Amira Nature Foods (ANFI) Catches Eye: Stock Jumps 5.8%

Amira Nature Foods Ltd. ANFI) was a big mover last session, as the company saw its shares rise nearly 6% on the day. The move came on solid volume too with far more shares changing hands than in a normal session. This breaks the recent trend of the company, as the stock is now trading above the volatile price range of $7.09 to $7.96 in the past one-month time frame.

None of the estimates for this stock were revised over the past 30 days. The Zacks Consensus Estimate also remained unchanged over the same time frame. Yesterday’s price action is encouraging though, so make sure to keep a close watch on this firm in the near future.

Amira Nature Foods currently carries a Zacks Rank #3 (Hold), while its Earnings ESP is 0.00%.

A better-ranked stock in the same industry is Fresh Del Monte Produce Inc. FDP, sporting a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Is ANFI going up? Or down? Predict to see what others think: Up or Down

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Ericsson Upgrades Expert Analytics, Boosts CEM Portfolio

Ericsson ERIC announced the expansion of its Customer Experience Management (“CEM”) solution portfolio with the launch of Ericsson Expert Analytics Release 16.1 for multi-play networks. This recent offering from Ericsson is scheduled for commercial release in fourth-quarter 2016.

Revamped Ericsson Expert Analytics

A big data analytics solution – Ericsson Expert Analytics – is a key player in the mobile marketplace with a robust portfolio of global clients, ranging from engineering and service operations to customer care and product management. Ericsson Expert Analytics Release 16.1 is the latest version of the technology. It has a Service Qualify Management functionality feature to improve customer experience of fixed and multi-play subscribers. 

Ericsson Expert Analytics Release 16.1 leverages on the competence of the company’s fixed network capabilities. It can offer operators a comprehensive 360-degree view of multi-play and fixed-line customer experience. Ericsson Expert Analytics can perform a host of critical customer experience functions, including the prediction of customer satisfaction, finding experience issues, detecting problems and taking steps to resolve them.

OSS & BSS Business: A Catalyst

The revamped software from Ericsson will empower fixed and mobile operators to converge for good. This will, eventually, help them meet customer demands for bundled mobile, fixed and video services. As operators have been increasingly incorporating video and other forms of rich media, Ericsson believes that its offering will enjoy steady market traction. The company’s Operational Support Systems (“OSS”) and (Business Support Systems (“BSS”) combines business, IT and network capabilities, which assists operators in rolling out novel offerings for better customer experience.

Ever since the Telcordia buyout in the first half of 2014, the company has fortified its foothold in the OSS and BSS segment. Also, it had entered into partnerships with Cisco Systems, Inc. CSCO and Tektronix Communications to boost its position in this market. Ericsson believes that its increased focus on customer satisfaction will compel operators to enhance their OSS and BSS solutions which bode well for growth. We perceive that the solid performance of these peripheral businesses will bolster Ericsson’s strength.

Macroeconomic Headwinds Hurting Prospects

Reduced consumer telecom spending, including the delayed spectrum auction, is playing a spoilsport for Ericsson. The company’s mobile broadband sales continue to take a beating from the soft macroeconomic environment and weakness in countries like Brazil, Russia and the Middle East. Moreover, the company has been facing investment headwinds in network developments in the Mediterranean, Northern Europe and Central Asia (especially Russia) regions as well as in Latin America and the Middle East.

Additionally, given that the company derives a major portion of its revenues in various foreign currencies, it is prone to negative impacts from currency fluctuation. During second-quarter 2016, weakening currencies across some of the major Latin America markets and floating of the Nigerian currency were major dampeners for the company. Further, stiff competition from peers, prolonged weakness in key end-markets and ongoing industry consolidation among customers & major rivals are adding to this Zacks Rank #4 (Sell) company’s woes.

Stocks to Consider

Some better-ranked stocks in the same space include Ubiquiti Networks, Inc. UBNT and Motorola Solutions, Inc. MSI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Networking products and solutions provider Ubiquiti Networks has an excellent earnings surprise history, beating estimates each time, over the trailing four quarters. It has a positive average surprise of 13.2%.

