estimate of $1.18 billion.

Combined sales of ProQuad, M-M-R II and Varivax declined 3% to $592 million, mainly due to lower demand in the United States.

Sales of the pneumococcal 15-valent conjugate vaccine Vaxneuvance declined 36% to $148 million due to lower demand in the United States and most international markets as well as unfavorable comparison to the prior year quarter, as public-sector activity in the United States increased sales in that period.

Capvaxive sales increased 40% to $184 million, driven by increased demand in the United States and continued launch uptake in some international markets.

Sales of the new RSV vaccine, Enflonsia, in the United States were $2 million in the second quarter of 2026 compared with $1 million in the first quarter.

Other DrugsIn the infectious disease portfolio, Bridion sales rose 8% to $497 million due to higher demand and pricing in the United States, partially offset by lower demand in most international markets due to generic competition. Bridion lost patent exclusivity in the United States in July 2026. However, Merck expects that U.S. sales will decline at a slower pace than previously expected due to lower-than-anticipated generic competition.

Prevymis sales increased 28% to $295 million, driven by higher demand in the United States and certain European markets.

Januvia/Janumet franchise sales fell 31% year over year to $429 million. Sales of the drug declined due to lower demand and net pricing in the United States due to competition, as well as lower demand in China and most other international markets amid ongoing generic competition.

Winrevair sales jumped 75% to $588 million, reflecting continued strong demand in the United States and early launch momentum across international markets, particularly Japan and Europe.

Ohtuvayre, added from the October 2025 acquisition of Verona Pharma, contributed $204 million in sales in the second quarter compared with $131 million in the previous quarter. Revenues in the second quarter benefitted from continued prescription demand as well as favorable timing of specialty pharmacy purchases. However, third-quarter revenues will be hurt by the unwinding of specialty pharmacy purchases. Merck is investing in salesforce expansion and patient support to drive accelerated growth in 2027.

Regarding its newly launched HIV pill, Idvynso, Merck said it is seeing encouraging early progress on access and reimbursement.

Merck’s Animal Health segment generated revenues of $1.78 billion, up 8% year over year on a reported basis and 5% excluding FX. This growth was driven by higher demand for livestock as well as companion animal products. Sales from this segment marginally beat the Zacks Consensus Estimate of $1.77 billion.

Sales of livestock products rose 6% to $1.04 billion, driven by higher demand for ruminant and poultry products. Sales of companion animal products rose 5% to $734 million, driven by new product launches.

Margin DiscussionAdjusted gross margin was 81.1%, down 110 basis points year over year due to higher inventory write-offs.

Adjusted selling, general and administrative expenses rose 10% to $2.89 billion, reflecting higher administrative and promotional spending.

Adjusted research and development expenses increased almost 144% to $9.74 billion in the quarter due to a significantly higher charge of $5.7 billion related to the Terns acquisition compared to a $200 million business development charge a year ago.

Excluding these business development charges, operating expenses grew 7% in the quarter.

2026 Sales Guidance Upped, EPS Range LoweredMerck raised its sales guidance for 2026 while lowering its adjusted EPS range to include acquisition costs.

The company now expects revenues to be in the range of $66.3-$67.3 billion, compared with the previous expectation of $65.8-$67.0 billion. The new range indicates year-over-year growth of 2% to 4%.

The company now expects adjusted earnings of $2.66-$2.76 per share, down from its previous guidance of $5.04-$5.16. The revised range includes a one-time charge of $2.43 per share related to the Terns acquisition.

The 2026 guidance represents a significant decline from adjusted EPS of $8.98 in 2025 due to higher charges related to business development transactions. In 2025, Merck recorded a one-time charge of 20 cents per share related to business development transactions.

The guidance includes a positive impact from Fx of approximately 1% on sales and around 15 cents on EPS.

The adjusted gross margin is expected to be around 81%, lower than the prior expectation of approximately 82% due to higher inventory reserves.

Adjusted operating expenses are now expected to be in the range of $42.0-$42.7 billion compared with the earlier projection of $36.0 billion to $36.8 billion. The adjusted tax rate guidance was raised to 35-36% compared with the previous guidance of 23.5-24.5%.

In 2026, Merck expects to buy back shares worth $3 billion.

How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.

VGM ScoresCurrently, Merck has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Merck has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerMerck is part of the Zacks Large Cap Pharmaceuticals industry. Over the past month, Novartis (NVS - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended June 2026 more than a month ago.

