Zacks Investment Ideas feature highlights: Stride, and Cava Group COHERENT and Twilio

Zacks

For Immediate Release

Chicago, IL – November 13, 2024 – Today, Zacks Investment Ideas feature highlights Stride LRN, COHERENT CORP COHR and Twilio TWLO.

Value, Growth, Momentum and Top Ranks (TWLO, COHR, LRN)

Sometimes when you research stocks you find names that are appealing in one aspect but weak on another. For instance, you find a stock with powerful momentum, but it has a premium valuation. Or you find something with a discount valuation, but it keeps trading lower. That isn’t the case here.

The three stocks I have identified today hit all the important factors that I am looking for; breakout momentum, discount valuations, impressive earnings growth and top Zacks Ranks.

Stride, COHERENT CORP and Twilio are some of the most compelling opportunities in the market today.

Twilio: Stock is Staging a Major Comeback

Back in 2021, Twilio was one of these high-flying mid-cap tech stocks that was trading at uber-rich valuations before getting slammed in 2022. At the end of 2022, TWLO stock was down 90% from its all-time high. But now it is rising from the ashes, with a reasonable valuation, strong growth and a Zacks Ranks #1 (Strong Buy) rating.

Twilio is a cloud communications platform company that enables businesses to integrate messaging, voice, and video capabilities directly into their applications. Known for its extensive APIs (application programming interfaces), Twilio allows developers to embed these functions seamlessly, enhancing customer engagement and support through automated messaging, authentication services, and more.

Today, Twilio is trading at a one-year forward earnings multiple of 25.8x, while earnings are forecast to grow 41.8% annually over the next three to five years. That gives TWLO a PEG ratio of just 0.62, a discount based on the metric.

In the chart below we can see that TWLO stock recently broke out from a massive stage one base, indicating that there may be a big bull run coming for this fast-growing technology stock.

COHERENT CORP: Huge Earnings Growth Forecasts

COHERENT CORP is a fascinating company, specializing in advanced materials, optics, and photonics solutions for industries such as communications, aerospace, and healthcare. Coherent’s diverse product line includes lasers, optics, materials, and components essential for next-gen applications in optical communications, industrial lasers, semiconductor fabrication, and quantum computing. Coherent plays a vital role in areas like 5G network expansion, electric vehicles, and medical devices, positioning itself as a key supplier in the transition to more digitally connected and energy-efficient systems.

Like the others, COHERENT CORP boasts a Zacks Rank #1 (Strong Buy) rating, and powerful momentum pushing it to new highs. The stock is up 140% year-to-date (YTD).

However, while the huge advance in the stock price may steer some investors away, worried that the gains have already occurred, I am less concerned. COHR still enjoys a reasonable valuation and tremendous growth forecasts.

Earnings are projected to grow 45% annually over the next three to five years, while the company has a forward earnings multiple of 36x. That gives it a PEG ratio of 0.82. This reasonable valuation discounted for growth makes me far less worried that the stock will correct aggressively.

Stride: Shares are Cheap Relative to Growth

Stride is another very interesting stock. It is an education technology company that provides online and blended learning solutions, primarily for K-12 students. The company partners with public and private schools, delivering curriculum, digital learning tools, and instructional services through its proprietary platform. Stride’s flexible learning model offers students personalized, self-paced education options that accommodate diverse learning needs.

Stride too has a Zacks Rank #1 (Strong Buy) rating, reflecting strongly trending earnings revisions. FY24 earnings estimates have increased by 32% in the last 60 days and FY25 have jumped by 32.8% over the same period.

Furthermore, LRN is trading at a one year forward earnings multiple of 15.5x, which is well below the industry average. Finally, With EPS forecast to grow 20% annually over the next three to five years, it has a PEG ratio of 0.77.

Should Investors Buy Shares in LRN, COHR and TWLO?

For investors seeking balanced exposure to value, growth, and momentum, Stride, Coherent Corp, and Twilio offer compelling opportunities in a range of industries. Each of these companies demonstrates substantial earnings growth and favorable valuations, making them less vulnerable to downturns compared to many high-momentum stocks.

With significant momentum behind them, shareholders should remain vigilant and actively manage their positions. While these stocks appear less risky than most momentum plays due to their reasonable valuations, investors should always prioritize sound risk management.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

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.

Zacks Investment Research

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Stocks Retreat as Bond Yields Spike Higher

Barchart

The S&P 500 Index Tuesday closed down -0.29%, the Dow Jones Industrials Index closed down -0.86%, and the Nasdaq 100 Index closed down -0.17%.