Motorola Solutions is engaged in providing communication equipments, software and services. The company has a striking earnings surprise history over the trailing four quarters, having beaten estimates all through, for an impressive average beat of 16.4%.

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Qualcomm Brings Snapdragon 600E, 410E Processors for IoT

Leading manufacturer of wireless chipsets based on baseband technology, Qualcomm Inc. QCOM, is forging ahead with its innovative plans to fortify its hold in the Internet of Things (IoT) industry. Recently, Qualcomm’s subsidiary, Qualcomm Technologies Inc. announced the launch of its two new Snapdragon processors – 600E and 410E – for embedded applications such as digital signage, set-top-boxes, medical imaging, point of sale systems, industrial robotics and other IoT-related applications.

This launch reflects Qualcomm’s vision to expand beyond its traditional market of smartphones into the IoT market. However, this launch marks Qualcomm’s first offering of Snapdragon products through third-party distributors. Initially, CO-based Arrow Electronics – an American Fortune 500 company – will be distributing the products. Qualcomm is also looking forward to working with other distributors going ahead. The company is also eyeing expansion in new industries through wireless connectivity on the IoT platform. The main purpose of bringing in distributors was to allow manufacturers of all sizes access numerous processors for embedded computing and IoT products and thus expand its potential customer base.

Qualcomm’s Take

Qualcomm’s Snapdragon processor is best known for its versatility in IoT applications. The latest launch will help the company serve a broader range of customers with additional support, durability and availability. The company further intends to introduce one of the latest advancements in technology and connections with Snapdragon 600E and 410E to meet the varied demands of consumer, enterprise and industrial categories. The Snapdragon embedded portfolio includes development boards, commercial-ready modules and discrete processors for chipsets.

The Snapdragon 600E supports a 1.5GHz quad-core Qualcomm Krait 300 CPU (central processing unit), Qualcomm Adreno 320 GPU (graphics processing unit) and Qualcomm Hexagon DSP (digital signal processor). In terms of connectivity, it enables Bluetooth (4.0, Low Energy, and 3.x), Wi-Fi up to 802.11ac and GPS for connected applications. It can be used for  a variety of use cases with SATA, SD3.0, DDR memory, eMMC storage, HDMI, LVDS, HSIC and PCIe interfaces.

The Snapdragon 410E supports a 1.2GHz quad-core processor with a Qualcomm Adreno 306 GPU and Qualcomm Hexagon DSP. It offers high performance, low power consumption and rich multimedia. It also supports Bluetooth (4.1 and Low Energy), Wi-Fi up to 802.11n and GPS. As it lacks the 600E’s modularity, it has been designed for single-purpose applications of IoT such as smart homes, digital signage, medical equipment, industrial automation, digital media players and smart surveillance. 

IoT & Drone Advancements

In Sep 2016, U.S. telecom behemoth Verizon Communications Inc. VZ entered into a partnership with Qualcomm Technologies, Inc. which will see Verizon's IoT platform, ThingSpace, being integrated into Qualcomm Technologies' MDM9206 Category M LTE modem.

Recently, Qualcomm teamed up with AT&T Inc.T to evaluate Unmanned Aircraft Systems (UAS) or drones on commercial 4G LTE networks. Notably, the trial will put the safety and security of drones on 4G LTE and 5G networks to test. The UAS test will be carried out on the Qualcomm Snapdragon Flight drone development platform and is scheduled to begin later in Sep 2016 at Qualcomm Technologies' San Diego Campus in an FAA (Federal Aviation Administration)-authorized UAS Flight Center.

Zacks Rank and Stock to Consider

Qualcomm currently has a Zacks Rank #3 (Hold). A better-ranked telecommunication stock is Nippon Telegraph and Telephone Corporation NTT with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The current year earnings estimates for Nippon Telegraph and Telephone Corporation rose 7.02% over the last 60 days.

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athenahealth Fights Competition with Saas-Based Approach

On Sep 28, we issued an updated research report on athenahealth Inc. ATHN. The company currently carries a Zacks Rank #3 (Hold).

