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Have you been paying attention to shares of Carnival (CCL)? Shares have been on the move with the stock up 14.7% over the past month. The stock hit a new 52-week high of $24.83 in the previous session. Carnival has gained 32.4% since the start of the year compared to the 11.3% move for the Zacks Consumer Discretionary sector and the 18.4% return for the Zacks Leisure and Recreation Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on September 30, 2024, Carnival reported EPS of $1.27 versus consensus estimate of $1.17 while it beat the consensus revenue estimate by 1.04%.
For the current fiscal year, Carnival is expected to post earnings of $1.31 per share on $25.19 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $1.66 per share on $26.07 billion in revenues. This represents a year-over-year change of 26.78% and 3.51%, respectively.
Valuation Metrics
Carnival may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Carnival has a Value Score of A. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 21.8X. On a trailing cash flow basis, the stock currently trades at 10.9X versus its peer group's average of 10.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Carnival currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Carnival fits the bill. Thus, it seems as though Carnival shares could have potential in the weeks and months to come.
How Does CCL Stack Up to the Competition?
Shares of CCL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is OneSpaWorld Holdings Limited (OSW). OSW has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. OneSpaWorld Holdings Limited beat our consensus estimate by 13.04%, and for the current fiscal year, OSW is expected to post earnings of $0.97 per share on revenue of $890.68 million.
Shares of OneSpaWorld Holdings Limited have gained 10.5% over the past month, and currently trade at a forward P/E of 22.72X and a P/CF of 25.59X.
The Leisure and Recreation Services industry is in the top 12% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CCL and OSW, even beyond their own solid fundamental situation.
Zacks Investment Research
Shares of Norwegian Cruise Line Holdings Ltd. NCLH have rallied 75.7% in the past six months, outperforming the Zacks Leisure and Recreation Services industry’s growth of 14%.
The company’s impressive third-quarter 2024 results anchored by resilient demand, elevated onboard offerings and targeted growth strategies have positioned it ahead of competitors. In the same time frame, stocks like Carnival Corporation & plc CCL, Royal Caribbean Cruises Ltd. RCL and OneSpaWorld Holdings Limited OSW have gained 69%, 66.8% and 30.9%, respectively.
NCLH Price Performance
But, with such a strong run, is now the right time to buy in? Let’s explore what’s fueling NCLH’s momentum and whether it’s time to add this stock to your portfolio.
Riding High: What’s Driving NCLH's Growth?
NCLH’s success has been powered by strong quarterly performance fueled by resilient consumer demand and enhanced onboard offerings. Investors are taking notice of this steady upward trajectory, especially as the company continues to outperform on key metrics while maintaining cost efficiency. In fact, Norwegian’s “Charting the Course” strategy — which focuses on people, products, growth platforms, and performance — appears to be keeping the company on track for sustained success. The cruise line operator exceeded its guidance across all key metrics for the third straight quarter, resulting in an increase in its full-year guidance for the fourth time this year.
In the third quarter of 2024, NCLH achieved its highest quarterly revenue and adjusted EBITDA in history. Earnings per share climbed 31% year over year, reaching 99 cents, outpacing guidance even after a small hit from foreign exchange fluctuations. Norwegian Cruise also made strides with its net leverage ratio, down to 5.58 from 2023’s year-end levels, indicating strong financial stability. The company expects its adjusted EBITDA margin to reach 35.3% in 2024, with a goal of hitting 39% by 2026.
The Demand Surge Keeps NCLH Sailing Smooth
Strong demand has continued to drive NCLH’s bookings and pricing, with net yield growing 9% year over year in the third quarter of 2024. The increase has been primarily fueled by solid demand across all geographies, particularly in Alaska, Canada and New England. Norwegian Cruise also reported a significant rise in onboard revenues, boosted by shore excursions and improved communication offerings via Starlink high-speed Internet. The company reported strong bookings for 2025, with pricing and occupancy rates in line with or above current levels. Advanced ticket sales have also increased 6% year over year, outpacing capacity growth and reflecting the strong consumer confidence in cruising as a desirable vacation option.
Partnerships and Branding Boost NCLH’s Market Appeal
NCLH’s partnership and brand-building initiatives further strengthen its appeal. The company recently launched the "Experience More at Sea" positioning for its Norwegian Cruise Line brand, which adds value through upgraded onboard amenities and exclusive partnerships. The positioning is complemented by a new partnership with the National Hockey League, which connects the company with hockey fans and expands its visibility within the sports community. Oceania Cruises also enhanced its brand promise, offering guests additional inclusions, such as gourmet dining, prepaid gratuities, and Starlink WiFi. These brand upgrades reflect NCLH’s focus on delivering superior experiences that align with evolving consumer preferences.
NCLH’s Fleet Expansion to Drive Long-Term Growth
A significant aspect of NCLH’s growth plan is its expanding fleet. Norwegian Luna, a new ship equipped with high-end amenities, is set to join the fleet in 2026. Other brands under NCLH’s umbrella, such as Oceania and Regent Seven Seas, are also set to launch new vessels, each aiming to provide an exceptional experience. This continuous growth in capacity reflects the company’s commitment to staying ahead of the curve in the cruise market.
NCLH Earnings Estimates Show Upward Movement
NCLH expects its 2024 earnings per share (EPS) to be nearly $1.65, up from the prior expectation of about $1.53. The Zacks Consensus Estimate for NCLH’s 2024 and 2025 EPS has moved up 1.9% and 3.7%, respectively, in the past 60 days. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock.
Attractive Valuation and High Returns Make NCLH Appealing
NCLH has shown impressive profitability, with a trailing 12-month return on equity of 113.7%, significantly higher than the industry average of 25.2%. This metric suggests that the company is efficiently using shareholders’ funds to generate returns, which can be a positive sign for long-term investors.
Additionally, NCLH trades at a forward 12-month price-to-earnings ratio of 14.67X, below the industry average of 21.26X, presenting a potentially attractive valuation for investors.
Technical Indicators Point to Potential Upside
From a technical perspective, NCLH's stock performance is showing upward momentum, with shares currently trading above both their 50-day and 200-day moving averages. This trend indicates that the stock has established strong support levels, suggesting potential resilience and further upside in the near term.
NCLH Stock Trades Above 50 and 200-Day Moving Average
Conclusion
Norwegian Cruise presents a compelling investment opportunity, driven by its impressive operational performance, strategic partnerships, and expanding fleet. The company’s strong booking volumes, improved net yield, and substantial return on equity underscore its capacity to capitalize on rising demand in the travel and leisure sector. With a favorable valuation relative to its industry peers and upwardly revised earnings projections, NCLH is well-positioned to deliver sustained growth and enhance shareholder value. We believe that this Zacks Rank #2 (Buy) stock is an ideal candidate for investors’ portfolio addition.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Investment Research
DoubleDown Interactive Co., Ltd.'s DDI third-quarter 2024 earnings and revenues missed the Zacks Consensus Estimate. Following the results, the company’s shares declined nearly 1% in the after-hours trading session yesterday.
During the third quarter, DoubleDown benefited from steady growth in its core social casino and SuprNation iGaming businesses. The company’s social casino segment saw a consistent revenue increase for the fourth quarter in a row, indicating DoubleDown's expertise in engaging and monetizing loyal players. This success was partly due to a disciplined approach to user acquisition and research, which supports strong profitability and free cash flow.
DoubleDown's iGaming division, SuprNation, has also exceeded initial revenue expectations since its acquisition, further strengthening the company’s portfolio.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
DDI Q3 Results in Detail
The company reported earnings per share (EPS) of 51 cents, which missed the Zacks Consensus Estimate of 55 cents by 7.3%. In the prior-year quarter, it reported an EPS of 54 cents.
Revenues of $83 million also missed the consensus mark of $83.5 million. The top line grew 13.7% on a year-over-year basis. SuprNation iGaming operations contributed $7.8 million to the quarterly revenues.
Average revenue per daily active user (ARPDAU) for the company’s social casino/free-to-play games increased to $1.30 from $1.06 reported a year ago. The average monthly revenue per payer for the social casino/free-to-play games also increased 14.7% year over year to $281.