Stock indexes settled moderately lower on Tuesday as they consolidated the past week’s rally to record highs. Higher bond yields Tuesday fueled some profit-taking pressures in stocks following five straight sessions of gains. Also, long liquidation in stocks ahead of Wednesday's US consumer price report weighed on the overall market.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

Positive Fed comments on Tuesday were bullish for stocks. Richmond Fed President Barkin said the US economy looks "pretty good," and the Fed is in a position to respond however the economy evolves. Also, Minneapolis Fed President Kashkari said only inflation could derail a Fed rate cut in December, and "if we saw inflation surprises to the upside between now and then, that might give us pause."

The markets are looking ahead to Wednesday’s US consumer price report for October, with Oct CPI expected to climb to +2.6% y/y, up from +2.4% y/y in Sep, and core Oct CPI expected to remain unchanged from Sep at +3.3% y/y. Also, Friday’s report on retail sales will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 62% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets Tuesday settled lower. The Euro Stoxx 50 tumbled to a 2-month low and closed down -2.25%. China's Shanghai Composite Index closed down -1.39%. Japan's Nikkei Stock 225 closed down -0.40%.

Interest Rates

December 10-year T-notes (ZNZ24) Tuesday closed down by -15.5 ticks. The 10-year T-note yield rose +13.1 bp to 4.435%. T-notes were under pressure Tuesday from carryover weakness in European government bonds. Also, upbeat comments Tuesday from Richmond Fed President Barkin curbed safe-haven demand for T-notes when he said the US economy looks "pretty good." In addition, concerns about inflationary pressures of future policies from President-elect Trump are weighing on T-notes.

European government bond yields Tuesday moved higher. The 10-year German bund yield rebounded from a 1-1/2 week low of 2.299% and finished up +3.6 bp to 2.362%. The 10-year UK gilt yield rose +7.4 bp to 4.499%.

The German Nov ZEW survey expectations of economic growth unexpectedly fell -3.7 to 7.4 versus expectations of an increase to 13.2.

ECB Governing Council member Rehn said disinflation in the Eurozone is "well on track," and the growth outlook "seems to be weakening," and "that strengthens the case for an ECB rate cut in December."

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Mosaic closed down more than -7% to lead losers in the S&P 500 after reporting Q3 net sales of $2.8 billion, weaker than the consensus of $3.14 billion.

GE Vernova closed down more than -7% after the Financial Times reported that CEO Strazik said the company plans to postpone searching for new offshore turbine orders until market conditions improve.

Home builders retreated Tuesday after the 10-year T-note yield jumped more than +13 bp, which boosts mortgage rates and is negative for housing demand. As a result, PulteGroup , Lennar , DR Horton , and Toll Brothers closed down more than -3%.

Elevance Health closed down more than -2% after the CFO said he sees pressure in Medicaid persisting in 2025 and sees Medicare Advantage margins missing their 2025 targets.

Neurogene closed down more than -43% after a disclosure indicated an emerging serious adverse event in a trial participant for the experimental Rett syndrome drug.

Alnylam Pharmaceuticals closed down more than -3% after Wolfe Research downgraded the stock to underperform from peer perform with a price target of $205.

Knight-Swift Transportation Holdings closed down more than -4% after Citigroup downgraded the stock to sell from neutral with a price target of $56.

Airbnb closed down more than -2% after Phillip Securities downgraded the stock to reduce from neutral with a price target of $120.

Tyson Foods closed up more than +6% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of 92 cents, stronger than the consensus of 72 cents.

Honeywell International closed up more than +3% to lead gainers in the Dow Jones Industrials and Nasdaq 100 after Elliot Investment Management said it built a $5 billion stake in the company and is calling for a breakup of the company.

Live Nation Entertainment closed up more than +4% after reporting Q3 adjusted operating income of $909.8 million, stronger than the consensus of $856.6 million.

Nvidia closed up more than +2% after Redburn initiated coverage on the stock with a buy recommendation and a price target of $178.

Shopify closed up more than +21% after reporting Q3 revenue of $2.16 billion, better than the consensus of $2.12 billion.

Twilio closed up more than +2% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $120.

Molson Coors Beverage closed up more than +2% after JPMorgan Chase said the latest data showed improving trends for the company as the latest 4-week trend to November 2 saw dollar takeaway down -1.9%, an improvement of 200 bp over the prior 4-week period.

