For Immediate Release
Chicago, IL – November 19, 2015 – Zacks Equity Research highlights Ruckus Wireless (RKUS) as the Bull of the Day and Jamba Inc. (JMBA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix, Inc. (NFLX), Alphabet, Inc. (GOOGL) and CBS Corporation (CBS).
Here is a synopsis of all five stocks:
Bull of the Day:
Ruckus Wireless (RKUS), a $1 billion Wi-Fi solutions provider, beat on the top and bottom lines when it reported Q3 earnings on October 29. But shares got slammed down 15% the next day because the company also offered less-than-stellar guidance about the current quarter.
Ruckus guided below the consensus due to lengthening sales cycles in Asia and FX headwinds.
Then as the dust settled, analysts actually raised EPS estimates, taking this year from $0.13 to $0.16 (GAAP basis) and next year from $0.26 to $0.30.
Both the agreement among analysts and the magnitude (on a percentage basis) of their upward earnings estimate revisions caused the Zacks Rank to rise to the top tier.
What's the Ruckus All About?
Ruckus Wireless is a pioneer in the wireless infrastructure market, enabling carriers and enterprises to stay ahead of the exploding demand for high-bandwidth applications and services. It provides routers, adapters, and wireless access gateways, as well as managed wireless local area network, backhaul, and triple-play carrier services.
Ruckus serves enterprise customers in various industries, including hospitality, education, healthcare, warehousing and logistics, corporate enterprise, retail, state and local government, and public venues, as well as to mobile operators, cable companies, wholesale operators, and fixed-line carriers.
Their unique enterprise solutions, which include innovative new products like Cloudpath, Xclaim, and Unleashed, are gaining traction in the industry.
Bear of the Day:
Jamba Inc. (JMBA) is once again a Zacks #5 Rank and this will mark the third occasion I've written about this fact. But this has nothing to do with the tastiness or quality of their healthy beverage offerings.
Remember, the Zacks Rank is a purely quantitative model that compares the earnings momentum, based on analyst EPS estimate revisions, of over 4,000 stocks every day.
So for a stock to become a top-ranked Zacks #1 -- and only the top 5% of stocks can do so -- the agreement among analysts and the magnitude of their upward revisions must be sufficiently positive.
Conversely, for a stock to become a bottom-ranked Zacks #5 -- again, only the bottom 5% of stocks get this punishment -- the agreement among analysts is still important and it's the EPS estimates that will be found taking a turn for the worse.
Additional content:
Can Netflix Sustain the Momentum?
Yesterday, video streaming service giant, Netflix, Inc. (NFLX) moved 5.2% higher to close at $117.10 per share. Per TheStreet, a report from Ericsson, which stated that mobile data traffic is expected to witness a 10 times jump by 2021, triggered the rally.
Per the report, video will comprise 70% of the total mobile traffic, up from 50% estimated earlier. Though Alphabet, Inc.'s (GOOGL) YouTube will account for 70% of the total video traffic in most mobile networks, Netflix has the potential to reach 20% in the regions it operates.
Another report that got Netflix shares soaring this week came from "Land Down Under". Per a report from the Australian Communications and Media Authority, Netflix attracted 2.5 million subscribers in the first six months of 2015, making a grand entry in Australia.
Per the report, nearly 17% Australians or 3.2 million consumers used streaming services in the first six months of 2015, of which a major chunk (78%) belongs to Netflix Australia. For the seven-day period prior to Jun 2015, 2.2 million consumers subscribed to streaming services, of which 88% used Netflix Australia, outpacing local streaming service providers like Stan, Presto and Quickflix.
We believe Netflix has tremendous growth opportunities. The company is aggressively expanding internationally, especially in emerging economies where the potential for subscriber growth is high. The company plans to cover 200 countries by 2016. Currently, it is available in over 50 countries apart from the U.S., including 13 European nations. Netflix entered Canada in late 2010 and has since expanded its business to Latin America & the Caribbean (Sep 2011), the U.K. and Ireland (Jan 2012) and the Netherlands (Sep 2013). In 2014, Netflix expanded its services to six new European countries — Germany, Austria, Switzerland, France, Belgium and Luxembourg.
Netflix also launched its services in Japan, its first Asian market. Going ahead, Netflix remains focused on Asian markets and will start offering its services in South Korea, Singapore, Hong Kong and Taiwan in early 2016. In addition, the company is planning to expand into China and is reportedly in talks with Chinese broadcasting executives in an attempt to enter the market.
We believe that capitalizing on growing markets is the right strategy for the company to expand its reach as domestic markets are getting saturated. In the third quarter of 2015, in the International Streaming segment, the company recorded 25.99 million members compared with 15.84 million in the comparable prior-year quarter. It recorded 2.74 million net new members in the quarter, compared with 2.04 million a year ago. Paid members were 23.95 million, up from 14.39 million at the end of the year-ago quarter. In total, Netflix now has over 69 million subscribers across the globe.
Moreover, in the third quarter, revenues from international operations soared nearly 49.5% year over year to $516.9 million driven by robust growth in paid members.
In addition, the significant subscriber growth can be attributed to Netflix's diversified streaming content. The company has licensing agreements with several major Hollywood production houses. Moreover, Netflix has expanded its original programming portfolio through partnerships with the likes of CBS Corporation (CBS), DreamWorks Animation, AMC, etc. These partnerships have helped the company to venture into different genres like comedy, political thrillers, autobiographies and horror, thereby attracting more subscribers.
Netflix expects to add 1.65 million subscribers in the U.S. and 3.5 million subscribers internationally in the current quarter. However, increasing content acquisition costs and intensifying competition remain an area of concern.
With a Zacks Rank #3 (Hold), Netflix has been on a bit of a rollercoaster ride this year. Following the stock split on Jul 7, 2015, shares went as high as $129.29 and also touched a low of $85.50 with an overall gain of 19.3% in the period.
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RUCKUS WIRELESS RKUS: Free Stock Analysis Report
JAMBA INC JMBA: Free Stock Analysis Report
NETFLIX INC NFLX: Free Stock Analysis Report
ALPHABET INC-A GOOGL: Free Stock Analysis Report
CBS CORP CBS: Free Stock Analysis Report
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