Novartis reported revenues of $14.41 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $2.41 for the same period compares with $2.42 a year ago.

For the current quarter, Novartis is expected to post earnings of $2.24 per share, indicating a change of -0.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Novartis. Also, the stock has a VGM Score of D.

A month has gone by since the last earnings report for Caterpillar (CAT - Free Report) . Shares have lost about 9.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Caterpillar due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Caterpillar Inc. before we dive into how investors and analysts have reacted as of late.

Caterpillar Q2 Earnings Beat Estimates on Higher Volume and PricingCaterpillar reported adjusted earnings of $8.17 per share for the second quarter of 2026, up 73% year over year. The figure surpassed the Zacks Consensus Estimate of $6.25 by 30.72%. Higher sales volume and favorable price realization supported the performance.

Including one-time items, Caterpillar’s earnings per share were $7.77 compared with $4.62 in the year-ago quarter.

Caterpillar's Q2 Revenues Powered by Volume, Reports Record BacklogSales and revenues increased 24% to $20.5 billion and topped the consensus estimate of $19.3 billion by 6.37%. The quarter marked Caterpillar’s first-ever revenue total above $20 billion. The increase primarily reflected $3.1 billion of higher sales volume and $595 million of favorable price realization. Currency movements added $199 million, while Financial Products revenues contributed another $67 million.

Higher sales of equipment to end users drove the volume increase. Sales rose across all three primary operating segments and every geographic region. Caterpillar’s order backlog surged 92% year over year to a record $72 billion.

Caterpillar's Margins Expand Sharply in Q2Cost of goods sold rose 18% to $12.781 billion. Gross profit was up 34.7% to $7.76 billion from the prior-year quarter. The gross margin expanded 300 basis points to 37.8% from the year-ago quarter.

Selling, general and administrative expenses increased 19% to $2 billion, while research and development expenses advanced 12% to $616 million. Operating profit increased 50% year over year to around $4.3 billion. The operating margin expanded to 20.9% from 17.3%, as the profit contribution from higher volume and pricing more than offset increased operating expenses.

Adjusted operating profit climbed 54% to around $4.5 billion, while the adjusted operating margin improved to 21.9% from 17.6%. The quarter included $392 million of expected International Emergency Economic Powers Act (IEEPA) tariff recoveries.

Segments Deliver Higher Sales and Improved ProfitsTotal Machinery, Power & Energy (MP&E) sales rose 24.9% year over year to around $19.6 billion. Operating profit was around $4.2 billion, up 51% year over year.

Construction Industries delivered the strongest segment sales growth. Revenues increased 35% to $8.3 billion, driven by $1.7 billion of higher volume and $309 million of favorable price realization. Segment profit advanced 57% to $1.9 billion, due to the higher sales volume. Margin widened to 23.3% from 20.1% in the prior-year quarter.

Resource Industries sales rose 20% to $4.6 billion, mainly reflecting higher equipment sales to end users.  Segment profit increased 23% to $693 million. Margin edged up to 14.9% from 14.5%, as higher volume offset $158 million of unfavorable manufacturing costs.

Power & Energy sales increased 17% year over year to $8.2 billion. The improvement reflected $736 million of higher volume, $212 million of favorable pricing and a $200 million increase in intersegment sales. The segment reported sales growth in Power Generation (29%), followed by 9% growth in Industrial and Oil and Gas sectors. Segment profit rose 30% to $2 billion and segment margin expanded 250 basis points to 24.6%. Volume and pricing benefits outweighed $149 million of unfavorable manufacturing costs, mainly related to higher period manufacturing expenses.

Financial Products revenues advanced 10% to $1.1 billion on higher average earning assets. Segment profit increased 32% to $328 million, aided by earning-asset growth and improved Insurance Services results, partly offset by a higher provision for credit losses.

Caterpillar's Cash Flow and Outlook StrengthenMachinery, Power & Energy operating cash flow reached $5.7 billion, up 94% year over year. Free cash flow more than doubled to $5.1 billion. CAT returned $2.2 billion to shareholders through $1.5 billion of share repurchases and $700 million of dividends. Caterpillar ended the quarter with $6.7 billion in cash and equivalents.

Caterpillar's Expectations for Q3 & 2026Looking to third-quarter 2026, management expects strong growth in sales and revenues compared with the year-ago period. Tariff costs are expected to be in line with the year-ago quarter. CAT anticipates the adjusted operating margin to be higher year over year in the third quarter. For context, the adjusted operating margin was 17.5% in the third quarter of 2025.

