When it comes to short-term investing or trading, they say "the trend is your friend." And there's no denying that this is the most profitable strategy. But making sure of the sustainability of a trend to profit from it is easier said than done.
The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock alive.
Our "Recent Price Strength" screen, which is created on a unique short-term trading strategy, could be pretty useful in this regard. This predefined screen makes it really easy to shortlist the stocks that have enough fundamental strength to maintain their recent uptrend. Also, the screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.
There are several stocks that passed through the screen and ATI (ATI - Free Report) is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing.
A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. ATI is quite a good fit in this regard, gaining 34.6% over this period.
However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 12.7% over the past four weeks ensures that the trend is still in place for the stock of this maker of steel and specialty metals.
Moreover, ATI is currently trading at 94.1% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.
Looking at the fundamentals, the stock currently carries a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.
So, the price trend in ATI may not reverse anytime soon.
In addition to ATI, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.
This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.
Click here to sign up for a free trial to the Research Wizard today.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Paychex (PAYX - Free Report) Paychex, Inc. is one of the leading providers of integrated human capital management (“HCM”) solutions for payroll, human resource (“HR”), retirement and insurance services for small- to medium-sized businesses. The company was incorporated in Delaware in 1979.
PAYX is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. PAYX has a Growth Style Score of B, forecasting year-over-year earnings growth of 7.8% for the current fiscal year.
Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.03 to $5.94 per share. PAYX also boasts an average earnings surprise of +1.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, PAYX should be on investors' short list.
Key Takeaways BKR won a subsea production systems contract for Azule Energy's Greater PAJ project in Angola.The award includes deepwater trees, control systems, installation, commissioning and production services.Delivery of BKR's subsea trees is expected to begin in 2027, boosting order backlog & its presence in Africa. Baker Hughes Company (BKR - Free Report) has secured a significant contract from Azule Energy to provide subsea production systems for the Greater PAJ offshore development in Angola, strengthening its position in the global deepwater services market. The award underscores BKR’s industry leadership in offshore production technologies while broadening its presence across one of Sub-Saharan Africa's premier energy-producing regions.
Under the agreement, Baker Hughes will supply deepwater horizontal tree systems, subsea control modules, intervention workover control systems and associated connection, distribution and topside equipment. The company will also provide integrated tooling, installation support, commissioning and ongoing production services through its established facilities in Angola. This broad scope allows BKR to generate revenues not only from equipment sales but also from services throughout the project's operating life.
The contract highlights Baker Hughes' technological advantage in ultra-deepwater developments. Its horizontal tree systems are engineered to operate at pressures of up to 10,000 pounds per square inch and water depths of 10,000 feet, while their modular design supports faster deployment and improved long-term production efficiency.
The award also reinforces BKR’s long-standing footprint in Angola, where it already maintains the largest installed subsea equipment base in Sub-Saharan Africa. Leveraging its local infrastructure and supply chain is expected to improve execution efficiency and strengthen customer relationships.
With subsea trees delivery scheduled to begin in 2027, the contract enhances Baker Hughes' future order backlog and revenue visibility. The agreement strengthens BKR’s business model and customer base while enhancing investor appeal by highlighting robust demand for its offshore production technologies.
Baker Hughes currently carries a Zacks Rank #4 (Sell).
The business models of oilfield equipment and service providers, including BKR, are closely linked to the capital spending of upstream players. With Brent prices trading above the $70-per-barrel mark and West Texas Intermediate (“WTI”) crude prices trading around the $70-per-barrel mark, according to oilprice.com, players like Vista Energy, S.A.B. de C.V. (VIST - Free Report) , YPF Sociedad Anónima (YPF - Free Report) and W&T Offshore, Inc. (WTI - Free Report) which have presence in upstream operations are benefiting from the elevated crude pricing environment. WTI and VIST currently carry a Zacks Rank #2 (Buy) each, while YPF sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vista operates 205,600 acres within the Vaca Muerta Basin, widely recognized as Argentina's premier shale basin. Supported by this massive footprint, VIST expects to achieve production of 200 thousand barrels of oil equivalent per day by 2030.
Argentina’s integrated energy company, YPF, has an extensive footprint in the Vaca Muerta formation to fuel production growth. YPF anticipates increased spending and activity in the coming quarters to bolster oil and gas production in the second half of 2026.
W&T Offshore’s robust offshore footprint in the Gulf of America spans approximately 605,000 acres and supports a large reserve base. WTI's 1P and 2P reserves provide 20 years of production potential and resource longevity.
Freshworks (FRSH) saw its shares surge in the last session with trading volume being higher than average. The latest trend in earnings estimate revisions may not translate into further price increase in the near term.
Arista Networks (ANET - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this cloud networking company have returned -1.2%, compared to the Zacks S&P 500 composite's -2.9% change. During this period, the Zacks Internet - Software industry, which Arista Networks falls in, has lost 5.2%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Arista Networks is expected to post earnings of $0.89 per share, indicating a change of +21.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The consensus earnings estimate of $3.63 for the current fiscal year indicates a year-over-year change of +21.8%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $4.39 indicates a change of +20.8% from what Arista Networks is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Arista Networks is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Arista Networks, the consensus sales estimate of $2.82 billion for the current quarter points to a year-over-year change of +28%. The $11.58 billion and $13.97 billion estimates for the current and next fiscal years indicate changes of +28.6% and +20.6%, respectively.
Last Reported Results and Surprise HistoryArista Networks reported revenues of $2.71 billion in the last reported quarter, representing a year-over-year change of +35.1%. EPS of $0.87 for the same period compares with $0.65 a year ago.
Compared to the Zacks Consensus Estimate of $2.62 billion, the reported revenues represent a surprise of +3.48%. The EPS surprise was +7.41%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Arista Networks is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Arista Networks. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
SALT LAKE CITY, UT / ACCESS Newswire / June 29, 2026 / FatPipe, Inc. (NASDAQ:FATN) ("FatPipe" or the "Company"), a pioneer and multiple patents holder in enterprise-class software-defined wide area networking (SD-WAN) and single-stack cybersecurity solutions, today announced that it qualified to continue as a member of the Russell Microcap® Index following the June 2026 Russell indexes semi-annual reconstitution, effective when the U.S. market opens on June 29.
The June reconstitution of the Russell U.S. indexes captures up to the 4,000 largest U.S. stocks as of April 30, ranking them by total market capitalization. Membership in the Russell Microcap® Index, which remains in place for half a year beginning 2026, means automatic inclusion in the appropriate growth and value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market-capitalization rankings and style attributes.
FatPipe was first added to the Russell Microcap® Index and the Russell 3000E™ Index in June 2025.
Dr. Ragula Bhaskar, CEO of FatPipe, Inc. comments:
"We are proud to continue our inclusion in the Russell Microcap® Index and the Russell 3000E™ Index for the second consecutive year. Since our initial addition in June 2025, FatPipe has delivered significant growth, including 90% year-over-year quarterly revenue growth and 18% full-year revenue growth in fiscal 2026, while expanding our channel through strategic partnerships such as TD SYNNEX. As we continue to scale our platform and bring next-generation SD-WAN, SASE, and cybersecurity solutions to enterprises modernizing their network infrastructure, our continued Russell index membership reflects the momentum we are building. We remain focused on driving sustainable growth and creating long-term value for our shareholders."
Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. According to data as of the end of June 2025, about $12.2 trillion in assets are benchmarked against the Russell U.S. indexes, which belong to FTSE Russell, the global index provider.
Forward-Looking Statements
Certain statements contained in this press release, may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on management's current expectations and are inherently subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. These risks and uncertainties include, but are not limited to, those described in FatPipe's filings with the U.S. Securities and Exchange Commission. Except as required by law, FatPipe expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.
Forward-looking statements speak only as of the date of this press release, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
About FatPipe Inc.
FatPipe, Inc. (NASDAQ:FATN) pioneered the concept of software-defined wide area networking (SD-WAN) and hybrid WANs that eliminate the need for hardware and software or cooperation from ISPs, and allows companies and service providers to control multi-link network traffic. FatPipe introduced Total Security 360, a single-stack cybersecurity and network security solution providing control over data within company and sovereign boundaries. FatPipe currently has 13 U.S. patents related to multipath, software-defined networking. FatPipe products are sold by 200+ resellers worldwide. For more information, visit www.fatpipe.com. Follow us on X @FatPipe_Inc.
About FTSE Russell, an LSEG Business
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $21.20 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.
FTSE Russell is wholly owned by LSEG.
For more information, visit FTSE Russell.
Contacts:
Vikrant Ragula
Director of Investor Relations
FatPipe Networks
+1 801.683-5656 x 1140 [email protected]
Key Takeaways BTSG, KNSA, ATI and VMI were selected for strong net profit margins.Each stock has witnessed upward EPS estimate revisions for the current fiscal year.All four picks have a Zacks Rank of 1 or 2 and solid VGM Scores, suggesting further upside potential. Net profit, also referred to as the bottom line, is one of the key tools to determine the financial health of an enterprise. The metric demonstrates a company’s ability to convert per-dollar sales into profits.
