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Pluralsight, Stanley Black Decker, Gilead, Regeneron and GlaxoSmithKline as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – May 14, 2020 – Zacks Equity Research highlights Pluralsight PS as the Bull of the Day and Stanley Black Decker SWK as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Gilead Sciences, Inc. GILD, Regeneron Pharmaceuticals Inc REGN and GlaxoSmithKline plc GSK.

Here is a synopsis of all five stocks:

Bull of the Day:                                              

Pluralsight is a Zacks Rank #1 (Strong Buy) and it is the Bull of the Day today. The stock has that growth divergence that I love to see.  That means it has an A for Growth and a D for Value – telling me right away that this stock is what growth investors are looking for.  That alone makes me want to take a deeper look at the stock.

Description

Pluralsight Inc. is an enterprise technology learning platform. It offers online training courses for professional developers, IT admins and creative artists. The company serves individuals and businesses, as well as academic and government sectors. Pluralsight Inc. is based in Utah, United States.

Earnings History

PS has a great earnings history with four consecutive beats of the Zacks Consensus Estimate.

The most recent quarter saw the company report a loss of nine cents, but that was five cents better than the consensus at a loss of fourteen cents. That positive earnings surprise works out to be 35%.

Over the last four quarters the average positive earnings surprise is 42.8%, which tells these are all really big beats.

Big beats like that tend to lead to higher earnings estimates, and that is what really drives the Zacks Rank.

Estimate Revisions

Those big beats have been driving estimates higher for Pluralsight. The consensus for this quarter has seen a positive increase of two cents.  The same is true for next quarter as well.

Two cents here and two cents there tends to add up and the full year estimate ended moving higher by eight cents. Next year also saw an increase of eight cents.

Valuation

The valuation for PS is pretty high and that is what keeps the value investors away from this stock. Since there are no earnings there is no PE to lean on. Instead we look at price to book and we see a lofty 11x multiple. The topline is seeing impressive growth of 33% and that has allowed the price to sales multiple come in at 7.4x. So there is good reason for growth investors to remain interested in the stock. 

Bear of the Day:

Stanley Black Decker is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. The stock recently beat the Zacks Consensus Estimate but estimates are moving lower and that is the main reason the stock fell to the lowest Zacks Rank.

Description

Headquartered in New Britain, CT, Stanley Black & Decker, Inc. manufactures and provides tools (power and hand tools) and related accessories, healthcare solutions, electronic security solutions, engineered fastening systems, and many more items and services.

Earnings History

SWK has a really good earnings history.  I see four straight beats of the Zacks Consensus Estimate, which makes you wonder why this is a Zacks Rank #5 (Strong Sell). 

The Zacks Rank does take into consideration earnings history, but earnings estimates carry a much bigger weight.

Estimate Revisions

Earnings estimates for SWK have fallen drastically. The current quarter was at $2.44 60 days ago and fell to $2.03 30 days ago. Now the estimate stands at $0.11.  That is a big move lower.

Next quarter also fell, but not as much moving from $2.37 down to $1.44.

Full year estimates have also dropped in a big way.  This year fell from $8.87 60 days ago to $5.19. Next year is also looking at a big move lower.

Valuation

I see a forward PE of 21x and that is a lot for a stock that is seeing topline contraction. The price to book is more reasonable at 2.2x and the price to sales multiple of 1.2x is also respectable.

Additional content:

Biotechs Leading the Search for Coronavirus Vaccine

 

On May 12, Gilead Sciences, Inc. entered into an agreement with five generic drugmakers to make antiviral drugs in 127 countries, not including the United States. The agreement will allow these drugmakers to manufacture and distribute remdesivir in low-income countries. The deal is royalty free.

Biotechnology companies and drugmakers across the world are leaving no stone unturned to develop a vaccine for the deadly COVID-19. Also, pharmaceutical giants are speeding up vaccine development for the novel coronavirus. Although the FDA is yet to approve a drug or treatment for COVID-19, company has already started ramping up manufacturing lines to meet global demand if any of the experimental vaccines succeed.

Gilead Ramps Up Remdesivir Manufacturing

Gilead said that the deal with the five generic drug manufacturers —  Mylan, Cipla, Ferozsons Laboratories, Hetero Labs and Jubilant Lifesciences — is royalty free. This is so until the  World Health Organization says the Covid-19 outbreak is no longer a global health crisis or until a pharmaceutical product other than remdesivir or a vaccine is approved to treat or prevent the virus, whichever is earlier.

Earlier this month, the FDA granted emergency use authorization for Gilead’s remdesivir to treat COVID-19. Remdesivir, an intravenous drug, has so far shown promise by helping in shortening the recovery time of some hospitalized Covid-19 patients, new clinical trial data suggests. 

Pharma and Biotech Giants Lead the COVID-19 Fight 

A number of biotech companies and pharmaceutical giants have joined forces to fight the coronavirus that has infected more than 4 million people globally over the past four months. This has seen many big names collaborating on both development and manufacturing of vaccines and drugs.

On May 12, Moderna said that its experimental COVID-19 vaccine has gained Fast Track designation from the FDA. Fast Track is designed to facilitate the development and expedite the review of therapies and vaccines for serious conditions and fill an unmet medical need.

Last month, Sanofi and Glaxo collaborated to expedite the development of a vaccine for the Wuhan virus. Sanofi recently said that if successful, the vaccine would be available in the second half of 2021.

Although a vaccine is yet to be developed, many companies have already started ramping up manufacturing process of the experimental vaccines they are working on. Pfizer is reportedly contemplating shifting more of its medicine production to outside contractors, as it is focusing on large-scale production of its experimental COVID-19 vaccine, provided it proves effective in curing the disease. 

Earlier this month, Moderna said that it could start manufacturing its yet-unconfirmed COVID-19 vaccine as early as July after it entered a 10-year deal with Swiss contract drugmaker Lonza to ramp up production of the experimental coronavirus vaccine.

Our Choices

A lot of money is being pumped in by biotech companies and drugmakers in research and development of a vaccine to treat the novel coronavirus. Below are five biotech stocks that are set to rally in the near future.

Regeneron Pharmaceuticals Inc is a biopharmaceutical company focused on the discovery, development and commercialization of treatments targeting serious medical conditions. 

The company’s expected earnings growth rate for the current year is 11.6%. The stock has rallied 8.7% in the past 30 days. Regeneron has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GlaxoSmithKline plc has three core businesses – Pharmaceuticals (respiratory, HIV, immuno-inflammation and oncology), Vaccines (meningitis, shingles and influenza vaccines) and Consumer Healthcare (oral health, wellness, skin health and nutrition products).

The company’s expected earnings growth rate for the next year is 1%. The stock has gained 8.6% over the past 30 days.  GlaxoSmithKline carries a Zacks Rank #2.

Gilead is a pioneer in developing drugs for the treatment of human immunodeficiency virus (HIV), liver diseases, hematology and oncology diseases, and inflammation and respiratory diseases. 

TheZacks Rank #2company’s expected earnings growth rate for the next year is 1.4%. Its shares have rallied 6% in the past 30 days.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

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Regeneron Pharmaceuticals Inc (REGN): Free Stock Analysis Report
 
Gilead Sciences Inc (GILD): Free Stock Analysis Report
 
GlaxoSmithKline plc (GSK): Free Stock Analysis Report
 
Stanley Black Decker Inc (SWK): Free Stock Analysis Report
 
Pluralsight Inc (PS): Free Stock Analysis Report
 
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