Sea Limited and Foot Locker have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – February 4, 2025 – Zacks Equity Research shares Sea Limited SE as the Bull of the Day and Foot Locker FL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Qualcomm Inc. QCOM, Deutsche Telekom DTEGY and Broadcom Inc. AVGO.Here is a synopsis of all five stocks.Bull of the Day:Sea Limited has rapidly evolved into one of the most exciting technology conglomerates in Southeast Asia and beyond. The company operates in three high-growth segments: e-commerce through Shopee, digital financial services via SeaMoney, and gaming under its Garena brand. This diversified business model has positioned Sea Limited as a dominant force in the region, capitalizing on the expanding opportunity set in the digital economy.Sea Limited stock has been on an extremely volatile path over the last several years, falling more than 90% between its 2021 highs and lows in early 2024. This deep correction significantly compressed SE’s previously elevated valuation to more reasonable levels, setting the stage for a strong recovery over the past year. Despite this volatility, SE shares now exhibit strong price momentum, driven by robust earnings revisions, a compelling valuation, and continued revenue growth.With a top Zacks Rank and accelerating earnings forecasts, investors may find Sea Limited an attractive opportunity.Massive Earnings Revisions Drive Sea Limited Stock MomentumSea Limited’s earnings revision trend has been quite strong, underscoring its improving fundamentals and investor confidence. Over the past few months, analysts have significantly upgraded their earnings estimates for the company, leading to a Zacks Rank #1 (Strong Buy) rating. Next year’s earnings estimates have risen by an incredible 75.3% over the last 60 days.All three business segments are firing on all cylinders. In its most recent quarterly earnings report, the company announced that e-commerce orders grew 24.3% year over year, financial services revenue increased 38% YoY, and gaming climbed 24.3%.SE is expected to achieve sales growth of 30.3% this year and 18.9% next year, reflecting the continued expansion of its e-commerce platform and fintech services. This positive momentum in earnings revisions and sales is a strong bullish indicator, often preceding sustained stock price appreciation.SE Shares Trade at a Reasonable ValuationDespite its explosive revenue growth and increasing profitability, SE shares remain attractively valued compared to historical levels. The stock currently trades at a one-year forward earnings multiple of 30.1x, which is significantly lower than its median valuation of 57.1x since its IPO.When factoring in the company’s projected 81.5% forecasted earnings growth over the next year, this valuation appears quite reasonable. Investors looking for a high-growth stock with a compelling risk-reward profile may find SE’s current price levels appealing.Should Investors Buy Shares in SE?Sea Limited has emerged as a major player in the global digital economy, leveraging its diversified revenue streams to drive long-term growth. With strong earnings revisions, a favorable valuation, and robust sales growth, SE appears well-positioned to continue its upward trajectory. While short-term volatility is always a consideration, the company’s long-term prospects remain bright. For growth-oriented investors, Sea Limited represents a compelling investment opportunity in today’s market.Bear of the Day:Foot Locker has faced mounting challenges over the past several years, reflecting broader difficulties in the retail industry. The company, a leading footwear and apparel retailer, has struggled with declining sales, competitive pressures, and shifting consumer preferences. These headwinds have weighed heavily on Foot Locker’s financial performance and stock price, making it a concerning prospect for investors.Declining Sales Weigh on Foot Locker StockOne of the most pressing issues for Foot Locker is its deteriorating revenue trends. Over the past three years annual sales have fallen from $8.9 billion to $8.1 billion, marking a clear contraction in its business. This trend underscores the difficulty of sustaining growth in a competitive retail landscape increasingly dominated by e-commerce and direct-to-consumer strategies from major footwear brands.Not surprisingly, Foot Locker's stock has significantly underperformed both its respective industry and the broad market, declining 64% over the last 10 years and 55% in the last three years. This prolonged downturn reflects investor concerns about the company’s ability to adapt and grow in the evolving retail market.Foot Locker has Falling Earnings EstimatesFoot Locker currently holds a Zacks Rank #5 (Strong Sell), which is indicative of persistent downward earnings revisions. Analysts have consistently lowered their earnings estimates for the company, with current quarter earnings estimates falling 23.4% and FY25 declining by 19.1%.FL Shares Trade at Historical PremiumDespite its challenges, Foot Locker is trading at a 16.3x forward earnings multiple, which is notably above its 10-year median of 12.1x. Given the company’s slowing growth and uncertain outlook, this valuation appears stretched. Investors typically expect lower valuation multiples for companies with contracting sales and limited growth prospects, making FL’s current pricing difficult to justify.Should