A low profit margin indicates higher risks, implying that a revenue drop might dampen profits, pushing a company into the red. However, BrightSpring Health Services, Inc. (BTSG - Free Report) , Kiniksa Pharmaceuticals International, plc (KNSA - Free Report) , ATI Inc. (ATI - Free Report) and Valmont Industries, Inc. (VMI - Free Report) boast solid net profit margins.
Net Profit Margin = Net profit/Sales * 100
In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength of a company’s operations and its cost-control measures.
Also, higher net profit is essential for rewarding stakeholders. Further, strength in the metric not only attracts investors but also draws well-skilled employees who eventually enhance business value.
Moreover, a higher net profit margin compared with peers provides a company with a competitive edge.
Pros and ConsNet profit margin helps investors gain clarity on a company’s business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.
However, net profit margin, as an investment criterion, has its share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.
In addition, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.
Furthermore, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on net profit. In such cases, the measure is rendered ineffective while analyzing a company’s performance.
The Winning StrategyA healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.
Apart from these, we have added a few criteria to ensure maximum returns from this strategy.
Screening ParametersNet Margin 12 months – Most Recent (%) greater than equal to 0: A high net profit margin indicates solid profitability.
Percentage Change in EPS F(0)/(F-1) greater than equal to 0: It indicates earnings growth.
Average Broker Rating (1-5) equal to 1: A rating of #1 indicates brokers’ extreme bullishness on the stock.
Zacks Rank less than or equal to 2: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally perform better than their peers in all types of market environments.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Here we discuss our four picks from the 11 stocks that qualified the screen:
BrightSpring Health Services provides complementary home and community-based pharmacy and health solutions. The stock sports a Zacks Rank #1 and has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BrightSpring Health Services’ 2026 earnings has moved upward by 16 cents to $1.67 per share over the past 60 days. BTSG outpaced the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, with the average surprise being 14.61%.
Kiniksa Pharmaceuticals is a biopharmaceutical company developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications. The stock currently sports a Zacks Rank of 1 and has a VGM Score of B.
The Zacks Consensus Estimate for Kiniksa Pharmaceuticals’ 2026 earnings has been revised upward by 13.8% over the past 60 days to $1.24 per share. KNSA beat the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being 1.53%.
ATI is a diversified specialty materials producer. It has two main business segments, High Performance Materials & Components, and Advanced Alloys & Solutions. The stock currently carries a Zacks Rank of 2 and has a VGM Score of B.
The Zacks Consensus Estimate for ATI’s 2026 earnings has been revised upward to $4.43 per share from $4.20 in the past 60 days. ATI outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.56%.
Valmont Industries is primarily engaged in the production of fabricated metal products, metal and concrete pole and tower structures, and mechanized irrigation systems in the United States and abroad. The stock currently carries a Zacks Rank of 2 and has a VGM Score of B.
The Zacks Consensus Estimate for Valmont Industries’ 2026 earnings has moved upward by 5 cents to $22.83 per share over the past 30 days. VMI outpaced the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, with the average surprise being 6.71%.
Ultragenyx (RARE) saw its shares surge in the last session with trading volume being higher than average. The latest trend in earnings estimate revisions may not translate into further price increase in the near term.
ELGIN, Ill.--(BUSINESS WIRE)--The Middleby Corporation (NASDAQ: MIDD) today announced that in connection with the previously announced spin-off of its Food Processing business, Midera Food Processing, Inc. (“Midera”) has entered into a five-year, $1.0 billion credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other financial institutions and lenders, consisting of a $750 million U.S. dollar revolving credit facility and a $250 million multi-curren.
The Middleby Corporation (NASDAQ: MIDD) today announced that in connection with the previously announced spin-off of its Food Processing business, Midera Food
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Artificial intelligence has no shortage of obstacles. The industry is scrambling to secure enough electricity to power new data centers, enough land to build them, and enough high-bandwidth memory (HBM) to keep next-generation chips fed with data.
Yet another constraint is emerging that could prove just as important: moving information between those chips fast enough to keep them working. As AI clusters grow from thousands to hundreds of thousands of GPUs, the network connecting them is becoming just as valuable as the processors themselves.
For investors, that shifts attention beyond Nvidia (NASDAQ:NVDA | NVDA Price Prediction) and toward the companies building AI’s digital highways.
AI Needs Better Roads, Not Just Faster Cars Intel (NASDAQ:INTC) CEO Lip-Bu Tan said on the No Priors podcast that the best investment opportunities lie where technology runs into a bottleneck. Today, one of the clearest choke points is interconnect technology — the hardware that transfers data between GPUs, CPUs, storage, and memory throughout an AI data center.
A modern AI cluster is really a massive logistics hub. GPUs perform the calculations, but every result depends on data arriving exactly when it is needed. If information is delayed, expensive processors sit idle. That wastes electricity, computing capacity, and billions of dollars of infrastructure investment.
The problem grows with scale. Traditional copper connections struggle to carry ever-faster electrical signals over longer distances because heat rises, power consumption increases, and signal quality deteriorates. Fiber optics solves many of those limitations by transmitting data as pulses of light instead of electricity, allowing far greater bandwidth while consuming less power.
Seven Companies Building AI’s Connectivity Infrastructure Company AI Connectivity Role Recent Highlights Credo Semiconductor (NASDAQ:CRDO) High-speed optical connectivity and active electrical cables Fiscal 2026 revenue reached approximately $1.3 billion, while four hyperscale cloud providers each represented more than 10% of sales. Astera Labs (NASDAQ:ALAB) PCIe connectivity, memory expansion, and AI fabric solutions First-quarter 2026 revenue climbed 93% year over year to $308 million. Coherent (NASDAQ:COHR) Lasers, optical transceivers, and photonic components Customer demand for AI optical products has extended backlog visibility well into 2028. Marvell Technology (NASDAQ:MRVL) Optical networking, custom AI silicon, and switching Expanded its AI portfolio through the acquisition of Celestial AI and its photonic fabric technology capable of delivering up to 16 terabits per second of bandwidth. Lumentum (NASDAQ:LITE) Optical engines and laser components Continues expanding production to meet accelerating AI networking demand. Corning (NYSE:GLW) Fiber optic cable and connectivity solutions Leveraging decades of fiber manufacturing expertise to support hyperscale AI deployments. Ciena (NASDAQ:CIEN) Optical transport systems linking AI data centers Benefiting from rising investments in long-distance, high-capacity networking infrastructure. Surprisingly, none of these companies manufactures the AI processors grabbing headlines. Instead, they build the infrastructure that allows those processors to work together efficiently.
Connectivity Could Become AI’s Next Arms Race Every billion dollars a hyperscaler spends on GPUs creates additional demand for networking switches, optical modules, fiber, lasers, cables, and connectivity chips. Compute power alone no longer determines AI performance. The speed at which thousands of processors exchange information increasingly defines how much useful work those processors can perform.
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That helps explain why Nvidia has aggressively expanded into photonics and optical networking through investments and strategic partnerships. CEO Jensen Huang also emphasized during Computex 2026 that while copper remains effective over shorter distances, optics become essential as AI systems scale across larger data centers.
Granted, these companies carry risks. Many rely heavily on a handful of hyperscale customers, and spending cycles can fluctuate from quarter to quarter. Valuations across AI infrastructure also remain elevated after a powerful multiyear rally.
Still, the long-term trend appears difficult to ignore. Industry spending is expanding beyond chips into every layer supporting AI infrastructure.
Key Takeaway In short, AI’s next breakthrough may not come from building a faster GPU but from ensuring thousands of them can communicate without delay. Investors have spent the past three years focusing almost exclusively on semiconductor designers. The next phase of the AI buildout broadens the opportunity to companies enabling high-speed connectivity.
Credo Semiconductor and Astera Labs offer the purest exposure to the networking bottleneck, while Marvell, Coherent, Lumentum, Corning, and Ciena provide investors with different ways to participate in what could become one of AI’s fastest-growing infrastructure markets.
Ultimately, as AI clusters continue expanding, the companies building the digital roads between processors may prove every bit as indispensable as those building the processors themselves.
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SAN JOSE, Calif.--(BUSINESS WIRE)--Calix, Inc. (NYSE:CALX) today announced that on Monday, July 20, 2026, after market close, the company will post on the Calix Investor Relations website its second quarter stockholder letter for the period ended June 27, 2026. The posting of the stockholder letter will be announced over the newswire with a link to the letter to stockholders available at https://investor-relations.calix.com/.Calix will host a conference call to discuss these results the followin.
[url="]Calix, Inc.[/url] (NYSE: CALX) today announced that on Monday, July 20, 2026, after market close, the company will post on the [url="]Calix Investor Relat
Madison Square Garden (MSGS) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the near term.
Duolingo, Inc. (DUOL - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this company have returned +9.1%, compared to the Zacks S&P 500 composite's -2.9% change. During this period, the Zacks Technology Services industry, which Duolingo falls in, has lost 5.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Duolingo is expected to post earnings of $0.58 per share for the current quarter, representing a year-over-year change of -36.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $2.76 points to a change of -67.8% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $3.08 indicates a change of +11.5% from what Duolingo is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Duolingo is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Duolingo, the consensus sales estimate for the current quarter of $296.19 million indicates a year-over-year change of +17.4%. For the current and next fiscal years, $1.21 billion and $1.36 billion estimates indicate +16.4% and +12.5% changes, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
ACI Worldwide (ACIW) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Chewy (CHWY - Free Report) .
