Twilio, Delphi Technologies, Netflix, IBM and PayPal Holdings highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – October 15, 2018 – Zacks Equity Research highlights Twilio Inc. TWLO as the Bull of the Day, Delphi Technologies DLPH as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix, Inc. NFLX, IBM Corp. IBM and PayPal Holdings, Inc. PYPL.

Here is a synopsis of all five stocks:

Bull of the Day:

San Francisco-based Twilio Inc. is a company that provides cloud communications platforms, two of which are the Programmable Communications Cloud and the Super Network. Twilio enables developers to build, scale, and operate real-time communications within its software applications.

It went public back in 2016, and was that year’s hottest tech IPO.

2018 has also been a good year for the cloud communications company so far, and despite the recent volatility that hit tech stocks and the overall U.S. markets last week, shares of Twilio have had no problem marching higher.

Impressive Q2 Earnings

One can look to better-than-expected results in Twilio’s second quarter that gave shares a nice break out. Revenues jumped 54% to $148 million, and earnings came in at three cents per share, well above the Zacks Consensus Estimate of a loss of six cents per share.

Existing customers grew, surging 32%, and Twilio saw an increase in first-time deals with new customers as well. This was a result in the company’s continued focus on introducing new products and its go-to-market sales strategy.

The company also provided upbeat guidance for Q3, and revenue is now expected in the range of $150 million and $152 million and earnings between two and three cents per share.

In its earnings release, co-founder and CEO Jeff Lawson said “Our core voice and messaging products grew rapidly once again, and the positive customer response to Flex further reinforces our Engagement Cloud strategy…Our go-to-market investments are driving growth in companies of all shapes and sizes, and we’re excited to unveil our newest set of innovations and gather our customers at our upcoming SIGNAL conference in October.”

Bear of the Day:

Delphi Technologies develops and designs powertrain technologies for original equipment manufacturers. It supplies a full suite of aftermarket products, including engine control modules, pumps, injectors, fuel modules, exhaust gas recirculation valves, brakes, steering and suspension.

Delphi is a recent spinoff of Delphi Automotive, which renamed itself Aptiv last year. Aptiv’s main focus is autonomous driving and self-driving cars, and the software that powers these technologies.

Shares of DLPH have experienced a rocky stretch so far in 2018, down over 56% since the start of the year.

Its Q2 results were mixed overall. Earnings of $1.29 per share beat the Zacks Consensus, but revenues of $1.23 billion just fell short of our estimate.

Segment-wise, Delphi’s Powertrain Systems revenues were $1.09 billion, up 4.9% year-over-year thanks to strong growth in commercial vehicles and power electronics. Revenues for Delphi Technologies Aftermarket, however, fell 7.3% year-over-year.

While Delphi tightened its 2018 revenue and guidance at the time of its earnings release, the company just announced that it trimmed its revenue outlook even further for the year, as well as its margin projection, due to “challenging industry dynamics.”

The company now expects revenue growth to be flat compared to a previous forecast of up 2%-4%. Full-year operating margin is now expected in the range of 11.3%-11.5%, down from 12.1%-12.3%

On top of this, CEO Liam Butterworth recently stepped down from his role; he was chief executive for less than a year. Delphi said that director Hari Nair would be interim chief, and its board is currently looking for a permanent CEO. Shares plunged 13% after this news.

Additional content:

Upcoming Tech Earnings to Watch: NFLX, IBM, PYPL

Tech stocks were rebounding in morning trading Friday after suffering a brutal two-day stretch of selling. The bounce from multi-month lows also comes as the first wave of Q3 earnings reports are delivered, with big banks as usual the first to post results.

Investors will now hope that earnings results are strong enough for Wall Street to overlook a number of headwinds, including rising bond yields, concerns about inflation, and ongoing U.S-China trade disputes. This battle will be especially fierce in high-flying growth sectors like tech.

Reports will begin pouring in over the next few weeks, and investors should remember to use the Zacks Earnings Calendar during this busy stretch. This handy tool is your perfect one-stop-shop to properly prepare for earnings, dividend announcements, and other important financial releases.

Earnings in the Technology sector are expected to be nearly 15% higher than the previous year on 11.4% higher revenue.

But will any of the tech reports coming in the next few days have enough positive news to outweigh other headwinds? Let’s take a closer look at a few of the sector's marquee reports due during the week of October 15.

1. Netflix, Inc.

Video streaming behemoth Netflix is scheduled to release its latest quarterly earnings report after the market closes on October 16. Netflix is always the first of the FAANGs to report, and it could very well set the tone for the rest of the group. Shares of NFLX are up 60% so far this year, but that momentum has cooled as the stock is now down 20% from its July 52-week highs.

Netflix is holding a Zacks Rank #3 (Hold) ahead of its report. According to our latest Zacks Consensus Estimates, analysts expect the firm to report adjusted earnings of $0.68 per share and revenue of $3.99 billion. These results would represent year-over-year growth of 134.5% and 33.7%, respectively.

2. IBM Corp.

Enterprise computing behemoth IBM is slated to announce its quarterly financial results after the closing bell on October 16. IBM has finally started to grow its revenue consistently, although it continues to face stiff competition in key areas like cloud computing. Last quarter, investors were also skeptical about the company’s reliance on a new sales cycle for an outdated server technology.

Earnings estimates for IBM have come down in the past 60 days, earning the stock a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for profits now sits at $3.40 per share, about 3.0% higher than the year-ago quarter. Revenue is projected to be $19.10 billion, which would represent a dip of 0.3%. IBM will need to surprise on the top line to keep its newfound revenue growth momentum.

3. PayPal Holdings, Inc.

Digital and mobile payments giant PayPal is ready to post its most recent quarterly report after the market closes on October 18. PayPal had put together a strong 2018 until last month, when the stock began a correction. Shares have now tumbled nearly 18.5% from their 52-week highs.

Still, positive estimate revisions for upcoming fiscal periods have lifted the stock to a Zacks Rank #2 (Buy). For the soon-to-be-reported quarter, earnings and revenue are expected to be $0.54 per share and $3.67 billion, respectively. These Zacks Consensus Estimates indicate growth of 17.4% and 13.2%.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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