DoubleDown Interactive Co., Ltd. Sponsored ADR Price, Consensus and EPS Surprise
DoubleDown Interactive Co., Ltd. Sponsored ADR price-consensus-eps-surprise-chart | DoubleDown Interactive Co., Ltd. Sponsored ADR Quote
DDI’s Operating Results
Adjusted EBITDA increased to $36.1 million from $29.7 million reported in the year-ago quarter. Adjusted EBITDA margin expanded 280 basis points to 43.5% year over year.
Total operating expenses increased year over year to $47.7 million from $43.3 million. This rise was due to the inclusion of operating expenses related to SuprNation.
DDI’s Financial Information
As of Sept. 30, 2024, DoubleDown had cash and cash equivalents of $292.7 million compared with $206.9 million as of Dec. 31, 2023.
At the end of the first nine months of 2024, net cash from operating activities was $101.1 million compared with $8.9 million of net cash used in operating activities in the year-ago period.
Zacks Rank of DDI
DoubleDown currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Carnival Corporation & plc CCL reported impressive third-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis. This upside was backed by sustained demand strength and increased booking volumes. In the quarter, the company reported strong booking momentum for 2025, with volumes remaining robust at higher prices compared with the prior year.
The company raised its 2024 adjusted EBITDA guidance due to strong demand and cost-saving opportunities. Management expects net yields at constant currency to increase around 10.4% compared with 2023 levels, exceeding the prior guidance provided in June.
Vail Resorts, Inc. MTN reported mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Revenues declined on a year-over-year basis and the adjusted loss widened from the prior-year quarter’s levels.
In the quarter, its EBITDA declined year over year due to the underperformance of the winter business in Australia. Snowfall at Australia’s resorts fell 28% from the prior year’s levels and was 44% below the 10-year average, leading to an 18% drop in skier visitation. Although North America’s summer mountain business did not meet expectations, it achieved 15% revenue growth with fewer weather and construction-related disruptions.
Hilton Worldwide Holdings Inc. HLT reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.
The company's performance was backed by notable improvements in revenue per available room, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories, including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.
Zacks Investment Research
Topgolf Callaway Brands Corp. MODG is scheduled to report results for the third quarter of 2024 on Nov. 12, after market close. In the last reported quarter, earnings topped the Zacks Consensus Estimate by 50% and increased 7.7% on a year-over-year basis,
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Notably, the company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 235.9%.
Trend in Estimate Revision of MODG
The Zacks Consensus Estimate for loss has widened by a cent to 18 cents per share in the past 60 days. The company reported adjusted earnings per share (EPS) of 20 cents in the year-ago quarter.
Topgolf Callaway Brands Corp. Price and EPS Surprise
Topgolf Callaway Brands Corp. price-eps-surprise | Topgolf Callaway Brands Corp. Quote
The consensus mark for revenues is pegged at $981.3 million, implying a decrease of 5.7% from the year-ago quarter’s reported figure.
Factors to Shape Topgolf Callaway’s Quarterly Results
Topgolf Callaway's third-quarter 2024 revenues and earnings are expected to have declined year over year due to slowing consumer activity and macroeconomic challenges. These include the cumulative impact of negative foreign exchange trends, persistently high inflation and lower-than-expected same-venue sales at Topgolf. These factors are likely to have hurt MODG’s performance in the quarter to be reported.
For third-quarter 2024, MODG expects consolidated revenues in the range of $970-$990 million, down from $1,041 million reported in the year-ago quarter.
Meanwhile, increased marketing expenses for new product launches and higher airfreight costs are likely to have hurt MODG’s bottom line in the quarter to be reported. The company expects adjusted EBITDA in the range of $95-$105 million, down from $163 million reported in the year-ago quarter. This decline is likely to have been driven by revenue deleverage, higher marketing expenses and increased hedge losses compared with the prior year.
Segment-wise, the company expects Topgolf (which accounted for 42.7% of second-quarter total revenues) to see a low single-digit decline in revenues for the third quarter. Operating income is likely to be down more than revenues due to revenue deleverage and changes in the timing of marketing expenses. However, continued efficiencies are expected to have partially offset this. Same-venue sales are expected to have remained roughly the same in the third quarter.