We believe that an impressive product portfolio and a growing physician base continue to serve as the key positives for the company. On the other hand, lack of enterprise-sized deals, winding up of government-funded stimulus and increasing competition pose as major headwinds.

The unique business model of athenahealth makes it a strong provider of Revenue Cycle Management (RCM) services to small physician practices. The Software as a Service (SaaS) based approach allows for a lower-cost and more flexible delivery mechanism that is expected to help athenahealth win deals.

In our opinion, athenahealth will continue to benefit from its extensive athenaCollector client base. Its EHR product is a key player in the ambulatory billing market. The company’s updated knowledge base gives its customers real time information that no other competitor has exactly replicated. In addition, the Epocrates acquisition is likely to enhance athenahealth’s user network.

On the macro level, the HITECH Act, which has authorized the EHR Incentive program or the Meaningful Use program, presents significant opportunities for EHR vendors like athenahealth.

However, as the government-sponsored EHR program winds down over the next few years, it will pose a significant problem for athenahealth. The company also lacks adequate alignment with hospitals, which prevents it from getting enterprise-sized deals.

We feel athenahealth’s long-term goal of 30% top-line growth is challenging, given the consolidation trend among small physician practices.

Stocks to Consider

Some better-ranked stocks in the broader medical sector are CryoLife Inc. CRY, IDEXX Laboratories Inc. IDXX and Masimo Corporation MASI. All these stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here. You can see the complete list of today’s Zacks #1 Rank stocks here.

CryoLife recorded an impressive year-to-date return of 65.4%, better than the S&P 500’s 6.2% over the same time frame. In fact, the company posted positive earnings surprises in the last four quarters, the average being 502.50%.

IDEXX represents a strong year-to-date return of 55.5%. The company also recorded a streak of positive earnings surprises over the last four quarters, the average being 12.7%.

Masimo has an impressive long-term expected earnings growth rate of 15% and a solid year-to-date return of 44.1%.

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Gap’s (GPS) Turnaround Seems Likely: Stock Worth Holding?

They say that “All that glitters is not gold.” So does it imply that all that is not glittering could be gold? Think about it.

Taking a look at premier international specialty retailer, The Gap, Inc. GPS, we note that the company has been in the red zone for a while now, with its stock price down 8.1% year to date. This is mainly because Gap has been struggling with dismal comparable store sales (comps), which could be attributable to the ever-changing fashion trends, slow traffic and currency headwinds.

Softness across its Banana Republic and namesake brands have also been pressing concerns for the company. With so much going wrong at Gap, what still makes this Zacks Rank #3 (Hold) company look attractive for the long run? Let’s delve deeper and bring what’s hidden to the surface.

The Growth Drivers

Gap has been firing on all cylinders with regard to bringing a turnaround to its business. Recently, management chalked out various strategic plans to keep track of the accelerated pace of change in the apparel industry. The company intends to speed up its transformation plan by bringing meaningful changes to its product portfolio and operating capabilities worldwide.

In this regard, management plans to focus on growing Gap’s brands in regions which offer greater structural advantage and potential to expand market share, while closing the underperforming stores. Further, the company remains keen on streamlining its operating model by creating a more proficient global brand structure, which will enable its brands to utilize scale advantages more efficiently.

While these actions are likely to attract annualized sales loss and restructuring charges, they are anticipated to deliver annualized pre-tax savings of $275 million and operating margin growth of about 2 percentage points. Clearly, the company remains committed to positioning itself better for long-term growth by setting its priorities right and channelizing its resources accordingly.

Apart from this, Gap has been making significant efforts to penetrate deeper into the over $1.4 trillion global apparel retail market. Over the past few years, the company aggressively expanded its global footprint across emerging markets including China, Russia, South Africa and certain Latin American countries. Going forward, management intends to remain committed toward store growth, with primary focus on greater China, Athleta and global outlet stores.

