Top 4 Consumer Stocks That May Explode In November

Maplebear (CART) came out with quarterly earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.22 per share. This compares to loss of $20.86 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 90.91%. A quarter ago, it was expected that this operator of the Instacart online grocery would post earnings of $0.13 per share when it actually produced earnings of $0.20, delivering a surprise of 53.85%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Maplebear, which belongs to the Zacks Internet - Commerce industry, posted revenues of $852 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.81%. This compares to year-ago revenues of $764 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Maplebear shares have added about 103.4% since the beginning of the year versus the S&P 500's gain of 25.8%.

What's Next for Maplebear?

While Maplebear has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Maplebear: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.33 on $893.8 million in revenues for the coming quarter and $1.17 on $3.38 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Commerce is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the broader Zacks Retail-Wholesale sector, American Eagle Outfitters (AEO), has yet to report results for the quarter ended October 2024.

This teen clothing retailer is expected to post quarterly earnings of $0.47 per share in its upcoming report, which represents a year-over-year change of -4.1%. The consensus EPS estimate for the quarter has been revised 0.3% lower over the last 30 days to the current level.

American Eagle Outfitters' revenues are expected to be $1.31 billion, up 0.5% from the year-ago quarter.

Zacks Investment Research

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores?

Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM Score

What if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Crocs (CROX)

Founded in 1999 and based in Niwot, CO, Crocs, Inc. is one of the leading footwear brands with its focus on comfort and style. Famous for its iconic clog material, Crocs’ simple design and great comfort was an instant hit among consumers. The company offers a wide variety of footwear products including sandals, wedges, flips and slide that cater to people of all age.

CROX is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. CROX has a Growth Style Score of B, forecasting year-over-year earnings growth of 7.5% for the current fiscal year.

For fiscal 2024, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.07 to $12.93 per share. CROX boasts an average earnings surprise of 17.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CROX should be on investors' short list.

Zacks Investment Research

Steven Madden, Ltd. SHOO reported solid third-quarter 2024 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.

This performance was driven by outstanding growth in accessories and apparel, highlighted by another stellar quarter for Steve Madden handbags and a substantial boost from the newly acquired Almost Famous. Strong top-line gains in international markets and direct-to-consumer channels underscore effective strategic execution. This momentum has led management to raise its 2024 guidance for revenues and adjusted earnings.

In the past three months, shares of this company have gained 6% outperforming the industry’s 2.9% growth.

Steven Madden’s Quarterly Performance: Key Insights

Steven Madden posted adjusted quarterly earnings of 91 cents per share, which beat the Zacks Consensus Estimate of 89 cents. The metric also increased 3.4% from 88 cents in the prior-year period.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Steven Madden, Ltd. Price, Consensus and EPS Surprise

Steven Madden, Ltd. price-consensus-eps-surprise-chart | Steven Madden, Ltd. Quote

Total revenues rose 13% year over year to $624.7 million. Net sales of $621.2 million went up 13%, and commission and licensing fee income of $3.5 million increased 21.4% from the year-ago period. The top line beat the consensus estimate of $607 million.

Adjusted gross profit rose 11.6% year over year to $259.6 million. We note that the adjusted gross margin contracted 50 basis points (bps) to 41.6%. We projected gross margin contraction of 30 bps.

This Zacks Rank #3 (Hold) company’s adjusted operating expenses increased 16.7% year over year to $174.2 million. As a percentage of revenues, adjusted operating expenses increased 90 bps year over year to 27.9%. We forecasted an increase of 14.1% in adjusted operating expenses.

Steven Madden reported an adjusted operating income of $85.4 million, up 2.4% from the prior-year quarter. However, the adjusted operating margin decreased 140 bps to 13.7% in line with our estimate.

SHOO’s Segment Wise Performance Details

Revenues for the Wholesale business improved 14.4% year over year to $495.7 million, which beat our estimate of $477.1 million. Excluding the newly acquired Almost Famous, wholesale revenues rose 4.8%.

Wholesale footwear revenues decreased 2.2%, while wholesale accessories/apparel revenues surged 54.2%. Excluding Almost Famous, wholesale accessories/apparel revenues grew 21.6%.

Gross profit, as a percentage of wholesale revenues, decreased 40 bps year over year to 35.5%, due to the effects of Almost Famous. We expected the gross margin to shrink 20 bps.

DTC revenues increased 7.8% year over year to $125.5 million in the quarter. Our model expected total DTC revenues of $125.7 million for the quarter, implying 8% year-over-year growth.

Gross profit, as a percentage of direct-to-consumer revenues, increased 30 bps to 64%, due to reduced promotional activity. We anticipated a 50 bps improvement in gross margin.

SHOO ended the third quarter with 282 brick-and-mortar retail outlets, five e-commerce websites and 67 company-operated concessions across the international markets.

SHOO’s Financial Health Snapshot

Steven Madden ended the third quarter with cash and cash equivalents of $139.4 million, short-term investments of $11.1 million and stockholders’ equity of $860.1 million, including non-controlling interest of $26.1 million.

In the reported quarter, SHOO repurchased $20.2 million of its common stock, including shares acquired via the net settlement of employees’ stock awards.

SHOO’s 2024 Outlook

For 2024, the company anticipates a 13-14% increase in revenues from 2023. This revised forecast is an upgrade from the previous guidance of 11-13%.

The company now anticipates adjusted earnings in the range of $2.62-$2.67 per share, an increase from the previous guidance of $2.55-$2.65 and up from $2.45 reported in 2023.

