AppLovin and Builders FirstSource have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – January 27, 2025 – Zacks Equity Research shares AppLovin Corporation APP as the Bull of the Day and Builders FirstSource, Inc. BLDR as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Starbucks Corporation SBUX, Chipotle Mexican Grill, Inc. CMG and CAVA Group, Inc. CAVA.Here is a synopsis of all five stocks:Bull of the Day:AppLovin Corporation stock has been a Wall Street superstar over the last two years, soaring 3,000% to blow away Nvidia and most other artificial intelligence stocks.AppLovin is thriving as digital app developers and companies flock to its AI-boosted offerings in the hyper-competitive digital app economy. The app-monetization firm's 2025 earnings outlook has jumped even higher recently.APP stock has traded sideways for the past two months and looks due to break out to all-time highs sooner than later.Why This AI-Boosted Stock Outshined NVDA and Other Tech StarsAppLovin's software suite helps app developers improve marketing, revenue generation, and beyond to boost profitable expansion. APP's products and solutions enable companies and app developers to acquire and keep their ideal users, measure their marketing and reach, and much more.AppLovin's broad sales pitch to clients is that its technology attracts more users, keeps them engaged, and increases value across customer lifecycles.AppLovin boasts that it connects its clients to "audiences in-app, on mobile devices, across CTV, and beyond so your business can do more, accelerate faster, and achieve meaningful growth."AppLovin's array of products are critical tools that its clients utilize to compete and thrive in the digital app world that's more competitive than ever. Everyone is competing for eyeballs in the attention economy and AppLovin's AI-boosted offerings are proving vital.AppLovin first rolled out its enhanced, machine learning and AI engine AXON technology in the second quarter of 2023. APP's machine learning and AI engine is generating impressive results for its clients across mobile gaming and beyond.APP's Growth OutlookAppLovin nearly doubled its sales (+93%) in 2021, growing its top line from $1.45 billion in 2020 to $2.79 billion in FY21. That massive YoY growth was always going to be difficult to replicate.AppLovin followed that up with 1% expansion in 2022 as the digital ad market tanked, dragging down Meta and many others.The digital ad market has come back to life since then. More importantly, AppLovin's improved portfolio has driven tangible results that its clients are paying for and helping boost its bottom line.APP grew its revenue by 17% in 2023 and swung from a loss of -$0.52 a share to +$0.98.AppLovin grew its Software Platform revenue by 66% in Q3 of 2024, as clients spend heavily on offerings that have proven to consistently help them achieve their return on ad spending goals. APP's booming sales growth, mixed with its ability to lower costs, saw it grow its EPS by over 300%.APP is projected to grow its revenue by 40% in 2024 from $3.28 billion to $4.60 billion and then expand by 24% in FY25 to reach $5.68 billion—adding over $1 billion to the top-line in both years.The digital app monetization firm is projected to grow its earnings by 314% from $0.98 to $4.06 a share in FY24. AppLovin's impressive earnings growth is projected to carry over into 2025 to the tune of 51% expansion to earn $6.12 a share.APP's EPS estimates have skyrocketed, with its FY25 estimate up 260% in the past 12 months. This includes a big surge since its Q3 earnings release in early November.APP's surging earnings revisions land it a Zacks Rank #1 (Strong Buy). AppLovin's Most Accurate estimates are also coming in above consensus across the board and it has topped our EPS estimate by an average of 26% in the last four quarters.Is This Soaring Tech Stock Ready to Break Out to New Highs?AppLovin stock skyrocketed 3,00% in the past two years, leaving Nvidia's NVDA 650% run in the dust and crushing digital advertising titan Meta's META 360%.APP soared 730% in the past 12 months, while Nvidia jumped 130% and Meta climbed 65%.AppLovin's run helped it break above its late 2021 highs (April 2021 IPO) in September. APP stock has traded sideways since the middle of November following its post-Q3 release gap higher.APP might be due for a healthy pullback to recalibrate its valuation, which has grown a little stretched. That said, AppLovin has found support at its recently converging 21-day and 50-day moving averages.AppLovin's choppiness has helped cool down the stock. APP might experience profit-taking and fade down to its 200-day moving average (near its pre-Q3 release levels) if it provides underwhelming guidance on February 12.Long-term investors don't need to be too picky and try to time stocks exactly. Traders, meanwhile, might want to wait for a possible flush lower before rushing into this standout growth tech stock over the last several years.Bear of the Day:Builders FirstSource, Inc. is a building products supplier giant suffering through a rough patch following a boom run between 2020 and 2022, driven by soaring demand for home and multi-family construction and renovations.Builders FirstSource's earnings outlook is fading as the housing construction market normalizes.BLDR Stock BasicsBuilders First Source is one of the largest suppliers of building products, prefabricated components, and services to the professional market for new residential construction and remodeling. Builders First Source works with large and small customers