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Wall Street Analysts Think Uber (UBER) Is a Good Investment: Is It?
ZACKS· 2025-03-10 14:35
Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Uber Technologies (UBER), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank for making informed investment decisions [1][4]. Brokerage Recommendations - Uber has an average brokerage recommendation (ABR) of 1.36, indicating a consensus between Strong Buy and Buy, based on 47 brokerage firms' recommendations [2]. - Out of the 47 recommendations, 37 are classified as Strong Buy, accounting for 78.7%, while three are classified as Buy, making up 6.4% of the total [2]. Limitations of Brokerage Recommendations - The article highlights that brokerage recommendations may not be reliable indicators of stock price movements due to analysts' biases stemming from their firms' vested interests [5][9]. - Studies suggest that brokerage firms tend to issue five "Strong Buy" recommendations for every "Strong Sell," indicating a tendency towards overly optimistic ratings [5]. Zacks Rank as an Alternative - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is presented as a more reliable indicator of near-term price performance, based on earnings estimate revisions [7][10]. - The Zacks Rank is updated more frequently than the ABR, making it a timely tool for predicting future stock prices [11]. Current Earnings Estimates for Uber - The Zacks Consensus Estimate for Uber's current year earnings has increased by 0.8% over the past month to $2.54, reflecting analysts' growing optimism [12]. - This increase in consensus estimates has contributed to Uber receiving a Zacks Rank 2 (Buy), suggesting a positive outlook for the stock [13].
Brokers Suggest Investing in Trip.com (TCOM): Read This Before Placing a Bet
ZACKS· 2025-03-07 15:30
Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Trip.com (TCOM), and highlights the disparity between brokerage ratings and actual stock performance [1][4]. Brokerage Recommendations - Trip.com has an average brokerage recommendation (ABR) of 1.11, indicating a consensus between Strong Buy and Buy, based on recommendations from 19 brokerage firms [2]. - Out of the 19 recommendations, 18 are classified as Strong Buy, representing 94.7% of all recommendations [2]. Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be advisable, as studies suggest they often fail to guide investors effectively towards stocks with high price appreciation potential [4]. - Brokerage analysts tend to exhibit a strong positive bias in their ratings due to vested interests, with five "Strong Buy" recommendations for every "Strong Sell" [5][9]. Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, making it a more reliable indicator of near-term stock performance [7][10]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates and business trends [11]. Current Earnings Estimates for Trip.com - The Zacks Consensus Estimate for Trip.com has declined by 6.5% over the past month to $3.74, indicating growing pessimism among analysts regarding the company's earnings prospects [12]. - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for Trip.com, suggesting caution despite the positive ABR [13].