Urban Outfitters and Bally's in the Box have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL –December 11, 2024 – Zacks Equity Research shares Urban Outfitters URBN, as the Bull of the Day and Bally’s BALY, as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla TSLA and  Alphabet’s GOOGL.Here is a synopsis of all four stocks:Bull of the Day:Urban Outfitters has been a stock to watch after impressively exceeding its third quarter earnings expectations in late November.Spiking 25% since reporting strong Q3 results, Urban Outfitters stock could continue rallying based on a pleasant trend of earnings estimate revisions. This has earned URBN a Zacks Rank #1 (Strong Buy) and the Bull of the Day.Urban Outfitters Brand ExpansionThe rally in Urban Outfitters stock comes as the popular fashion apparel retailer reported record third quarter sales and profits. Speaking to Urban Outfitters' growing popularity, each of its four retail brands outside of its namesake brand achieved record Q3 revenue.Nuuly stood out in particular, which is a subscription-based rental service that offers a rotating selection of clothing and accessories and saw double-digit revenue growth thanks to a 51% increase in average active subscribers.Q3 Top and Bottom Line BeatOverall, Urban Outfitters' Q3 sales rose 6% year over year to $1.36 billion which topped Zacks estimates of $1.33 billion. More impressive, Q3 net income spiked 24% to $103 million or $1.10 per share. This crushed the Zacks EPS Consensus of $0.85 by 29%. Furthermore, Urban Outfitters has exceeded earnings expectations in three of its last four quarterly reports with an average EPS surprise of 22.82%.Urban Outfitters Growth TrajectoryShaping up to be a viable long-term investment, Urban Outfitters' total sales are now expected to increase over 5% in its current fiscal 2025 and FY26 with projections edging toward $6 billion. Even better, FY25 EPS is expected to increase 18% to $3.84 versus $3.25 in FY24. Plus, FY26 EPS is projected to expand another 8%.URBN EPS RevisionsPeaking short-term interest in Urban Outfitters stock is that FY25 and FY26 EPS estimates have risen over 6% in the last 30 days respectively.Urban Outfitters Attractive ValuationAdding to the alluring trend of positive EPS revisions is that Urban Outfitters stock trades at a very reasonable 12.8X forward earnings multiple.This is still a pleasant discount to the benchmark S&P 500 and its Zacks Retail-Apparel and Shoes Industry average of 17X with some noteworthy peers being Abercrombie & Fitch and The Gap.Interestingly enough, URBN is also near its decade-long median of 13X forward earnings and well below a high of 197X during this period.Bottom LineSitting on gains of over +40% year to date and hovering near its 52-week peaks, higher highs could be in store for Urban Outfitters stock. To that point, in addition to its strong buy rating, URBN has an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.Bear of the Day:Landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day, a decline in earnings estimate revisions is starting to make it clear why investors may want to stay away from stock.Rising over +20% in 2024, it may be time to take any profits in Bally’s stock as the casino and hotel operator is a ways away from being profitable despite this year’s optimism. Furthermore, BALY is still down 50% in the last three years and the return to downside risk has resurfaced after its very subpar Q3 results in November.High Operating Expenses Lead to Weak Q3 ResultsSeeing its operating expenses increase by 20% year over year, Bally’s reported a Q3 net loss of $247.86 million or -$1.99 a share. This widely missed Zacks estimates which called for a Q3 adjusted loss of -$0.25 a share while contracting from EPS of -$1.15 in the comparative quarter.On the top line, Q3 sales of $629.97 million dipped from $632.48 million a year ago and missed estimates of $650.63 million by -3%. More concerning is that Bally’s has missed earnings expectations in three of its last four quarterly reports and has been short of sales estimates for six consecutive quarters.Industry Weakness & Regulatory ScrutinyOperating in a competitive landscape, Bally’s is not alone in what has been challenging market conditions as the Zacks Hotels and Motels Industry is in the bottom 23% out of 250 Zacks industries. For hotel-casino operators specifically, regulatory scrutiny has been an issue as it’s also noteworthy that there have been ongoing investigations and inquiries into Bally’s accounting practices by the SEC.Declining EPS EstimatesAdding fuel to the fire after Bally’s recent earnings miss is that fiscal 2024 EPS estimates had already plummeted over the last 60 days from expectations of an adjusted loss of -$6.08 a share to -$11.07. Plus, FY25 EPS is now projected at a loss of -$3.53 compared to -$3.01 two months ago.Lackluster Top Line TrajectoryWhat may start to sour investor sentiment for Bally’s future earnings potential is that the company is expecting less than 1% sales growth in FY24 and FY25 with projections remaining near $2.4 billion. Bottom LineConsidering there are accounting probes into Bally’s financial practices it's easy to see how investors may be inclined