For Immediate Release
Chicago, IL – August 18, 2016 – Zacks Equity Research highlights NVIDIA (NASDAQ:NVDA) (NVDA) as the Bull of the Day and DaVita HealthCare Partners (DVA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Cisco Systems (NASDAQ:CSCO) (CSCO), L Brands (NYSE:LB) (L) and NetApp (NASDAQ:NTAP) ( NTAP).
Here is a synopsis of all five stocks:
NVIDIA (NVDA) became a Zacks #1 Rank Strong Buy in January when shares were trading under $30. Since then, the stock has more than doubled and rising earnings estimates have the name back to a #1 again after a strong Q2 earnings report on August 11.
NVIDIA designs, develops and markets a top-to-bottom family of award-winning 3D graphics processors, graphics processing units and related software that set the standard for performance, quality and features for every type of desktop personal computer user, from professional workstations to low-cost computers.
NVIDIA's 3D graphics processors are well known in the video game industry, but the company has been steadily making inroads into virtual reality, education applications and machine learning technology like that for autonomous driving.
I last wrote about NVDA as our Bull of the Day on January 4 and here's what I said...
NVIDIA was the top performing large-cap semiconductor stock of the fourth quarter, with a stunning 60%+ move higher since their Q2 earnings report in early August.
And tonight at the International Consumer Electronics Show (CES) in Las Vegas, the company is likely to reveal further insights into their plans to stay hot on technology investor radars in 2016. In fact, they announced on New Year's Eve that they plan to unveil new technology for self-driving cars.
Firing On All Frontiers
NVIDIA reported revenue for the second quarter ended July 31 of $1.43 billion, up 9% sequentially and up 24% from $1.15 billion a year earlier. This was above the company’s original guidance range of $1.35 billion +/- 2%.
GAAP earnings per diluted share for the quarter were $0.40, compared with $0.05 a year ago and up 21% from $0.33 in the previous quarter.
The company saw growth across all platforms and noted the strong launch of Pascal-based GPUs and growing demand for deep learning applications. Gaming and professional graphics were the leaders, while datacenter and automotive also contributed to growth in the July quarter.
DaVita HealthCare Partners (DVA) became a Zacks #4 Rank Sell in mid-July as analysts began lowering estimates before the company's Q2 report.
On August 8 the company delivered a 3% EPS beat but disappointed with lowered guidance for the year due to difficulties with a recent acquisition.
Since the report, shares have tumbled 13% and most analysts have moved their estimates down again, pushing the stock into the cellar of the Zacks Rank.
The Business of Dialysis
DaVita HealthCare Partners is the second-largest US provider of dialysis services to patients with chronic kidney failure and end stage renal disease. They serve roughly 180,000 patients through a network of 2,179 owned and managed dialysis facilities.
The company offers outpatient, home-based, and hospital inpatient hemodialysis services, ESRD laboratory services and provides management and administrative services to outpatient dialysis centers.
DaVita had revenues of $13.78 billion in 2015 and trailing 12-month (TTM) sales are at $14.36 billion as of June 30. DaVita HealthCare Partners Inc., formerly known as DaVita Inc., is headquartered in Denver, Colorado. With the acquisition of HealthCare Partners (HCP), the company became the largest operator of medical groups and physician networks in the US.
The Quarter Analysts Saw Coming... Mostly
Total revenue increased 8.8% year over year to approximately $3.72 billion and narrowly surpassed the Zacks Consensus Estimate by 1.2%. The year-over-year improvement was mainly attributable to a rise in patient service revenues.
Analysts knew that the HealthCare Partners acquisition was not going according to management's plans. That's why they were lowering estimates in July. But they weren't expecting a $70 million drop in segment guidance.
Here's how analysts at Raymond James broke down the news...
Drivers behind HCP’s lowered 2016 guidance include: 1) fee for service revenue growth of 3% vs. management 6% target, 2) an overestimation of Medicare Advantage reconciliation payments; 3) Medicare Advantage mentorship growth lower than expected and; 4) an acceleration in the re-branding of HCP to the DaVita Medical Group - $5/$10 million more than expected.
Additional content:
Cisco Down on Fiscal Q4 Earnings, L Brands & NetApp Beat
Cisco Systems (CSCO) reported earnings results for its fiscal Q4 after the closing bell Wednesday, beating estimates on both the top and bottom lines. Earnings of 58 cents per share (accounting for stock-based compensation and other BNRI) topped the 55 cents in the Zacks consensus, whereas sales of $12.64 billion improved on the $12.54 billion expected.
However, we are seeing CSCO shares trading lower a tad in the after-market following the earnings report. This comes after a down trading day today to the tune of about -1.3%. Total gross margins for the quarter reached 64.6%, and guidance for Q1 is between -1% and +1%. Cisco also announced a restructuring that will eliminate up to 5500 jobs.
Prior to the earnings report, Cisco carried a Zacks Rank #3 (Hold), with a Value-Growth-Momentum combined grade of C. Cisco is in the top 14% of industries, and shares have risen 3% in the past month, +13.13% year to date. For more information on Cisco's earnings, click here.
L Brands (L), the retail conglomerate that owns Victoria's Secret and Bath & Body Works, among other companies, beat estimates on the bottom line (70 cents per share versus 49 cents) on modestly lower revenues. Guidance for Q3 came in a little below estimates at a range of 40-45 cents per share. Shares were trading up 2% around the time of the announcement. Here's a podcast by Tracey Ryniec and Maddy Johnson discussing L Brands recently.
NetApp (NTAP) is trading up higher than 5% in the late market on a big earnings beat of 46 cents per share (36 cents had been expected). Revenues of $1.29 billion more modestly beat the Zacks consensus of $1.26 billion. The network storage firm has enjoyed a great calendar 2016 so far, up 14% year-to-date prior to the latest earnings release.
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NVIDIA CORP (NVDA): Free Stock Analysis Report
DAVITA HEALTHCR (DVA): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
LOEWS CORP (L): Free Stock Analysis Report
NETAPP INC (NTAP): Free Stock Analysis Report
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