For Immediate Release
Chicago, IL – January 6, 2021 – Zacks Equity Research Shares of Winnebago Industries, Inc. WGO as the Bull of the Day, Alteryx, Inc. AYX as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Deckers Outdoor Corp. DECK, NIKE, Inc. NKE and Lululemon Athletica Inc. LULU.
Here is a synopsis of all five stocks:
Winnebago Industries is a Zacks Rank #1 (Strong Buy) that is a leading producer of recreational vehicles (RVs). The stock has seen some bullish action since the pandemic as people change their travel habits and buy RVs. Recent earnings have given investors more reasons to buy the stock and with COVID-19 still around in 2021, there seems to be plenty of demand coming.
More About WGO
The company was founded in 1958 and is headquartered in Forest City, Iowa. Winnebago employs over 5,500 people and sell its products through independent dealers in the United States, Canada and internationally.
The company is valued at $2 billion and pays a 0.78% dividend. It operates in six segments that focus on towable products, motorhomes, boats and specialty vehicles.
Travel Has Changed
The appeal of camping and other outdoor activities has increased due to COVID-19. Consumers are changing their travel habits from international to domestic and one of the best ways to do this is by camper, RV and even boat.
Hotels and planes still aren’t appealing to people yet and will likely be avoided until the vaccine gets the world to herd immunity. Because this seems to be taking longer than expected, WGO should have continued strength well into 2021.
Last month, the company reported a 64% EPS surprised to the upside. Q1 came in at $1.69 v the $1.03 expected, while revenues came in at $793.1M v the $742M expected. Gross margins, motor home deliveries, backlog, and revenue were all up double-digit percentages year over year.
CEO Michael J. Happe had some comments on what’s to come:
“Throughout the remainder of Fiscal Year 2021, Winnebago Industries will be focused on building upon our market momentum, and doing good in the social arena as well. We are confident that the favorable industry dynamics in the RV and marine markets and the unique appeal of our innovative products will continue to drive market share gains and strong financial results.”
The strong quarter caused analysts to take numbers higher across all-time frames. For next quarter, estimates have ranged from $1.07 to $1.46 over the last 30 days, a hike of 36%. For the current year, we see a 27% jump in estimates for that same time frame.
The Technical Take
Along with every other stock back in March, WGO crashed under $20 a share. From there, it grinded all the way back to $72.65 over the summer as investors realized this new consumer trend of domestic travel.
The stock saw some weakness and traded to the hallway back mark from those March lows. Then WGO spiked on earnings, but has since come back into the 21-day MA at $61.
The stock has support around the $55 level, where the 50 and 200 moving averages reside.
The way Americans travel has changed due to the pandemic. While this won’t last forever, the current situation makes WGO a stock to own into 2021. The stock looks to hit all-time highs, but investors should keep careful eye on earnings as we get past the pandemic in the back half of the year.
Alteryx is a Zacks Rank #5 (Strong Sell) that provides a self-service data analytics software platform for data analysts and scientists. The stock has had a volatile year and is well off its highs. The upcoming quarter is crucial for the bulls to hold technical support, but estimates are trending lower, making investors nervous as we head into earnings season.
About the Company
Alteryx is headquartered in Irvine, CA and employs 1500 people. The company was founded in 1997 and focuses on providing software designed to make advanced analytics accessible to any data worker.
AYX is valued at $7.4 billion and has a Forward PE of 140. Because of this high PE, the company holds a Zacks Style Score of “F” in Value
The stock was riding high over the summer as it approached its Q2 earnings report. The company did beat for the quarter, but guided FY20 down significantly. The stock dropped from $170 to $120 overnight, a loss of 30% just like that.
The stock held its own around the $120 mark until the company guided higher in October, helping the stock jump back above $150. However, when the company reported again in November, the Q4 guide was lowered which dropped the stock back to $120.
