Market Overview - Significant turbulence in global financial markets due to escalating hostilities between Israel and Iran, particularly Israeli airstrikes on Iran's nuclear facilities [1] - Major U.S. indices experienced sharp declines, with the Dow Jones Industrial Average down 1.8% (769.81 points), S&P 500 down 1.1% (68.29 points), and Nasdaq Composite down 1.3% (255.67 points) [2] Investment Opportunities - Value stocks may become attractive during market uncertainty as they are often priced below intrinsic value, providing a margin of safety [3] - Effective valuation metric for value stocks is the Price to Cash Flow (P/CF) ratio, with companies like StoneCo Ltd. (STNE), Centene Corporation (CNC), CVS Health Corporation (CVS), and Pfizer Inc. (PFE) showing low P/CF ratios [4][10] Financial Health Metrics - P/CF ratio is preferred over Price/Earnings (P/E) as it reflects a company's financial health by adding back non-cash charges to net income [5][6] - Positive cash flow indicates increased liquidity, allowing companies to settle debts, reinvest, and undertake shareholder-friendly actions [7] Value Investing Strategy - A comprehensive investment strategy should include multiple metrics such as price-to-book ratio, price-to-earnings ratio, and price-to-sales ratio, along with a favorable Zacks Rank and Value Score [8][12] - Parameters for selecting true-value stocks include P/CF less than or equal to industry median, minimum stock price of $5, and various other financial ratios [9][11] Company Performance Insights - StoneCo (STNE) has a Zacks Rank 1, with projected sales and EPS growth of 10.9% and 4.4% respectively, and shares have risen 15.2% in the past year [14] - Centene (CNC) holds a Zacks Rank 2, with projected sales and EPS growth of 10.1% and 1.5% respectively, but shares have declined 19.1% in the past year [14] - CVS Health (CVS) also has a Zacks Rank 2, with projected sales and EPS growth of 3.5% and 12.6% respectively, and shares have increased by 10.4% in the past year [15] - Pfizer (PFE) carries a Zacks Rank 2, with projected sales and EPS declines of 0.6% and 1.6% respectively, and shares have fallen 9.1% in the past year [16]

Industry Overview - Financial technology (fintech) is a transformative investment space merging finance and technology, offering services like online banking, peer-to-peer payments, insurance, cryptocurrency, and cybersecurity [1] - The fintech space is expected to benefit from expanding transaction volumes due to the widespread adoption of digital means, accelerated by the pandemic [2] - The innovative nature of fintech positions it favorably in the evolving financial landscape, with significant growth potential driven by mobile and broadband network expansion [3] Catalysts for Growth - Consumer behavior is shifting towards digital platforms, driven by convenience and cost-effectiveness, which supports fintech's adaptability to changing technological needs [3] - The rise of artificial intelligence (AI) and machine learning is revolutionizing banking, payments, and investments, providing efficient and secure financial solutions [4] Company Highlights BILL Holdings Inc. (BILL) - BILL primarily serves small and medium businesses (SMB) with its AI-enabled financial software platform, benefiting from an expanding clientele and diversified business model [7] - Expected revenue and earnings growth rates for BILL are 13.7% and 11.2%, respectively, for the next year, with a Zacks Consensus Estimate for next-year earnings improving by 5.6% in the last 60 days [10] ACI Worldwide Inc. (ACIW) - ACIW develops software products for facilitating digital payments, powering electronic payments for over 5,000 organizations globally, executing $14 trillion in payments daily [12][13] - Expected revenue and earnings growth rates for ACIW are 7.1% and 7.2%, respectively, for the current year, with a Zacks Consensus Estimate for current-year earnings improving by 1.1% in the last 60 days [13] Shift4 Payments Inc. (FOUR) - Shift4 Payments provides software and payment processing solutions, offering omni-channel card acceptance and processing across multiple payment types [14] - Expected revenue and earnings growth rates for FOUR are 26% and 43.4%, respectively, for the current year, with a Zacks Consensus Estimate for current-year earnings improving by 17.2% in the last 60 days [16] OppFi Inc. (OPFI) - OppFi operates as a specialty finance platform for community banks, providing access to credit for consumers turned away by mainstream options [17] - Expected revenue and earnings growth rates for OPFI are 10% and 29.5%, respectively, for the current year, with a Zacks Consensus Estimate for current-year earnings improving by 15% in the last 60 days [18] StoneCo Ltd. (STNE) - StoneCo is a leading provider of point-of-sale payment processing services, empowering businesses to accept various payment methods and manage accounts [20] - Expected revenue and earnings growth rates for STNE are 10.9% and 4.4%, respectively, for the current year, with a Zacks Consensus Estimate for current-year earnings improving by 11.9% in the last 60 days [21]