For 2026, management expects sales and revenues to grow in the mid-to-high teens. Adjusted operating margin is projected near the bottom of its target range, excluding tariff recoveries. MP&E free cash flow is expected in the top half of the company’s target range. The company forecasts tariff costs of around $2.2 billion, excluding tariff recoveries.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 5.33% due to these changes.

VGM ScoresAt this time, Caterpillar has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Caterpillar has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Key Takeaways MetLife's adjusted earnings rose 15% and total premium increased 5.8% in Q2 2026.MET is using AI, asset management and its New Frontier strategy to support scalable growth.MetLife's strong liquidity supports shareholder returns through share repurchases and dividend payouts. MetLife, Inc. (MET - Free Report) benefits from its diversified product portfolio, strong corporate relationships and global footprint, which support steady business volumes and premium growth. Its cost-cutting efforts, cash generation ability, strategic acquisitions and partnerships further support growth. Over the past year, shares of MET have grown 17.9%, outperforming the industry’s 4.6% rise.

MetLife — with a market capitalization of $62 billion — primarily provides protection and investment products to a range of individual and institutional customers. Beyond offering individual annuities, insurance and investment products, the company also delivers group insurance, as well as retirement and savings products and services. Its forward P/E of 9.30X is higher than the industry average of 9.17X.

Courtesy of solid prospects, MET currently carries a Zacks Rank #3 (Hold) and a Value Score of A.

MET’s Growth DriversMetLife continues to benefit from broad-based growth across its businesses, supported by stronger sales, favorable underwriting trends and improving operating momentum. Adjusted earnings rose 15% year over year to $1.6 billion in the second quarter of 2026, while total premium increased 5.8%.

Group Benefits remains an important contributor, supported by customer additions, broader product adoption and digital capabilities. MET continues to see strong opportunities in retirement and international markets. RIS-adjusted PFOs, excluding pension risk transfers, increased 19%, led by U.K. longevity reinsurance and structured settlement sales, while newer solutions such as U.K. FundedRe are broadening the platform. In Asia, sales climbed 17% on a constant-currency basis, helped by product launches and equity market tailwinds in Korea, while Latin America and EMEA sales rose 9% and 15%, respectively, creating additional room for expansion.

MET is also using technology and asset management to support scalable growth. AI-driven productivity gains are helping the company manage expenses while improving customer service and creating opportunities to apply data across policies, claims and service interactions. Meanwhile, MetLife Investment Management is expanding its role as the company grows its asset base and captures benefits from the integration of PineBridge.

MET’s New Frontier strategy combines capital-light and capital-driven businesses, leveraging its retirement origination, investment and risk-management capabilities to pursue growth while creating additional assets for its investment management platform. This model supports earnings diversification and more efficient capital deployment. The company also has flexibility to pursue additional growth through reinsurance, third-party capital and targeted acquisitions. Reinsurance can help MetLife originate more retirement business while creating additional assets for its investment management platform. The company is also evaluating selective opportunities in asset management and Group Benefits that can add complementary capabilities without requiring transformational deals.

MetLife’s robust liquidity position, evidenced by $19.3 billion in cash and cash equivalents as of June 30, 2026, far exceeds its short-term debt of $460 million. This financial strength supports shareholder returns through share repurchases and dividend payouts. The company bought back common shares worth $700 million in the second quarter of 2026. It pursued additional repurchases of roughly $225 million in July 2026. Its dividend yield of 2.5% remains higher than the industry’s average of 2.4%.

Where Do Estimates for MET Stand?The Zacks Consensus Estimate for MetLife’s 2026 earnings is pegged at $9.76 per share, indicating a 10.5% year-over-year rise, which has been revised upward over the past seven days. Furthermore, the consensus mark for revenues is pegged at $78.7 billion for 2026. It beat earnings estimates in each of the past four quarters, with an average surprise of 5.7%.

MET Stock: Risks to WatchHowever, there are some factors that investors should keep a careful eye on.

MET’s variable investment income has been volatile in recent years and remained below target at $1.5 billion in 2025. The first quarter of 2026 produced $518 million of pre-tax variable investment income, but the second quarter fell to $231 million due to lower private equity returns, and real estate and other fund returns.

The company’s return on invested capital (ROIC) is 1.9%, below the industry average of 2%. This indicates relatively weaker capital efficiency and modest returns on its investments.