Golf equipment (accounted for 35.7% of second-quarter total revenues) sales are expected to be down slightly, primarily due to unfavorable changes in foreign currency. Operating income is anticipated to have declined due to the revenue decrease and higher marketing spending related to new product launches.
Revenues in the Active Lifestyle (accounted for 21.6% of second-quarter total revenues) segment are expected to have declined year over year due to lower sales estimates for Jack Wolfskin and the Europe wholesale channel. Operating income is anticipated to have declined due to the revenue decrease.
The Zacks Consensus Estimate for revenues from the Active Lifestyle segment in the to-be-reported quarter is pegged at $271 million, indicating a year-over-year decline of 9.5%. The Zacks Consensus Estimate for the segment’s operating income is pegged at $20.15 million, down from $40 million reported in the year-ago quarter.
The Zacks Consensus Estimate for the operating income from Topgolf and Golf equipment segment is pegged at $11.51 million and $28.32 million, down from $38.9 million and $35.2 million reported in the year-ago quarter, respectively.
However, MODG is likely to have benefited from increased digital sales penetration and strong market share performance at Travis Mathew and Callaway Golf Equipment. Also, the emphasis on expansion through organic and inorganic options is likely to have aided its performance in the to-be-reported quarter.
The Zacks Consensus Estimate for revenues from Topgolf and Golf equipment segment is pegged at $464 million and $299 million, indicating year-over-year growth of 3.6% and 1.9%, respectively.
Also, continued improvement in venue operating efficiencies and cost-saving initiatives are expected to have aided its third-quarter’s bottom-line performance.
What the Zacks Model Unveils for MODG
Our proven model does not conclusively predict an earnings beat for Topgolf Callaway this time around. The company does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), to increase the odds of an earnings beat.
Earnings ESP of MODG: MODG has an Earnings ESP of 0.00% at present. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
MODG’s Zacks Rank: The company currently carries a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to beat estimates this time around.
Bowlero Corp. BOWL has an Earnings ESP of +3.00% and a Zacks Rank of 3 at present.
BOWL’s earnings for the to-be-reported quarter are expected to increase 1100% from the prior-year reported level. It posted earnings beat in one of the trailing four quarters and missed on the other three occasions, with an average negative surprise of 119.4%.
Norwegian Cruise Line Holdings Ltd. NCLH currently has an Earnings ESP of +3.28% and a Zacks Rank of 2.
NCLH’s earnings for the to-be-reported quarter are expected to increase 150% from the prior-year reported level. It posted earnings beat in three of the trailing four quarters and missed on one occasion, with an average surprise of 4.2%.
OneSpaWorld Holdings Limited OSW has an Earnings ESP of +1.21% and has a Zacks Rank of 2 at present.
OSW’s earnings for the to-be-reported quarter are expected to increase 75% from the prior-year reported level. It posted earnings beat in two of the trailing four quarters, met on one occasion and missed once, with an average negative surprise of 1.2%.
Zacks Investment Research
Markets rallied strongly this week as investors got a clear outcome in the presidential election and an expected interest rate cut by the Federal Reserve. Is this a relief rally, the continuation of a Trump trade, or the beginning of a longer bull market? That question will be answered over time, and it wouldn’t be surprising to see some profit-taking as investors start rebalancing their portfolios for 2025.
For now, money is coming into the market based on the expectation of public policy, which will mean lower taxes and less regulation, which is historically bullish for stocks. However, the market’s momentum may be tested next week when the next readings of the consumer price index (CPI) and producer price index (PPI) are released. The trend has been inflationary, and if that trend continues, it may temper expectations for the pace of interest rate cuts in 2025.
A key takeaway for investors is that now is the time to be in the market, and MarketBeat would love to help you. Whether you’re a short-term trader or a long-term investor, our team of analysts will stay on top of the stocks and stories moving the market. Here are some of our most popular stories from this week.
Articles by Jea Yu
The cruise line industry has seen a strong recovery in 2024, with many carriers reporting demand levels exceeding 2019 levels. This week, Jea Yu analyzed Royal Caribbean Cruises Ltd. and Carnival Co. & plc . The two cruise lines have different business models, and Yu explained how that affects the upside for each stock.
Investing in biotech companies, particularly clinical-stage companies, carries risk as long-term investments. But Yu explained why nimble traders may want to watch Summit Therapeutics Inc. closely. The stock is up over 700% in 2024 but may have room to move higher as its lead candidate shows signs of performing better than industry-leading Keytruda in lung cancer treatment.
It’s been a rough year for battery companies, as the market is oversupplied. But Yu explained why this may be a good time to look at Enovix Co. . The company is on track to ramp up production of its next-generation silicon-anode lithium-ion batteries, which can meet the enhanced power demands of AI-powered devices.
Articles by Thomas Hughes
Many investors are betting on how the stock market will perform in 2025 after Donald Trump's election. This week, Thomas Hughes explained Trump’s proposed policies and their potential impact on stocks in the coming year.
Whatever policies Trump implements shouldn’t affect the outlook for gold. That’s because the tailwind for gold has been government spending and lower interest rates. Both conditions are expected to be in place in 2025, and Hughes explained why that means gold prices should continue to rise in 2025.
Weight loss drugs have been one of the best-performing categories of stocks in 2024. Eli Lilly & Co. is one of the leading names. However, as that trade gets more crowded, Hughes explained there are other reasons analysts are raising their outlook for LLY stock in 2025.
Articles by Sam Quirke
Intel Corp. has been one of the worst-performing stocks in 2024 as the company can’t seem to keep up with its competitors. However, Sam Quirke explained why a solid earnings report and improving analyst sentiment are reasons to believe it may be time to be greedy while others are fearful.
Turning his attention to the chip sector, Quirke was looking at another turnaround story. The bottom fell out on Qualcomm Inc. after the stock hit an all-time high in June. Quirke explained why a strong earnings report is starting to create a bullish setup for QCOM stock in 2025.
Could Trump be ushering in the crypto presidency? The surge in Bitcoin and Ethereum since the election would seem to suggest it is. Coinbase Global Inc. is a way to get exposure to this market without direct speculation in digital assets. Quirke gave readers two reasons to consider COIN stock and one reason they may want to stay on the sideline.
Articles by Chris Markoch
Palantir Technologies Inc. led the week with another blowout earnings report. While questions remain about the stock’s valuation, Chris Markoch explained why the stock crossing $50 isn’t surprising and why there may still be time for investors to get on board.
Investors looking for a lower price tag (at least on paper) may want to look at one of the three stocks under $20 that Markoch highlighted because they carry Strong Buy ratings from analysts.
Markoch also wrote about the recent earnings reports for Merck & Co. Inc. and Bristol-Myers Squibb Co. . The reports were similar, but analysts have different views on each stock.
Articles by Ryan Hasson
The last two months of 2024 may turn out to be a fantastic opportunity for momentum traders. This week, Ryan Hasson wrote about two opportunities for traders to consider. First, there’s the Trump trade. Hasson explained which three sectors have been posting the largest gains since the election and why investors may want to wait for a pullback before getting involved.
The other area for momentum traders may come from “riding the hot hand.” In this case, Hasson looks at the five best-performing S&P stocks in 2024 and why they may have room to run higher.
If we’re entering a bull market, there are plenty of stocks for buy-and-hold investors to consider. Hasson wrote about three food and beverage names among consumer staples stocks and consumer discretionary stocks with a history of long-term growth and solid dividends.
Articles by Gabriel Osorio-Mazilli
If you’re feeling a little FOMO right now, you’re not alone. However, it’s important to understand which stocks have real potential. This week, Gabriel Osorio-Mazilli highlighted three technology stocks on which options traders are making big bets. Osorio-Mazilli explained what those traders may see to help you understand the opportunity.
Many analysts have predicted that small-cap stocks would lead a new bull market. The performance of the Russell 2000 since the election proves them right. With that in mind, Osorio-Mazilli highlighted three Russell 2000 stocks that traders may want to target.
