Friday, December 20, 2024
The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including Caterpillar Inc. (CAT), Shopify Inc. (SHOP) and Eaton Corp. plc (ETN), as well as a micro-cap stock Vaso Corp. (VASO). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Caterpillar’s shares have outperformed the Zacks Manufacturing – Construction and Mining industry over the past year (+26.2% vs. +22.4%). The company’s Construction Industries segment will gain from increased construction activities in the U.S. and globally. The mining sector will be bolstered by commodity demand driven by the energy transition trend, which will support the Resource Industries segment.
The Energy & Transportation segment is well-positioned for growth, backed by strong demand across all applications. The company has has been winessing growth in aftermarket parts and service-related revenues, which generate high margins. It plans to double its services revenues to $28 billion in 2026.
Caterpillar has paid higher annual dividends to shareholders for 30 consecutive years. Its current dividend yield is higher than its peers. A solid liquidity position and investments in expanding services and digital initiatives will lead to exceptional returrns.
(You can read the full research report on Caterpillar here >>>)
Shares of Shopify have outperformed the Zacks Internet – Services industry over the past year (+40.6% vs. +30.5%). The company is benefiting from strong growth in its merchant base. New merchant-friendly tools like Bill Pay, Tax Platform, Collective and the Marketplace Connect app are helping it to win new merchants regularly.
Strong adoption of these solutions holds promise for Shopify’s prospects. Integration of Shop Pay Installments into the point-of-sale terminal and general availability of Pro makes it easier for merchants to discover and engage their customers. Expansion of back-office merchant solutions to more countries is also strengthening Shopify’s international footprint.
An expanding partner base that includes TikTok, Snap, Pinterest, Criteo, IBM, Cognizant, Amazon and Adayen are expected to expand its merchant base further. However, persistent inflation and cautious consumer spending are headwinds.
(You can read the full research report on Shopify here >>>)
Eaton’s shares have outperformed the Zacks Manufacturing – Electronics industry over the past year (+43.2% vs. +15.7%). The company benefits from its research and development work that allows the company to develop new products. Eaton is aided by rising demand from the new AI data center and contributions from its organic assets.
Eaton has been expanding via acquisitions and strategy to manufacture in the region of its end market which has helped the company to reduce expenses. Reindustrialization and megatrends will create more opportunities for Eaton. Our model projects total revenues to improve year over year in 2024 to 2026 period.
However, Eaton’s global operations expose it to unpredictable currency translation, cyber security threats, changes in tax rates and security breaches, which might impact operations. The shortage of raw materials and supplier insolvencies might impact production and operations
(You can read the full research report on Eaton here >>>)
Shares of Vaso have underperformed the Zacks Medical – Instruments industry over the past year (+3.4% vs. -60.2%). This microcap company with market capitalization of $20.96 million is facing rising selling, general and administrative (SG&A) costs, operating losses of $1.4 million, declining EBITDA and margin pressures, and heightened competition underscore risks. Strategic investments, while promising, pose execution challenges.
Nevertheless, Vaso demonstrates a diversified business model across IT services, medical devices and sales services, with IT revenue growing 12.3% year over year to $11.1 million in third-quarter 2024, reflecting strong demand in healthcare digitization.
Liquidity remains robust, with $26.8 million in cash as of Sept. 30, 2024, and $3.6 million operating cash flow in the first nine months of 2024, supporting growth initiatives. Deferred revenues rose 2.9% to $33.1 million, enhancing predictability. Seasonal fourth-quarter upside and a partnership with GE HealthCare boost near-term prospects.
(You can read the full research report on Vaso here >>>)
Other noteworthy reports we are featuring today include Trane Technologies plc (TT), Diamondback Energy, Inc. (FANG) and Fidelity National Information Services, Inc. (FIS).
Mark Vickery
Senior Editor
