SolarEdge Technologies, Tilly's, Darling Ingredients, Lamb Weston and Hain Celestial highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research

For Immediate Release

Chicago, IL – February 26, 2020 – Zacks Equity Research Shares of SolarEdge Technologies SEDG as the Bull of the Day, Tilly's TLYS asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Darling Ingredients Inc. DAR, Lamb Weston Holdings Inc. LW and The Hain Celestial Group, Inc. HAIN.

Here is a synopsis of all five stocks:

Bull of the Day:

SolarEdge Technologiesstock has soared over the last year and it topped our fourth quarter earnings and revenue estimates last week. The solar energy firm’s outlook remains strong, as part of a red-hot renewable energy space.

SolarEdge’s Pitch

SolarEdge’s intelligent inverter solutions have helped change the way power is stored and managed within a solar photovoltaic system. Many people commonly refer to these simply as solar panels, but they are part of a larger solar energy capturing and converting systems that look poised to play a larger role as they become more efficient and affordable.

SolarEdge’s DC optimized inverter offerings are vital because they convert the variable direct current outputs of a PV solar panel into usable alternating current. The firm’s DC optimized inverters help to maximize power generation at the individual PV module-level. Plus, SolarEdge is able to help lower the cost of energy produced by the solar PV systems.

SEDG began selling its offerings on a commercial level back in 2010. Since then, its DC optimized inverter systems and its products have been installed in solar PV systems in over 130 countries around the world. And SolarEdge’s offerings are geared toward businesses, homeowners, solar professionals, and energy grid services.

As we mentioned at the top, SolarEdge topped our Q4 fiscal 2019 estimates last week. The firm’s 2019 revenue surged 52% billion, while adjusted full-year earnings soared 40% to $4.44 a share. “This year, we continued to expand our solar business and also made significant investments in our acquired businesses that open new opportunities for us to expand our product offerings into adjacent segments and leverage our highly talented technological teams to become leaders in those markets,” CEO Zvi Lando said in prepared Q4 remarks.

Other Fundamentals

Investors can see in the nearby chart that SEDG stock has soared over the last three years, up nearly 800%, against the solar market’s 140% climb. SolarEdge did hit a rough patch between May 2018 until the start of 2019. Since then, however, SEDG shares have skyrocketed 300% to destroy fellow high-flyers such as Apple (AAPL) and Nvidia (NVDA).

SolarEdge stock climbed after its Q4 release on February 19. But the stock has slipped as part of the broader market pullback recently, which might set up a better buying opportunity for those high on the stock that currently hovers around $134 a share.

Despite its industry-topping run, SEDG shares are trading at a discount compared to its industry in terms of forward 12-month earnings estimates and right near the S&P 500 when it comes to forward sales.

Bear of the Day:

Tilly'sshares have plummeted over 45% in 2020, and in mid-January the apparel retailer announced sluggish holiday period sales and cut its outlook.

What’s Going On?

Tilly’s is a trendy clothing, shoes, and apparel retailer geared toward teenagers and young adults. The firm is inspired by “West Coast fashion” and competes against the likes of Urban Outfitters (URBN), Zumiez (ZUMZ), and American Eagle (AEO).

The Irvine, California-headquartered firm had been on a solid run from late May 2019 until December. The stock began to fall around December 15 and then it tumbled after it updated its guidance on the back of rough holiday season sales on January 13.

Tilly’s said that its comparable store net sales, including e-commerce, decreased by 2.0% for the holiday period, which came against a 5.8% climb in the year-ago period. “Following a strong Black Friday weekend and Cyber Monday, our business experienced an unexpected deceleration in net sales and store traffic during the second and third weeks of December, resulting in a disappointing 2019 holiday season overall,” CEO Ed Thomas said in prepared remarks.

Outlook

Tilly’s management said that its fourth quarter comp sales would fall between 2% and 3%, based on its tough holiday period. With this in mind, our Zacks estimates call for the company’s overall Q4 revenue to pop 1.15% from the year-ago period to $172.6 million.

At the bottom end of the income statement, the company’s adjusted earnings are projected to tumble 26% to $0.20 per share.

Investors can also see that TLYS earnings revisions activity has moved in the wrong direction for Q4, fiscal 2019, and 2020. For example, its fourth quarter consensus estimates fell from $0.30 to its current $0.20 a share in the last 60 days.

Bottom Line

Tilly’s downward earnings estimate revisions activity helps it earn a Zacks Rank #5 (Strong Sell) at the moment. The stock is trading at under $7 per share, which might make it attractive to some investors looking for cheap stocks.

However, Tilly’s has been pretty volatile over the last several years and until it shows signs of a recovery, it is likely best to stay away from TLYS stock.

Additional content:

Buy 3 Food Stocks That Have Been Crushing the Industry

The Zacks Food-Miscellaneous industry is not in its best shape. Several companies in the space are grappling with inflated input costs for grains, vegetables, dairy items, meat and animal feed, among other commodities. Moreover, escalated logistics, warehouse and packaging expenses have raised the cost burden. Increased investments in promotions and brand building are other factors impacting food companies’ margins.

A number of companies are dealing with cost pressure. Some of these companies expect the cost woes to linger, per their last earnings call. Apart from this, companies in the food space have been bearing the brunt of intense competition on grounds of pricing, product assortment and responsiveness to changing consumer preferences.

These have made things sour for the Food – Miscellaneous industry, which is ranked #187 (among the bottom 27%) out of more than 250 Zacks industries. Nonetheless, the space is not devoid of flavorful picks. Despite such roadblocks, there are food companies that are performing well on their focus on innovation, product launches and diversification, and solid pricing initiatives. Also, benefits from acquisitions and divestitures are helping these companies strengthen their portfolios.

These upsides along with stringent cost-containment and restructuring efforts have helped a host of players stand out in the food industry that has gained just 2.5% in the past six months. That said, let’s take a closer look at these three Food – Miscellaneous stocks, which carry a solid Zacks Rank and have crushed the industry in the past six months.

3 Delectable Picks in the Food Space

Darling Ingredients Inc.is undoubtedly a solid bet. The Zacks Rank #1 (Strong Buy) stock has rallied 48.9% in six months. The global provider of natural ingredients is benefiting from its diverse business model, extensive reach, rising demand for health and nutrition, and the focus on plant expansions. Darling Ingredients’ Diamond Green Diesel expansion is worth a mention, in particular.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Lamb Weston Holdings Inc.is another promising pick. Carrying a Zacks Rank #2 (Buy), the Eagle, ID-based company’s shares have gained 38.4% in the past six months. Lamb Weston — which delivered a positive earnings surprise of 7.3%, on average, over the trailing four quarters — has been gaining from its focus on limited-time offerings, efficient price/mix, and efforts to boost offerings and expand capacity. The company is especially benefiting from strength in its Global segment. Notably, the global manufacturer, marketer and distributor of value-added frozen potato products has a long-term growth rate of 8.8%.

Investors can also count on The Hain Celestial Group, Inc. The New York-based company’s earnings beat the Zacks Consensus Estimate by about 7%, on average, in the trailing four quarters. Additionally, the Zacks Rank #2 stock has rallied 43.2% in six months. Notably, the company’s focus on SKU rationalization, Project Terra and acquisitions has been a major driver. Also, Hain Celestial’s transformation strategy bodes well.

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The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
 
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