Stocks to Consider

The Gap, Inc. GAP operates as an apparel retail company, which offers apparel, accessories and personal care products for men, women and children, currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for The Gap’s current fiscal-year sales and earnings indicates growth of 0.5% and 31.5%, respectively, from the year-ago quarter’s reported numbers. GAP has a trailing four-quarter average earnings surprise of 142.8%.

Abercrombie & Fitch Co. ANF, through its subsidiaries, operates as an omnichannel retailer, which offers an assortment of apparel, personal care products and accessories for men, women and kids, currently carrying a Zacks Rank #2. ANF has a trailing four-quarter average earnings surprise of 28%.

The consensus estimate for Abercrombie’s current financial-year sales and earnings indicates growth of 13.1% and 63.4%, respectively, from the year-ago period’s reported figures.

American Eagle Outfitters Inc. AEO, operates as a multi-brand specialty retailer, which provides jeans, apparel and accessories, and personal care products for women and men, currently carries a Zacks Rank #2. AEO has a trailing four-quarter average earnings surprise of 12%.

The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales and earnings indicates growth of 2.5% and 17.1%, respectively, from the year-ago period’s reported figures.

Zacks Investment Research

lululemon athletica inc. LULU has maintained its growth trajectory through innovative products and strong brand loyalty. However, the company’s current forward 12-month price-to-earnings (P/E) multiple of 21.23X raises concerns about whether the stock's valuation is justified. This multiple is significantly higher than the Zacks Textile - Apparel industry average of 13.55X, making the stock appear relatively expensive.

The price-to-sales (P/S) ratio of lululemon, which is a distinguished name in the athleisure and high-performance sportswear industry, adds to investor unease especially considering its low Value Score of D, which suggests that it may not be a strong value proposition at current levels.

lululemon’s Premium Valuation Surpasses Peers

At 21.23X P/E, lululemon is trading at a valuation much higher than its competitors. Its competitors, such as Columbia Sportswear COLM, Ralph Lauren RL and Crocs Inc. CROX, are delivering solid growth and trade at more reasonable multiples. COLM, RL and CROX have forward 12-month P/E ratios of 20.23X, 18.35X and 7.73X — all significantly lower than lululemon. At such levels, LULU’s stock valuation seems out of step with its growth trajectory.

The stock’s premium valuation suggests that investors have strong expectations for lululemon’s growth potential. However, the stock currently seems somewhat overvalued. As a result, investors might be hesitant to buy at these elevated levels and prefer to wait for a more favorable entry point.

While LULU’s share price has risen 32.4% in the past three months after witnessing significant declines since the start of 2024, many investors are questioning whether the recent recovery presents a buying opportunity. After the recent recovery in the past three months, the lululemon stock has outpaced the broader industry’s 17.6% rise. The stock also outperformed the Consumer Discretionary sector’s growth of 14.4% and the S&P 500’s rally of 11% in the same period.

LULU’s 3-Month Price Performance

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.

• Piper Sandler boosted Duolingo, Inc. price target from $271 to $351. Piper Sandler analyst Arvind Ramnani maintained an Overweight rating. Duolingo shares closed at $318.85 on Wednesday. See how other analysts view this stock.
• B of A Securities cut the price target for Bloom Energy Corporation from $8 to $7. B of A Securities analyst Julien Dumoulin-Smith maintained an Underperform rating. Bloom Energy shares closed at $10.97 on Wednesday. See how other analysts view this stock.
• Needham raised the price target for Vertex, Inc. from $45 to $60. Needham analyst Joshua Reilly maintained a Buy rating. Vertex shares closed at $49.76 on Wednesday. See how other analysts view this stock.
• Baird increased McKesson Corporation price target from $531 to $688. Baird analyst Eric Coldwell upgraded the stock from Neutral to Outperform. McKesson shares settled at $549.31 on Wednesday. See how other analysts view this stock.
• TD Cowen raised Dutch Bros Inc. price target from $47 to $53. TD Cowen analyst Andrew Charles maintained a Buy rating. Dutch Bros shares closed at $34.94 on Wednesday. See how other analysts view this stock.
• Truist Securities cut Devon Energy Corporation price target from $49 to $43. Truist Securities analyst Neal Dingmann downgraded the stock from Buy to Hold. Devon Energy shares closed at $40.02 on Wednesday. See how other analysts view this stock.
• Cantor Fitzgerald raised the price target for Sarepta Therapeutics, Inc. from $152 to $167. Cantor Fitzgerald analyst Kristen Kluska upgradd the stock from Neutral to Overweight. Sarepta shares settled at $127.97 on Wednesday. See how other analysts view this stock.
• Leerink Partners raised Zymeworks Inc. price target from $10 to $25. Leerink Partners analyst Andrew Berens upgraded the stock from Market Perform to Outperform. Zymeworks shares closed at $15.61 on Wednesday. See how other analysts view this stock.
• Loop Capital slashed the price target for Crocs, Inc. from $150 to $110. Loop Capital analyst Laura Champine downgraded the stock from Buy to Hold. Crocs shares closed at $102.74 on Wednesday. See how other analysts view this stock.
• Keefe, Bruyette & Woods increased Lemonade, Inc. price target from $18 to $21. Keefe, Bruyette & Woods analyst Thomas McJoynt-Griffith downgraded the stock from Market Perform to Underperform. Lemonade shares closed at $29.29 on Wednesday. See how other analysts view this stock.

Read More:

• Jim Cramer: This Financial Stock Is A Buy, Likes Broadcom

Latest Ratings for SRPT

View More Analyst Ratings for SRPT

View the Latest Analyst Ratings

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.