Earnings Reports (11/13/2024)

Cisco Systems Inc (CSCO), Loar Holdings Inc (LOAR), NU Holdings Ltd/Cayman Islands (NU), Tetra Tech Inc (TTEK).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

Risk Warnings and Disclaimers

Add to Favorites

Stocks Slightly Lower as Indexes Consolidate Recent Rally

Barchart

Alnylam Pharmaceuticals

-2.53%

The S&P 500 Index today is down -0.13%, the Dow Jones Industrials Index is down -0.29%, and the Nasdaq 100 Index is down -0.07%.

Stock indexes today are slightly lower as they consolidate the past week’s rally to record highs. Higher bond yields today sparked some profit-taking and long liquidation pressures in stocks after following five straight sessions of gains. Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

Positive comments today from Richmond Fed President Barkin supported stocks when he said the US economy looks "pretty good," and the Fed is in a position to respond however the economy evolves.

The markets are discounting the chances at 65% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are lower. The Euro Stoxx 50 tumbled to a 2-month low and is down -1.82%. China's Shanghai Composite Index closed down -1.39%. Japan's Nikkei Stock 225 closed down -0.40%.

Interest Rates

December 10-year T-notes (ZNZ24) today are down by -5 ticks. The 10-year T-note yield is up +6.6 bp to 4.371%. T-notes are under pressure today from carryover weakness in European government bonds. Also, upbeat comments today from Richmond Fed President Barkin curbed safe-haven demand for T-notes when he said the US economy looks "pretty good." In addition, concerns about inflationary pressures of future policies from President-elect Trump are weighing on T-notes.

European government bond yields today are moving higher. The 10-year German bund yield rebounded from a 1-1/2 week low of 2.299% and is up +0.1 bp to 2.328%. The 10-year UK gilt yield is up +4.2 bp to 4.467%.

The German Nov ZEW survey expectations of economic growth unexpectedly fell -3.7 to 7.4 versus expectations of an increase to 13.2.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 24% for a -50 bp rate cut at the same meeting.

US Stock Movers

Mosaic is down more than -7% to lead losers in the S&P 500 after reporting Q3 net sales of $2.8 billion, weaker than the consensus of $3.14 billion.

Elevance Health is down more than -2% after the CFO said he sees pressure in Medicaid persisting in 2025 and sees Medicare Advantage margins missing their 2025 targets.

Neurogene is down more than -40% after a disclosure indicated an emerging serious adverse event in a trial participant for the experimental Rett syndrome drug.

Alnylam Pharmaceuticals is down more than -5% after Wolfe Research downgraded the stock to underperform from peer perform with a price target of $205.

Knight-Swift Transportation Holdings is down more than -3% after Citigroup downgraded the stock to sell from neutral with a price target of $56.

Airbnb is down more than -2% after Phillip Securities downgraded the stock to reduce from neutral with a price target of $120.

Baxter International is down more than -1% after cutting its quarterly dividend to 17 cents per share from 29 cents and after CFRA downgraded the stock to sell from hold.

Tyson Foods is up more than +9% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of 92 cents, stronger than the consensus of 72 cents.

Honeywell International is up more than +4% to lead gainers in the Dow Jones Industrials and Nasdaq 100 after Elliot Investment Management said it built a $5 billion stake in the company and is calling for a breakup of the company.

Live Nation Entertainment is up more than +3% after reporting Q3 adjusted operating income of $909.8 million, stronger than the consensus of $856.6 million.

Nvidia is up more than +2% after Redburn initiated coverage on the stock with a buy recommendation and a price target of $178.

Shopify is up more than +25% after reporting Q3 revenue of $2.16 billion, better than the consensus of $2.12 billion.

Twilio is up more than +3% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $120.

Cardinal Health is up more than +1% after it agreed to buy a 71% stake in GI Alliance from GIA physician owners for $2.8 billion and acquire Advanced Diabetes Supply Group for $1.1 billion in cash.

Earnings Reports (11/12/2024)

Amdocs Ltd (DOX), Archer-Daniels-Midland Co (ADM), Azenta Inc (AZTA), Cava Group Inc (CAVA), GRAIL Inc (GRAL), Home Depot Inc/The (HD), Light & Wonder Inc (LNW), Maplebear Inc (CART), Mosaic Co/The (MOS), Natera Inc (NTRA), Occidental Petroleum Corp (OXY), Repligen Corp (RGEN), Rocket Cos Inc (RKT), Roivant Sciences Ltd (ROIV), Shift4 Payments Inc (FOUR), Skyworks Solutions Inc (SWKS), Spotify Technology SA (SPOT), Tyson Foods Inc (TSN), ZoomInfo Technologies Inc (ZI).

Risk Warnings and Disclaimers

Add to Favorites