Core Insights - MercadoLibre's fintech arm, Mercado Pago, is crucial for the company's growth, achieving $1.49 billion in fintech revenues in Q1 2025, which is 34.4% of total revenues and represents a 43% year-over-year increase [1] - The company is experiencing strong user growth, with 64 million monthly active users (MAUs) in Q1 2025, a 31% increase year-over-year, driven by improved product offerings and user experience [4] Fintech Growth and User Engagement - Consistent improvements in Net Promoter Score (NPS) in Brazil and Mexico indicate a strong value proposition, with expectations for continued growth in product adoption and user engagement [2] - The expansion of digital accounts and high-yield deposits is enhancing product adoption, particularly in Brazil, Mexico, and Chile, where user growth exceeds the overall average [3][9] Competitive Landscape - MercadoLibre faces competition from other fintech players in Latin America, such as Nu and StoneCo, which are also showing significant user growth and engagement [5][6] - Nu reported nearly 100 million MAUs in Q1 2025, while StoneCo had 4.3 million active clients in its payments segment, with 38% of clients using multiple solutions [5][6] Stock Performance and Valuation - MELI shares have increased by 39.6% year-to-date, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector [7] - The stock is currently trading at a forward Price/Sales ratio of 3.91X, compared to the industry's 1.98X, indicating a higher valuation [11] Earnings Estimates - The Zacks Consensus Estimate for MELI's Q2 2025 earnings is $12.01 per share, reflecting a 14.60% year-over-year growth, with the 2025 earnings estimate at $48.38 per share, indicating a 28.36% year-over-year growth [13]

Core Insights - CrowdStrike Holdings, Inc. (CRWD) reported non-GAAP earnings per share of 73 cents for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate by 10.61% and management's guidance of 64-66 cents, although it represented a 7.6% decline year-over-year [1][12] - Despite the earnings beat, CRWD's shares fell 6.5% in extended trading due to revenues falling short of consensus expectations [2] - The company's Q1 revenues were $1.103 billion, slightly below the Zacks Consensus Estimate of $1.105 billion, but showed a 20% year-over-year increase [2][3] Revenue Breakdown - Subscription revenues, which account for 95.2% of total revenues, increased by 20.5% year-over-year to $1.051 billion [4] - Professional services revenues rose 7.8% year-over-year to $52.67 million, contributing to the overall revenue growth [4] - As of April 30, 2025, annual recurring revenues (ARR) reached $4.4 billion, up 22% year-over-year, with a net addition of $193.8 million in the reported quarter [4][12] Customer Adoption - 48% of CRWD's subscription customers adopted six or more cloud modules, while 32% used seven or more, and 22% utilized eight or more modules as of April 30, 2025 [5] Operating Performance - Non-GAAP gross profit increased 18.5% to $857 million, with a gross margin of 78%, down 100 basis points year-over-year [6] - Non-GAAP subscription gross profit rose 19.6% to $840.8 million, while the gross margin fell 100 basis points to 80% [7] - Total non-GAAP operating expenses increased 35.6% to $656 million, representing 56% of revenues, up from 55.4% in the previous year [8][9] Profitability Metrics - Non-GAAP operating income declined 5.7% to $201.12 million, with an operating margin of 18%, down 500 basis points year-over-year [10] Cash Flow and Balance Sheet - As of January 31, 2025, CRWD had cash and cash equivalents of $4.61 billion and long-term debt of $744.36 million [13] - The company generated operating cash flow of $384.1 million and free cash flow of $279.4 million in the fiscal first quarter [13] Future Guidance - For Q2 fiscal 2026, CRWD anticipates revenues between $1.1447 billion and $1.1516 billion, with non-GAAP earnings per share expected in the range of 82-84 cents [14] - For the full fiscal year 2026, the company projects revenues between $4.7435 billion and $4.8055 billion, with non-GAAP earnings anticipated in the range of $3.44-$3.56 per share [15]

Core Insights - The second half of 2025 begins with cautious optimism in U.S. stock markets, despite ongoing geopolitical tensions, particularly between the U.S. and China, which are affecting the global economic outlook [1] - The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all recorded modest gains, indicating a resilient market environment [2] Value Investing Appeal - Rising uncertainty in the market enhances the attractiveness of value investing strategies, particularly using the Price to Cash Flow (P/CF) ratio as a key valuation metric [3][9] - The P/CF ratio is favored over the Price/Earnings (P/E) ratio as it reflects a company's financial health by accounting for non-cash charges [4][5] Selection Criteria for Value Stocks - Effective value investing requires a comprehensive approach, considering multiple metrics such as price-to-book ratio, price-to-earnings ratio, and price-to-sales ratio, alongside a favorable Zacks Rank and Value Score [7][11] - Parameters for selecting true-value stocks include P/CF less than or equal to the industry median, a minimum stock price of $5, and an average 20-day trading volume exceeding 100,000 [8][10] Featured Value Stocks - StoneCo Ltd. (STNE) has a Zacks Rank of 1, with a trailing four-quarter earnings surprise of 6.4% and projected sales and EPS growth of 10.9% and 5.9%, respectively [12][13] - Centene Corporation (CNC) holds a Zacks Rank of 2, with a trailing earnings surprise of 25.5% and expected sales and EPS growth of 10.2% and 1.4%, respectively [13] - CVS Health Corporation (CVS) also has a Zacks Rank of 2, showing a trailing earnings surprise of 18.1% and projected sales and EPS growth of 3.5% and 12.6%, respectively [14] - Pfizer Inc. (PFE) carries a Zacks Rank of 2, with a trailing earnings surprise of 43.5% but expected declines in sales and EPS of 0.6% and 1.6%, respectively [15]

