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Rush Enterprises, Townsquare, CounterPath, Xcerra And Sphere 3D As Zacks Bull And Bear Of The Day

By Zacks Investment ResearchStock MarketsJan 08, 2018 09:13PM ET
Rush Enterprises, Townsquare, CounterPath, Xcerra And Sphere 3D As Zacks Bull And Bear Of The Day
By Zacks Investment Research   |  Jan 08, 2018 09:13PM ET
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For Immediate Release

Chicago, IL – January 9, 2018 – Zacks Equity Research highlights Rush Enterprises (NASDAQ:RUSHA) as the Bull of the Day and Townsquare Media (NYSE:TSQ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CounterPath Corporation (NASDAQ:CPAH) , Xcerra Corporation (NASDAQ:XCRA) and Sphere 3D Corporation (NASDAQ:ANY) .

Here is a synopsis of all five stocks:

Bull of the Day:

Rush Enterprises owns and operates the biggest network of commercial vehicle dealerships in the U.S., with over 100 locations in 22 states.

From Peterbilt heavy-duty trucks to John Deere construction equipment, its dealerships provide an integrated, one-stop source for new and used heavy-duty trucks and construction equipment; aftermarket parts, service and body shop facilities; and a wide array of financial services.

Rush was actually the first automotive or truck dealer to go public—its IPO was in 1996—and this Zacks Rank #1 (Strong Buy) stock could see huge gains going forward, especially in this current market environment.

Strong Third Quarter Results

Back in October, Rush reported strong third quarter results across the board.

Earnings came in at 72 cents a share, a record high for the company and soaring way past the Zacks Consensus of 48 cents per share. Net income was $29.8 million compared to $14.9 million reported in the year ago quarter.

Total revenues were $1.257 billion, also surpassing our consensus estimate and growing 14.7% year-over-year, while parts, service and body shop revenues increased 11.7% to $375.8 million.

U.S. Class 8 truck sales of 51,574 units jumped 11%, outpaced the broader industry, and accounted for 7.1% of the U.S. Class 8 truck market. The company’s Class 4-7 medium-duty sales were also on the rise last quarter, spiking 14.5% to over 61,000 units.

Rush attributed this growth mainly to “increased activity from energy customers,” and noted that vehicles sales remain “solid” in other industries like construction, refuse, and general freight, among others.

Rising Earnings Estimates

As a result, growth estimates have been steadily increasing, with analysts growing more and more bullish on RUSHA lately.

Earnings are expected to grow over 77% for the current quarter, and revenues could see growth of 17.4% in the same time frame.

As for the current year, year-over-year earnings growth sits at roughly 92%, with one analyst revising their estimate upwards in the last 60 days. The current consensus is $2.17 per share, up from $2.08 just two months ago.

This sentiment is even carrying over into next year, and Rush’s earnings are projected to rise about 14.6%. The Zacks Consensus has jumped from $2.32 to $2.49 in the past 60 days.

Bear of the Day:

Townsquare Media is an entertainment and digital marketing solutions company that owns and operates radio, digital, and live event properties in small and mid-sized markets across the U.S.

They own 317 radio stations including WYRK, KLAQ, K2, and NJ101.5, over 325 local websites, and music festivals such as Mountain Jam, WE Fest, and the Taste of Country Music Festival.

Townsquare also has entertainment events like the America on Tap craft beer festival series and the Insane Inflatable 5K obstacle race series in its portfolio.

Sitting at a Zacks Rank #5 (Strong Sell), the company was hit hard recently by challenges in one of its smaller business segments, which negatively impacted its performance.

Lackluster Third Quarter Earnings

Back in November, Townsquare reported lackluster results for its fiscal 2017 third quarter.

Earnings of 51 cents per share missed the Zacks Consensus of 61 cents per share and represented a negative surprise of 16.4%. Net income decreased 9.9% to $14.3 million.

Total revenues came in at $164 million, also missing our consensus estimate and falling just 1% year-over-year.