This week the company guided Q4 revenue slightly above expectations, but stock reacted by dropping 10%. Cleary not what the market was looking for.
Valuation and Stock Plunge
Alteryx has growth and is beating on revenue, but it is priced for perfection. The issue with the stock is that when the company reports a disappointment, the sellers come aggressively. Additionally, short sellers see opportunity to push the stock down even more, as the bulls who are leveraged are forced out.
The company reports EPS in early February and this quarter will likely be the catalyst for the next 20% up or down. With about a month left to go, estimates have fallen 23% for the current quarter over the last 60 days.
The bulls do have hope, as the current year numbers have ticked up slightly. However, given the volatility of the company’s numbers, investors should ask themselves if it’s worth the risk.
The chart is all over the place, but the bulls seem to be giving up after the revenue guide last week. The $110 level is crucial to hold or the stock will likely trade in to the low $90s. The 200-day moving average is at $129 and will provide a lot of resistance if the stock can rally.
Stocks are going up every day, but AYX continues to struggle and their volatile earnings just aren’t worth the trouble. Investors interested in the company might want to wait until the company proves itself more consistent.
3 Athletic Stocks to Watch as COVID-19 Prompts Fitness at Home
The athletic apparel and footwear market witnessed a rise during the COVID-19 pandemic with people carrying out their work and fitness routines from home. This looks like a lasting trend now as COVID-19 cases across the United States continue to surge. Per the latest data from the Johns Hopkins University, coronavirus cases in the United States crossed 20 million as of Jan 5. Although the rollout of the vaccine has started in the country, it will still take time for the vaccines to reach the majority of the population.
Social distancing norms to curb the spread of the virus forced gyms and yoga centers to close down. Hence, people resorted to buying more activewear apparel as the distinction among office wear, casual and activewear began to fade.
People started wearing comfortable clothing and accessories which would allow them to exercise or relax at home without having to change. Athleisure wear or apparel fit the bill as both regular and exercise wear. In fact, the athleisure wear market is expected to grow in the future as well. Notably, Allied Market Research expects the global athleisure market to reach $257.1 billion by 2026 from a market size of $155.2 billion in 2018, as mentioned in a Heuritech article.
Moreover, the U.S. athletic apparel market is also predicted to contribute to this growth most significantly as it is the largest in the world, as quoted in a Linchpin article. The article estimated that the U.S. market for athletic wear will grow to $69.2 billion in 2021 from $54.3 billion in 2015. Notably, this stands to account for 36% of athletic apparel sales worldwide.
Meanwhile, as an accessory to athletic apparel, performance footwear is set to witness growth in 2021, per a press release by the NPD Group. Notably, the article mentioned that the health and fitness segment during the pandemic benefited the performance running category in 2020. NPD predicted that running shoes are well poised to “outperform the overall market as consumers continue turning to the activity to stay active yet socially distant.”
3 Stocks to Watch
The athletic apparel industry looks poised to witness growth in the near term as people remain focused on maintaining their fitness while staying comfortable. Moreover, performance footwear is also estimated to grow as people look to stay active. This makes it judicious to keep an eye on stocks that have the potential to make the most of this trend. Hence, we have selected three such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Deckers Outdoor, along with its subsidiaries, designs, markets and distributes footwear, apparel and accessories for casual lifestyle use and high-performance activities. It offers premium footwear, apparel and accessories under the UGG brand name; sport sandals, shoes, and boots under the Teva brand name.
The company also provides footwear and apparel for ultra-runners and athletes under the Hoka brand name. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 22.5% over the past 90 days. The company’s expected earnings growth rate for the current year is 15.9%.
NIKE, along with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment and accessories worldwide. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 4.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 85%.
Lululemon Athletica, along with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women, men and female youth internationally. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings increased 3.1% over the past 90 days. The company’s expected earnings growth rate for next year is 44.4%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Alteryx, Inc. (AYX): Free Stock Analysis Report
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