For Immediate Release
Chicago, IL – August 5, 2020 – Zacks Equity Research Shares of Domino's Pizza, Inc. DPZ as the Bull of the Day, Six Flags Entertainment Corporation SIX as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Camping World Holdings, Inc. CWH, The Walt Disney Company DIS, Activision Blizzard, Inc. ATVI and Beyond Meat, Inc. BYND.
Here is a synopsis of all six stocks:
Bull of the Day:
Founded in 1960, Domino’s Pizza has become one of the biggest quick-service restaurant brands here in the U.S. and abroad; it currently has more than 15,900 locations in 85 markets.
Q2 Earnings Impress Wall Street
Back in July, Domino’s reported second-quarter results that blew past analyst expectations; both earnings of $2.99 a share and total revenue of $920 million easily beat the Zacks Consensus Estimate.
Comparable store sales in the core U.S. market shot up 16% compared to only 2% growth in the first quarter.
Unlike many other restaurants, Domino’s has been able to stay open throughout the Covid-19 pandemic, helping spur growth to new levels.
The company also benefited from the fact that many of its rivals either closed down or had to scale back their operations as people were forced to stay home.
But because of its well-known (and fast) delivery model, Domino’s has been able to keep customers happy and satisfied. It recently added a contactless car-side delivery model to its carryout locations and even continues to add to its store footprint here in the U.S.
Year-to-date, shares of Domino’s have gained a respectable 33% compared to the S&P 500’s 2.12% return. Earnings estimates have been rising too, and DPZ is a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, 11 analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up well over one dollar to $12.54 per share. Earnings are expected to jump over 30% compared to the prior year period. 2021 looks strong too, with earnings expected to maintain positive year-over-year growth.
Domino’s is also a dividend stock. Shares currently yield 0.8% annually, and the company most recently raised its cash payout by 20%.
Its cash trends are strong enough to keep its dividend stable, too. Last year, Domino’s generated $411 million in free cash flow, up 50% from 2018, and for the first half of 2020, operating cash flow hit $212 million.
If you’re an investor searching for a restaurant stock to add to your portfolio, make sure to keep DPZ on your shortlist.
Bear of the Day:
Six Flags Entertainment owns and operates regional theme parks, offering guests rides and water attractions, concerts, shows, restaurants, game venues, and retail outlets. The company also holds long-term licenses for certain Warner Bros. and DC Comic characters like Bugs Bunny and Batman.
Q2 Earnings Leave Investors Disappointed
Because of the coronavirus, Six Flags had to suspend operations of its North American parks on March 13, but today, many of its parks have now resumed partial operations.
These park closures hurt the company’s key metrics. Revenue was only $19 million for the quarter, and attendance of 433,000 plunged 96% year-over-year; net loss per share was $1.62 compared to earnings per share of $0.94 in the year-ago quarter.
Total guest spending per capita also took a hit, down 15% to $35.77, while its Active Pass Base declined 38% year-over-year. Not surprisingly, Six Flags sold much fewer season passes and memberships in Q2 than it did last year.
To help build and maintain sufficient liquidity, Six Flags is continuing to reduce operating expenses and either defer or eliminate certain capital initiatives planned for this year and next.
SIX is now a Zacks Rank #5 (Strong Sell).
Seven analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen well over two dollars to a loss of $4.02 per share; earnings are expected to see a triple-digit decline for fiscal 2020.
Shares have fallen over 60% since the beginning of the year compared to the S&P 500’s +2.3% return.
Six Flags will likely have a long, hard road ahead of it. Even though it’s gone to great lengths to increase the safety of its guests, like new cleaning regimens and implementing social distancing measures, it will be difficult to get its business back to pre-pandemic growth levels.
Until there’s a coronavirus vaccine on the market and the broad economic picture comes into focus, companies like Six Flags will have a hard time getting customers back, as well as getting customers to spend money at their parks like they used to.
Investors who are interested in adding travel-leisure stock to their portfolio could consider Camping World Holdings, a company that sells new and used RVs. CWH is a #2 (Buy) on the Zacks Rank, and shares have skyrocketed 165% year-to-date.
Disney's Q3 Not as Bad as Some Expected, Plus ATVI & BYND Q2s
Another positive close in what’s been overall a somewhat reticent bullish market off the pandemic lows a few months ago — 5 straight up days on the Nasdaq has brought it to a fresh all-time closing high to 10.941, the S&P 500 rose for the fourth straight session to 3306, and the Dow bettered either with +0.62% growth to 26,8239 on the day. For once, it wasn’t Big Tech names driving the bus, but buoying sectors like Energy.
After the closing bell, The Walt Disney Company released earnings for its fiscal Q3, and even with estimates slashed by analysts (Disney was a Zacks Rank #5 [Strong Sell] prior to the release) the entertainment giant came in lower than expected on the revenue side: $11.78 billion versus $12.65 billion expected. Earnings of 8 cents per share, however, easily topped the expected loss of 43 cents in the quarter, though still well off the $1.35 per share reported a year ago.
Disney+ surpassed 100 million subscribers with an additional 57.5 million added in the quarter, with Networks bringing in $6.5 billion overall. However, its Parks business, while anticipated to be down, missed expectations and came in at $983 million. Direct-to-Consumer brought in $3.79 billion, beneath the $4.6 billion estimated. All told, however, this was not the disastrous quarter some analysts were expecting, and shares have bounced up 2% in late trading. For more on DIS' earnings, click here.
Activision Blizzard posted a big beat on both top and bottom lines in its Q2 report, with earnings of 81 cents per share on $2.08 billion in sales surging past the 68 cents per share and $1.69 billion expected. The amounts to top-line growth of 70% year over year, as the video game maker has enjoyed increased demand during the shut-in aspect of the pandemic crisis.
Further, the Call of Duty and World of Warcraft creator increased guidance by 29 cents per share from the Zacks consensus for Q3 to $1.65, and by 50 cents per share for the full year to $7.63. The company has not missed on earnings since Zacks recalibrated stock-based compensation back in Q4 2016.
Beyond Meat also grew revenues around 70% year over year to $113.3 million in its Q2 report, ahead of the $96.95 million analysts were looking for. Earnings, however, took a hit to -16 cents per share; -$0.01 was expected, down from +$0.01 per share posted a year ago.
The company explained its product move from Food Service to Retail was the aggressive growth move, but is costing the company more in the near term. In order to compete with meat companies during the “shelter in place” period of the pandemic, Beyond Meat cut prices on its products. Shares are taking a hit in late trading, down 7%.
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Dominos Pizza Inc (DPZ) : Free Stock Analysis Report
Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Camping World Holdings Inc. (CWH) : Free Stock Analysis Report
Six Flags Entertainment Corporation New (SIX) : Free Stock Analysis Report
Beyond Meat, Inc. (BYND) : Free Stock Analysis Report
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