Breaking it down by segment, Local Marketing Solutions revenues, which is the core of TSQ’s business according to co-CEO Dhruv Prasad, grew 1.7% to $257 million. Entertainment revenues, however, fell 4.1% to $136.2 million thanks in part to revenue declines in the company’s live events business.

Adjusted EBITDA also decreased 11.1%.

Earnings Estimates Lowered

Townsquare’s earnings growth trajectory has taken a hit lately, with analysts becoming more bearish on the media company.

For the current quarter, Zacks expects TSQ’s earnings to decline about 31.6%; the consensus has fallen just two cents, from $0.15 to $0.13 per share, in the last 60 days.

Earnings are also expected to fall nearly 30% for the current fiscal year, and two analysts have revised their estimates downward in the last 60 days.

Additional content:

3 Tech Stocks to Buy Under $10 Now

Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.

That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks.

When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have. We are also keenly aware of the latest sector trends and make sure to cover all of the hottest industries.

Today we’ve highlighted three stocks that fall into the broad “technology” sector. Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better. Take a look at the strong estimate revision activity and other factors that make these companies stick out right now:

1. CounterPath Corporation

Prior Close: $4.15

CounterPath designs desktop and mobile application software, including voice over Internet protocol, unified communications, and fixed-mobile convergence solutions. The stock is currently a Zacks Rank #2 (Buy) and has soared more than 80% over the past four weeks.

Our consensus estimate for the company’s upcoming fiscal year earnings has risen by 13 cents within the last 30 days. The firm is now expected to be profitable and improve its EPS results by over 1,000% next year. CounterPath is also witnessing cash flow growth of 16%, and its P/S ratio of 2.00 comes at a significant discount to the “Computer – Software” industry average.

2. Xcerra Corporation

Prior Close: $10.00

Xcerra engages in designing, manufacturing, and marketing automatic test equipment for the semiconductor industry. On top of its Zacks Rank #2 (Buy), XCRA is sporting an “A” grade for Value in our Style Scores system, meaning that this low-priced stock could be giving investors a great bang for their buck right now.

Shares of Xcerra are trading at just 10.31 times earnings and 1.27 times sales, so it is clear that the revenue and profitability picture is solid. Meanwhile, the company’s full-year consensus earnings estimate has gained 27 cents over the past 60 days. Earnings are now expected to expand 98% this year. Still, with a PEG ratio of 0.86, investors are getting a good price for that earnings growth right now.

3. Sphere 3D Corporation

Prior Close: $2.62

Sphere 3D is a software company offering professional visualization solutions via hybrid cloud, cloud, and on-premise implementations. Times have been tough for the company over the past year or so, but after four solid earnings beats, estimates have risen and the stock has earned a Zacks Rank #1 (Strong Buy).

Sphere 3D is in the red, but management has reported narrower-than-expected losses in four consecutive quarters. Meanwhile, revenues are expected to improve by over 15% in the upcoming year. ANY is trading at just a fraction of its total sales, so investors with an eye on rock-bottom P/S ratios may be interested right now. And if the firm can work towards profitability soon, shares could really take off.

Bottom Line

A stock’s market price is not a clear indicator of whether it is a good investment. However, the nice thing about the Zacks Rank is that it can be applied to stocks of any price. For smaller investors looking to find solid tech stocks at lower prices, this list is a great place to start.

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

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 more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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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.

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Zacks Investment Research

800-767-3771 ext. 9339 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.

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 information about the performance numbers displayed in this press release.

Rush Enterprises, Inc. (RUSHA): Free Stock Analysis Report

Sphere 3D Corp. (ANY): Free Stock Analysis Report

Townsquare Media, Inc. (TSQ): Free Stock Analysis Report

CounterPath Corporation (CPAH): Free Stock Analysis Report

Xcerra Corporation (XCRA): Free Stock Analysis Report

Original post

Zacks Investment Research
Rush Enterprises, Townsquare, CounterPath, Xcerra And Sphere 3D As Zacks Bull And Bear Of The Day

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Rush Enterprises, Townsquare, CounterPath, Xcerra And Sphere 3D As Zacks Bull And Bear Of The Day

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