Latest news with #M1Abrahms
Yahoo
22-05-2025
- Business
- Yahoo
1 Cash-Producing Stock for Long-Term Investors and 2 to Brush Off
While strong cash flow is a key indicator of stability, it doesn't always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning. Cash flow is valuable, but it's not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that excels at turning cash into shareholder value and two that may struggle to keep up. Trailing 12-Month Free Cash Flow Margin: 9.3% Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ:SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin. Why Should You Dump SKIN? Annual revenue growth of 3.8% over the last three years was below our standards for the consumer staples sector Historical operating losses point to an inefficient cost structure High net-debt-to-EBITDA ratio of 10× could force the company to raise capital at unfavorable terms if market conditions deteriorate BeautyHealth's stock price of $1.54 implies a valuation ratio of 12.2x forward EV-to-EBITDA. To fully understand why you should be careful with SKIN, check out our full research report (it's free). Trailing 12-Month Free Cash Flow Margin: 6.8% Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products. Why Does GD Give Us Pause? Backlog failed to grow over the past two years, suggesting the company may need to tweak its product roadmap and go-to-market strategy Estimated sales growth of 3.1% for the next 12 months implies demand will slow from its two-year trend Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.6 percentage points At $279 per share, General Dynamics trades at 18.5x forward P/E. If you're considering GD for your portfolio, see our FREE research report to learn more. Trailing 12-Month Free Cash Flow Margin: 38.8% Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ:ABNB) is the world's largest online marketplace for lodging, primarily homestays. Why Is ABNB a Top Pick? Nights and Experiences Booked are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features Earnings per share have massively outperformed its peers over the last three years, increasing by 49.4% annually Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends Airbnb is trading at $127.44 per share, or 18.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
Yahoo
09-05-2025
- Business
- Yahoo
Q1 Earnings Outperformers: General Dynamics (NYSE:GD) And The Rest Of The Defense Contractors Stocks
Let's dig into the relative performance of General Dynamics (NYSE:GD) and its peers as we unravel the now-completed Q1 defense contractors earnings season. Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia's invasion of Ukraine or China's aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds. The 13 defense contractors stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 1.6% while next quarter's revenue guidance was in line. In light of this news, share prices of the companies have held steady as they are up 1.1% on average since the latest earnings results. Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products. General Dynamics reported revenues of $12.22 billion, up 13.9% year on year. This print exceeded analysts' expectations by 1.8%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts' adjusted operating income estimates but a significant miss of analysts' backlog estimates. "We continue to see steady growth and improvement in operating performance across the defense portfolio," said Phebe Novakovic, chairman and chief executive officer "The Aerospace segment saw a significant increase in profitability, reflecting the manufacturing efficiencies associated with reaching higher levels of production on our new aircraft models." The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $271.90. Is now the time to buy General Dynamics? Access our full analysis of the earnings results here, it's free. Formed through the split of IT services company SAIC, Leidos (NYSE:LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets. Leidos reported revenues of $4.25 billion, up 6.8% year on year, outperforming analysts' expectations by 3.6%. The business had a very strong quarter with an impressive beat of analysts' backlog and EBITDA estimates. The market seems happy with the results as the stock is up 5.2% since reporting. It currently trades at $155.50. Is now the time to buy Leidos? Access our full analysis of the earnings results here, it's free. Responsible for the development of the first stealth bomber, Northrop Grumman (NYSE:NOC) specializes in providing aerospace, defense, and security solutions for various industry applications. Northrop Grumman reported revenues of $9.47 billion, down 6.6% year on year, falling short of analysts' expectations by 4.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts' expectations. Northrop Grumman delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 9.2% since the results and currently trades at $482. Read our full analysis of Northrop Grumman's results here. Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries. RTX reported revenues of $20.31 billion, up 5.2% year on year. This print topped analysts' expectations by 1.7%. Overall, it was a strong quarter as it also logged an impressive beat of analysts' EBITDA estimates. The stock is up 2% since reporting and currently trades at $128.49. Read our full, actionable report on RTX here, it's free. Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services. Leonardo DRS reported revenues of $799 million, up 16.1% year on year. This number beat analysts' expectations by 9.2%. It was a very strong quarter as it also recorded a solid beat of analysts' adjusted operating income estimates and an impressive beat of analysts' EPS estimates. Leonardo DRS scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 11.7% since reporting and currently trades at $41.27. Read our full, actionable report on Leonardo DRS here, it's free. In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump's presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
