Primerica and Dow in the Box have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – February 7, 2025 – Zacks Equity Research shares Primerica PRI as the Bull of the Day and Dow DOW as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shopify SHOP, PayPal PYPL and Roblox RBLX.Here is a synopsis of all five stocks:Bull of the Day:Primerica, a Zacks Rank #1 (Strong Buy), provides financial services to middle-income households in the United States and Canada. The company’s mission is to serve families by helping them make informed financial decisions and providing them with a strategy and means to gain financial independence.PRI stock is displaying relative strength, buoyed by a bullish move in the broader financial sector. The price movement is a sign of strength as we head further into the new year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.Primerica is part of the Zacks Insurance – Life Insurance industry group, which currently ranks in the top 36% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has over the past year.Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.Company DescriptionPrimerica assists its customers in meeting their needs for term life insurance, mutual funds, retirement plans, variable annuities, and other financial products. Its representatives utilize a proprietary financial needs analysis (FNA) tool and an educational approach to demonstrate how its products can help achieve their clients’ goals.In addition, Primerica offers mortgage loans, homeowners’ insurance, prepaid legal services, and identity theft services. Founded in 1927 and headquartered in Duluth, Georgia, the company distributes and sells its products through licensed sales representatives.Growth in policies issued and equity market appreciation are aiding its results. Primerica hasn’t shied away from divesting non-core assets to improve profitability.Primerica should benefit from the strong demand for protection products. Its business model makes it well-positioned to cater to the middle-income market's increased demand for financial security in the current market environment.Earnings Trends and Future EstimatesPrimerica (PRI) has built up an impressive reporting history, surpassing earnings estimates in two of the past three quarters. The company delivered a trailing four-quarter average surprise of 4.89%.Back in November, Primerica reported third-quarter earnings of $5.68 per share, an 18.83% surprise over the $4.78/share consensus estimate. Revenues of $770.1 million also exceeded projections by 4.1%.Analysts are bullish on the stock and have raised fourth-quarter earnings estimates by 1.02% in the past 60 days. The Q4 Zacks Consensus Estimate now stands at $4.96 per share, reflecting EPS growth of 16.7% relative to the year-ago period on 5.9% revenue growth ($767.2 million).Let’s Get TechnicalThis market leader has seen its stock advance nearly 35% over the past 9 months. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.The stock has been making a series of higher highs throughout the past year. With both strong fundamental and technical indicators, PRI stock is poised to continue its outperformance.Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Primerica has recently witnessed positive revisions. As long as this trend remains intact (and PRI continues to deliver earnings beats), the stock will likely continue its bullish run.Bottom LineBacked by a leading industry group and history of earnings beats, it’s not difficult to see why PRI stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.In addition to ongoing share price momentum, Primerica currently pays a $3.60 (1.24%) dividend, which adds to the overall appeal of owning the stock.Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put PRI on your shortlist.Bear of the Day:Dow engages in the provision of various materials science solutions. The company provides a portfolio of advanced, sustainable products for packaging, infrastructure, mobility, and consumer applications.A global chemical company, Dow offers ethylene, propylene and aromatics products. In addition, Dow provides coatings, adhesives, and sealants used in maintenance and protective industries, metal packaging, traffic markings, and manufactured silicone.The company faces challenges from soft demand due to weak global economic activities. A feeble recovery in China is impacting overall demand in Asia. Lower consumer spending due to inflationary pressures is also impacting demand in Europe.The Zacks RundownA Zacks Rank #5 (Strong Sell) stock, Dow is a component of the Zacks Chemical - Diversified industry group, which currently ranks in the bottom 8% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the past year.Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.Along with many other diversified chemical stocks, DOW shares have been underperforming over the past year while the general market returned to new heights. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head further into the new year.Recent Earnings Misses & Deteriorating OutlookDow has fallen short of earnings estimates in two of the past three quarters. Just last month, the company reported (adjusted) breakeven fiscal fourth-quarter earnings, missing the $0.23/share Zacks Consensus Estimate by -100%.In the prior-year period, Dow had delivered earnings of 43 cents per share. Revenues of $10.41 billion fell 2% year-over-year and also fell short of analysts’ projections.CEO Jim Fitterling stated that until demand picks up, managing the business is all about cutting costs and protecting cash flow. Dow will slash up to $500 million in capital spending in 2025 and cut approximately 1,500 jobs as the company attempts to fight through a sluggish global economic backdrop.The chemical product distributor has posted a negative trailing four-quarter earnings surprise of -21.1%. Consistently falling short of earnings estimates is a recipe for underperformance, and DOW is no exception.The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by a whopping -41.82% in the past 60 days. The fiscal Q1 Zacks Consensus EPS Estimate is now $0.32/share, reflecting negative growth of -42.9% relative to the year-ago period.Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.Technical OutlookDOW stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen nearly 25% over the past year alone.Final ThoughtsA deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that DOW is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of DOW until the situation shows major signs of improvement.Additional content:Buy, Hold or Sell Shopify Stock Ahead of Q4 Earnings?Shopify is scheduled to report its fourth-quarter 2024 results on Feb. 11.See the Zacks Earnings Calendar to stay ahead of market-making news.For the to-be-reported quarter, Shopify expects revenues to grow at a mid-to-high twenties percentage rate on a year-over-year basis.The Zacks Consensus Estimate for revenues is currently pegged at $2.72 billion, suggesting growth of 27.02% from the year-ago quarter’s reported figure.The consensus mark for earnings is pegged at 44 cents per share, unchanged over the past 30 days and indicating 29.41% growth from the figure reported in the year-ago quarter.SHOP’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the earnings surprise being 24.5%, on average.Shopify Inc. price-eps-surprise | Shopify Inc. QuoteLet’s see how things are shaping up prior to this announcement.Key Factors to Note for SHOP’s Q4Shopify is benefiting from strong growth in its merchant base, a trend that will likely be reflected in fourth-quarter results. Merchant-friendly tools like Shop Pay, Shopify Payments, Shopify Collective, Shopify Audiences, Shopify Capital, Shop Cash, Shopify Flow, AI-powered Shopify Inbox, Shopify Tax and managed markets are helping it win new merchants amid a challenging macroeconomic environment.In the third quarter of 2024, Gross Merchandise Volume (GMV) increased 24% year over year, driven by same-store sales growth from existing merchants driven by Plus merchants, growth in the number of merchants, strong international growth and robust point of sale growth (27% GMV growth year over year). These same factors are expected to have driven GMV growth in the to-be-reported quarter.The Zacks Consensus Estimate for fourth-quarter GMV is currently pegged at $93 billion, indicating 24% year-over-year growth.The consensus mark for fourth-quarter Subscription solutions revenues is pegged at $650 million, indicating 23.8% year-over-year growth. The Zacks Consensus Estimate for Merchant Solutions is pegged at $2.07 billion, suggesting 28% year-over-year growth.SHOP’s Gross Profit to Grow at Q3 RateShopify expects fourth-quarter 2024 gross profit to grow 24% (same rate as reported in third-quarter 2024) year over year, with higher percentage of revenues from Payments driven by high-volume holiday selling season.The Zacks Consensus Estimate for Merchant Solutions gross profit is currently pegged at $788 million suggesting 24.3% year over year. The consensus mark for Subscription solutions gross profit is pegged at $529 million, indicating 23.6% year-over-year growth.Shopify expects a 300 to 400 basis point decrease in operating expenses as a percentage of revenues.SHOP Shares Outperform Sector, IndustrySHOP shares have appreciated 43% in the trailing 12 months, outperforming the Zacks Computer & Technology sector’s return of 23.6% and the Zacks Internet Services industry’s appreciation of 31%.Shopify Trading at a PremiumHowever, the Value Score of F suggests a stretched valuation for Shopify at this moment.SHOP stock is trading at a premium with a forward 12-month Price/Sales of 14.42x compared with the industry’s 6.10x.SHOP Stock to Ride Higher on Strong Merchant BaseShopify’s long-term prospects are strong, given its growing merchant base and expanding partner base. Its strategy of adding features and updates frequently — 400 in the past couple of years — has been the key catalyst. SHOP has added more than 150 new product updates and features in the fourth quarter of 2024.An expanding partner base that includes TikTok, Snap, Pinterest, Criteo, IBM, Cognizant, PayPal, Roblox, YouTube, Target, Manhattan Associates, COACH, Oracle and Adyen is expected to expand its merchant base further.Shopify’s partnership with Amazon allows Shopify merchants to use the former’s massive fulfillment network. SHOP became the first commerce integration partner for Roblox, which has on average has more than 88 million daily active users. The company integrated its platform with YouTube Shopping affiliate program and diversified its Payments product offering through the PayPal partnership.Shopify’s expanding international footprint is noteworthy. In October 2024, the company expanded Tap to Pay across Shopify Point of Sale. Tap to Pay is now available in multiple countries, including Australia, Germany, the Netherlands and the United Kingdom, as well as merchants using Android devices.SHOP’s expanding enterprise customer base is a long-term growth driver. Its new data migration tool is helping new merchants import essential data like products easily and much faster.SHOP Stock: Buy or Hold Ahead of Q4?Shopify is benefiting from strong growth in its merchant base, international expansion and growing enterprise customer base.However, challenging macroeconomic conditions and new tariffs are expected to hurt SHOP’s near term prospects. Benefits from both the PayPal wallet integration and expanding enterprise customer base are expected to occur in the later part of 2025. Stretched valuation is also a concern.Shopify currently has a Zacks Rank #3 (Hold), which implies investors should wait for a more favorable point to accumulate the stock. 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. 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/performance for information about the performance numbers displayed in this press release.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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