Thursday, March 27, 2025

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 The Walt Disney Co. (DIS), The Progressive Corp. (PGR) and $Citigroup Inc(C-N)$. (C), as well as two micro-cap stocks Tucows Inc. (TCX) and Team, Inc. (TISI). 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 >>>

Ahead of Wall Street

The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens and attempts to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.

You can read today's AWS here >>> Moderating Economic Prints, Mixed Pre-Markets

Today's Featured Research Reports

Shares of Walt Disney have gained +5.2% over the past six months against the Zacks Media Conglomerates industry’s gain of +11.2%. The company is benefiting from slow yet steady growth in the Media and Entertainment Distribution business. Disney's domestic theme park and resort businesses are gaining from guest spending growth attributable to increases in per capita guest spending at theme parks and cruise lines.

In Entertainment, DIS expects double digit percentage segment operating income growth in fiscal 2025. The Zacks analyst expects fiscal 2025 net sales to increase 3.3% from fiscal 2024. Disney+’s profitability is expected to be hurt by higher investments in content, which will also increase programming and production costs in the Media and Entertainment Distribution segment.

Disney+ is facing tough competition from the likes of Netflix and HBO Max. DIS expects a modest decline in Q2 fiscal 2025 Disney+ Core subscribers. Its leveraged balance sheet remains a concern.

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

Progressive’s shares have outperformed the Zacks Insurance - Property and Casualty industry over the past year (+34.4% vs. +22.4%). The company continues to gain on higher premiums, given its compelling product portfolio, leadership position and strength in both Vehicle and Property businesses.

Progressive’s focus on becoming a one-stop insurance destination, catering to customers opting for a combination of home and auto insurance, augurs well for the company's growth. Policies in force and retention ratio should remain healthy. Competitive pricing to retain current customers and address customer needs with new offerings should continue to drive policy life expectancy.

However, exposure to catastrophe losses induces underwriting volatility. Escalating expenses due to higher losses and settlement expenses remain an overhang on the margin. Its high debt level induces higher interest expense concerns.

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

Shares of Citigroup have gained +18.8% over the past six months against the Zacks Financial - Investment Bank industry’s gain of +19.1%. The company's business transformation initiatives, including consumer banking business exits and organizational overhaul efforts, will boost its financials in the long run.

So far Citigroup has already closed its consumer banking business in nine countries. Upbeat activities across debt capital markets are expected to support its investment banking (IB) business. Its net interest income (NII) will likely benefit from the Fed rate cuts. Given a solid liquid position, its capital distribution seems sustainable.

Increased cross-border payment activity will aid financials. Its earnings surpassed the estimates in each of the trailing four quarters. However, rising expenses will likely hinder its bottom-line growth. Subdued fee income growth will limit its top-line expansion.

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

Tucows’ have underperformed the Zacks Internet - Content industry over the past year (-8.2% vs. +22.5%). This microcap company with market capitalization of $188.11 million is facing risks including persistent net losses, Ting’s slower growth post-build freeze, mobile service commitments, and competitive pressures across all segments that may limit long-term upside and margin expansion.

Nevertheless, Tucows offers a compelling mix of stable cash flow and scalable growth. Its Domains segment remains a reliable profit engine, generating $254.6 million in 2024 revenue with 76% renewal rates and expansion into adjacent services.

Wavelo, its telecom software platform, grew revenue to $39.9 million with 95% gross margin and rising Tier 1/2 interest, positioning it for long-term margin expansion. Ting is transitioning from capital-heavy builds to profitability, reaching breakeven EBITDA in December and narrowing losses. Consolidated 2024 results showed 7% revenue growth and a 125% jump in Adjusted EBITDA.

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

Shares of Team’s have outperformed the Zacks Building Products - Maintenance Service industry over the past year (+132.6% vs. +17.9%). This microcap company with market capitalization of $75.35 million have seen Operational improvements, cost control, and a $13.3 million free cash flow swing underscore growing financial resilience.

A new $10 million cost-reduction program and gains in both business segments support continued margin expansion, with management targeting double-digit EBITDA margins and 15% growth in 2025. Team’s turnaround is gaining momentum, marked by three consecutive years of adjusted EBITDA growth, including a 28% increase to $54.3 million in 2024, despite a slight revenue decline.

However, high debt, ongoing net losses, reliance on cyclical end markets, declining revenue despite stable demand, limited contract visibility, potential dilution from a complex capital structure, and inflationary cost risks present challenges. While operational execution is strong, sustained profitability and deleveraging are key to unlocking long-term equity upside.

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

Other noteworthy reports we are featuring today include Canadian Natural Resources Ltd. (CNQ), Carvana Co. (CVNA) and IDEXX Laboratories, Inc. (IDXX).

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

Disney (DIS) Banks on Disney+, Theme Parks Business Growth

Personal & Commercial business lines Aid Progressive (PGR)

Citigroup's (C) Streamlining Efforts Aid Amid Rising Costs

Featured Reports

IDEXX (IDXX) Banks on Strategic Gains, Currency Woes Worry
The Zacks analyst is impressed with IDEXX gaining strategically from premium instrument placements globally and net customer gains across testing modalities. Yet, adverse FX impacts may hurt growth.

Strong Booking Trends Aid Carnival (CCL), High costs Ail
Per the Zacks analyst, Carnival benefits from sustained demand strength, increased booking volumes and marketing efforts. However, increased operating expenses and cruise costs are concerns.

Seagate (STX) Rides on Mass Capacity Demand Amid High Debt
Per the Zacks analyst, Seagate's performance is gaining from improving demand for mass capacity storage solutions and expansion into the SSD storage market. However, high indebtedness is a concern.

MGM Resorts (MGM) Banks on Sports Betting, High Costs Ail
Per the Zacks analyst, MGM Resorts is likely to benefit from sports betting expansion, property enhancements and strategic partnerships. However, high costs and heightened competition are a headwind.

Halozyme's (HALO) ENHANZE Drug Delivery Technology Aid Growth
Per the Zacks Analyst, Halozyme's collaboration deals with large pharma companies related to ENHANZE technology, drives revenues growth. Over dependence on partners for revenues remains a concern.

Reliable Assets, Customer Increase Aid Southwest Gas (SWX)
Per the Zacks analyst, Southwest Gas' investment in infrastructure is making its assets more reliable. Economic improvement and expanding customer base are creating demand and boosting performance.

G-III Apparel (GIII) to Benefit From its Key Owned Brands
Per the Zacks analyst, G-III Apparel remains confident in the strength of its brands and business model, expecting double-digit growth in key owned brands in fiscal 2026.

New Upgrades

Canadian Natural (CNQ) to Gain from 100% Ownership in AOSP
The Zacks analyst believes Canadian Natural's strategic acquisitions, including full AOSP ownership, will significantly improve its production capacity and cash flow prospects.

Carvana's (CVNA) Cost-Cut Efforts Are Paying Off
The Zacks analyst believes that Carvana's focus on operational efficiency, cutting retail reconditioning, SG&A, and transport costs, will continue to drive margin expansion.

Loans, Dealer Enrollments to Aid Credit Acceptance (CACC)
Per the Zacks analyst, decent loan demand, rising dealer enrollments, high cash-flow generating, and a capital-light business model, will likely will likely support Credit Acceptance's financials.

New Downgrades

Robert Half (RHI) Struggles with Operational Challenges
The Zacks analyst thinks that Robert Half faces operational challenges, raising concerns about its efficiency. As the market remains competitive, questions arise about the company's stability.

Weak Demand & High Debt to Weigh on Harley-Davidson (HOG)
With soft retail and wholesale demand, Harley-Davidson expects HDMC revenue to be flat to down 5% in 2025. The Zacks analyst is also worried about HOG's elevated leverage, which stands at 70%.

Lower Gross Margin Hurts FormFactor's (FORM) Prospects
Per the Zacks analyst, FormFactor's prospects are challenged by weak demand in key markets, export restrictions, and expected gross margin contraction.

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Citigroup Inc. (C) : Free Stock Analysis Report

The Walt Disney Company (DIS) : Free Stock Analysis Report

The Progressive Corporation (PGR) : Free Stock Analysis Report

Tucows Inc. (TCX) : Free Stock Analysis Report

Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report

IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report

Team, Inc. (TISI) : Free Stock Analysis Report

Carvana Co. (CVNA) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research