Friday, December 13, 2024

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Visa Inc. (V), Linde plc (LIN) and Thermo Fisher Scientific Inc. (TMO), as well as two micro-cap stocks Tile Shop Holdings, Inc. (TTSH) and Autoscope Technologies Corp. (AATC). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Shares of Visa have gained +21.6% over the year-to-date period against the Zacks Financial Transaction Services industry’s gain of +23.3%. The company’s strategic acquisitions and alliances are fostering long-term growth and consistently driving revenues. 

Visa, fueled by persistent increases in payments, cross-border volumes and sustained investments in technology, is witnessing significant profit growth. The Zacks analyst expects the revenues to grow 9.1% in fiscal 2025. The ongoing shift to digital payments is advantageous for Visa, with strong domestic volumes supporting its overall performance. A robust cash position enables the company to enhance shareholder value. 

However, elevated operating expenses pose margin challenges. We expect adjusted operating expenses to jump 8.1% in fiscal 2025. It is witnessing a volatile cash volume from the Asia Pacific and U.S. regions. Consumer spending growth is also drying up. Moreover, rising client incentives will affect its adjusted revenues.

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

Linde’s shares have outperformed the Zacks Chemical - Specialty industry over the year-to-date period (+8.0% vs. -15.9%). The company being a global leader in industrial gas manufacturing, supplies a wide range of essential gases to industries such as energy, steel, healthcare, manufacturing and electronics. The firm secures long-term contracts with key on-site clients featuring minimum purchase agreements, helping to stabilize earnings during economic downturns.

With a substantial project backlog and a strong balance sheet, Linde is well-positioned for future growth. Linde remains committed to rewarding shareholders through dividends. 

However, increasing competition for new projects poses challenges to the company's return on investment. Additionally, the volatility of energy prices, particularly for natural gas and diesel fuel, presents a significant concern for profitability. Increasing regulatory burden may negatively impact the company’s overall financial health.

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

Shares of Thermo Fisher Scientific have gained +0.9% over the past year against the Zacks Medical - Instruments industry’s gain of +7.7%. The company is braving the ongoing tough economic conditions by utilizing the PPI Business System, resulting in strong financial performance. 

Thermo Fisher Scientific’s growth strategy has been bolstered by several recent product launches, including a pre-transplant risk assessment assay and the international CorEvitas Adolescent Atopic Dermatitis (AD) Registry in the third quarter. Thermo Fisher’s continuous efforts to prioritize its partnership with customers to drive innovation and improve patient care bode well. Robust solvency is an added advantage. The raised 2024 EPS outlook also instils optimism. 

However, the year-over-year decline in revenues in Life Science Solution is discouraging. Volatile macroeconomic uncertainties can also dent its operations.

(You can read the full research report on Thermo Fisher Scientific here >>>)

Tile Shop’s shares have outperformed the Zacks Building Products - Retail industry over the past six months (+3.6% vs. +21.8%). This microcap company with market capitalization of $308.59 million reflects financial resilience with $25.1 million cash, no debt and $73.8 million credit availability, enabling growth. 

Gross margin rose to 66.5% in third-quarter 2024, driven by reduced costs and inventory management. SG&A expenses fell 1.3% as cost-saving measures promised $2.8 million–$4.1 million in annual reductions. 

Product expansion, including the Superior brand and Arbour LVT, targets professionals and budget-conscious consumers. E-commerce enhancements and designer partnerships strengthen competitive positioning. Despite a 7.9% same-store sales declines, an 8.3% sales drop and macroeconomic pressures, adjusted EBITDA remains positive. 

Yet, falling net income, stagnant store growth, high costs, higher taxes and inventory risks pose challenges amid housing market uncertainty. Competition underscores operational challenges.

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

Shares of Autoscope Technologies have gained +43.7% over the past six months against the Zacks Technology Services industry’s gain of +50.7%. This microcap company with market capitalization of $44.45 million is witnessing growth in Europe, Asia and the Middle East, alongside innovations like IntelliSight and Autoscope Analytics, aligns with global ITS demand and U.S. "Vision Zero" goals, enhancing urban safety and traffic efficiency. 

Boasting a high gross margin and cost reductions, the company shows financial stability, whereas its dividend policy supports shareholder returns. A leader in ITS with more than 160,000 installations, its focus on research and development positions it for trends like AI and autonomous vehicles. 