Better-Ranked PlayersSome better-ranked stocks in the insurance space are Hippo Holdings Inc. (HIPO - Free Report) , Slide Insurance Holdings, Inc. (SLDE - Free Report) and The Hanover Insurance Group, Inc. (THG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hippo Holdings’ current-year earnings is pinned at $2.46 per share and has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. HIPO beat earnings estimates in each of the trailing four quarters, with the average surprise being 521.8%. The consensus estimate for current-year revenues is pegged at $581.9 million, implying 24.2% year-over-year growth.

The Zacks Consensus Estimate for Slide Insurance Holdings’ current-year earnings is pinned at $3.79 per share and has witnessed two upward revisions in the past 60 days against one movement in the opposite direction. SLDE beat earnings estimates in each of the trailing four quarters, with the average surprise being 36.9%. The consensus estimate for current-year revenues is pegged at $1.5 billion, implying 29.5% year-over-year growth.

The Zacks Consensus Estimate for Hanover Insurance Group’s current-year earnings is pinned at $20.17 per share and has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. THG beat earnings estimates in each of the trailing four quarters, with the average surprise being 27.3%. The consensus estimate for current-year revenues is pegged at $7 billion, implying 4.6% year-over-year growth.

A month has gone by since the last earnings report for W.W. Grainger (GWW - Free Report) . Shares have lost about 0% in that time frame, outperforming the S&P 500.

Will the recent trend continue leading up to its next earnings release, or is W.W. Grainger due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for W.W. Grainger, Inc. before we dive into how investors and analysts have reacted as of late.

Grainger Beats Q2 Earnings Estimates on Margin Gains, Raises OutlookGrainger reported second-quarter 2026 earnings of $12.01 per share, up 20.5% year over year. The figure beat the Zacks Consensus Estimate of $11.28 by 6.47%, aided by strong sales growth, and wider gross and operating margins.

Quarterly sales increased 10.3% year over year to $5.02 billion and surpassed the consensus estimate of $4.95 billion by 1.35%. Daily sales advanced 10.3%, reflecting solid momentum across both operating segments. We predicted daily sales to increase 8.5%. 

On a daily, organic constant currency basis, sales increased 13.7%. The comparison adjusts for foreign currency movements and the company’s exit from the U.K. market, including the divested Cromwell business and closed Zoro U.K. operations.

Grainger’s Q2 Segmental PerformanceThe High-Touch Solutions N.A. segment’s daily sales rose 11.9% year over year in the second quarter of 2026, reflecting strong volume growth and a healthy contribution from pricing. The Endless Assortment segment’s daily sales grew 13.5% year over year in the quarter, supported by strong performances at MonotaRO and Zoro.

GWW Expands Profitability in Q2Gross profit increased 13% year over year to $1.98 billion. The gross margin expanded 100 basis points to 39.5%, supported by improvement in both segments and benefits related to the U.K. market exit.

The quarter included $43 million in refunds on IEEPA tariffs for products directly imported by Grainger. These refunds reduced the cost of goods sold and provided a roughly 90-basis-point benefit to the gross margin. The cost of sales came in at $3.04 billion, 8.5% year over year.

Selling, general and administrative expenses rose 9.3% to $1.18 billion. Grainger’s operating earnings in the quarter increased 19% year over year to $807 million. The operating margin came in at 16.1% compared with 14.9% in the prior-year quarter.

Grainger Generates Solid Cash FlowThe company had cash and cash equivalents of $589 million as of June 30, 2026, compared with $585 million at the end of 2025. The cash flow from operating activities was $1.18 billion in the first six months of 2026 compared with $1.02 billion in the prior-year period.

Long-term debt was $2.41 billion as of June 30, 2026, compared with $2.36 billion as of Dec. 31, 2025. Grainger returned $341 million to shareholders through dividends and share repurchases during the quarter.

GWW Raises Its 2026 OutlookGrainger raised its 2026 net sales guidance to $19.4-$19.7 billion from $19.2-$19.6 billion. The company expects reported sales growth of 8.4-10% from the prior mentioned 6.7-9.1%.  

The adjusted earnings guidance was increased to $45.50-$47.25 per share from $44.25-$46.25. Grainger also raised its operating margin outlook to 15.8-16.2% and the gross margin forecast to 39.3-39.6%. The updated outlook reflects strong first-half execution, improving MRO market demand and better top-line leverage.

How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.

VGM ScoresAt this time, W.W. Grainger has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, W.W. Grainger has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.