Core Insights - Zscaler reported strong third-quarter fiscal 2025 results, with non-GAAP earnings of 84 cents per share, exceeding the Zacks Consensus Estimate by 12% and reflecting an 18.3% year-over-year increase driven by revenue growth and cost management [1][3] - The company's revenues for the third quarter reached $678 million, surpassing the Zacks Consensus Estimate by 1.8% and management's guidance, marking a 23% year-over-year growth [2][3] - Following the positive results, Zscaler raised its fiscal 2025 guidance, which is expected to positively impact its stock performance [3] Financial Performance - Zscaler's calculated billings increased by 25% year over year to $784.5 million, with the Americas contributing 54% of revenues, EMEA 30%, and Asia Pacific and Japan 16% [4] - The non-GAAP gross profit rose by 20.8% year over year to $544.15 million, while the non-GAAP gross margin contracted by 100 basis points to 80% [7] - Total non-GAAP operating expenses accounted for 58.6% of revenues, increasing by 21% year over year to $397.5 million, resulting in a non-GAAP operating income of $146.7 million [7] Customer Metrics - Zscaler added multiple large customers across its offerings, achieving a net 12-month trailing dollar-based retention rate of 114% [5] - The company had 642 customers with annualized recurring revenues (ARR) of $1 million or more, and 3,363 customers with ARR exceeding $100,000 at the end of the third quarter [6] Balance Sheet and Cash Flow - As of April 30, 2025, Zscaler had $1.99 billion in cash and short-term investments, down from $2.88 billion as of January 31, 2025 [8] - The company generated operating cash flow of $211.1 million and free cash flow of $119.5 million during the third quarter [8] Updated Guidance - Zscaler revised its fiscal 2025 revenue forecast to a range of $2.659-$2.661 billion, up from $2.640-$2.654 billion, indicating a growth of 22.18% from fiscal 2024 [9] - The company expects calculated billings to be in the range of $3.184-$3.189 billion, an increase from the previous guidance [9] - Non-GAAP earnings per share for fiscal 2025 are now projected between $3.18 and $3.19, compared to the previous guidance of $3.04-$3.09 [10]

Core Viewpoint - Ambarella, Inc. reported stronger-than-expected first-quarter fiscal 2026 results, with significant revenue growth and improved earnings, indicating successful execution of its edge AI strategy despite market volatility [1][2][3]. Financial Performance - Non-GAAP earnings for the first quarter were 7 cents per share, exceeding the Zacks Consensus Estimate of 4 cents, and a notable improvement from a loss of 26 cents per share in the same quarter last year [1][2]. - Revenues increased by 57.6% year over year to $85.9 million, surpassing the Zacks Consensus Estimate of $84 million, and were at the higher end of management's guidance of $81-$87 million [2][3]. - Gross margin on a non-GAAP basis was 62.0%, slightly above the guided range of 61-62.5% due to a favorable product mix [6]. Revenue Drivers - Record Edge AI revenues accounted for over 75% of first-quarter revenues, marking the fourth consecutive quarter of record AI sales [3]. - The automotive segment showed over 20% growth year over year, despite a low single-digit sequential decline [3]. Customer Contributions - One logistics and original design manufacturer customer contributed more than 10% to total revenues, with WT Microelectronics accounting for 63.1% of first-quarter revenues [4]. Future Guidance - For the second quarter, Ambarella forecasts revenues between $86 million and $94 million, with expected mid-single-digit sequential growth in IoT applications and slight growth in automotive revenues [8]. - The consensus estimate for second-quarter non-GAAP earnings per share is 4 cents [9]. Cash Flow and Balance Sheet - At the end of the first quarter, cash, cash equivalents, and marketable debt securities totaled $259.4 million, up from $250.3 million in the prior quarter and $203.3 million year over year [7]. - Operating cash flow generated during the first quarter was $14.8 million, with free cash flow of $10.2 million [7].

