For Immediate Release
Chicago, IL – May 26, 2017 –Zacks Equity Research Inogen (NASDAQ: INGN – Free Report ) as the Bull of the Day, Acacia Research (NASDAQ: ACTG – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ulta Beauty Inc. (NASDAQ: ULTA – Free Report ).
Here is a synopsis of all three stocks:
Inogen (NASDAQ:INGN – Free Report ) is a $1.75 billion maker of portable oxygen concentrators, or POCs, that primarily serve patients with obstructive pulmonary disease.
The company's compact, lightweight and travel-approved portable oxygen concentrators are designed to free patients from heavy tanks, managing tank refills or being tethered to stationary systems.
Inogen offers its oxygen concentrator, cart, carry bags, backpacks, external battery chargers and universal power supply to US and increasingly global markets.
We last covered Inogen as the Bull of the Day in April when my colleague Dave Bartosiak talked about the fundamentals and the chart. Here's what he had to say on April 19...
It should come as no surprise that INGN has been rallying for quite some time, in line with the increased EPS estimates coming from analysts. This is a stock that was trading below $45 in June of last year which has rallied all the way to $75. There’s been a bit of a consolidation recently with shares bouncing between $74 and resistance just under the 52-week high near $80. With the 50-day moving average providing support down at $72.66 I think there is a nice risk/reward scenario being carved out here.
Dave was a buyer of Inogen shares on the strong earnings momentum and the technical breakout above $76 in March for his Momentum Trader service.
And I am revisiting Inogen for two reasons. First, I bought INGN shares on May 3 for my new Healthcare Innovators portfolio because I really liked the company's niche in POCs.
Second, the company reported earnings on May 9 and delivered a big 125% EPS beat and solid revenue growth that inspired healthcare-focused research house Leerink Swann to raise their price target from $90 to $100.
Acacia Research (NASDAQ:ACTG – Free Report ) has consistently been a Zacks #4 Rank (Sell) or #5 Rank (Strong Sell) for most of the past four years. I have chosen the name for Bear of the Day numerous times in this period to warn investors that their money was better off somewhere else.
In January of 2016, I wrote "The stock has fallen from $30 to new 7-year lows this month under $4." And the driving theme of falling shares was consistent quarter after quarter: analysts were forced to lower EPS estimates as the fundamentals deteriorated.
After a 2016 earnings recovery where shares climbed back above $7.50, they are back under $4.50, and back to the Zacks Rank cellar.
Is There Opportunity Now?
Not only is the company poised to deliver a big double-digit earnings decline from last year's $0.45 profit, but the 2017 full-year consensus has declined in the past 30 days from $0.19 to $0.15.
Part of the problem too is that so few analysts are even providing estimates for this company anymore. In fact, 2018 estimates have only recently been established and by only a single analyst who is calling for a rise in profitability to $0.28 on the year.
This low visibility is reflected in the company's last earnings "surprise" which was negative and sizable. ACTG delivered a loss of 13-cents when the consensus expectation was a profit of 1-cent.
A Business Model In Decline?
Acacia Research Corporation, through its subsidiaries, develops, acquires, and licenses patented technologies. It assists patent owners with the prosecution and development of their patent portfolios, protection of their patented inventions from unauthorized use, generation of licensing revenue from users of their patented technologies and enforcement against unauthorized users of their patented technologies.
For years, the fluctuation in their earnings was blamed on the nature of the business model where patent protection fees and litigation wins and costs were so variable. But the overall trend has still been one way: down.
For these reasons, ACTG has been a terrific short position for several years. When the Zacks Rank locks on to a consistent earnings decliner, the shorts don't let go.
So, until this earnings evaporation stops and reverses, it's probably best to keep this portfolio of patents out of yours.
Additional content:
Ulta Beauty (ULTA) Posts Gorgeous Q1 Earnings on eCommerce +70.9%
Ulta Beauty Inc. (NASDAQ:ULTA – Free Report ) just released its first quarter fiscal 2017 earnings results, posting earnings of $1.91 per share and revenues of $1.314 billion. Currently, ULTA is a #3 (Hold) on the Zacks Rank, and is up 4.9% to $307.44 per share in trading shortly after its earnings report was released.
Ulta:
Beat earnings estimates. The company reported earnings of $1.91 per share, topping the Zacks Consensus Estimate of $1.79 per share. This number excludes 14 cents from non-recurring items.
Beat revenue estimates. The company saw revenues of $1.314 billion, soaring past our consensus estimate of $1.276 billion and increasing 22.5% year-over-year.
Comparable store sales increased 14.3%, driven mostly by 8.7% transaction growth and 5.6% growth in average ticket. Retail comps increased 10.9%, including salon comparable sales growth of 9.9%.
E-commerce sales jumped 70.9% to $104.9 million compared to $61 million in the first quarter of fiscal 2016. This represents 340 basis points of Ulta’s total comps.
Looking ahead, Ulta has raised its fiscal 2017 guidance. The beauty giant now expects to achieve comps growth of roughly 9% to 11%, including the impact of its e-commerce business. Ulta expects to grow online sales in the 50% range and open roughly 100 new stores.
For Q2, Ulta expects net sales in the range of $1.257 billion to $1.278 billion, with earnings between $1.72 and $1.77 per share.
“The Ulta Beauty team kicked off 2017 with excellent performance in the first quarter,” said Mary Dillon, Chief Executive Officer. “Strong execution of our growth strategies delivered above plan sales and earnings growth. Our results reflect continued newness and innovation in merchandising, successful marketing programs, steady progress in our salon business and exceptional growth in e-commerce.”
Ulta Beauty, Inc. is a beauty retailer primarily in the United States and the premier beauty destination for cosmetics, fragrance, skin, hair care products and salon services. Ulta Beauty, Inc., formerly known as Ulta Salon, Cosmetics & Fragrance Inc., is based in Bolingbrook, Illinois.
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Inogen, Inc (INGN): Free Stock Analysis Report
Acacia Research Corporation (ACTG): Free Stock Analysis Report
Ulta Beauty Inc. (ULTA): Free Stock Analysis Report
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