Okta and CleanSpark in the Box have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL –December 12, 2024 – Zacks Equity Research shares Okta OKTA, as the Bull of the Day and CleanSpark CLSK, as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Halliburton Company HAL, SLB SLB and Baker Hughes BKR.Here is a synopsis of all five stocks:Bull of the Day:I last wrote about Okta in late September when shares were under $75 and the premier provider of "identity security" solutions was still suffering from the fallout of a breach of customer data.I thought it was a prime opportunity to add OKTA to any cybersecurity-minded portfolio. Here's what I wrote...Okta, a $13 billion provider of identity security solutions, is back to the upper realms of the Zacks Rank after EPS estimates turned back north this month.What's odd is that the stock price is still in the cellar after their late August earnings report saw shares drop over 17% on the day of, and then over -25% total to Sep 10.The problem is that Wall Street is still nervous about the company's business outlook after they had to pay $60 million to settle a data breach from two years ago.Among 34 analysts, the average price target is above $105 and the low PT is $75.And large institutions were big net buyers of OKTA shares in Q2.It's almost as if everyone is waiting for more bad news as the stock sits here at $76.So I bought some. I'm obviously looking for the "contrarian upside" to good news the stock is not being discounted for. Here's what I told my TAZR members yesterday...TAZR TradersPortfolio is buying Okta between $74 and $76.I just went over the numbers and outlook. Unless somebody knows that another internal OKTA security breach is going to drop, or they are losing customers because of the way they handled the last one, I think the stock is cheap relative to all cybersecurity peers.It's back to a Zacks #1 Rank for a reason and I don't see the worry here at $13 billion, trading under 5X sales.In the last few weeks since the company report, the Zacks consensus EPS estimate for this fiscal 2025 (ends in January) rose 7% from $2.40 to $2.57, representing a 29X P/E in an industry loaded with 90X P/Es.(end of TAZR Buy Alert excerpt)Why I Think OKTA Has a Bright FutureBesides that fact that the company specializes in "identity security," in essence making sure that the person authorized for an IT function is the one being authenticated and monitored, they are also aggressively pursuing the edges of new AI threat vectors.Yesterday, they rolled out an expansion of an existing service, Auth0, to attract more corporate clients as the threat landscape evolves. Traditional identity threats, bolstered by AI advances, are enabling low-quality, high-intensity attacks to become more dangerous and helping new, personalized attacks to emerge.With bots making up nearly 50% of all internet traffic, developers are challenged with securing their applications in this landscape. Multi-factor authentication (MFA), with possession-based or biometric factors, remains as one of the most effective defenses.Conversely, AI can also power bot detection, with AI helping Okta block 79% of automated login attempts and recently reduce bot traffic by 90% over a 90 day period.(end of excerpt from my Sep 25 report where you can also read the recent press release about Auth0, their premier identity solution)OKTA Makes the GradeFinally this month, OKTA gets out of the cyber doghouse with their Q3 report and price targets jump over $100. Here's what I told my TAZR Trader group last week...Okta delivered a strong report last night and price targets are climbing above $100 -- even from the reluctant "neutral" crowd (Jefferies, Susquehanna, Barclays, Piper). But here's a good summary from the biggest bulls on the Street with a $130 PT...Guggenheim analyst John DiFucci said pressure on new deals and contract renewals is at least partially being offset by sales of news products."We continue to believe that this is the reason to own OKTA, and while the volatility around this name undoubtedly has caused bouts of nausea among investors, we believe the business (and stock) can build from this foundation," DiFucci wrote in a note last week.You can get more detail about the OKTA numbers in this article...Okta (OKTA) Reports Q3 Earnings: What Key Metrics Have to SaySince the report, where shares gapped up above $90, she's fallen back to fill the gap from $82 and we are now pushing back above $85. I think you can still buy this premier provider now before the inevitable reach for new highs above $100.Bottom line: Ransomware costs are expected to soar at a 30% CAGR from $35B in 2023 to $220B by 2030. You don't have to buy OKTA, but you better own at least 3 cyber firms since the enterprises needing extensive protection usually employ 5+ of them to cover all bases.Bear of the Day:CleanSpark is a $4 billion technology enterprise that call's itself "America's Bitcoin Miner."I ran a year-to-date look at CLSK shares vs some other prominent miners. While CLSK is up nearly 20%, the big dog Marathon Digital is flat for the year, despite their big Bitcoin acquisitions.Meanwhile Iris Energyis up over 90% while Riot Platforms is down over 20%.Here's how CleanSpark describes their mission...CleanSpark responsibly develops infrastructure for Bitcoin, an essential tool for financial independence and inclusion. We strive to leave the planet better than we found it by investing in communities that we operate in. Bitcoin is a watershed moment, not only in the history and invention of money, but in how we relate to each other.Why CleanSpark is a Zacks #5 RankCLSK topline growth looks strong, with a projected jump this fiscal year (ends September) to $637 million for a 