Also, the brick-and-mortar retailing concept has been losing its luster over the past few years in the U.S. as consumers have gradually shifted to online shopping. To keep pace with this change, Gap is enhancing its eCommerce and omni-channel capabilities by adopting a number of initiatives like “find-in-store”, “Reserve-in-Store” and “Order in Store” facilities, across various stores. We believe that these initiatives will boost its top line in the long run.

If this is not enough to justify Gap’s “Hold” status, investors can satisfy themselves with the company’s financial flexibility and efficient capital allocation. Its strong free cash flow generation enables it to boost earnings per share through large stock repurchases, and helps enhance shareholder value via consistent dividend payments.

Hence, we believe that with all aforementioned factors at play, Gap has tremendous scope to come out of the woods, which makes it a good choice for the long term.

GAP INC Price and Consensus
 

GAP INC Price and Consensus | GAP INC Quote

Investors can further satiate their appetite with better-ranked apparel/shoe stocks like American Eagle Outfitters, Inc. AEO, The Children's Place, Inc. PLCE and Urban Outfitters Inc. URBN, each with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle has a positive record of earnings surprises in the trailing four quarters, with an average beat of 9.3%. The stock has seen positive estimate revisions for the current fiscal year, over the last 60 days.

Children's Place has an average earnings beat of 33.1% in the last four quarters, and estimates for the current fiscal year moved up in the last 60 days.

Urban Outfitters has to its credit an average beat of 6.7% in the trailing four quarters and estimates for the current fiscal year have moved north in the last 60 days.

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Accenture plc’ (ACN) Q4 Earnings Beat Estimate

Accenture plc ACN is one of world’s leading providers of management consultancy, technology and outsourcing services. The company is steadily gaining traction in its outsourcing business primarily backed by a rise in demand for technology to improve operating efficiencies and save costs.

Furthermore, considering the growing need for digital marketing, we commend Accenture’s efforts to enhance its digital marketing capabilities through acquisitions which should positively impact fourth-quarter results.

However, increasing competition from Cognizant Technology Solutions and International Business may temper its growth prospects to some extent. Additionally, Accenture’s broad European exposure and a cautious spending environment are likely to have a negative impact on the to-be-reported quarter results. Due to this, investors are eagerly awaiting Accenture’ earnings report in order to set the record straight and to give some guidance on where this company is heading.

This is especially true given the recent earnings estimate revisions for Accenture as the consensus estimate has been going lower. However, Accenture does have decent history when it comes to recent earnings reports as the stock has beaten estimates in three out of the last four quarters, making for an average surprise of approximately 3.90%.

Currently, Accenture has a Zacks Rank #3 (Hold), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: Accenture Beats on earnings. Our consensus called for EPS of $1.30 per share, and the company reported EPS of $1.68 per share.

Revenue: Revenues surpassed. Accenture posted revenues of $8.489 billion, compared to our consensus estimate of $8.405 billion.

Key Stats: The company witnessed year over year growth in revenue, primarily aided by an increase in Consulting and Outsourcing revenues.

1Q17 Outlook:For 1Q17, Accenture expects revenue to be in the range of $8.40 billion to $8.65 billion.

ACCENTURE PLC Price and EPS Surprise

ACCENTURE PLC Price and EPS Surprise | ACCENTURE PLC Quote

Check back later for our full write up on this Accenture earnings report later!

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Pepsi (PEP) Beats on Q3 Earnings and Revenues

PepsiCo, Inc. PEP is one of the largest food and beverage business in North America and the second largest in the world. The company boasts a diverse portfolio, both geographically and product wise. Pepsi’s product portfolio includes 22 Billion Dollar brands including Pepsi, Mountain Dew, Gatorade, Tropicana, Lay's, Doritos, Cheetos and Quaker which generate more than $1 billion each in retail sales annually. Pepsi has the competitive advantage of selling both snacks and beverages which are complementary food categories.

However, growing health and wellness consciousness is hurting carbonated soft drinks or CSD category growth.

Investors should note that the earnings estimate for PEP have remained over the past 30 days. Moreover, PEP has an impressive track record in the earnings season. It has delivered positive earnings surprises in all the past four quarters, bringing the average to a positive surprise of 5.62%.

