Latest news with #ZWS
Yahoo
07-05-2025
- Business
- Yahoo
3 Stocks Under $50 with Questionable Fundamentals
Stocks in the $10-50 range offer a sweet spot between affordability and stability as they're typically more established than penny stocks. But their headline prices don't guarantee quality, and investors should exercise caution as some have shaky business models. These dynamics can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead. Chewy (CHWY) Share Price: $38.05 Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE:CHWY) is an online retailer specializing in pet food, supplies, and healthcare services. Why Does CHWY Fall Short? Annual sales growth of 9.8% over the last three years lagged behind its consumer internet peers as its large revenue base made it difficult to generate incremental demand Estimated sales growth of 4.5% for the next 12 months implies demand will slow from its three-year trend Gross margin of 28.8% reflects its high servicing costs At $38.05 per share, Chewy trades at 24.1x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CHWY doesn't pass our bar. Zurn Elkay (ZWS) Share Price: $34.28 Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries. Why Does ZWS Worry Us? Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth Estimated sales growth of 3.5% for the next 12 months implies demand will slow from its two-year trend Issuance of new shares over the last five years caused its earnings per share to fall by 8.2% annually, even worse than its revenue declines Zurn Elkay's stock price of $34.28 implies a valuation ratio of 25.2x forward P/E. To fully understand why you should be careful with ZWS, check out our full research report (it's free). IMAX (IMAX) Share Price: $25.03 Originally developed for World Expo '67 in Montreal as an innovative projection system, IMAX (NYSE:IMAX) provides proprietary large-format cinema technology and systems that deliver immersive movie experiences with enhanced image quality and sound. Why Are We Wary of IMAX?
Yahoo
28-04-2025
- Business
- Yahoo
3 Profitable Stocks with Mounting Challenges
While profitability is essential, it doesn't guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity". Not all profitable companies are created equal, and that's why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are three profitable companies to steer clear of and a few better alternatives. Trailing 12-Month GAAP Operating Margin: 12.7% Originally founded as a necktie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic and sophisticated style. Why Is RL Not Exciting? Constant currency revenue growth has disappointed over the past two years and shows demand was soft Demand will likely be soft over the next 12 months as Wall Street's estimates imply tepid growth of 3.8% Projected 2.6 percentage point decline in its free cash flow margin next year reflects the company's plans to increase its investments to defend its market position At $218.90 per share, Ralph Lauren trades at 16.9x forward price-to-earnings. To fully understand why you should be careful with RL, check out our full research report (it's free). Trailing 12-Month GAAP Operating Margin: 16.1% Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries. Why Are We Wary of ZWS? Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its two-year trend Issuance of new shares over the last five years caused its earnings per share to fall by 8.2% annually, even worse than its revenue declines Zurn Elkay is trading at $33.86 per share, or 24.9x forward price-to-earnings. Read our free research report to see why you should think twice about including ZWS in your portfolio, it's free. Trailing 12-Month GAAP Operating Margin: 10.2% Founded on the principle of treating others as one wants to be treated, Helios (NYSE:HLIO) designs, manufactures, and sells motion and electronic control components for various sectors. Why Do We Think HLIO Will Underperform? Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth Revenue growth over the past five years was nullified by the company's new share issuances as its earnings per share fell by 2.9% annually 6.2 percentage point decline in its free cash flow margin over the last five years reflects the company's increased investments to defend its market position Helios's stock price of $28.16 implies a valuation ratio of 12.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why HLIO doesn't pass our bar. 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 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
Yahoo
24-04-2025
- Business
- Yahoo
Zurn Elkay Water Solutions Corp (ZWS) Q1 2025 Earnings Call Highlights: Strong Growth Amid ...
Revenue: First quarter sales totaled $389 million, representing 5% core growth. EBITDA Margin: Adjusted EBITDA margin expanded 110 basis points year over year to 25.2%. Adjusted EBITDA: First quarter adjusted EBITDA was $98 million. Cash Flow: Cash flow ahead of expectations. Net Debt Leverage: Ended the quarter with leverage below 1 at 0.9 times. Share Repurchases: Deployed $77 million to repurchase shares in the quarter. Tariff Impact: Expected tariff cost impact for 2025 between $45 million and $55 million. Supply Chain Strategy: Direct material spend from China to be under $30 million by the end of 2026. Filtered Water Delivery: 600 million gallons delivered in Q1, up 33% year over year. Warning! GuruFocus has detected 3 Warning Sign with ZWS. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Zurn Elkay Water Solutions Corp (NYSE:ZWS) reported a solid Q1 with 5% organic growth and a 110 basis point improvement in EBITDA margins year over year. The company achieved cash flow ahead of expectations, indicating strong financial management. ZWS has a strategic plan to reduce its supply chain exposure to China, aiming for only 2% to 3% of COGS from China by the end of 2026. The company has been recognized for its sustainability efforts, including delivering 600 million gallons of filtered water in Q1, a 33% increase over the prior year. ZWS ended the quarter with a strong balance sheet, maintaining a net debt leverage below 1 at 0.9 times, even after deploying $77 million for share repurchases. The company faces potential cost increases due to tariffs, with an expected impact of $45 million to $55 million in 2025. There is uncertainty regarding the impact of tariffs on future pricing and demand, which could affect financial performance. ZWS's residential and certain commercial segments within non-residential markets showed softness, partially offsetting growth. The company is operating in an environment with potential new tariffs or added costs for the foreseeable future, which could impact profitability. There is a risk of demand destruction due to price increases, although the extent is currently unknown. Q: Can you provide more details on the volume and price contribution for the year, and any operating adjustments to navigate the current environment? A: Todd Adams, CEO: We expect price increases to generate price well above the 1% initially discussed, but it's too early to specify changes to guidance due to market uncertainties. Our supply chain and pricing strategies give us confidence in meeting our guidance despite these uncertainties. Q: How are tariffs impacting your pricing strategy, and do you expect any demand destruction as a result? A: Todd Adams, CEO: We aim to be price/cost neutral at a minimum on a dollar basis. While there could be some demand destruction, it's too early to quantify. We expect net price increases to benefit our top line, but we'll update as the situation evolves. Q: With the potential reduction in Chinese imports and possible tariff changes, will you maintain current pricing? A: Todd Adams, CEO: Historically, we haven't retraced prices. However, given the unusual environment, we'll need to be strategic to support the industry and our customers. We monitor competitive pricing closely and will adapt as necessary. Q: Have you seen any changes in the education vertical or hesitancy from customers due to potential government spending cuts? A: Todd Adams, CEO: We have not observed any slowing or increased hesitancy in the education vertical. We remain confident in our positioning and ability to manage any changes effectively. Q: How does your cost structure compare to competitors, and how are you positioned in the current tariff environment? A: Todd Adams, CEO: We believe we are extraordinarily well-positioned from a cost perspective. Our supply chain strategy and competitive pricing align us well with industry peers, ensuring we maintain a strong market position. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