And if you’re still not sure about stocks, Osorio-Mazilli explained why there’s still time to get involved with gold. The precious yellow metal is already at all-time highs, and Osorio-Mazilli explained why $3,000 an ounce – and maybe higher – is still in play.
Articles by Leo Miller
Many investors may wish they could invest in Elon Musk’s SpaceX as the company deploys an increasing number of its Starlink satellites. However, SpaceX isn’t publicly traded. But imitation is the sincerest form of flattery, and competition is bringing this space into being. This week, Leo Miller analyzed two of the largest companies in two of the world’s largest countries, which are making moves to take market share from SpaceX.
Miller also wrote about the recent price action in SoundHound AI , which is focused on developing AI speech recognition. SOUN stock is up more than 220% in 2024 as NVIDIA Corp. is on board as a partner. And with earnings coming up on November 12, investors may want to know if there’s still room to get involved.
The GLP-1 trade is getting crowded. This week, Miller wrote about why Altimmune Inc. is on investors' radars. The company’s lead GLP-1 candidate is in clinical trials and is showing an ability to combat the muscle loss that is a side effect of current GLP-1 treatments. The drug will be in trials for some time, but this may be an opportunity for patient, long-term investors who have capital to put in the market.
Articles by Nathan Reiff
The holiday season will soon be upon us. For investors, that means looking at retail stocks that may outperform their competitors. Nathan Reiff tackled that topic this week, highlighting three retail stocks that have held up well this year and explaining why one may stand above the crowd.
Renewable energy stocks are under pressure, and there are expectations that they will be out of favor in a second Trump administration. However, Reiff explained why there still may be an opportunity with First Solar Inc. . The stock tumbled after a weak earnings report in October. But the solar industry is growing, and despite regulatory pressure, there may be an opportunity for nimble traders.
What does the future hold for hydrogen stocks? It’s a question that’s been asked for years and one that Reiff took on this week. While others are looking at nuclear stocks, hydrogen also offers a path to clean energy. With an uncertain payoff, investors would be well served to focus on the best-in-class names like the three hydrogen stocks that analysts continue to back.
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at OneSpaWorld (OSW), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. OneSpaWorld currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here
Set to Beat the Market?
In order to see if OSW is a promising momentum pick, let's examine some Momentum Style elements to see if this company holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For OSW, shares are up 0.98% over the past week while the Zacks Leisure and Recreation Services industry is up 0.01% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 11.82% compares favorably with the industry's 7.18% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of OneSpaWorld have increased 24.98% over the past quarter, and have gained 72.82% in the last year. On the other hand, the S&P 500 has only moved 15.2% and 38.09%, respectively.
Investors should also pay attention to OSW's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. OSW is currently averaging 498,358 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with OSW.
Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost OSW's consensus estimate, increasing from $0.82 to $0.85 in the past 60 days. Looking at the next fiscal year, 3 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that OSW is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep OneSpaWorld on your short list.
Zacks Investment Research
Paramount Global PARA delivered adjusted earnings of 49 cents per share for the third quarter of 2024, which beat the Zacks Consensus Estimate by 104.2% and increased 63% from the year-ago quarter.
Revenues of $6.73 billion missed the Zacks Consensus Estimate by 5.6%. The figure declined 6% year over year, owing to softness in TV Media and Filmed Entertainment revenues.
Adjusted OIBDA rose 20% from the year-ago quarter’s level to $858 million.
Selling, general and administrative expenses decreased 11.8% year over year to $1.53 billion.
The company expects the Skydance transaction to close in the first half of 2025.
Paramount Global Price, Consensus and EPS Surprise
Paramount Global price-consensus-eps-surprise-chart | Paramount Global Quote
Revenues by Type
Advertising revenues (32.3% of total revenues) of $2.17 billion grew 1.9% year over year. Affiliate revenues (47.8% of total revenues) of $3.21 billion declined 1.4% year over year. Theatrical revenues (1.6% of total revenues) totaled $108 million in the reported quarter, which declined 71.4% year over year. Content-licensing revenues (18.3% of total revenues) of $1.23 billion decreased 9.3% year over year.