Core Viewpoint - HP Inc. reported lower-than-expected earnings for Q2 fiscal 2025, leading to a 7.8% decline in share price after market hours. The company also provided a profit outlook for Q3 that fell short of expectations, indicating ongoing challenges in the personal computer market [1][10]. Financial Performance - HP's non-GAAP earnings for Q2 were 71 cents per share, missing the consensus estimate by 11.3% and declining 13% from the previous year's earnings of 82 cents [1][2]. - Revenues increased by 2.4% year-over-year to $13.2 billion, but this also missed the Zacks Consensus Estimate by 1.7% [2]. - The Personal Systems (PS) segment, which accounts for 68.2% of total revenues, generated $9 billion, reflecting a 7% increase year-over-year (8% at constant currency) [3][4]. Segment Performance - The total PC units sold increased by 6% year-over-year, with a notable 11% rise in Commercial PS shipments, while Consumer PS shipments decreased by 2% [4]. - The Printing business, making up 31.8% of net revenues, saw a 4% decline in revenues year-over-year to $4.2 billion, primarily due to weaknesses in the Commercial Printing and Supplies segments [5]. Regional Performance - HP experienced growth across all regions, with the Americas up 4.7%, EMEA growing by 1.5%, and Asia Pacific and Japan increasing by 8.8% year-over-year [6]. Operating Margins - The non-GAAP operating margin for the PS segment contracted by 150 basis points to 4.5%, while the Printing division's margin decreased by 50 basis points to 19.5%. Overall, HP's non-GAAP operating margin from continuing operations contracted by 120 basis points to 9% [7]. Cash Flow and Shareholder Returns - At the end of Q2, HP had cash and cash equivalents of $2.73 billion, down from $2.89 billion in the previous quarter. The company generated $38 million in cash from operations but reported negative free cash flow of $95 million [8]. - During the quarter, HP repurchased $100 million in shares and paid $273 million in dividends, totaling $546 million in dividends and $200 million in share buybacks for the first half of fiscal 2025 [9]. Guidance - For Q3 fiscal 2025, HP estimates non-GAAP EPS between 68 cents and 80 cents, below the Zacks Consensus Estimate of 82 cents. The company also lowered its fiscal 2025 EPS guidance to a range of $3.00 to $3.30, down from $3.06 to $3.36, with the consensus at $3.44 [10].

Core Insights - Synopsys (SNPS) shares increased by 3.7% after reporting better-than-expected Q2 fiscal 2025 results, with non-GAAP earnings of $3.67 per share, exceeding the Zacks Consensus Estimate of $3.39 and the guided range of $3.37-$3.42, reflecting a 22.3% year-over-year increase in earnings due to revenue growth [1][2] Financial Performance - Q2 revenues rose by 10.3% year-over-year to $1.604 billion, slightly above the Zacks Consensus Estimate of $1.602 billion, driven by increases in Time-Based Product and Upfront Product revenues [2] - Time-Based Product revenues accounted for 51.6% of total revenues, reaching $828.3 million, a 6% increase year-over-year, while Upfront Product revenues, making up 31.8%, surged 28.7% to $510.7 million [3] - Maintenance and Service revenues decreased by 4.1% to $265.3 million [3] - Electronic Design Automation (EDA) revenues, which comprised 66.9% of total revenues, were $1.073 billion, up 6.5% year-over-year, while Design IP revenues increased to $482 million from $399.8 million in the previous year [4] Geographic Breakdown - North America contributed 41% of total revenues, amounting to $655.1 million, while Europe accounted for 12% with revenues of $194.8 million. Revenues from Korea (16%), China (10%), and Other regions (21%) were $257.6 million, $157.5 million, and $339.2 million, respectively [5] Margins and Cash Flow - The non-GAAP operating margin improved to 38%, up 70 basis points year-over-year, with EDA's adjusted operating margin increasing by 130 basis points to 40.9% [5][6] - As of April 30, 2025, Synopsys had cash and short-term investments of $14.26 billion, a significant increase from $3.81 billion as of January 31, 2025. Total long-term debt was reported at $10.03 billion [7] Guidance - For fiscal 2025, Synopsys expects revenues between $6.745 billion and $6.805 billion, with non-GAAP earnings projected in the range of $15.11-$15.19. The Zacks Consensus Estimate for revenues is $6.77 billion, and for earnings, it is $14.88 per share [8] - For Q3 fiscal 2025, expected revenues are between $1.755 billion and $1.785 billion, with non-GAAP earnings per share estimated between $3.82 and $3.87 [9]

Markets began 2025 on a strong footing but have since been gripped by heightened volatility because of the Trump administration’s tariff plans, which have resulted in ambiguity. The uncertainty has clouded expectations around the tariffs’ potential impact on the U.S. economy and the Federal Reserve’s monetary policy decisions. Amid this backdrop, investors are approaching the markets with increased caution.Therefore, the conventional method of selecting stocks is the need of the hour. One such way is choosi ...