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Which internet and social media company will dominate the market next? Is it either Snap (SNAP) or Sogou (SOGO), and whether either of them a safe buy as a long term investment?
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. Sogou's research: Sogou (SOGO) is a Chinese search engine with a language input technology that captures Chinese expressions and phrases on the internet. Recently, the company's shares were moving up, which has speculative investors interested in the stock. Its recent earnings report shows that the company's search business is outperforming the market despite the pandemic. Total revenue grew by 2% compared to a year ago and reached $257 million, and the company is profitable with a 12-month EPS of $0.15. However, compared to the industry benchmark, it has a smaller gross profit margin, which is concerning, and the revenue growth, while positive, is small.
Snap's research:
Snap (SNAP) calls itself a camera company. However, most people know the company by its social networking app Snapchat. Since going public in mid-2017, it has evolved its app in many ways. Starting from a simple image and video app, Snap has added image enhancing, ads, video content, games, and augmented reality capabilities. While seeing steady growth, Snap has recovered quite well from the low of March. Its recent earnings report shows that despite its struggles with profitability, sales growth is robust. However, the company's gross profit margin and 12 month EPS are both negative and lower than the industry benchmark.
Final decision:
While Sogou has a massively larger audience to tap into, Snap already has its position as a market leader and is widely popular in the U.S. among the younger crowd. Moreover, the company's focus on enhancing its platform beyond basic social media features and into augments reality capabilities are some of the features that may lead to its rapid growth in the future.
Which renewable energy company is a more lucrative investment? With Plug Power (PLUG) and Canadian Solar (CSIQ) taking different approaches to renewable energy, which company is poised for growth in the future?
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.
Research and analysis:
Plug Power (PLUG) and Canadian Solar (CSIQ) are two leaders in the renewable energy industry. The two companies have a history of being at the forefront of the extremely popular niche and are pioneering developments in fuel cell and solar panel technology.
Plug Power's analysis: Plug Power is an innovator of modern hydrogen and fuel cell technology. According to the company's quarterly earnings release, "it has revolutionized the material handling industry with its full-service GenKey solution, which is designed to increase productivity, lower operating costs, and reduce carbon footprints reliably and cost-effectively." Based on Scott Levine's analysis, shares of Plug Power are up 180% year-to-date due to investors growing more confident that the company is on track to meet management's 2024 projection of generating sales of $1.2 billion and an operating income of $170 million. Plug Power has also strengthened its business profile by acquiring two companies in June that will aid in the business of hydrogen generation. While the company has a track record of growing its top line, many experts are wary of its future. The company's history of diluting shares also has investors skeptical about the future of the company.
Canadian Solar's analysis:
Canadian Solar is an integrated provider of solar power products, services, and system solutions. While many solar panel companies have gone bankrupt, Canadian Solar has thrived over the past decade, and investors are quite confident in its future. The solar panel expert set a goal of solar module shipments this year and expects to increase its growth rate by over 15% by the end of this year. Canadian Solar also has a strong focus on the energy storage market with a massive 2,820 megawatt-hours of storage projects. According to the company's Stock Card, the company's profitability seems quite positive last year, with an EPS growth trend of 10%. Its last quarter's profit margin is also at around 27%, which is over 10% higher than industry benchmarks. One prevalent risk that financial analysts like Scott Levine discuss is that solar panel businesses tend to sacrifice pricing power for market share. Final decision: Although the fuel cell market is expected to grow by around 13%, Plug Power's financials seem to be weak compared to Canadian Solar's. Canadian Solar has a long history of profitability and growth as well as the market for solar panels being expected to grow substantially.
With tech companies like Tencent Holdings (TCEHY) and Alphabet (GOOG) leading the way for everything from internet content to gaming, which of these companies is better investment? Which company has bigger growth potential, especially after the pandemic has shaken up the market?
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 anaysis: Tencent and Alphabet are two of the world's most influential tech companies. Tencent's businesses consist of market-leading gaming, mobile messaging, advertising, cloud, and media streaming businesses. Tencent's stock has surged nearly 50% over the past 12 months, and many investors are hyped about the Chinese internet giant's growth potential. Much of this surge has to do with Tencent being the largest video game publisher in the world. Tencent’s massive video game publication list includes League of Legends, Clash of Clans, Honor of Kings, and has a stake in Epic Games and Bluehole. According to Leo Sun, a tech and consumer goods specialist, the gaming section generated 35% of Tencent's revenue last quarter and grew substantially due to COVID-19 forcing people to stay at home. Tencent's online advertising business, its second most profitable sector, was also flourishing due to online education, and e-commerce companies trying to push ad purchases to stay-at-home consumers. The increase in revenue in ad purchases offset the slower growth of the ad purchases in the travel, auto, and consumer goods markets due to COVID-19 . Overall, Tencent is a stable and diversified company that has few risks. One major risk for the Chinese internet giant is that it has some major competitors. Companies such as ByteDance and Alibaba (BABA) are fierce competitors in the internet space and control a majority of the market share. Alphabet is a large tech company that owns Google and is fairly diversified in internet content and information. Alphabet's Google dominates online searches, its Android OS leads the smartphone market, and its YouTube division reached over two billion users. The company's stock has grown roughly 35% over the last 12 months, making it a bit less than Tencent. The slower growth rate could be due to the Alphabet's reliance on Google's advertisement business, which generated 82% of the company's revenue last quarter. This dependence on advertisement revenue leaves the company a bit more exposed to the market's dynamics and sensitive to the cost of acquiring traffic. In the latest quarterly earnings report, Google's traffic acquisition costs remained steady year-over-year at 22% of its total ad revenue. However, that percentage could rise as the COVID-19 crisis throttles ad purchases, and fierce competitors, such as Facebook and Amazon, expand their advertising platforms. Moreover, in the recently announced quarterly report, Alphabet's revenue rose 13% annually in the first quarter and seems to be going steady with a 3% increase today. The slower than expected advertisement revenue growth is a risk investors in Alphabet have to consider. Considering that both companies are the heavy-weight titans of their respective markets and industries, which one is a better investment choice?
Final decision:
While both stocks are solid long term investments, I'd buy Tencent for its better-diversified business, stronger financials, and stronger growth rates.
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. ​ 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.
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