Segment Details
DTC Details
DTC revenues jumped 10% year over year to $1.86 billion. DTC subscription revenues grew 7%, driven by year-over-year subscriber growth and pricing increases for Paramount+.
DTC profitability improved significantly year over year. Sports, including the return of the NFL and UEFA, originals like Tulsa King, which saw the biggest global debut in platform history for season 2, and Mayor of Kingstown, as well as post-theatrical releases, such as A Quiet Place: Day One and IF, all drove acquisition in the quarter. Pluto TV continues to benefit from strong engagement resulting in increased monetization.
DTC advertising revenues rose 18%, reflecting growth from Paramount+ and Pluto TV.
Paramount+ revenues grew 25%, driven by year-over-year subscriber growth and ARPU expansion. Paramount+ subscribers increased 3.5 million in the quarter to 72 million. Paramount+ global ARPU expanded 11% year over year.
DTC adjusted OIBDA increased $287 million year over year to $49 million, reflecting revenue growth and cost efficiencies.
TV Media Details
TV Media revenues decreased 6% year over year to $4.29 billion, primarily due to lower affiliate revenues and fluctuations in licensing revenues.
TV Media advertising revenues decreased 2%, reflecting declines in the linear advertising market, partially offset by higher political advertising and the recognition of revenues underreported by an international sales partner in prior periods.
TV Media affiliate and subscription revenues decreased 7%, driven by subscriber declines and a 2-percentage point decrease from the absence of pay-per-view boxing events, partially offset by price increases.
TV Media licensing and other revenues decreased 12%, reflecting a lower volume of licensing in the secondary market.
TV Media adjusted OIBDA decreased 19% to $936 million.
TV Media benefited from a powerful combination of sports, news and entertainment. CBS live news channels saw strong growth in minutes viewed year over year. The Daily Show continued to grow across streaming, linear and social platforms, MTV’s Video Music Awards had its biggest audience in four years, and The Challenge delivered its highest share in franchise history.
Filmed Entertainment Details
Filmed Entertainment revenues decreased 34% year over year to $590 million. Theatrical revenues plunged 71%, reflecting the number and timing of releases in the quarter compared with the prior year.
Licensing and other revenues decreased 6%, as lower revenue from home entertainment and the licensing of film library titles were partially offset by higher studio facility revenues compared to last year, which was impacted by the labor strikes.
The company reported negative Adjusted OIBDA of $54 million.
Paramount Pictures’ diverse film slate continued to deliver with the success of A Quiet Place: Day One, which set a franchise record for the biggest opening at the global box office and has grossed $261 million worldwide to date. Transformers One has grossed $127 million at the global box office to date.
Balance Sheet
As of Sept. 30, 2024, Paramount Global had cash and cash equivalents of $2.44 billion compared with $2.31 billion as of June 30, 2024. Total debt, as of Sept. 30, 2024, was $14.6 billion, which remained unchanged sequentially.
Zacks Rank & Stocks to Consider
Paramount Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Discretionary sector are Madison Square Garden Entertainment Corp. MSGE, Carnival CCL and Flexsteel Industries FLXS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of MSGE have gained 35.5% year to date. The Zacks Consensus Estimate for MSGE’s fiscal 2025 revenues is pegged at $978.29 million, indicating a year-over-year increase of 1.98%. The consensus mark for earnings is pegged at $1.66 per share, which has gained 2 cents in the past 30 days.
Shares of Carnival have gained 27.9% year to date. The Zacks Consensus Estimate for CCL’s 2024 revenues is pegged at $25.19 billion, indicating a year-over-year increase of 16.63%. The consensus mark for earnings is pegged at $1.31 per share, which has increased 2.3% in the past 30 days.
Shares of Flexsteel have gained 217.2% year to date. The Zacks Consensus Estimate for FLXS’s fiscal 2025 revenues is pegged at $433.08 million, indicating a year-over-year increase of 4.92%. The consensus mark for earnings is pegged at $3.25 per share, which has increased 8.3% in the past 30 days.
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