Chewy currently has an average brokerage recommendation (ABR) of 1.67, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 27 brokerage firms. An ABR of 1.67 approximates between Strong Buy and Buy.
Of the 27 recommendations that derive the current ABR, 18 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 66.7% and 7.4% of all recommendations.
Brokerage Recommendation Trends for CHWY
Check price target & stock forecast for Chewy here>>>
While the ABR calls for buying Chewy, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CHWY a Good Investment?In terms of earnings estimate revisions for Chewy, the Zacks Consensus Estimate for the current year has declined 9.3% over the past month to $1.53.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Chewy. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Chewy with a grain of salt.
onsemi (ON) will acquire Synaptics (SYNA) in a $7B all-equity deal, aiming to expand into industrial robotics and automation. The acquisition is expected to be highly accretive, with $200M in cost synergies and a 2% EBITDA margin improvement projected with an expected close in eFY27. Both ON and SYNA are rated Buy with a $128/share target for ON, reflecting strong growth prospects despite near-term dilution-driven share price declines.
CHICAGO--(BUSINESS WIRE)--Global professional services firm Huron (NASDAQ: HURN), today announced that three of its senior leaders have been recognized by Consulting Magazine as 2026 Top Consultants, underscoring the depth of expertise, innovation, and leadership that continues to drive value for its clients and support the firm's long-term growth strategy. John DiDonato received the Lifetime Achievement Award, Paul Praveen was honored in the Global & Cross-Border Consulting category, and A.
Deckers (DECK - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this maker of Ugg footwear have returned -8.2% over the past month versus the Zacks S&P 500 composite's -2.9% change. The Zacks Retail - Apparel and Shoes industry, to which Deckers belongs, has gained 0.2% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Deckers is expected to post earnings of $0.93 per share, indicating no change. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $7.42 points to a change of +5.7% from the prior year. Over the last 30 days, this estimate has changed +0.6%.
For the next fiscal year, the consensus earnings estimate of $8.26 indicates a change of +11.3% from what Deckers is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Deckers is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Deckers, the consensus sales estimate of $1.02 billion for the current quarter points to a year-over-year change of +5.4%. The $5.9 billion and $6.44 billion estimates for the current and next fiscal years indicate changes of +7.9% and +9.1%, respectively.
Last Reported Results and Surprise HistoryDeckers reported revenues of $1.12 billion in the last reported quarter, representing a year-over-year change of +9.6%. EPS of $0.96 for the same period compares with $1 a year ago.
Compared to the Zacks Consensus Estimate of $1.08 billion, the reported revenues represent a surprise of +3.45%. The EPS surprise was +18.52%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Deckers is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Deckers. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Raymond James Financial, Inc. (RJF - Free Report) Established in 1962, Raymond James Financial Inc. is a diversified company based in St. Petersburg, FL. The company along with its subsidiaries – Raymond James & Associates Inc. (RJ&A), Raymond James Financial Services Inc. (RJFS), Raymond James Financial Services Advisors Inc. (RJFSA), Raymond James Ltd. (RJ Ltd.), Eagle Asset Management Inc. (Eagle) and Raymond James Bank N.A. (RJ Bank) – provide financial services mainly in the United States and Canada.
RJF is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. RJF has a Growth Style Score of B, forecasting year-over-year earnings growth of 10.9% for the current fiscal year.
Two analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.02 to $11.82 per share. RJF boasts an average earnings surprise of +2.7%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, RJF should be on investors' short list.
LANSING, Mich.--(BUSINESS WIRE)--Jackson National Life Insurance Company (Jackson®), the main operating subsidiary of Jackson Financial Inc.1 (NYSE: JXN), has been named the 2026 Annuities Provider of the Year by InvestmentNews. The award recognizes the annuity provider or insurance carrier that has displayed leadership in delivering value to financial professionals and their clients in product innovation, education, service excellence and operational effectiveness.“Jackson is honored to be reco.
[url="]Jackson National Life Insurance Company[/url] (JacksonÂ), the main operating subsidiary of Jackson Financial Inc.1 (NYSE: JXN), has been named the 2026
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: The Cooper Companies (COO - Free Report) The Cooper Companies is a global medical device company operating through two main segments: CooperVision (CVI) and CooperSurgical (CSI). CVI focuses on contact lenses, with a strong presence in daily silicone hydrogel lenses, torics, multifocals, and myopia management. Its flagship MyDay franchise, including MyDay Energys and toric/multifocal expansions, continues to capture premium share, while MiSight addresses the growing myopia epidemic. CSI provides products and services in fertility and women’s health, offering in-vitro fertilization (IVF) solutions, contraceptives such as Paragard, and office/surgical devices.
COO is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. COO has a Growth Style Score of B, forecasting year-over-year earnings growth of 12.4% for the current fiscal year.
Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.01 to $4.63 per share. COO also boasts an average earnings surprise of +5.8%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, COO should be on investors' short list.
SummaryBroadstone Net Lease remains a compelling Buy for long-term income and total return, underpinned by a focused industrial and retail portfolio.BNL's build-to-suit strategy drives growth, with $382M in pipeline projects offering initial cash yields of 7.3% and long lease terms.Q1 2026 results showed 5.6% AFFO/share growth, 99.8% occupancy, and a safe, growing 5.5% dividend yield supported by a BBB-rated balance sheet.Looking for a portfolio of ideas like this one? Members of iREIT®+HOYA Capital get exclusive access to our subscriber-only portfolios. Learn More »Sitewide Sale 2026: Get 20% OffNicoElNino/iStock via Getty Images
The S&P 500 (SPY) has had a decent run since the start of the year, despite fits and starts along the way. While it's easy to ignore lesser-followed sectors of the market, like REITs, it's the value sectors that
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of BNL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
I am not an investment advisor. This article is for informational purposes and does not constitute as financial advice. Readers are encouraged and expected to perform due diligence and draw their own conclusions prior to making any investment decisions.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Key Takeaways Magnolia Oil & Gas reportedly leads bidding for WildFire Energy in a deal valued at more than $4 billion.MGY's potential purchase would be its largest acquisition and would expand its shale asset portfolio.WildFire operates 2,000 wells producing over 50,000 boe/d, making it an attractive acquisition target. Magnolia Oil & Gas Corporation (MGY - Free Report) is reportedly emerging as the leading contender to acquire privately held WildFire Energy in a deal valued at more than $4 billion. According to a Bloomberg report cited by SeekingAlpha, the acquisition would be the largest in MGY's history and signal a significant shift from its traditionally conservative growth strategy.
If finalized, the transaction would further underscore the ongoing consolidation trend in the U.S. oil and gas industry, where producers are seeking larger, higher-quality asset portfolios to strengthen long-term competitiveness.
Magnolia Oil & Gas Reportedly Leads the Bidding ProcessAccording to reports, Magnolia Oil & Gas is poised to win the auction for Texas-based WildFire, which is backed by private equity firms Warburg Pincus and Kayne Anderson. While the companies have not officially confirmed the transaction, sources indicate that negotiations are at an advanced stage and an announcement could come within weeks.
The acquisition process remains competitive, meaning another bidder could still emerge before a final agreement is reached.
A Major Strategic Shift for Magnolia Oil & GasA transaction exceeding $4 billion would represent a notable departure from Magnolia Oil & Gas' long-standing strategy of disciplined capital allocation and smaller, bolt-on acquisitions.
The company has built its reputation on maintaining capital efficiency, preserving a strong balance sheet and returning value to shareholders. Acquiring WildFire would significantly expand MGY's operational footprint while demonstrating a greater willingness to pursue transformative growth opportunities.
If completed, the deal would become Magnolia Oil & Gas' largest acquisition to date and could redefine its position among independent U.S. exploration and production companies.
WildFire Brings High-Quality Shale AssetsWildFire has become an attractive acquisition target thanks to its sizable portfolio of producing assets. The company operates more than 2,000 wells that collectively produce over 50,000 barrels of oil equivalent per day (boe/d).
Its management team also brings substantial industry experience, having previously led WildHorse Resource Development before selling that company to Chesapeake Energy in 2019.
These established operations and experienced leadership make WildFire a valuable asset for companies seeking immediate production growth.
Industry Consolidation ContinuesThe reported acquisition reflects a broader trend reshaping the U.S. upstream energy sector. Over the past two years, oil and gas companies have increasingly pursued mergers and acquisitions to secure premium shale acreage, improve operating efficiencies and achieve greater economies of scale.
Strong commodity prices have generated substantial cash flows, allowing many producers to pursue strategic acquisitions while positioning themselves for long-term competitiveness against larger integrated energy companies.
Private equity-backed producers such as WildFire have become especially attractive targets as public companies look to expand through acquisitions rather than organic development alone.
Investors to Watch Financing and Capital AllocationAlthough Magnolia Oil & Gasappears to be the leading bidder, investors are likely to focus on how the company finances a transaction of this size.