However, declining royalty revenues, heavy reliance on Econolite (99% of revenues), weak product sales (1.3% of total revenues), and competition from Iteris and Wavetronix create challenges for the company. Its dependence on flagship products increases vulnerability to technological disruption, limiting growth in the evolving ITS market.

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

Other noteworthy reports we are featuring today include Bristol-Myers Squibb Company (BMY), Prologis, Inc. (PLD) and Synopsys, Inc. (SNPS).

Mark Vickery
Senior Editor

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

Visa (V) Rides on Increasing Payments Volume, Expenses High

Linde's (LIN) Long-Term Contracts With Minimum Volume Aid

Innovation Spree, Strategic Ties Aid Thermo Fisher (TMO)

Featured Reports

New Drugs Fuel Bristol Myers (BMY) Amid Generic Competition
Per the Zacks analyst, encouraging uptake of new drugs fuel growth for Bristol Myers. However, one of the top drugs Revlimid is facing generics, which has adversely impacted sales.

Expansion Moves Amid Industry Tailwinds to Aid Prologis (PLD)
Per the Zacks Analyst, Prologis is well poised to grow through opportunistic expansions in the industrial real estate market and focus on data centers business, though high supply is a key concern.

Synopsys (SNPS) Banks on Strong Product Menu, Contract Wins
Per the Zacks analyst, Synopsys' focus on strengthening its product portfolio is helping it cater to the growing demand in the EDA market. Deal wins at leading semiconductor companies is a tailwind.

Application Software unit Aids Roper (ROP) Amid Rising Costs
Per the Zacks analyst, Roper's Application Software unit is driven by solid momentum across the Deltek, Frontline, Strata and Aderant businesses. However, High operating costs remain a concern.

Mobile Service, Internet Sales Benefits Charter (CHTR)
Per the Zacks analyst, growth in residential mobile service, Internet and commercial revenues aids Charter's growth partly offset by lower video revenues.

L3Harris (LHX) Gains From Acquisitions Amid Labor Shortage
As per the Zacks analyst, L3Harris Technologies is likely to benefit from increasing strategic acquisitions. Yet labor shortage might result in delays and hurt the company's operating results.

Five Below (FIVE) Focus on Pre-Teen Customers to Fuel Sales
Per the Zacks analyst, Five Below's impressive merchandise, focus on pre-teen customers & pricing strategy should drive sales. However, SG&A expenses deleverage is a concern.

New Upgrades

Buoyant Air Travel Demand Lifts United Airlines (UAL)
The Zacks analyst is impressed by the upbeat demand for air travel. Low fuel costs aid the company's bottom line.

A Solid Product Portfolio, Strategic Deals Aid Masimo (MASI)
The Zacks analyst is upbeat about Masimo's solid product portfolio. Its collaborations with various hospitals, where its products are being used to improve patient outcomes, is an added plus.

Powell (POWL) Gains From Oil, Gas & Petrochemical Markets
Per the Zacks analyst, strength in Powell's oil, gas and petrochemical markets, fueled by growth in energy transition projects, such as biofuels, carbon capture and hydrogen, will lend it momentum.

New Downgrades

Ongoing Affordability Challenges Hurt D.R. Horton (DHI)
The Zacks analyst believes that a slowdown in buyer activity, due to the expectation of rates to fall more in 2025, hurt D.R. Horton. Net sales orders were up only 0.4% in the fiscal fourth quarter.

Soft Product Revenues Affect BCE, Bell Media Underperforms
Per the Zacks analyst, BCE's performance is hurt by weak performance in the product division. A continued downtrend in Bell Media unit remains added woe.

America Movil (AMX) Hit By Macro Headwinds And Rising Costs
Per the Zacks analyst, America Movil's performance in some regions is hindered by macroeconomic and forex challenges. Rising costs and intense competition pose additional concerns.

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

Visa Inc. (V) : Free Stock Analysis Report

Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report

Prologis, Inc. (PLD) : Free Stock Analysis Report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

Synopsys, Inc. (SNPS) : Free Stock Analysis Report

Linde PLC (LIN) : Free Stock Analysis Report

Tile Shop Hldgs, Inc. (TTSH) : Free Stock Analysis Report

Autoscope Technologies Corporation (AATC) : Free Stock Analysis Report

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