via its roughly 570 distribution and manufacturing locations around the country.Builders First Source boasts that it works in 90 of the top 100 Metropolitan Statistical Areas.BLDR grew its sales by 18% in 2020 and then posted a mind-blowing 132% YoY sales expansion in 2021, climbing from $8.56 billion to roughly $20 billion. Builder First Source followed that surge up with another 14% sales growth in 2022.Builders First Source's impressive run was driven by the housing boom around the U.S., as well as some acquisitions. The housing construction market has cooled and its 2023 sales fell 25%, with revenue set to slip about 3.5% in 2024. BLDR is projected to bounce back with 6% growth in 2025 and it remains miles above its pre-Covid revenue totals.Bottom Line on BLDR Stock Right NowBLDR last quarter said that its profit margin slipped on the back of "ongoing Multi-Family and core organic normalization." Builders First Source remains a great company and the housing shortage provides wind its sails over the long haul.In the short run, Builders First Source's adjusted earnings are projected to dive 21% in FY24 following a big pullback in 2023.On top of that, its earnings outlook has tanked and its Most Accurate estimate for 2025 came in 10% below its beaten-down consensus. Builders First Source lands a Zacks Rank #5 (Strong Sell) right now. On top of that, its Building Products – Retail space sits in the bottom 22% of over 250 Zacks industries.Investors interested in Builder First Source might want to wait for it to report its Q4 results and provide guidance on February 20 before they jump in.Additional content:How Will Starbucks Perform in 1st Full Quarter with Brian Niccol as CEO?Starbucks Corporation is scheduled to report first-quarter fiscal 2025 results on Jan. 28, 2025, after the closing bell.In the last reported quarter, the company reported adjusted earnings per share (EPS) of 80 cents, in line with the Zacks Consensus Estimate. The bottom line decreased 24.5% year over year.The company's earnings met the Zacks Consensus Estimate in two of the trailing four quarters and missed on two occasions with an average surprise of negative 4%.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Trend in Estimate Revision of SBUXThe Zacks Consensus Estimate for fiscal first-quarter EPS has declined to 65 cents from 66 cents in the past seven days. The expected figure indicates a fall of 27.8% from the year-ago quarter's 90 cents per share.The consensus mark for revenues is pegged at $9.31 billion. The metric suggests a deterioration of 1.2% from the year-ago quarter's figure.Factors Likely to Shape Starbucks' Quarterly ResultsStarbucks' fiscal first quarter performance is likely to have benefited from strong customer demand and an expanded store footprint. Initiatives such as reintroducing condiment coffee bars, simplifying the menu and offering non-dairy milk options (at no extra charge) are likely to have improved efficiency, enhanced throughput and reduced customer wait times, driving customer satisfaction and traffic in the fiscal first quarter.Seasonal menu items and holiday campaigns are anticipated to have played a role in driving customer visits during the fiscal first quarter. The rollout of the Clover Vertica brewers in more locations and investments in digital engagement, including enhancements to its mobile ordering system, is likely to have aided the company's fiscal first quarter top line.Despite its strong brand equity, Starbucks continues to face traffic challenges, particularly during off-peak hours and in U.S. stores. The company's focus on marketing to Starbucks Rewards members has unintentionally alienated non-members, leading to declines in foot traffic. Reflecting the ongoing challenges, our model predicts fiscal first-quarter comps to fall 4.4% year over year.SBUX's fiscal first-quarter margins may remain under pressure due to inflationary costs related to labor, raw materials and supply chain inefficiencies. While operational improvements are expected to partially offset these pressures, heightened promotional activity during the holiday season and investments in partner wages could weigh on the company's profitability. Our model predicts total operating expenses in the fiscal first quarter to rise 4.1% year over year to $5.2 billion.What Our Model Says About SBUX StockOur proven model does not conclusively predict an earnings beat for Starbucks this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.Earnings ESP: Starbucks has an Earnings ESP of +4.78%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.Zacks Rank: The company has a Zacks Rank #4 (Sell).Stocks With the Favorable CombinationHere are some stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.Chipotle Mexican Grill, Inc. has an Earnings ESP of +1% and currently carries a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here.CMG's earnings for the to-be-reported quarter are expected to increase 14.3% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 9.8%.CAVA Group, Inc. has an Earnings ESP of +8.89% and a Zacks Rank of 3 at present.CAVA's earnings for the to-be-reported quarter are expected to increase 200% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 91.8%.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339https://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Starbucks Corporation (SBUX): Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report AppLovin Corporation (APP): Free Stock Analysis Report CAVA Group, Inc. (CAVA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks