Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Vertex Pharma, A10 Networks, Microsoft, Visa and eBay highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL –July 21, 2017 –Zacks Equity Research highlightsVertex Pharma (NASDAQ: VRTX Free Report) as the Bull of the Day A10 Networks, Inc. (NYSE: ATEN Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft (NASDAQ: MSFT Free Report ), Visa (NYSE: V Free Report) and eBay (NASDAQ: EBAY Free Report).

Here is a synopsis of all five stocks:

Bull of the Day :

Cystic Fibrosis (CF) is a rare genetic disease that causes persistent lung infections and limits the infected person’s ability to breathe. According to the CF Foundation, “ In the lungs, the mucus clogs the airways and traps bacteria leading to infections, extensive lung damage, and eventually, respiratory failure. In the pancreas, the mucus prevents the release of digestive enzymes that allow the body to break down food and absorb vital nutrients .” Our Zacks Bull of the Day, Vertex Pharma (NASDAQ: VRTX Free Report) has created a new drug that improves lung functions in patients.

This Zacks Ranked #1 (Strong Buy) company discovers, develops and markets small molecule drugs that address major unmet medical needs. The company has eight drug candidates in clinical development to treat viral diseases, inflammation, cancer, autoimmune diseases and neurological disorders. Vertex has created its pipeline using a proprietary information-based approach to drug design that integrates multiple technologies in biology, chemistry and biophysics aimed at increasing the speed and success rate of drug discovery.

Recent Announcements

On Tuesday July 18, management announced that three of their four next-generation correctors in development to treat cystic fibrosis (CF) patients had positive Phase 1, and Phase 2 data. Highlighting the report was the efficacy and safety that was shown by the three triplet regiments. The data showed consistency across many regiments and patient populations, and is viewed as a game changer for the disease. Given this positive data, it is expected that the company will be granted Breakthrough Therapy Designation (BTD) for their triplet regiment; cutting the 12 month timeline to 6 months. It is estimated that the 24-week Phase three trials will begin in the first half of 2018, and potentially be launched in the late part of 2019.

This breakthrough therapy is expected to deliver increased sales and earnings growth over the next 5 years if and when it eventually gets full approval. Further, it is estimated that this triplet regiment will penetrate almost 100% of the $9 billion CF market.

The company is reporting Q2 17 earnings after the market closes on July 26th.

Streets Response

After the Phase I and II trial results, several brokerage firms made significant upgrades to their ratings and target prices; Citigroup maintained their Buy rating, and raised their target price from $135 to $190, Oppenheimer increased their rating from Perform to Outperform, and set their target price to $150, and Stifel reiterated their Buy rating and lifted their target price from $154 to $182.

Most Accurate Estimate Versus Zacks Consensus

According to the Zacks models, the most accurate estimates for the current and future quarters are well above the consensus estimates; Q2 17 most accurate is $0.10, above the $0.06 consensus (+66.7% upside), Q3 17 most accurate is $0.11, ahead of the $0.06 consensus (+83.3% upside), FY 17 most accurate is $0.74, above the $0.50 consensus (+48% upside), and FY 18 most accurate is currently at $1.69 ahead of the consensus of $1.38 (+22.5% upside).

Bear:

This Zacks Ranked #5 (Strong Sell) company provides software based application networking solutions. Its solutions enable enterprises, service providers, Web giants, and government organizations to enhance, secure, and optimize the performance of their data center applications and networks. The company delivers its solutions on optimized hardware appliances and as virtual appliances across its Thunder Series and AX Series product families. A10 Networks, Inc. (NYSE: ATEN Free Report) is headquartered in San Jose, California.
 

Recent News
 

On July 13th management preannounced their Q217 results; both earnings and revenues are now expected to come in significantly below the Zacks consensus estimates. Revenues are now expected to be in a range of $52.5-53.5 million, about $10 below the Zacks expectation. Earnings EPS will now be in a range between -$0.06 and -$0.05, well below the expected $0.02 level.

Management blamed delayed deals in North American, and in Japan. Most believe that many large service provider deals were the main cause of the negative revision of both earnings and revenues. It is estimated that about 40% of the company’s revenues are derived from the service provider segment. Further, these segment deals typically suffer from unpredictable timing, and tend to be lumpy throughout the year.

Management’s Comments

According to Lee Chen, President and CEO, “ We are disappointed with our preliminary results. Revenue came in below our guidance as a number of opportunities in our pipeline did not close primarily in North America and to a lesser degree in Japan. Key deals remain in our pipeline and we are diligently working to improve our execution. We remain confident that our investments in security and cloud will serve as a strong foundation to penetrate these faster-growing segments of our market .”

Additional content:

Microsoft Posts Big Beat, Visa & eBay Also Report

Microsoft (NASDAQ: MSFT Free Report ) blew the doors off earnings estimates after the bell today, posting EPS of 98 cents per share in its fiscal Q4, easily surpassing the 71 cents per share expected in the Zacks consensus estimate. Revenues were also better than expected, albeit less so, putting up $24.7 billion as opposed to the $24.2 billion in our consensus.

Poking into the earnings report a little, Microsoft's Azure revenue growth stands out at +98% year over year. Azure is the company's enterprise cloud-computing platform. Commercial cloud revenues overall came in at $18.9 billion. Productivity revenue rose 21% year over year to $8.4 billion, which was in-line with estimates. Windows PC revenue gained 1%, whereas Surface slipped 2% in the quarter.

Microsoft shares are trading up in the after-market today, but currently by less than a full percentage point. Keep in mind this stock has been strong in 2017 -- +19.5% year to date -- as well as year over year -- +38%. Yet at 21x earnings, Microsoft does not appear to be a stock priced for perfection.

Visa (NYSE: V Free Report ), however, may just be. The credit card giant is up roughly 25% year to date, and currently trading near all-time highs. The company also beat fiscal Q3 estimates on the top and bottom lines: 86 cents per share versus 80 cents expected, on revenues of $4.57 billion which easily outpaced the $4.36 billion in the Zacks consensus. An impressive 28.5 billion transactions were processed by Visa in the quarter. This marks at least the fifth-straight earnings beat for Visa.

Finally, eBay (NASDAQ: EBAY Free Report) shows mixed Q2 results after the bell today. Earnings of 34 cents per share (accounting for stock-based employee compensation and other before nonrecurring items) missed the Zacks consensus of 36 cents. But $2.33 billion in sales was marginally better than the $2.31 billion expected. But Gross Merchandise Volume (GMV) came in at $20.5 billion, notably beneath the $21.4 billion analysts had been looking for. The company also reduced Q3 EPS guidance, and shares in late trading are currently down 3%.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

Get the full Report on VRTX – FREE

Get the full Report on ATEN – FREE

Get the full Report on MSFT – FREE

Get the full Report on V – FREE

Get the full Report on EBAY – FREE

Follow us on Twitter:

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Re...

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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
 
Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report
 
A10 Networks, Inc. (ATEN): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Visa Inc. (V): Free Stock Analysis Report
 
eBay Inc. (EBAY): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research