The acquisition could have implications for Magnolia Oil & Gas' capital allocation strategy, including shareholder returns programs such as dividends and share repurchases that have been central to its investment appeal.
Market participants will also evaluate whether the expected operational synergies and production growth justify the scale of the investment.
What the Deal Could Mean for Magnolia Oil & GasWhile the reported acquisition has not yet been finalized, Magnolia Oil & Gas appears to be positioning itself for a transformational expansion. If the company successfully acquires WildFire, it would gain a significant portfolio of shale assets while joining the growing list of independent producers pursuing larger-scale consolidation.
As the energy industry continues to evolve, the outcome of this potential deal could shape MGY's long-term growth strategy and further accelerate consolidation across the U.S. upstream sector.
MGY’s Zacks Rank & Key PicksMagnolia Oil & Gas is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Currently, MGY carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may consider some top-ranked stocks like Global Partners LP (GLP - Free Report) , Delek US Holdings, Inc. (DK - Free Report) and Liberty Energy Inc. (LBRT - 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.
Global Partners is a Delaware limited partnership formed by affiliates of the Slifka family. It owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. The Zacks Consensus Estimate for GLP’s 2026 earnings indicates 113.1% year-over-year growth.
TN-based Delek US Holdings is an independent refiner, transporter and marketer of petroleum products. The company’s operations are organized into two reportable segments: Refining and Logistics. The Zacks Consensus Estimate for DK’s 2026 revenues indicates 5.9% year-over-year growth.
Liberty Energy is a leading North American oilfield services company, specializing in hydraulic fracturing and completion solutions. The company provides differentiated services through advanced technology integration and real-time data analytics. The Zacks Consensus Estimate for LBRT’s 2026 earnings indicates 66.7% year-over-year growth.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: C.H. Robinson Worldwide (CHRW - Free Report) Based in Minnesota, C.H. Robinson Worldwide, Inc. is a third-party logistics company. As an asset-light transportation provider, it offers freight transportation services and logistics solutions across industries. The company’s services range from commitments on a specific shipment to more comprehensive and integrated relationships.
CHRW is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. CHRW has a Growth Style Score of A, forecasting year-over-year earnings growth of 19.7% for the current fiscal year.
Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.11 to $6.09 per share. CHRW boasts an average earnings surprise of +9.4%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CHRW should be on investors' short list.
Goosehead (GSHD) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
Key Takeaways Dave posted 47% top-line growth in Q1'26, with net income surging 101% and profit up 64%.SoFi Technologies added 1.1 million customers and 1.8 million products, lifting revenues 43% y/y.Dave improved credit metrics, while SoFi faces refinancing pressure and higher funding-cost risks. Both Dave (DAVE - Free Report) and SoFi Technologies (SOFI - Free Report) operate within the fintech space and offer digital banking and financial services through mobile platforms. These companies target tech-savvy consumers who seek alternatives to traditional banks.
We have analyzed both stocks to find out which of these two fintech stocks provides an upside.
The Case for DAVEDave registered 47% year-over-year growth in its top line in the first quarter of 2026. The company demonstrated an efficient business model as it incurred customer acquisition costs of $18, flat with the year-ago quarter, coupled with a lofty 101% jump in its net income. This highly profitable business model helped the bottom line surge 64% year over year. The disproportionate rallies in revenues and profit highlighted Dave’s operational prowess, further justified by a 300-basis-point year-over-year expansion in adjusted EBITDA.
The company improved on the credit front as well. Dave’s CashAI v5.5, its proprietary credit mitigation apparatus, resulted in a record-low 28-day past-due rate of 1.69% despite a 37% year-over-year increase in ExtraCash originations, which could raise credit risks. Furthermore, the company maintained a solid credit profile amid an 18% year-over-year increase in monthly transacting members and successfully raised the net monetization rate to 5.1%, the highest level achieved over the past four years.
Dave’s customer-first strategy was solid, driving new member count 22% year over year to 695,000 in the first quarter of 2026. The company operates in an environment experiencing dynamic financial needs, evidenced by a dip in user demand for short-term liquidity during tax refund season. However, Dave was successful at keeping engagement intact, leading to a recovery in April with an average origination size of $214.
An efficient business model that boosts profitability, accompanied by strength in the credit mitigation strategy, allows the company to scale while maintaining its credit profile. Dave’s customer-first approach, which includes a simplified fee model, allows members to access credit faster and more easily than traditional banks, deepening customer relationships.
The Case for SOFIIn the first quarter of 2026, SOFI witnessed a 35% year-over-year increment in total members. The 1.1-million customer addition took the total to 14.7 million. The company added a record 1.8 million products, up 39% from the year-ago quarter, taking the total to 22.2 million.
Strong member addition, coupled with product additions, reflects the efficacy of SOFI’s customer-centric strategy. This strategy drove the top line 43% year over year, leading to an explosive 134% rise in adjusted net income. This growth trajectory signals strength in the company’s operations, which can be utilized by the company to scale its business.
SoFi Technologies managed to increase cross-buy to 43%, fueled by continued investment in brand building, hinting at a growing percentage of members who are adopting multiple products within the ecosystem. This drove SOFI’s unaided brand awareness to an all-time high of 10%. Enhancement in visibility positions SoFi Technologies to operate within a sustainable environment in the long run, which is vital to its competitive moat.
SOFI accelerated renewed investor interest in cryptocurrencies by relaunching its crypto trading platform. SoFi Coach, launched to provide bespoke financial insights across customer accounts, strengthened its value proposition as a one-stop shop for financial services. SoFi Smart Card enhanced customer engagement as well, offering cashback rewards on food purchases alongside credit-building tools and access to competitive borrowing and deposit rates.
While the company managed to improve its customer stickiness and strengthen its brand loyalty, it shoulders the pressure of rising interest rates affecting refinancing incentives. Student loan refinancing, which was considered to be the major long-term growth catalyst, faces slower momentum as customers delay refinancing decisions amid economic setbacks.
The company’s business model is sensitive to funding costs. With deposit competition intensifying across the banking sector, SOFI might find maintaining attractive rates for customers increasingly expensive. In the off chance that funding expenses rise faster than the loan yield, the net interest margin could take a hit, creating earnings pressure.
How Do Estimates Compare for DAVE & SOFI?The Zacks Consensus Estimate for DAVE’s 2026 sales and EPS indicates year-over-year growth of 28.8% and 26%, respectively. Four EPS estimates have moved upward for 2026, with no downward revision over the past 60 days. For the same period, the consensus estimate for EPS rose 13.8%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SOFI’s 2026 sales and EPS indicates year-over-year rallies of 29.8% and 51.3%, respectively. One EPS estimate for 2026 has moved north in the past 60 days against six southward revisions. During that period, the consensus mark for EPS has been flat at 59 cents.
Image Source: Zacks Investment Research
DAVE Priced Lower Than SOFIDave is currently trading at a forward 12-month P/E ratio of 18.6 times, marginally lower than the 12-month median of 18.7 times. SoFi Technologies is trading at 25.8 times, substantially lower than the 12-month median of 45.8 times.
Image Source: Zacks Investment Research
Add DAVE to Your Portfolio, Hold SOFI for NowDave’s explosive first-quarter 2026 performance was marked by hefty top and bottom-line growth, displaying high profitability in its core operations. It is impressive how the company managed to maintain a strong credit profile, leveraging CashAI v5.5 despite a significant upsurge in ExtraCash originations. Dave’s rising membership count despite seasonal setbacks hints at robust customer engagement.
SoFi Technologies' top and bottom-line growth took a similar trajectory to that of Dave’s. SOFI’s customer-centric approach involved the launch of SoFi Coach and SoFi Smart Card, which promote the company’s ability to become the one-stop shop for financial services. However, the company shoulders the pressure of rising interest rates and high sensitivity to funding costs. These lingering headwinds could delay refinancing and create earnings pressure.
While both companies hold solid top and bottom-line prospects, DAVE trades significantly cheaper than SoFi Technologies. Therefore, we urge investors to add Dave to their portfolios, while a wait-and-see approach is a must for SOFI.
DAVE flaunts a Zacks Rank #1 (Strong Buy), whereas SOFI carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Palantir Technologies is among the top vendors of artificial intelligence (AI) software solutions, and it has been witnessing phenomenal growth in revenue and earnings in recent quarters due to the healthy spending on its offerings by both commercial and government customers.
However, Palantir stock has retreated 33% so far in 2026, primarily due to concerns about its expensive valuation. On the other hand, shares of cloud communications platform provider Twilio (TWLO +2.20%) have jumped by 38% this year, as the demand for the company's AI-focused solutions is now driving stronger revenue and earnings growth.
What's more, Twilio trades at a significantly cheaper valuation than Palantir. Let's look at the factors driving Twilio's growth and check why this AI stock is primed for more gains.
Image source: The Motley Fool.
Twilio's AI products are encouraging its customers to spend more money Twilio's cloud communications platform enables its clients to remain in touch with their customers through voice, text, chat, video, email, and other channels. The company's application programming interfaces (APIs) help customers integrate these communication channels into their applications.
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Twilio's APIs have helped clients replace traditional contact centers with a cloud-based platform, reducing the costs and overhead of operating physical call centers. And now, Twilio is providing its clients with AI tools and solutions to enhance their customer service and drive stronger sales.
Twilio noted on its April earnings call that a digital marketing agency used its voice, messaging, and voice AI solutions to build an AI agent. The client witnessed a 39% increase in bookings in three months following the deployment of this agent, generating an additional $8.4 million in revenue. Not surprisingly, Twilio is now witnessing stronger spending by its clients, who can now gain better insights into customer behavior with the help of AI.
Using AI tools is helping Twilio customers increase product adoption, make appointments, reduce fraud attempts, and increase click rates, among other things. As a result, Twilio's dollar-based net expansion rate increased to 114% in the first quarter, up by seven percentage points from the year-ago period.
This metric compares Twilio's total revenue for the quarter to revenue from the same customer cohort in the year-ago period. A reading of more than 100% means that Twilio's existing customers have increased their adoption of its offerings or have increased the usage of its products. Getting more business from existing customers is ideal for Twilio's bottom line, as it won't have to spend additional money on customer acquisition.
This explains why Twilio's earnings per share increased by 31.5% year over year in Q1 to $1.50. That was well above the 20% jump in its top line to $1.41 billion. What's more, Twilio is now expecting stronger growth in 2026. It now expects revenue to increase by 14% to 15% in 2026 to $5.8 billion, up from the prior expectation of 12%. It is also expecting a stronger jump in both earnings and free cash flow.
However, don't be surprised to see Twilio increase its guidance further as the year progresses. That's because the integration of AI in cloud communications applications will boost its addressable market to $158 billion by 2028. It was earlier anticipating $119 billion in revenue from its core communications and data platform markets.
So, it is easy to see why analysts have been becoming bullish about Twilio's top-line growth prospects.
Data by YCharts
The attractive valuation and earnings growth prospects suggest more upside for investors The improvement in Twilio's revenue growth and the company's ability to win more business from existing customers explain why analysts expect healthy, double-digit earnings growth.
Data by YCharts
It won't be surprising if it exceeds those expectations. But even if Twilio's earnings increase in line with consensus estimates and it trades at 34 times earnings after three years (in line with the tech-focused Nasdaq-100 index's earnings multiple), its stock price could reach $264 (based on the $7.77 earnings per share estimate seen in the above chart). That's a potential 37% jump from current levels.
Given that Twilio is trading at 34 times forward earnings, investors are getting a good deal on this growth stock. Also, its sales multiple of 5.7 is almost in line with the Nasdaq Composite index. So, investors looking to capitalize on the AI software market's growth can consider buying Twilio as it offers a nice mix of growth and value.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about Sterling Infrastructure (STRL - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Sterling Infrastructure currently has an average brokerage recommendation (ABR) of 1.00, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by nine brokerage firms. An ABR of 1.00 indicates Strong Buy.
Of the nine recommendations that derive the current ABR, nine are Strong Buy, representing 100% of all recommendations.
Brokerage Recommendation Trends for STRL
Check price target & stock forecast for Sterling Infrastructure here>>>
The ABR suggests buying Sterling Infrastructure, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is STRL a Good Investment?In terms of earnings estimate revisions for Sterling Infrastructure, the Zacks Consensus Estimate for the current year has increased 1.9% over the past month to $19.12.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Sterling Infrastructure. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Sterling Infrastructure may serve as a useful guide for investors.
NEW YORK--(BUSINESS WIRE)--Piper Sandler Companies (NYSE: PIPR), a leading investment bank, is pleased to announce the addition of John D'Amico as a managing director in the Piper Sandler restructuring group. D'Amico will be focused on advising a broad range of clients in complex restructurings and special situation transactions.With approximately 25 years of investment banking and corporate advisory experience, D'Amico has advised companies, boards of directors, official and ad hoc creditor com.
Key Takeaways ACHR expands flight testing to validate aircraft systems and support regulatory certification.ACHR advances Midnight certification through compliance, testing and system validation activities.ACHR certification progress supports future aircraft deliveries and commercial deployment plans. Archer Aviation Inc. (ACHR - Free Report) continues making progress toward aircraft certification, a critical milestone in its path to commercial operations. The company is working closely with regulators to complete certification activities for its Midnight aircraft while continuing flight testing, system validation and compliance efforts. Achieving certification is expected to support commercial deployment and strengthen Archer Aviation's position within the emerging electric aircraft market.
Aircraft certification requires extensive testing and validation to demonstrate that an aircraft satisfies regulatory safety and performance standards. Archer Aviation continues expanding its test program by evaluating aircraft systems, flight characteristics and key components while generating data that supports the certification process. These activities help the company refine its aircraft while advancing toward regulatory approval.
Certification progress also strengthens Archer Aviation's commercial prospects. Reaching this milestone would enable the company to begin aircraft deliveries, support planned customer deployments and execute commercial agreements. Continued advancement through the certification process also reflects Archer Aviation's growing operational and engineering capabilities as it prepares for commercial production.
As the advanced aviation market evolves, regulatory approval is expected to remain one of the most important milestones for industry participants. Archer Aviation's continued focus on certification activities positions the company to support future commercial operations while strengthening its long-term growth outlook.
Companies Advancing Aircraft Certification ProgramsAircraft developers continue investing in certification activities as they prepare next-generation aircraft for commercial service. Companies like Joby Aviation, Inc. (JOBY - Free Report) and BETA Technologies, Inc. (BETA - Free Report) are also progressing certification efforts for their electric aircraft platforms.
Joby Aviation continues advancing flight testing and certification activities for its electric aircraft while working toward commercial passenger operations.
Beta Technologies is making progress in the certification of its electric aircraft through continued flight testing, system validation and regulatory engagement to support future commercial operations.
Earnings Estimates for ACHR StockThe Zacks Consensus Estimate for 2026 and 2027 earnings per share suggests a year-over-year decline of 61.90% and growth of 7.51%, respectively.
Image Source: Zacks Investment Research
ACHR Stock Trading at a DiscountArcher Aviation is trading at a discount relative to the industry, with a trailing 12-month price-to-book of 1.78X compared with the industry average of 6.02X.
Image Source: Zacks Investment Research
ACHR Stock Price PerformanceOver the past three months, ACHR shares have fallen 1.4% against the industry’s 3.9% growth.
Image Source: Zacks Investment Research
ACHR’s Zacks RankArcher Aviation currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AI-Driven Cardiovascular Diagnostics Company Brings Early Detection Technology to Capital Markets
TORONTO--(BUSINESS WIRE)--Cboe Canada Inc. (“Cboe Canada”) today announced the listing of GuideAI Health Corp. (“GuideAI”), an artificial intelligence healthcare company focused on improving the detection, management, and outcomes of vascular disease. The company's common shares are now available for trading on Cboe Canada, under the symbol GDAI.
GuideAI is developing an AI platform designed to transform complex medical imaging and clinical data into actionable diagnostic insights. Its mission is to make advanced cardiovascular diagnostic intelligence accessible to a broader range of healthcare providers beyond major academic and research centers.
"We are pleased to welcome GuideAI to Cboe Canada," said CEO, Joacim Wiklander. "Their work at the intersection of artificial intelligence and cardiovascular health represents exactly the kind of innovative, high-growth company that Canadian public markets should be supporting. We look forward to their continued growth as a publicly listed company."
The listing on Cboe Canada gives GuideAI access to an internationally recognized exchange with deep expertise in emerging sectors and a strong commitment to capital formation for innovative companies.
"Going public marks an important milestone for GuideAI as we scale our platform and broaden access to life-changing diagnostic technology," said Raj Shah, CEO of GuideAI Health Corp. "We are excited to join the Cboe Canada community and look forward to delivering on our mission for patients, clinicians, and shareholders alike."
Investors can trade shares of GDAI through their usual investment channels, including discount brokerages and full-service dealers. To explore all listed securities on Cboe Canada, click here.
Cboe Canada continues to attract innovative companies and asset managers by offering a streamlined listing process, competitive fee structure, and access to a diverse and engaged investor base. The exchange is home to leading Canadian and international growth companies, ETFs from Canada’s most reputable ETF issuers, and an expansive suite of Canadian Depositary Receipts (CDRs). Cboe Canada consistently facilitates close to 15% of all trading volume in Canadian listed securities.
About Cboe Canada
Cboe Canada is Canada’s senior stock exchange providing a best-in-class listing experience for issuers that are shaping the economies of tomorrow. Fully operational since 2015, Cboe Canada lists companies and investment products seeking a robust and internationally recognized platform that enables investor trust, quality liquidity, and broad awareness including unfettered access to market data.
Connect with Cboe Canada: Website | LinkedIn | X
About GuideAI Health Corp.
GuideAI Health Corp. is a healthcare technology company using artificial intelligence to enable the early detection of vascular disease and support more precise treatment decisions. Its platform analyzes routine CT scans to identify peripheral vascular disease. By surfacing disease earlier, GuideAI aims to improve patient outcomes while helping hospitals and radiology groups deliver more comprehensive vascular care.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Outfront Media (OUT - Free Report) Headquartered in New York, OUTFRONT Media Inc. is a leading provider of out-of-home (OOH) advertisement space in key U.S. markets. With billboard and transit displays, the company provides advertising structures and sites to diverse industries across the largest markets in the United States. Its inventory consists of billboard displays primarily located on heavily traveled highways and roadways in top Nielsen Designated Market Areas and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the United States. The company has displays in approximately 120 markets across the United States, including the 25 largest markets. As of Dec. 31, 2025, the company had approximately 19,100 lease agreements with approximately 17,500 different landlords.
