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With COVID-19 boosting the success of Dominoes Pizza (DPZ) and Wingstop (WING), which of these companies is a better buy? Are these growth numbers sustainable for both these casual restaurant giants?
This is Sailesh Tirupasur. I'm a part of Stock Card's summer internship program in 2020, and this post is a part of my Stock Battle series. I don't own these two stocks, and my goal here is to study them to decide whether to invest or not. These stocks are apart of our Stock Card's Watchlist for Beginners list. If you want to see other stocks in this category, click here. Stock research and analysis: The restaurant industry is experiencing some extreme difficulties at the moment. According to the National Restaurant Association, roughly 100,000 restaurants are expected to close permanently in the next month, with more than 30,000 already shut down. With over three million restaurant workers out of a job and $25 billion lost, the industry is forced to adapt to the delivery business model or to shut down inevitably. Two casual restaurants that have been more than prepared to tackle the pandemic and adjust their business model are Domino's Pizza and Wingstop. Domino's is a leading competitor in the $84 billion global pizza market. It has caught many investors' eyes with their move to delivery and a new menu addition of chicken wings. Domino's quarterly earnings report was shared by the company yesterday and reported revenue and earnings that far exceeded investor expectations. The second quarter totaled $920 million, which is up from $811 million last year. Wingstop's same-store sales and its international sales grew 16% and 1% respectively. These positive numbers, combined with its move to offer chicken wings on its menu, make Domino's a lucrative option for investors. One prevalent risk of this well-established pizza stock is that experts are cautious of the high share price due to the positive earnings report. Experts are informing investors that it's likely smarter to wait for a pullback to around mid 300's to look to invest in the pizza giant seriously. Wingstop is a high-growth franchisor and operator of restaurants specializing in cooked-to-order, hand-sauced, and tossed chicken wings. Wingstop has planned on becoming a top 10 restaurant/food brand in the U.S. despite the harsh conditions of the pandemic. When dining rooms closed across the country, Wingstop was quite prepared due to 80% of its sales being to-go orders. Its digital sales were already 40% of total sales, giving it a robust technology platform to accommodate the sudden shift in consumer behavior. Wingstop shares flew 61% higher during the first half of the year, making it the top restaurant stock. Domestic same-store sales rose 30% higher in April, meaning that its sales growth streak of 16 years is still intact. Wingstop even ended the first half of the year with its first "ghost kitchen," a small space designed entirely for a to-go operating model. This shows the company's commitment to the changing landscape of the struggling industry. â While Wingstop has a very successful business plan, experts associate some risks with the company. With a ridiculously high valuation, investors assume that Wingstop's success will never stop, and that could be a dangerous assumption. A shift in dietary preferences among Americans could spell serious trouble for the chicken wing company. With waves of "healthy lifestyle" campaigns, Wingstop's products might not match the health benefits of other foods. Companies like Beyond Meat (BYND) are hitting billion-dollar valuations and could be a serious potential competitor in the future.
Final decision:
With the pandemic changing the restaurant industry's landscape, these two companies are in a prime position to grow due to their adaptable business models and reliable use of technology. While both of these stocks are lucrative, I would bet on Domino's due to its recent strong earnings numbers and willingness to dip its feet into different food products to appeal to a larger crowd.
Today I want to talk about two giant tech innovators that have just become competitors. Apple (AAPL) and Zoom Video Communications (ZM) weren't competing directly until the lastest product launch by Zoom. Now, the question is which one is a better buy, and why? This is Sailesh Tirupasur. I'm a part of Stock Card's summer internship program in 2020, and this post is a part of my Stock Battle series. I don't own these two stocks, and my goal here is to study them to decide whether to invest or not. These stocks are apart of our Companies Shaping the Future stock list. If you want to see other stocks in this category, click here. Stock research and analysis: Apple (AAPL) is a mature brand in an established but growing market. According to the company's Stock Card, the consumer electronics market is set to grow by almost 9% annually. The tech giant tops $267 billion in yearly revenues and even posted an impressive 9% topline growth in its annual report last year before the pandemic. With COVID-19 slowing sales, though, its most recent quarter's year-over-year growth was only 0.5%. Analysts estimate Apple's full-year gains to come in just above 1%. While Apple is one of the premier blue-chip stocks, there are still risks associated with the company. A slowdown in the smartphone market's growth could be exponentially painful since over half its current revenue comes from its iPhone products. Moreover, Apple relies on its device owners' base to grow its other revenue segments, such as financial services and content. It is paramount to Apple to maintain and slowly increase its device owners' base. Zoom Video Communications (ZM), founded in 2011, is a video communication platform that has skyrocketed in recent months due to the COVID-19 pandemic. Zoom is a small upstart that's posting massive growth in the number of users. The pandemic has strengthened the video platform's most recent quarter's revenues to a massive 169% year-over-year growth. The full year outlook of the company is set to top $1.7 billion, which is almost a 200% increase from the previous year. Rather obvious risk of investing in Zoom now is its high stock price thanks to the seemingly unstoppable stock price rally since the start of the pandemic. The interesting new development in this market is the launch of Zoom's iPad's lookalike. The company just announced a hardware device for home videoconferencing, not too, unlike Apple's iPad. On the one hand, I applaud the company's bold move in the hardware market. On the other hand, I'm pausing to ask whether Zoom believes its growth rate in the video communication software has reached maturity this fast that it would need to launch a hardware product to continue to grow. Perhaps the rapid growth due to the pandemic accelerated the adoption of video conferencing by businesses and schools, and Zoom might have already reached its peak. Final decision: The choice between these two depends on your investment style. If you are looking for a very established low-risk stock, then Apple would be a solid buy. If you are looking for the chance for a more highly valued growth stock with more risk attached, then Zoom would be a great pick. I would choose Zoom due to its massive potential for growth and high returns.
With COVID-19 cases at an all-time high in the U.S., which biotech companies are leading the race for a vaccine? Will Moderna (MRNA) or Inovio Pharmaceuticals (INO) create the first COVID-19 vaccine? This is Sailesh Tirupasur. I'm a part of Stock Card's summer internship program in 2020, and this post is a part of my Stock Battle series. I don't own these two stocks, and my goal here is to study them to decide whether to invest or not. These stocks are apart of our Companies Shaping the Future stock list. If you want to see other stocks in this category, click here. Stock research and analysis: The COVID-19 vaccine race has been on the mind of many investors looking to take advantage of the pandemic. With several biotech titans and new-comers tackling this issue, many investors are confused about who is at the forefront of this race. Out of many choices, Moderna and Inovio Pharmaceuticals seem to be in the running to create the first successful COVID-19 vaccine. Shares of Moderna are up almost 7% today due to its unveiling of positive test results for a phase one study. Moderna's COVID-19 vaccine contains mRNA that tells the body to produce a structure similar to the spike protein. The theory behind this is it will stimulate the immune system to create antibodies. This potentially groundbreaking research has investors eagerly awaiting the beginning of a phase three test that includes around 30,000 test patients. Despite the positive technological outlook, Moderna still has a couple of issues as an investment. It does not sell any commercial products at the moment, and it has reported quarterly losses for several years. This by itself is significant enough for investors to take a second look before investing, regardless of investor hype. Inovio Pharmaceuticals is a contender due to its results for a phase one study. However, they are quite behind compared to Moderna. Inovio focuses on DNA instead of mRNA. The company's vaccine uses strands of DNA, which are called plasmids, and inserts them directly into the cells. It uses a quick electrical pulse that opens tiny pores in the cells allowing the plasmids to enter (a process called electroporation). While the research is sound, investors are not as confident in Inovio as of late. Shares of Inovio are down almost 7% today after hitting a high point in late June. While they seem to be slower than Moderna with the testing of its COVID-19 vaccine, the results from its phase one study are promising. A staggering 94% of participants aged 18 to 50 demonstrated immune responses six weeks after two doses of the vaccine were given. Like Moderna, Inovio is a risky investment due to the lack of strong operations irrespective of the technological advances in producing the vaccine. Final decision: While Moderna seems to be leading the race with its efficient testing and groundbreaking research, betting on a single company in a volatile race could spell disaster for investors riding the wave. If something goes wrong with the clinical trial's final stage, it may lose a significant portion of its value. Investors who invest in this stock should be ready for volatility and the probability of losing money in exchange with an outsized return likelihood. I'm not confident that any of these two stocks are fit for a beginner investor.