68% advance.The problem is that the same analysts took down EPS estimates for the same period from +12 cents to -30 cents in the past two months.I don't know all the details of why they made that move. But considering how revolutionary the Bitcoin mining business is becoming, there is definitely some re-modeling that Wall Street analysts must do with their revenue and profit projections.The "spreadsheet jockeys" who also had to drop coverage of MicroStrategy because they couldn't figure it out, will be doing their homework over the coming quarters and finding their way back to Bitcoin-centric stocks.To learn more, see my recent essay which explains the mania and the math over Bitcoin...The Bitcoin Heist and Bailout: Cyber ManhattanAdditional content:Think Twice About Buying the 20% Dip in Halliburton StockAs Halliburton Company experiences a significant downturn, now trading just 7% above its 52-week low, investors might be tempted to see this as a buying opportunity. However, a deeper look reveals reasons for caution. The oilfield services giant — down 19.6% in 2024 — has not only underperformed its peers in the Zacks Oil and Gas Field Servicesindustry but has also lagged behind the broader S&P 500 Index year to date.Halliburton’s Disappointing Q3 ResultsHalliburton’s latest quarterly report offered little comfort to its investors. The company reported adjusted net income per share of 73 cents, falling short of the Zacks Consensus Estimate of 75 cents. This figure also marked a decline from the prior year’s adjusted profit of 79 cents. The weak third-quarter numbers reflect subdued activity in the North American region and the effects of the August cyberattackincident. Revenues dipped 1.8% year over year to $5.7 billion, missing projections of $5.8 billion.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.North America, a critical market for Halliburton, bore the brunt of this underperformance. Regional revenues plummeted 8.5% year over year to $2.4 billion. The Completion and Production segment faced setbacks, with operating income dropping to $669 million from $746 million in the previous year. Weak demand for U.S. onshore pressure pumping services, declining completion tool sales in multiple regions, and subdued stimulation activity in Latin America weighed heavily on results.HAL Faces Challenging Outlook for North AmericaHalliburton’s significant exposure to the North American market — where approximately 40% of its revenues are generated — poses a key risk. This dependency is much higher than its peers like SLB or Baker Hughes — 20% and 25%, respectively — making the company more vulnerable to regional weakness.The North American market is projected to face further seasonal budget exhaustion, potentially dragging down full-year revenues. Margins are also likely to suffer, raising concerns about HAL’s ability to maintain its competitive edge.Meanwhile, the international segment showed modest growth, up 4% year over year. However, challenges such as decreased drilling activity in the North Sea and project delays in the Middle East cast a pall on HAL’s prospects. Additionally, if OPEC+ nations were to increase production, it could disrupt global oil supply dynamics, reducing demand for Halliburton’s services and putting further pressure on profitability.Cybersecurity Breach Adds to Halliburton’s TroublesA cybersecurity incident in Q3 further complicated Halliburton’s situation. This breach disrupted billing and collection processes, impacting free cash flow and earnings per share by an estimated 2 cents. It also forced the company to suspend its share repurchase program temporarily, limiting shareholder returns.Long-term digitization projects, such as SAP system upgrades, were already delayed prior to this incident. The breach underscores potential operational vulnerabilities that could weigh on HAL’s future performance and investor confidence.Declining Earnings Estimates Signal More Pain Ahead for HALAdding to investor concerns, earnings estimates for Halliburton have been revised downward. Projections for 2024 EPS have dropped by 4% over the past two months to $3.00, while 2025 estimates fell by more than 8% in the same period. This downward trend erodes Halliburton’s growth narrative and suggests that its challenges are far from over.A Word on Halliburton’s ValuationFrom a valuation perspective, while Halliburton might appear attractive relative to the subindustry, it is still trading above its 3-year low. Going by the forward price-to-earnings (P/E) ratio, the company is trading at a forward earnings multiple of 9.33, higher than its 3-year low of 8.10. We don’t think that this premium is justified given the company’s softening North American activity and pressure on margins.Conclusion: HAL Stock to Avoid—for NowDespite Halliburton’s prominent position in the oilfield services sector, its recent struggles make it a risky bet. Weak Q3 results, growing challenges in North America, international headwinds, and cybersecurity issues all point to a difficult road ahead. With declining earnings estimates and a Zacks Rank #4 (Sell), Halliburton stock is not the bargain it may appear to be. Investors would be wise to wait for clear signs of improvement before considering an entry.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.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. 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Click to get this free report Schlumberger Limited (SLB): Free Stock Analysis Report Halliburton Company (HAL): Free Stock Analysis Report Baker Hughes Company (BKR): Free Stock Analysis Report Okta, Inc. (OKTA): Free Stock Analysis Report Cleanspark, Inc. (CLSK): 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