Chicago, IL –November 1, 2024 – Zacks Equity Research shares BlackSky Technology BKSY,as the Bull of the Day and Amkor Technology AMKR, as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Palantir Technologies Inc. PLTR NVIDIA NVDA and SoundHound AI SOUN.
Here is a synopsis of all five stocks:
BlackSky Technology is a Zacks Rank #1 (Strong Buy) that has a D for Value and an A for Growth. The company is a provider of real time geospatial intelligence and global monitoring services. Let’s explore more about this company in this Bull of The Day article.
BlackSky Technology, Inc. is a space-based intelligence company, which engages in the business of delivering real-time imagery, analytics, and high-frequency monitoring of most critical and strategic locations, economic assets, and events. The firm is also involved in providing geospatial intelligence, imagery and related data analytic products and services, and mission systems that include the development, integration, and operation of satellite and ground systems to government and commercial customers. The company was founded in 2014 and is headquartered in Herndon, VA.
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
BlackSky Technology has a good earnings history with the company topping the Zacks Consensus in three of the last four quarters.
Over the course of the last four quarters the average positive earnings surprise works out to be 10.7%.
Earnings estimates revisions is what the Zacks Rank is all about.
Estimates are moving higher for BKSY.
This quarter has increased from a loss of $0.70 to a loss of $0.61.
Next quarter has also lifted from a loss of $0.42 to a loss of $0.29.
The moves in the quarterly estimates have occurred over the last 30 days.
The full year fiscal 2024 has increased from a loss of $2.60 to a loss of $2.33 over the last 60 days.
Next year has seen a slight increase from a loss of $1.72 to a loss of $1.20 over the last 60 days.
For fiscal 2024 the company is expected to show 14% growth with $107.7 million in sales. Next year analysts are calling for sales of $134.4M for growth of 24.75%. Investors love to see revenue acceleration like this.
No earnings means no PE to lean on, so we go straight to price to book. At 1.7x book, the value conscious investors should like this stock as well. Price to sales at 1.2x is very low, so there is a lot of room to run here.
Margins are negative for this year and next, but they should make 5K - 8K basis point moves in the coming quarters.
Amkor Technology is a Zacks Rank #5 (Strong Sell) after the company missed the Zacks Consensus Estimate when the last reported on October 28. The stock was hit hard after the miss thanks to some soft guidance. The company is in the semiconductor ecosystem providing packaging and test services. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Amkor Technology, Inc. engages in the provision of outsourced semiconductor packaging and test services. Its services include design, package characterization, test, and wafer bumping services. The company was founded in 1968 and is headquartered in Tempe, AZ.
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of Amkor Technology, I see three beats and one miss of the Zacks Consensus Estimate over the last year. The most recent quarter was the miss with the company posting $0.49 when the consensus was calling for $0.50. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The company guided EPS for next quarter to a range of $0.28 - $0.44 when the consensus was calling for EPS of $0.55.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For AMKR I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from $1.54 to $1.42 over the last 60 days.
The next year has moved from $2.29 to $1.97 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Palantir Technologies Inc. will report its third-quarter 2024 results on Nov 4, after the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported stands at 9 cents, indicating 28.6% growth from the year-ago reported quarter. The consensus estimate for total revenues stands at $705.1 million, indicating 26.3% year-over-year growth. There has been no change in analyst estimates or revisions lately.
The company has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters and matched thrice, with an earnings surprise of 4.2%, on average.
Palantir Technologies Inc. price-eps-surprise | Palantir Technologies Inc. Quote
Our proven model doesn’t conclusively predict an earnings beat for PLTR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
PLTR has an Earnings ESP of -1.22% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
We expect a significant year-over-year improvement in the company’s top line in the to-be-reported quarter, driven by healthy business from existing as well as new customers, strengthening both the Government and Commercial segments.
The consensus estimate for Government revenues is pegged at $377.3 million, indicating 22.7% year-over-year growth. The consensus mark for Commercial revenues is pegged at $329.7 million, indicating 31.6% year-over-year growth.
Palantir shares have surged a whopping 154.4% year to date. This performance has significantly outpaced the 28.1% rise of its industry and the 22.5% increase of the Zacks S&P 500 composite. Interest in this prominent AI-focused stock remains strong as investors seek opportunities to capitalize on the trend. Similarly, other noteworthy AI stocks have experienced significant gains, reflecting the overall positive sentiment in the market. NVIDIA has gained 181.4% and SoundHound AI has rallied 157.1% year to date.
At this moment, it is worth noting that at its current valuation, Palantir is looking pricey. Based on training 12-month EV-to-EBITDA, PLTR is currently trading at 387.07X, way above the industry’s 50.29X. If we look at the forward 12-month Price/Earnings ratio, the company’s shares are currently trading at 103.67X forward earnings, well above the industry’s 39.9X.
Palantir’s AI strategy is comprehensive. It combines its proprietary Foundry and Gotham platforms with a solid plan to promote AI adoption across the government and commercial sectors. The company’s expertise in AI-driven information warfare and cybersecurity supports its sustained growth amid evolving global security demands. In the government sector, Palantir is aligning its AI strategy with U.S. defense priorities. In the commercial space, Palantir's AI Platform (AIP) boot camps — providing hands-on experience to over 1,000 companies — have proven instrumental in customer acquisition.
In the second quarter of 2024, Palantir’s government revenues grew 23% year over year, driven by strong demand for its AI-powered products. U.S. commercial revenues also surged 55%, fueled by the success of AI platforms. Additionally, the company reported an 88% year-over-year increase in operating income and a 1,200 basis points increase in adjusted operating margin, reflecting improved cost management and higher-margin government contracts.
Palantir's latest guidance suggests a 3% sequential increase in revenues for the third quarter of 2024, indicating a potential slowdown in business growth in the latter half of the year. Nevertheless, the company's agility in AI-led information warfare and cybersecurity continues to position it for sustained growth amidst evolving global security needs.
However, given the stock's current high valuation based on EV-to-EBITDA and Price/Earnings ratios, it might be prudent for investors to wait for a potential market correction, especially when PLTR does not seem poised for an earnings beat. Palantir remains fundamentally strong, but a better entry point could emerge if the stock undergoes some price adjustment.
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