Are Joyy (YY) and Cloudflare (NET) undervalued at the moment? Is the pandemic increasing the growth rate of these companies? This is Sailesh Tirupasur. I'm a part of Stock Card's summer internship program in 2020, and this post is a part of my Stock Battle series. I don't own these two stocks, and my goal here is to study them to decide whether to invest or not. These stocks are apart of our Companies Shaping the Future stock list. If you want to see other stocks in this category, click here. Stock research and analysis: Two stocks that seem to have high growth potential in the coming years are Joyy (YY) and Cloudflare (NET). Joyy is a Chinese based social media and online digital streaming platform that has garnered a large amount of attention in the east. China's population is around 1.4 billion people, and almost 800 million of these people have access to the internet. That is more than double the population of the United States to put it into perspective. With a considerable audience to potentially attract, investors are excited about the future of this company. Joyy's stock is up 50% year-to-date, and the share price chart shows that it wasn't hit as hard by COVID-19 than other companies. A critical part of Joyy's growth in recent months is its acquisition of a Singapore based live streaming platform called Bigo. Bigo has become the 5th fifth largest site in the world for streaming apps and is continuing to grow. Experts are raising Joyy's price target to about $125, which is a massive $43 difference from the current share price. Cloudflare is a multibillion-dollar online network operator that offers content delivery network services, web infrastructure and website security, and domain name server services for businesses. With more people working remotely from home and businesses relying on teleconferences, Cloudflare's products and services are in high demand. The last earnings report shows that Cloudflare's revenue is surging and beating the predicted forecasts by a wide margin. It also reported 250,000 new customers in the previous quarter, which adds to their existing customer base of over 2.5 million. With revenue and sales doing well, experts are raising the price target to around $52, which is $15 more than the current share price. Final decision: Although both companies have strong qualities for the current landscape of their market, Joyy seems to have more explosive growth potential. While the pandemic has shot Cloudflare up significantly, Joyy seems likely to succeed due to a massive market that it can tap into.
With the recent acquisition of Vivint Solar (VSLR), will Sunrun (RUN) dominate the residential solar panel industry? Will the merger fix the long term business model problems that both companies have?
This is Sailesh Tirupasur. I'm a part of Stock Card's summer internship program in 2020, and this post is a part of my Stock Battle series. I don't own these two stocks, and my goal here is to study them to decide whether to invest or not. These stocks are apart of our Companies Shaping the Future stock list, if you want to see other stocks in this category, click here.
Stock research and analysis: The global solar energy market is a multibillion dollar industry and according to Allied Market Research is projected to reach $223 billion by 2026, growing at a rate of 20% annually. The need for new sustainable energy has caused many companies to tackle this issue by offering solar energy to mainly residential customers. Two prominent solar companies that have investors excited are Vivint Solar (VSLR) and Sunrun (RUN). Sunrun is in the process of squiring its smaller rival, Vivint Solar. If approved, the merger will create a new titan in the American solar market: the largest solar installer and solar panel lessor in the country, with annual sales exceeding $1.2 billion. The deal comes as America’s consumer solar panel industry claws its way back from the difficulties of the pandemic. Door-to-door sales, a common marketing practice for solar panel businesses, practically ceased as lockdowns were enforced in most states. Experts are quite positive on the deal though and are bumping Vivint Solar's price target from $12 a share to $18 and Sunrun's from $25 to $32. Once merged, the company is expected to control a massive 23% of the solar installation market, beating out other competitors such as Tesla (TSLA). While many investors are excited about the acquisition, there are still several of problems that these companies face in the long term. Long term solar products are considered risky due to how fast the solar panel industry is changing and evolving. Customers, as a result, might not be receptive to older solar panel models in their house and on their rooftop. Costs also seem to be an issue for both Sunrun and Vivint Solar. The residential solar market has been very liberal with their pricing methods.The entire market tends to resort to falling prices to appeal to a larger audience. A team-up between Sunrun and Vivint Solar will have little impact on their cost problem over the long term. While this acquisition could allow Sunrun to maintain higher prices for longer due to reduced competition, Sunrun will still have to contend with a shaky business model. Lastly, the quality of competition in the residential solar market is going to increase dramatically moving forward with new competitors in the space.
Final decision:
There seems to be plenty of reason to get behind this merger due to their large market share as well as positive investor sentiment. However, both these companies' business models will be tested in the long term once better solar technology is developed.
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