OUT is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Finance stock. OUT has a Momentum Style Score of B, and shares are up 3.1% over the past four weeks.
Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.04 to $2.26 per share. OUT boasts an average earnings surprise of +12.1%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, OUT should be on investors' short list.
Key Takeaways RadNet's DeepHealth received FDA clearances for BAC Assessment and Mammo Dx functionalities.BAC Assessment detects breast arterial calcifications on 2D and 3D screening mammograms.Mammo Dx compares current and prior mammograms to track lesion changes and reduce recalls. DeepHealth, a wholly owned subsidiary of RadNet (RDNT - Free Report) , recently received FDA clearances for two new functionalities within its AI-powered Breast Suite. The FDA clearances expand its AI-powered Breast Suite with cardiovascular risk assessment and prior exam integration, strengthening its end-to-end breast imaging platform. The approvals cover Breast Arterial Calcification (BAC) Assessment and prior exam integration into ProFound Pro, which will be marketed as Mammo Dx.
The BAC Assessment automatically detects breast arterial calcifications on standard mammograms to identify the potential risk of cardiovascular disease. Whereas Mammo Dx compares current and prior mammograms to track lesion changes, improving cancer detection and reducing patient recalls. Both functionalities are now commercially available in the United States.
Per management, DeepHealth's strategy has always focused on using AI to find disease early. The launch of BAC Assessment and Mammo Dx transforms its Breast Suite into a fully integrated suite of solutions that gives radiologists a complete patient overview and adds clinical confidence in the top causes of death in U.S. women.
Likely Trend of RDNT Stock Following the News
Shares of RDNT have gained 1.2% since the announcement on Thursday. Year to date, the stock has declined 14.9%, underperforming the industry’s 14.3% growth and the S&P 500’s 7.4% rise.
The FDA clearance of BAC Assessment and Mammo Dx is positive for RadNet as it expands DeepHealth's AI-powered breast imaging portfolio and strengthens its competitive position. The new solutions enhance cancer detection and cardiovascular risk assessment and improve radiologist decision-making without additional imaging. In addition, deployment across RadNet's imaging centers will generate real-world validation, support broader customer adoption and reinforce the company's AI-driven growth strategy.
RDNT currently has a market capitalization of $4.78 billion.
Image Source: Zacks Investment Research
More on the FDA-Cleared Functionalities
BAC Assessment automatically identifies breast arterial calcifications on both standard 2D (FFDM) and 3D (DBT) screening mammograms without requiring additional imaging. These calcifications have been associated with an increased risk of future cardiovascular events such as heart attacks and strokes.
In clinical testing, the assessment demonstrated more than 90% sensitivity and over 88% specificity across dense and non-dense breast tissue. The assessment will be deployed across RadNet imaging centers for real-world validation.
Mammo Dx enables radiologists to analyze current and prior mammograms together, helping identify subtle tissue changes and undetected lesions in a single examination. By incorporating historical findings into the diagnostic workflow, the solution aims to improve cancer detection, reduce false-positive recalls and support more informed clinical decision-making.
With these additions, DeepHealth's Breast Suite offers a comprehensive AI platform supporting cancer detection, cardiovascular risk assessment, breast density evaluation, future cancer risk assessment and workflow optimization. So far, components of Breast Suite support diagnostic accuracy and standardization of care across more than 10 million mammograms annually worldwide.
Industry Prospects Favoring the Market
Going by the data provided by Precedence Research, the artificial intelligence (AI) in the breast imaging market is valued at $666.9 million in 2026 and is expected to witness a CAGR of 15.9% through 2035.
Factors like increased breast cancer awareness and early detection, growing health insurance and an increasing aging population are boosting the market’s growth.
Other News
DeepHealth recently launched Reporting Pro, an AI-powered reporting solution that streamlines radiology workflows. The platform combines speech recognition, AI-generated findings and impressions, automated measurements, quality assurance and structured reporting into a single, integrated workflow for radiologists.
RDNT’s Zacks Rank & Key Picks
Currently, RDNT has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are BrightSpring Health (BTSG - Free Report) , Globus Medical (GMED - Free Report) and West Pharmaceutical (WST - Free Report) .
BrightSpring Health, currently sporting a Zacks Rank #1 (Strong Buy), reported first-quarter 2026 adjusted earnings per share (EPS) of 39 cents, which beat the Zacks Consensus Estimate by 34.5%. Revenues of $3.61 billion surpassed the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSpring Health has an estimated long-term earnings growth rate of 46.5%. BTSG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 14.6%.
Globus Medical, currently carrying a Zacks Rank #2 (Buy), reported a first-quarter 2026 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 22.1%. Revenues of $759.9 million beat the Zacks Consensus Estimate by 4.0%.
GMED has an estimated long-term earnings growth rate of 10.2%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 26.3%.
West Pharmaceutical, carrying a Zacks Rank #2 at present, reported first-quarter 2026 EPS of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
West Pharmaceutical has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.4%.
LOS ANGELES, June 29, 2026 (GLOBE NEWSWIRE) -- The Schall Law Firm, a national shareholder rights litigation firm, reminds investors of a class action lawsuit against Helen of Troy Limited (“Helen of Troy” or “the Company”) (NASDAQ: HELE) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.
Investors who purchased the Company’s securities between April 24, 2024 and October 8, 2025, inclusive (the “Class Period”), are encouraged to contact the firm before August 3, 2026.
If you are a shareholder who suffered a loss, click here to participate.
We also encourage you to contact Brian Schall of the Schall Law Firm, 2049 Century Park East, Suite 2460, Los Angeles, CA 90067, at 310-301-3335, to discuss your rights free of charge. You can also reach us through the firm's website at www.schallfirm.com, or by email at [email protected].
The class, in this case, has not yet been certified, and until certification occurs, you are not represented by an attorney. If you choose to take no action, you can remain an absent class member.
According to the Complaint, the Company made false and misleading statements to the market. Helen of Troy misled investors about the success of its Project Pegasus restructuring program. The Company touted the “fuel” produced by Project Pegasus, despite what it called “implementation hiccups.” The Company continued to tout its restructuring effort, telling shareholders, "despite the delayed savings related to our Tennessee distribution center, Project Pegasus continues to move forward. We have made good progress on the cost of goods sold work streams, implementing multiple projects that reduce costs and simplify our supplier base." Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Helen of Troy, investors suffered damages.
Join the case to recover your losses.
The Schall Law Firm represents investors around the world and specializes in securities class action lawsuits and shareholder rights litigation.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and rules of ethics.
CONTACT:
The Schall Law Firm
Brian Schall, Esq.,
www.schallfirm.com
Office: 310-301-3335 [email protected]
Jones Lang LaSalle (JLL) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might help the stock continue moving higher in the near term.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Jones Lang LaSalle (JLL - Free Report) Chicago-based Jones Lang LaSalle Incorporated — popularly known as JLL — is a leading full-service real estate firm that provides corporate, financial and investment management services to corporations and other real estate owners, users and investors worldwide.
JLL is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. JLL has a Growth Style Score of B, forecasting year-over-year earnings growth of 21.5% for the current fiscal year.
For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $1.09 to $22.84 per share. JLL boasts an average earnings surprise of +12.1%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, JLL should be on investors' short list.
Key Takeaways ELF enters fiscal 2027 with more growth levers but slower momentum in its flagship brand. Rhode topped $500M in annualized global retail sales and grew net sales more than 80%. ELF expects fiscal 2027 net sales of $1.835B-$1.865B and adjusted EBITDA of $379M-$385M. e.l.f. Beauty, Inc. (ELF - Free Report) enters fiscal 2027 with a wider platform but a more complicated investment setup.
Rhode, Naturium, e.l.f. SKIN and international expansion give the company more growth levers. The key question is whether those levers can offset slower momentum in the flagship e.l.f. brand.
ELF Has More Than One Growth Enginee.l.f. Beauty is no longer just a low-price cosmetics story. Its portfolio now includes e.l.f. Cosmetics, e.l.f. SKIN, rhode, Naturium and Well People, spanning mass beauty, prestige skin care and digital-led brands.
The shift has changed the risk profile. Non-e.l.f. brands rose from 0% to 30% of global consumption over the past three years, while skin care increased from 9% to 23%. That lowers dependence on a single product cycle and gives ELF multiple paths to growth.
The Estee Lauder Companies Inc. (EL - Free Report) remains a relevant benchmark in prestige beauty because its portfolio spans skin care, makeup, fragrance and hair care. Ulta Beauty, Inc. (ULTA - Free Report) is also central to the beauty ecosystem as a specialty retailer that connects consumers with mass, prestige and emerging brands.
Rhode Gives e.l.f. Beauty New ReachRhode is the clearest growth catalyst in the portfolio. On an annualized basis in fiscal 2026, the brand generated more than $500 million in global retail sales and about $390 million in net sales, with net sales rising more than 80% year over year.
Its retail start has been notable. Rhode reached the number one beauty brand ranking in Sephora North America and delivered record-breaking launches with Sephora in the United Kingdom and MECCA in Australia and New Zealand.
Distribution still leaves room for growth. Rhode is in less than 20% of Sephora’s global stores, while about 20% of its direct-to-consumer sales and 74% of social followers are outside the United States.
Image Source: Zacks Investment Research
ELF Needs Its Core Brand to ReaccelerateThe flagship e.l.f. brand still drives the investment case. e.l.f. Cosmetics produced about $1.8 billion in fiscal 2026 global retail sales and gained 115 basis points of U.S. color cosmetics market share during the year.
That scale also makes the recent slowdown harder to ignore. e.l.f. brand global consumption moderated from high single digits in fiscal 2026 to low single digits in the final 12 weeks of the year, as spring 2026 innovation produced less lift across core items than expected.
Management is responding through pricing, innovation, international focus and leadership changes. The company cut the price of Halo Glow Skin Tint from $18 to $14, with initial tests showing a 38% lift on Amazon and a 36% lift across all retailers.
e.l.f. Beauty Faces Margin PressureTop-line growth is not fully flowing through to earnings. Fiscal 2026 net sales rose 25%, while adjusted EBITDA increased 13%, showing that spending and cost pressures are absorbing part of the revenue benefit.
Marketing and digital expenses were about 24% of net sales in fiscal 2026. The Zacks Rank #3 (Hold) company is also navigating tariff exposure, inflation and a more retail-heavy Rhode channel mix, which can affect near-term profitability as the brand scales beyond direct-to-consumer sales. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fiscal 2027 outlook still points to growth. Management expects net sales of $1.835 billion to $1.865 billion and adjusted EBITDA of $379 million to $385 million, compared with fiscal 2026 adjusted EBITDA of $335 million.
How ELF Stock Signals Fit the SetupELF looks like a balanced story rather than a straightforward momentum call. Rhode, Naturium, e.l.f. SKIN and international growth have expanded the company’s runway, but the core brand must reaccelerate for investors to regain confidence in organic growth.
The stock’s setup is also constrained by signal gaps. Specific Zacks Rank and Style Scores are not available for investors to lean on, leaving the brand reset, Rhode’s rollout and margin execution as the more useful near-term markers.
For investors, that argues for discipline. A favorable Zacks Rank and strong Style Scores can help identify stocks with better earnings-revision and style characteristics over the next one to three months, but ELF’s current case depends more on execution than on a clean quantitative read.
e.l.f. Beauty (ELF - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this cosmetics company have returned +20.4% over the past month versus the Zacks S&P 500 composite's -2.9% change. The Zacks Cosmetics industry, to which e.l.f. Beauty belongs, has lost 4% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, e.l.f. Beauty is expected to post earnings of $0.73 per share, indicating a change of -18% from the year-ago quarter. The Zacks Consensus Estimate has changed -15.5% over the last 30 days.
The consensus earnings estimate of $3.31 for the current fiscal year indicates a year-over-year change of +5.8%. This estimate has changed -1.6% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.57 indicates a change of +7.8% from what e.l.f. Beauty is expected to report a year ago. Over the past month, the estimate has changed -2.7%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for e.l.f. Beauty.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For e.l.f. Beauty, the consensus sales estimate for the current quarter of $424.55 million indicates a year-over-year change of +20%. For the current and next fiscal years, $1.86 billion and $1.99 billion estimates indicate +13.6% and +7% changes, respectively.
Last Reported Results and Surprise Historye.l.f. Beauty reported revenues of $449.29 million in the last reported quarter, representing a year-over-year change of +35.1%. EPS of $0.32 for the same period compares with $0.78 a year ago.
Compared to the Zacks Consensus Estimate of $425.82 million, the reported revenues represent a surprise of +5.51%. The EPS surprise was +10.34%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
e.l.f. Beauty is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about e.l.f. Beauty. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways ELF is leaning on skincare and global expansion as larger parts of its growth profile. Skincare rose to 23% of global consumption, helped by Rhode, Naturium and e.l.f. SKIN. ELF still faces softer core brand demand, tariff uncertainty and heavy marketing spending. e.l.f. Beauty, Inc. (ELF - Free Report) is moving into a new phase as skincare and international distribution become larger parts of its growth profile.
The company still depends on value-led cosmetics, but investors are watching whether Rhode, Naturium and e.l.f. SKIN can extend the runway.
ELF Is Riding the Skincare ShiftSkincare has become the clearest portfolio shift at e.l.f. Beauty. The category represented roughly 9% of global consumption three years ago and has grown to about 23%, supported by Rhode, Naturium and e.l.f. SKIN.
That shift broadens ELF beyond color cosmetics. e.l.f. SKIN generated about $200 million in fiscal 2026 global retail sales, while Naturium delivered nearly $250 million, roughly double its pre-acquisition level.
Rhode adds a prestige skincare platform with demand across direct-to-consumer and retail channels. The trend places ELF near The Estee Lauder Companies Inc. (EL - Free Report) , whose portfolio spans skincare, makeup, fragrance and hair care.
e.l.f. Beauty Sees Global White SpaceInternational expansion is the second major trend. International net sales grew 38% in fiscal 2026, but markets outside the United States still represented only about 21% of total company sales.
That mix leaves room for ELF to scale abroad through new retail partners and additional doors. The company added eight international retail partners across 14 countries during fiscal 2026 and exited the year with improving trends in the U.K. and Germany.
Rhode strengthens that opportunity. The brand generated more than $500 million in annualized fiscal 2026 retail sales and about $390 million in net sales, yet remains in less than 20% of Sephora’s global store base.
Ulta Beauty, Inc. (ULTA - Free Report) is relevant because specialty beauty retailers help shape discovery across cosmetics, skincare and wellness. Its role as a major beauty destination highlights why retail access still matters for digitally popular brands.
ELF Shows Digital Demand Still MattersELF’s model remains digitally oriented and community-led. The Zacks Rank #3 (Hold) company uses connected commerce, social media and direct consumer engagement to test product ideas, build demand and support launches. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The approach also supports speed. Management is fast-tracking products not originally planned for fiscal 2027 after softer spring innovation, showing how quickly ELF can adjust its calendar.
For a multi-brand platform, that feedback loop can be valuable. Rhode, Naturium and e.l.f. SKIN can all benefit from the same playbook of marketing, digital commerce, retail execution and faster product response.
Image Source: Zacks Investment Research
ELF Also Reflects Cost and Demand StrainThe trend story is not risk-free. ELF’s namesake brand consumption slowed from high-single-digit growth in fiscal 2026 to low-single-digit growth in the final 12 weeks of the year.
Management also cited softer spring innovation and a more pronounced decline in units after a fiscal 2026 price increase. Value-led beauty is not immune to a more selective consumer backdrop.
Costs are another constraint. The fiscal 2027 outlook assumes tariff rates remain at 35%, and oil near $100 per barrel could add $15 million to $20 million of cost headwinds.
Marketing and digital spending is expected to remain high at roughly 23% to 25% of net sales in fiscal 2027. Those investments may support brand building but limit near-term earnings leverage when core demand softens.
Where ELF Fits in a Trend-Led Stock ViewELF has credible exposure to skincare penetration, international expansion, social commerce and value-led product innovation. Fiscal 2027 sales guidance of $1.84 billion to $1.90 billion still implies 12% to 14% year-over-year growth.
The stock view is less straightforward because EBITDA margin is expected to be in the high teens in the first half before improving toward about 21% for the full year. That puts more weight on execution as the year progresses.
The risk-reward profile looks balanced rather than clearly bullish. Strong trend exposure supports investor interest, but softer core demand, tariff uncertainty and heavy marketing spending keep earnings visibility limited.
Without a disclosed Zacks Rank or Style Scores, investors have fewer clean quantitative signals to lean on. ELF may fit watchlists focused on skincare and global beauty growth, but the stock still needs better evidence of core demand recovery and margin stability before the setup becomes conviction-driven.
Key Takeaways ELF trades at 19.3X forward earnings after falling 48.5% over the trailing 12 months.Rhode grew fiscal 2026 net sales more than 80% and remains in under 20% of Sephora stores.ELF's buy case hinges on Rhode growth, skin care gains and a core brand reset lifting earnings. e.l.f. Beauty, Inc. (ELF - Free Report) has pulled back sharply, but the stock is not being valued like a no-growth story. ELF trades at 19.3X forward 12-month earnings while management still projects fiscal 2027 sales growth of 12%-14%.
That leaves investors weighing a cheaper multiple against a business in transition. Rhode, Naturium and international expansion support the growth case, but core brand softness and margin pressure keep the buy case from being straightforward.
ELF Valuation Looks Lower but Not CheapELF’s valuation has reset materially. Shares are down 14.4% year to date and 48.5% over the trailing 12 months, while the stock trades well below its five-year median earnings multiple of 52.36X.
The current 19.3X multiple sits close to the Zacks sub-industry’s 18.78X and below the S&P 500’s 20.95X. That is more reasonable than ELF’s former premium, but not cheap for a company that still needs above-category growth, portfolio scaling and better operating leverage.
e.l.f. Beauty Still Has Real Growth DriversThe strongest reason to keep ELF on the watchlist is that it no longer depends only on e.l.f. Cosmetics. Non-e.l.f. brands now represent about 30% of global consumption, while skincare has climbed to roughly 23% of the mix from 9% three years ago.
Rhode is the clearest growth engine. The brand delivered about $390 million in fiscal 2026 net sales, grew more than 80% year over year and remains in less than 20% of Sephora’s global stores.
Naturium delivered nearly $250 million in fiscal 2026 global retail sales, roughly double its pre-acquisition level. International markets represented 21% of fiscal 2026 net sales, giving ELF another runway if it can extend its retail and digital playbook.
Ulta Beauty, Inc. (ULTA - Free Report) gives investors another way to assess beauty demand through specialty retail. Coty Inc. (COTY - Free Report) , with exposure across fragrance, color cosmetics and skin care, remains a relevant peer for tracking broader beauty-category sentiment.
ELF Earnings Power Is Under PressureRevenue growth alone does not settle the investment debate. In the fourth quarter of fiscal 2026, revenues increased 35% year over year to $449.3 million, but adjusted earnings fell 59% to 32 cents per share.
The pressure came from spending. Marketing and digital investment increased to 31% of sales from 23% a year earlier, while adjusted selling, general and administrative expenses rose to 67% of sales from 52%.
Management expects first-half fiscal 2027 adjusted EBITDA margins to remain in the high teens. The Zacks Rank #3 (Hold) company is still investing behind pricing initiatives, faster innovation, Rhode support and global infrastructure, which may delay a clearer earnings recovery. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ELF Guidance Requires a Second-Half TurnFiscal 2027 guidance calls for net sales of $1.84 billion to $1.90 billion and adjusted EBITDA of $379-$385 million. Adjusted earnings are expected in the range of $3.27-$3.32 per share.
That outlook depends on improvement after a muted start. Guidance assumes first-quarter organic sales decline at a high-single-digit rate before benefiting from easier comparisons and better execution later in the year.
The timing matters because the core e.l.f. brand has slowed from high-single-digit consumption growth in fiscal 2026 to low-single-digit growth in the final 12 weeks of the year. Pricing tests, accelerated launches and potential cost relief need to arrive on schedule.
Image Source: Zacks Investment Research
What ELF Signals Say About Risk and RewardELF looks more balanced after the decline, but not clean enough to call a simple value opportunity. The stock is cheaper than it was, yet the business still needs Rhode growth, skincare expansion and a core-brand reset to translate into steadier earnings growth.
The Zacks Rank and Style Scores are most useful when they give investors a cleaner signal. A favorable setup would typically include a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) along with A or B Style Scores, especially on the VGM Score, which combines value, growth and momentum indicators.
For ELF, the current debate is more mixed. The valuation reset improves the entry point, but weaker core trends and high near-term investment intensity limit earnings visibility. That makes the stock one to watch for execution progress rather than a clear buy based on valuation alone.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Urban Outfitters (URBN - Free Report) Urban Outfitters, Inc. was founded in 1970 and is headquartered in Philadelphia, PA. It is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company’s key brands include Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly. Anthropologie also includes the Terrain and Maeve brands. Free People also includes FP Movement. The company operates in North America and Europe, and also sells through franchise partners in the Middle East.
URBN is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Retail-Wholesale stock. URBN has a Momentum Style Score of A, and shares are up 1.2% over the past four weeks.
For fiscal 2027, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.17 to $6.01 per share. URBN boasts an average earnings surprise of +12.2%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, URBN should be on investors' short list.
Krystal Biotech (KRYS) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
Key Takeaways APO capped ADS withdrawals after redemption requests neared 17% versus a 5% quarterly limit.ARES capped ASIF withdrawals after redemption requests exceeded 14% of outstanding shares.Blackstone and KKR have also faced elevated redemption requests in recent quarters. The private credit industry is once again under scrutiny after leading alternative asset managers Apollo Global Management (APO - Free Report) and Ares Management (ARES - Free Report) imposed fresh limits on investor withdrawals from their flagship retail-focused private credit funds. The restrictions came after redemption requests once again exceeded the funds' quarterly repurchase limits.
Private credit has become one of the fastest-growing segments of alternative investments by offering investors attractive yields through loans to middle-market companies. However, unlike publicly traded bonds, these loans are inherently illiquid and cannot be sold quickly without potentially disrupting valuations.
To balance illiquid assets with investors' demand for periodic liquidity, most non-traded private credit funds allow quarterly redemptions of only up to 5% of outstanding shares. When redemption requests exceed that limit, withdrawals are processed on a pro-rata basis.
That is precisely what occurred again this quarter.
Apollo capped withdrawals from its roughly $25-billion Apollo Debt Solutions (“ADS”) fund after investors sought to redeem nearly 17% of outstanding shares during the latest redemption window. Because the fund permits repurchase of only 5% of shares per quarter, this marks the second consecutive quarter in which investor requests exceeded the allowable limit.
Similarly, Ares Management restricted withdrawals from its approximately $23-billion Ares Strategic Income Fund (“ASIF”) after redemption requests climbed above 14% of outstanding shares, also well beyond the fund's quarterly limit. The parallel actions by two of the industry's largest managers suggest that redemption pressures are broad-based across retail private credit rather than isolated incidents.
Here's Why Investors Are Pulling BackThe redemption wave reflects shifting investor sentiment toward an asset class that has expanded rapidly over the past several years. Higher interest rates initially boosted the appeal of direct lending by increasing yields, attracting capital from institutional investors, family offices and high-net-worth individuals.
More recently, however, concerns over private credit valuations, uncertainty surrounding the impacts of artificial intelligence on software-sector borrowers, and expectations of lower interest rates have prompted some investors to rebalance their portfolios.
Importantly, both Apollo Global and Ares Management continue to report that the overwhelming majority of their underlying loans remain current. This indicates that the withdrawal restrictions stem primarily from liquidity management rather than weakening credit fundamentals.
A notable trend is the persistence of redemption pressure across multiple quarters. Apollo has reported that gross outflows have exceeded inflows this year, while ARES has also experienced a meaningful increase in redemption requests compared with the prior quarter.
Management at both firms noted that much of the redemption has come from offshore investors, family offices and certain institutional clients, whereas demand from U.S. retail wealth investors has remained comparatively resilient. This divergence suggests that investor confidence has softened unevenly rather than deteriorating across the entire market.
The challenge extends beyond Apollo and Ares Management. Other leading asset managers, including Blackstone (BX - Free Report) and KKR & Co. (KKR - Free Report) , have also experienced elevated redemption requests in recent quarters, underscoring that liquidity pressures are becoming an industry-wide phenomenon rather than a manager-specific issue.
What it Means for the Private Credit MarketThe latest withdrawal caps reinforce one of private credit's defining trade-offs: investors gain access to higher yields and reduced mark-to-market volatility in exchange for limited liquidity. During periods of heightened uncertainty, redemption gates serve as a critical safeguard, allowing managers to avoid selling long-term loans at distressed prices and protecting remaining investors from value erosion.
As private credit continues to evolve into a mainstream asset class, investors are likely to place greater emphasis not only on credit performance but also on fund liquidity structures, redemption policies and portfolio transparency.
For industry leaders such as Apollo Global, Ares Management, Blackstone and KKR & Co., the ability to navigate this period without meaningful credit losses will be an important test of underwriting discipline and portfolio resilience. At the same time, recurring redemption limits may reshape investor expectations, reinforcing that private credit is designed as a long-term investment, wherein liquidity is deliberately constrained in exchange for enhanced returns.
Levi Strauss & Co. (NYSE:LEVI) will release its second quarter earnings report after the closing bell on Wednesday, July 8.
Analysts expect the San Francisco, California-based company to report quarterly earnings of 24 cents per share, up from 22 cents per share in the year-ago period. The consensus estimate for Levi Strauss’ quarterly revenue is $1.52 billion. It reported $1.45 billion last year, according to Benzinga Pro.
On April 7, Levi Strauss reported better-than-expected first-quarter financial results and raised its FY26 guidance.
Levi Strauss shares gained 2.3% to close at $24.54 on Friday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.
Considering buying LEVI stock? Here’s what analysts think:
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JFrog (FROG) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the road.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of MPLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Viking Therapeutics, Inc. (VKTX - Free Report) .
Viking Therapeutics currently has an average brokerage recommendation (ABR) of 1.30, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 20 brokerage firms. An ABR of 1.30 approximates between Strong Buy and Buy.
Of the 20 recommendations that derive the current ABR, 17 are Strong Buy, representing 85% of all recommendations.
Brokerage Recommendation Trends for VKTX
Check price target & stock forecast for Viking Therapeutics here>>>
While the ABR calls for buying Viking Therapeutics, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is VKTX a Good Investment?Looking at the earnings estimate revisions for Viking Therapeutics, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at -$4.7.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Viking Therapeutics. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Viking Therapeutics.