Investors Avoid Foot Locker?With contracting sales, a struggling stock price, and a challenging business model, Foot Locker presents significant risks to investors. The combination of poor earnings trends, an unappealing valuation, and competitive headwinds suggests that FL may continue to face pressure in the near term. While long-term investors may hope for a turnaround, the current fundamentals make it difficult to recommend the stock at this time.Additional content:Is Qualcomm Stock a Smart Buy Before Q1 Earnings?Qualcomm Inc. is scheduled to report first-quarter fiscal 2025 earnings on Feb. 5, 2025. The Zacks Consensus Estimate for revenues and earnings is pegged at $10.92 billion and $2.93 per share, respectively. Earnings estimates for QCOM have improved from $11.17 per share to $11.21 for fiscal 2025 and from $12.23 per share to $12.32 for fiscal 2026 over the past 30 days.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Earnings Surprise HistoryThe chip manufacturer delivered a four-quarter earnings surprise of 7.6%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 5.1%.Earnings WhispersOur proven model predicts an earnings beat for Qualcomm for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Qualcomm currently has an ESP of +3.34% with a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping the Upcoming ResultsWith the accelerated rollout of 5G technology, Qualcomm is benefiting from investments toward building a licensing program in mobile. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company intends to harness artificial intelligence (AI) to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy. Qualcomm envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio.During the fiscal first quarter, Qualcomm completed an end-to-end trial of SMS send and receipt over a Geostationary Equatorial Orbit (GEO) satellite in collaboration with Deutsche Telekom and Skylo, marking a significant milestone in the development of satellite communication services. This marks the first time in Europe that an operator’s terrestrial mobile network has been integrated with a satellite network to enable texting, following the 3GPP Release 17 specifications for Direct-to-Handset (D2H) connectivity. The device was equipped with QUALCOMM’s cutting-edge Snapdragon X-80 5G Modem-RF System, which provided integrated NB-NTN satellite connectivity based on 3GPP Release 17 standards. This innovation will likely allow customers in remote or underserved regions to send and receive text messages globally through satellite connectivity.In the fiscal first quarter, Qualcomm unveiled the Qualcomm Artificial Intelligence (AI) Program for Innovators 2025 in the Asia-Pacific region (APAC), a new initiative to empower developers and startups in Japan, Singapore and South Korea. The program focuses on creating cutting-edge on-device AI solutions across mobile, compute and Internet of Things (IoT) sectors. This initiative underscores Qualcomm’s dedication to advancing the AI ecosystem in the APAC and empowering innovators to redefine industries through on-device AI solutions. These initiatives are likely to be reflected in the upcoming results.Price PerformanceOver the past year, Qualcomm has gained 20.1% compared with the industry’s growth of 33.3%, lagging peers like Broadcom Inc.Key Valuation MetricFrom a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company shares currently trade at 14.92 forward earnings, lower than 21.53 for the industry and the stock’s mean of 17.35.Investment ConsiderationsQualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience a seamless transition to superfast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, offers the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.The company is reportedly the only chipset vendor with 5G system-level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front-end suppliers with design wins across all premium-tier smartphone customers. Leveraging the technology roadmap for a focused approach to innovation, it aims to connect millions of devices to the ‘connected intelligent edge.’In addition, solid growth opportunities within the mobile space led by innovations in the Snapdragon portfolio for premium-tier Android handsets and a firmer footing in the emerging market of driver-assistance technology with the Snapdragon Ride Advanced Driver Assistance Systems portfolio are tailwinds.End NoteWith solid fundamentals and healthy revenue-generating potential driven by robust demand trends, Qualcomm appears to be a solid investment proposition. It also looks cheaper relative to its valuation metrics. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With improving earnings estimates, the stock is witnessing a positive investor perception.Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed to record solid quarterly results in the ensuing earnings. Hence, investors are likely to profit if they bet on this high-flying stock now.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.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. 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 QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Sea Limited Sponsored ADR (SE): Free Stock Analysis Report Deutsche Telekom AG (DTEGY): Free Stock Analysis Report Foot Locker, Inc. (FL): Free Stock Analysis Report Broadcom Inc. (AVGO): 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