Currently, PEP has a Zacks Rank #3 (Hold), but that could definitely change following Pepsi’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

PEPSICO INC Price and EPS Surprise

 

PEPSICO INC Price and EPS Surprise | PEPSICO INC Quote

Earnings: PEP beat earnings. Our consensus earnings estimate called for EPS of $1.32/share, and the company reported EPS of $1.40/share. Investors should note that these figures take out stock option expenses.

Revenues: PEP reported revenues of $16.03 billion. This surpassed our consensus estimate of $15.89 billion.

Key Stats to Note: Revenues increased 4.2% on an organic basis, higher than 3.3% in the previous quarter.

The company has increased its core EPS guidance for 2016 to $4.78 per share from its earlier expectation of $4.71.

Stock Price: Shares rose 0.58% in pre-market trading.

Check back later for our full write up on this PEP earnings report later!

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Lockheed’s Sikorsky Wins $277M Army Deal for Blackhawks

Defense major Lockheed Martin Corp.’s LMT business unit, Sikorsky Aircraft recently secured a contract from the U.S. Army for the sale of six UH-60M Black Hawk helicopters to the Taiwan government. Notably, these six choppers have been uniquely configured to serve the Taiwan National Airborne Service Corp.

Details of this Deal

Valued at $148.7 million, this foreign military sales (FMS) contract was awarded by the Army Contracting Command, Redstone Arsenal, AL.

The contract will utilize fiscal 2016 other funds to finance the work. Work, to be executed in Stratford, CT, is scheduled to be complete by Dec 31, 2021.

Other Similar Contracts

In recent times, Lockheed has won several other contracts from the U.S. Army for the same product line. Sikorky clinched another FMS contract for four UH-60M Blackhawk aircraft for the Tunisian government. These uniquely modified choppers will offer support to the Tunisian Ministry of National Defense. Valued at $38.4 million, the contract too was awarded by the Army Contracting Command.

The contract will also utilize fiscal 2016 other funds. Work is scheduled to be complete by Apr 30, 2020 and will be carried out in Stratford.

Sikorky has grabbed another deal, worth $90.2 million for offering non-personal technical field service for the UH-60 Blackhawk choppers. This takes the total value of the three contracts to $277.3 million.

The contracting activity is the same as that of the previous contracts. Work will be over by Sep 26, 2021. However, details of funding and work location for this contract have not been disclosed yet, and will be determined with individual order.

A Brief Note on Blackhawk

Originally developed and manufactured by Sikorsky, the Blackhawk helicopter has been the work-horse for the U.S. Army, performing multi-mission tactical operations since 1978. There are numerous variants of this product line, which has been successfully serving the nation as well as foreign governments.

While UH-60 is one of the legacy Blackhawk models, UH-60M is a modified version of this family of copters. It is a twin-engine, medium-lift utility copter that offers fail-safe service, during both day and night, in the harshest weather conditions, anywhere in the world.

Among other models of the Black Hawk, UH-60M is the most efficient, thanks to its integrated digital cockpit, moving map display, enhanced GPS/INS system, fully integrated flight controls and superior vertical lift.

Our View

We remind investors that the purchase of the Sikorky Aircraft for $9 billion in cash, last November strengthened Lockheed’s position as the largest defense contractor in the U.S. Notably, this acquisition added Sikorsky’s world-known aircraft, Black Hawk, along with a handful of combat and commercial choppers, to Lockheed’s helicopter product line.

Going ahead, management expects to witness improved cash flows from the Sikorsky business unit in 2018, indicating possibilties of expansion of the business in the days to come. We believe such generous fund flows from Pentagon, in the form of contracts, can certainly help the company achieve its desired business expansion.

Zacks Rank & Stocks to Consider

Lockheed currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the aerospace and defense sector include Engility Holdings, Inc. EGL, General Dynamics Corp. GD and Ducommun Inc. DCO.

Engility's shares witnessed a 0.6% rise during the last trading session. On an average, the company has delivered a positive earnings surprise of 12.09% in the trailing four quarters. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ducommun, also sporting a Zacks Rank #1, has witnessed an almost 1% rise in its stock price during the last trading session. The company’s current year consensus estimate improved 9.4% in the last 60 days.

General Dynamics, a Zacks Rank #2 (Buy) stock, has witnessed a 0.5% gain in its last day’s stock price. The company’s current year consensus estimate improved 1% in the last 60 days.

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Here’s Why Astec (ASTE) is Worth Adding to Your Portfolio

On Sep 28, 2016, we issued an updated research report on Astec Industries, Inc. ASTE. The company is poised to benefit from acquisitions and new product launches. Extension of the long-term highway bill, opportunity from pellet plants and strong infrastructure sales activity will also drive growth.

Acquisitions remain a key part of Astec’s expansion strategy, along with organic growth and targeted sales improvement efforts, both in the U.S. and international markets. The company’s goal is to undertake at least one acquisition during 2016. In line with this, it completed the acquisition of Power Flame for $43 million in August. Power Flame’s strong market share, innovative technology and reliable products will boost Astec’s Energy Group’s performance. The transaction is expected to close early in the third quarter, subject to final due diligence and customary closing conditions.

Astec’s total backlog as of Jun 30, 2016 was $229.5 million, up 58.8% year over year. The improvement was primarily supported by its domestic backlog, which recorded a substantial improvement of 80% to $172 million at the end of the second quarter. This is mainly attributable to the passage of a new Federal highway bill, on-going strong private market activity and the $122.5 million pellet plant order announced during the quarter.

The Congress passed a long-term highway bill extending highway authorization for five years with total funding at $305 billion for the next five years. The main purpose of the bill is to improve infrastructure, reformation of the environmental review and permitting processes, and improving truck and bus safety. In the infrastructure business, the company is witnessing better order activity in the large capital projects that were hampered by the lack of a long-term highway bill in the U.S.

In addition, Astec remains committed to boost parts sales volume in the long term, while it works to accelerate competitive parts sales in the U.S. and worldwide. Also, the company’s continuous focus on lean efforts and gross margins will drive growth.

Astec currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other well-ranked stocks in the same sector include Berry Plastics Group, Inc. BERY, Brady Corp. BRC and Caterpillar Inc. CAT.

Berry Plastics has seen upward estimate revisions over the past 60 days. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Brady Corp., also a Zacks Rank #1 stock, has witnessed upward estimate revisions over the past 30 days.

Caterpillar, which carries a Zacks Rank #2, has seen solid estimate revisions over the last 30 days.

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Tesla (TSLA) Will Stick to No-Discount Policy, Assures Musk

Tesla Motors, Inc.’s TSLA CEO Elon Musk announced that the company would continue to stick to its no-discount policy and employees should follow the same. Musk’s letter to Tesla’s staff via social-media platform, Twitter TWTR, came amid reports that employees of the company were offering discounts to customers to meet the quarter-end delivery targets.

Per Musk’s tweet, there were very few cases of such discounted sales worldwide and action to rectify the situation has been taken. While offering discounts is a common occurrence among automakers, it usually implies overproduction and impacts consumer perception. Tesla follows a strict no-discount policy even for friends and family. The company aims to remove the pressure on customers of bargaining with car sales persons by imposing a uniform selling price.

The discount offer from employees supposedly came after Musk urged staff to cut costs and increase deliveries in the third quarter of 2016 via email on Aug 29. Musk intended to generate funding from investors on a solid quarterly performance. The company requires cash to begin the production of a new car model, Model 3, and complete the Gigafactory as well as its intended merger with SolarCity SCTY, which is also facing liquidity concerns.

However, per the mail released on Twitter, the third quarter’s results would only include sales where delivery of the car was completed in the period rather than only title transfer.

Shares of Tesla closed 0.22% higher at $206.27 on Sep 28.

Zacks Rank

Tesla currently carries a Zacks Rank #3 (Hold). 

A better-ranked auto stock is Superior Industries International, Inc. SUP.The company has witnessed positive estimate revisions in the last 60 days and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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