For Immediate Release
Chicago, IL – February 16, 2021 – Zacks Equity Research Shares of XPO Logistics, Inc.
XPO
as the Bull of the Day, Centene Corporation
CNC
as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pinterest, Inc.
PINS
, Facebook, Inc.
FB
and Twitter, Inc.
TWTR
.
Here is a synopsis of all five stocks:
Bull of the Day
:
Based in Greenwich, CT,
XPO Logistics
is a third-party logistics provider offering fast, single-source solutions for time-critical and service-sensitive shipments through its non-asset-based transportation network. XPO serves customers in the U.S., Canada, and Mexico with domestic and international freight destinations.
Q4 Earnings Recap
XPO recently reported solid fourth-quarter earnings results.
Revenue saw a double-digit year-over-year jump to $4.67 billion. Operating income grew in the double digits as well compared to the prior year quarter, to $228 million; diluted EPS was $0.91.
XPO generated $193 million of cash flow from operations, and $91 million of free cash flow, in Q4.
“Our fourth quarter revenue, earnings and free cash flow were all much better than expected. The investments we made in our people and technology in 2020 helped us to generate the highest revenue of any quarter in our history,” said CEO Brad Jacobs.
He continued, “The industry’s biggest tailwinds are at our back in 2021 — e-commerce fulfillment and returns, supply chain outsourcing and fast-growing customer demand for our digital capabilities.”
As for guidance, the company expects adjusted EBITDA between $1.725 billion and $1.8 billion for the fiscal year, which would represent growth of 24% and 29% year-over-year in each operating segment. Free cash flow is expected to be $600 million to $700 million.
XPO Breaks Out
In the past six months, shares of XPO have jumped over 44% compared to the S&P 500’s 17.5% increase. Earnings estimates have been rising too, and XPO is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, five analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up 16 cents to $3.88 per share. Earnings are expected to grow 93% compared to the prior year period. Fiscal 2022 looks strong too, and earnings should see double-digit year-over-year growth as well.
Looking ahead, XPO is making some big growth plans. Management recently announced a plan to split its two main business segments, logistics and transportation, into separate publicly traded companies, a move that will boost earnings potential and shareholder returns in the future.
Investors can also expect XPO to capitalize on the e-commerce growth it was able to establish during the pandemic, as well as popular tech tools like XPO Connect, which is a digital marketplace that connects shippers and carriers to the company’s transportation network.
If you’re an investor searching for a transportation sector stock to add to your portfolio, make sure to keep XPO on your shortlist.
Bear of the Day
:
Headquartered in St. Louis,
Centene
is a multi-national healthcare company that primarily provides services to government sponsored healthcare programs. The company serves the under-insured and uninsured individuals through member-focused services. The recent acquisition of WellCare Health leveraged the company’s position as the largest Medicaid managed care organization in the country.
Despite revenue increasing 50% year-over-year, Centene’s top line of $28.3 billion still lagged our consensus estimate. Q4 GAAP net loss came to $12 million, or $0.02 per share, while adjusted net income was $0.46 for the quarter, much lower than the year-ago figure of $0.73 per share.
There were some bright spots in the report. Medicaid revenue spiked 47% year-over-year, while its commercial business grew 17% to $4.2 billion, both of which helped CNC’s total revenue rebound.
For 2021, CNC expects sales in the range of $116.1 billion and $118.1 billion, with adjusted EPS between $5.00 and $5.30 per share.
Bottom Line
However, CNC is now a Zacks Rank #5 (Strong Sell).
Eight analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 27 cents to $5.16 per share; earnings and sales are expected to notch small year-over-year gains for fiscal 2021, though the outlook looks brighter for fiscal 2022.
Shares are down 7% in the past one-year period compared to the S&P 500’s gain of 16.7%.
Looking at its business, Centene faces some tough headwinds going forward, as analysts still have a bearish outlook on the stock after an incredibly tough 2020.
CNC just announced that it plans to buy Magellan Health Services for $2.2 billion back in January, which, along with the WellCare and PANTHERx acquisitions, will help get Centene back on a steady recovery path.
Additional content:
3 Stocks to Watch as Social Media Looks Poised to Grow
Social media has been taking the world by storm for more than a decade as it allows people to stay connected with each other at all times. It also provides a platform for users to express themselves or highlight their content and creativity with the help of posts, images, audio, videos and so on. Moreover, the platforms allow businesses to advertise their products and services and in turn, increase their reach to people.
Notably, per a report by ReportLinker, the global social media market is estimated to grow from $94.83 billion in 2020 to $102.62 billion in 2021, at a CAGR of 8.2%, as quoted in a
GlobeNewswire article
. The report further mentioned that the market is estimated to reach $308.96 billion in 2025 at a CAGR of 32%.
According to the report, rising data consumption and increasing penetration of mobile devices, tablets and so on, will help in bolstering the social media market. This is because the rising sales of devices like smartphones and tablets lead to an increase in time spent on social media.
Meanwhile, even though the outbreak of the COVID-19 pandemic significantly affected businesses across the globe, the report mentioned that many media markets were “unaffected or benefited from this as they transmit their content remotely through digital channels.” In fact, the pandemic helped in boosting social media platforms as people found it to be a feasible way of interacting with each other while maintaining social distancing.
A
survey
by Digital Commerce 360 last year found that social media usage went up in the United States. Notably, 72% of respondents agreed that their social media consumption went up during the pandemic while 43% agreed that they were posting more.
Moreover, social media is also being used for shopping as 82% of respondents in the survey indicated that social media is the most common channel from where they get to know about a brand and its products. Reflective of this trend, advertising spend looks set to go up in the future. Notably, Statista estimated that ad spending in the social media advertising segment worldwide is estimated to show an
annual growth rate of 5.8%
from 2021 to 2025.
3 Social Media Stocks to Keep an Eye On
Social media has emerged as one of the most important ways in which people stay connected with one another and the global social media market looks poised to grow further. In fact, Statista stated that in 2020,
over 3.6 billion
people used social media worldwide and it is estimated that its reach will increase to almost 4.41 billion people in 2025.
Hence, this makes it a good time to look at social media stocks that can make the most of this potential going forward. Notably, 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
.
Pinterest
provides a visual discovery engine in the United States and internationally. The company’s engine allows people to find inspiration for their lives, including recipes, style and home inspiration, DIY and others. It currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 71.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 71.4%.
Facebook
develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 8.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 10.9%.
Twitter
operates as a platform for public self-expression and conversation in real time in the United States and internationally. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 4.3% over the past 60 days. The company’s expected earnings growth rate for the next year is 26%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year’s 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
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