Yahoo
07-05-2025
- Business
- Yahoo
1 S&P 500 Stock to Target This Week and 2 to Avoid
The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn't mean every stock is worth owning. Some companies face significant challenges, whether it's stagnating growth, heavy debt, or disruptive new competitors. Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here is one S&P 500 stock that could deliver good returns and two that may struggle. Two Stocks to Sell: Williams-Sonoma (WSM) Market Cap: $18.98 billion Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE:WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture. Why Does WSM Worry Us? Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation Disappointing same-store sales over the past two years show customers aren't responding well to its product selection and store experience Free cash flow margin shrank by 4.8 percentage points over the last year, suggesting the company is consuming more capital to stay competitive Williams-Sonoma is trading at $153.01 per share, or 18x forward P/E. Read our free research report to see why you should think twice about including WSM in your portfolio, it's free. General Dynamics (GD) Market Cap: $72.52 billion Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products. Why Is GD Not Exciting? Backlog failed to grow over the past two years, suggesting the company may need to tweak its product roadmap and go-to-market strategy Estimated sales growth of 3.1% for the next 12 months implies demand will slow from its two-year trend Free cash flow margin dropped by 2.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up General Dynamics's stock price of $273.99 implies a valuation ratio of 18x forward P/E. Check out our free in-depth research report to learn more about why GD doesn't pass our bar. One Stock to Watch: Ingersoll Rand (IR) Market Cap: $30.63 billion Started with the invention of the steam drill, Ingersoll Rand (NYSE:IR) provides mission-critical air, gas, liquid, and solid flow creation solutions. Why Are We Fans of IR?
Yahoo
23-04-2025
- Business
- Yahoo
General Dynamics (NYSE:GD) Exceeds Q1 Expectations
Aerospace and defense company General Dynamics (NYSE:GD) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 13.9% year on year to $12.22 billion. Its GAAP profit of $3.66 per share was 5.7% above analysts' consensus estimates. Is now the time to buy General Dynamics? Find out in our full research report. Revenue: $12.22 billion vs analyst estimates of $12 billion (13.9% year-on-year growth, 1.8% beat) EPS (GAAP): $3.66 vs analyst estimates of $3.46 (5.7% beat) Adjusted EBITDA: $1.43 billion vs analyst estimates of $1.45 billion (11.7% margin, 1.5% miss) Operating Margin: 10.4%, in line with the same quarter last year Free Cash Flow was -$290 million compared to -$437 million in the same quarter last year Backlog: $88.7 billion at quarter end, down 5.4% year on year Market Capitalization: $73.64 billion "We continue to see steady growth and improvement in operating performance across the defense portfolio," said Phebe Novakovic, chairman and chief executive officer "The Aerospace segment saw a significant increase in profitability, reflecting the manufacturing efficiencies associated with reaching higher levels of production on our new aircraft models." Creator of the famous M1 Abrahms tank, General Dynamics (NYSE:GD) develops aerospace, marine systems, combat systems, and information technology products. Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia's invasion of Ukraine or China's aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds. A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, General Dynamics's sales grew at a tepid 4.8% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a tough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. General Dynamics's annualized revenue growth of 11.1% over the last two years is above its five-year trend, suggesting its demand recently accelerated. We can better understand the company's revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. General Dynamics's backlog reached $88.7 billion in the latest quarter and was flat over the last two years. Because this number is lower than its revenue growth, we can see the company fulfilled orders at a faster rate than it added new orders to the backlog. This implies General Dynamics was operating efficiently but raises questions about the health of its sales pipeline. This quarter, General Dynamics reported year-on-year revenue growth of 13.9%, and its $12.22 billion of revenue exceeded Wall Street's estimates by 1.8%. Looking ahead, sell-side analysts expect revenue to grow 3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. General Dynamics has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.5%. Analyzing the trend in its profitability, General Dynamics's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q1, General Dynamics generated an operating profit margin of 10.4%, in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. General Dynamics's weak 4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For General Dynamics, its two-year annual EPS growth of 8.6% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point. In Q1, General Dynamics reported EPS at $3.66, up from $2.88 in the same quarter last year. This print beat analysts' estimates by 5.7%. Over the next 12 months, Wall Street expects General Dynamics's full-year EPS of $14.41 to grow 4.2%. We enjoyed seeing General Dynamics beat analysts' revenue expectations this quarter. We were also happy its EPS outperformed Wall Street's estimates. On the other hand, its backlog missed significantly and its EBITDA fell slightly short of Wall Street's estimates. Overall, this quarter was mixed. The stock remained flat at $274.12 immediately following the results. General Dynamics underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