to look away from BALY. To that point, the trend of declining EPS estimates is very concerning as Bally's remains well below the profitability line.Additional content:Will Tesla Stock Hit New Highs in the 2024 Santa Claus Rally?The end of the year often brings anticipation, not just for holiday cheer but also for stock market gains. Investors eagerly await the "Santa Claus Rally," — when stock prices rise during the final trading week of December and the first two trading days of January. Stocks that have already demonstrated strong performance throughout the year often see continued upward momentum during this period. In the past six months, shares of electric vehicle (EV) giant Tesla have more than doubled, crushing the broader market. Is Tesla all geared up for a Santa Claus Rally in 2024?TSLA’s 2024 Momentum: Riding High on OptimismShares of Tesla have surged over 50% since the 2024 U.S. presidential election. Yesterday, TSLA surged to a 52-week high of $404.80 before settling at $389.75, just 6% off its historical peak of $414.50 attained on Nov. 4, 2021. The surge was driven by bullish analyst reports, led by Bank of America (BofA) Securities raising its price target on the stock and maintaining a "Buy" rating.BofA raised its price target for Tesla from $350 to $400, citing impressive advancements in Tesla’s Full Self-Driving (FSD) technology and the upcoming robotaxi launch. BofA’s Senior Automotive Analyst John Murphy expressed confidence in Tesla’s ability to grow its total addressable market with new vehicles and revolutionary technologies like Optimus, Tesla’s humanoid robot project.Meanwhile, Wedbush Securities’ Dan Ives maintains Tesla as the market's most undervalued artificial intelligence (AI) play, underscoring the company’s leadership in autonomous driving and AI innovation.These endorsements come at a time when Tesla is ramping up production of the Cybertruck and reportedly laying the groundwork for the highly anticipated Model Q, a sub-$30,000 EV expected to hit the market in 2025. The launch of this budget-friendly model could expand Tesla’s market reach significantly, ensuring its growth story remains intact.Tesla's current momentum, surging optimism and groundbreaking developments create an ideal setup for a Santa Claus Rally.Tesla’s Long-Term DriversTesla’s long-term growth drivers make it a compelling story for 2025 and beyond.Under a Trump administration favoring deregulation, Tesla's long-delayed robotaxi program could gain significant traction, challenging Alphabet’s Waymo (which is currently leading the AV race) and further boosting investor confidence.Musk has promised ride-hailing robotaxis in Texas and California, and a few other states by next year, pending regulatory approval. And under Trump’s presidency, bureaucratic hurdles could get much smoother.TSLA is likely to stay unscathed by Trump’s push to repeal the $7,500 EV tax credit. Its early investment in EV technology gives it a distinct advantage over competitors that still rely on federal incentives. Unlike its rivals, Tesla has largely outgrown the need for such incentives, thanks to its massive scale, high brand loyalty, head start in production and a sprawling Supercharger network.Tesla’s humanoid robot, Optimus, represents another frontier. Limited production is expected to commence next year, with mass production beginning in 2026. Optimus is expected to leverage Tesla’s AI expertise to disrupt multiple industries.The company’s gigafactories in Texas, Berlin, and Shanghai provide it with unmatched scale and production efficiency. This global footprint, combined with a robust Supercharger network, reinforces Tesla’s dominance in the EV space. We should not also forget TSLA’s thriving Energy Generation & Storage business. Though it remains a small segment of Tesla’s business, its robust growth and juicy margins should be a significant catalyst in the long term.High liquidity and low leverage provide Tesla with the financial flexibility to tap growth opportunities. Tesla exited the third quarter of 2024 with cash/cash equivalents/investments of more than $33 billion.The company is also witnessing positive earnings estimate revisions.Given the trend of upward earnings estimate revisions aligning with Musk's optimistic outlook for FY25 (vehicle deliveries to surge 20-30% next year) and, of course, the Trump effect, the TSLA stock rally is expected to continue.Last WordBuoyed by bullish sentiment, groundbreaking advancements in AI and strides in autonomous driving, the stock looks poised to make the most of the holiday spirit and close the year on a high note, with strong momentum likely carrying into 2025 and beyond. With a robust growth strategy, technological leadership and unmatched market dominance, Tesla remains a compelling investment story for long-term investors.TSLA sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank 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.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want 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 Urban Outfitters, Inc. (URBN): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Bally's Corporation (BALY): 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