Latest news with #cyclical
Yahoo
26-05-2025
- Business
- Yahoo
Is this a turning point for markets?
-- Despite a turbulent start to 2025 marked by policy uncertainty and renewed concern over the U.S. growth outlook, equity markets have shown surprising resilience in recent weeks. The S&P 500 is down just 1.3% year-to-date, while the NASDAQ Composite is down about 3%. In contrast, the more economically sensitive Russell 2000 has dropped 8.5%, reflecting investor caution toward cyclical exposure. Wolfe Research analysts attribute the market's recent relative stability to 'positive news on the trade front and better-than-expected soft data economic surprises,' which have helped offset deepening fears of a recession that surfaced only weeks ago. However, concerns are mounting around the U.S. fiscal trajectory. As bond vigilantes push back against unsustainable federal deficits, Wolfe expects volatility to persist through the summer. 'We continue to remain defensively positioned as stocks are likely to be hypersensitive to economic data and moves in long-term interest rates over the coming months,' the analysts wrote. There is some early optimism, as sentiment indicators have improved slightly. Still, the analysts remains cautious. 'While we're encouraged by the slight improvement in sentiment surveys, our sense is we'll need to see a reacceleration in the economy before shifting to more cyclical positioning,' they said in a note. Markets were also buoyed after Donald Trump postponed a planned 50% tariff on EU imports until July 9, following a call with European Commission President Ursula von der Leyen. 'She said she wants to get down to serious negotiation,' Trump said Sunday. 'July 9 would be the day… I agreed to do that.' In response to these news, STOXX 600 index rose 1% while the German DAX added as much as 1.6%. U.S. equity markets are closed Monday in observance of Memorial Day. Trading will resume Tuesday, following a week marked by geopolitical headlines, fiscal concerns, and a solid rebound in risk sentiment. Related articles Is this a turning point for markets? China auto stocks take a hit as BYD, Geely offer fresh incentives ArcelorMittal shares surge as Trump backs Nippon Steel partnership
Yahoo
25-05-2025
- Business
- Yahoo
Should You Buy Nucor's Rallying Stock?
Nucor is one of the largest steelmakers in the United States. Steel is a cyclical business, prone to deep downturns during periods of economic concern. Nucor's stock has fallen by more than 45% from its peak, but it may have hit an inflection point. 10 stocks we like better than Nucor › Nucor (NYSE: NUE) is a large and diversified U.S. steelmaker. Despite being conservatively run, the company can't avoid the cyclical nature of the industry in which it operates. No amount of diversification or financial strength can change steel demand trends or market-driven steel pricing. With its industry weak right now, Nucor's stock has fallen dramatically from its recent highs. But for investors, that could present an attractive long-term opportunity. Nucor makes steel and manufactures fabricated steel products. It is one of the largest and most diversified U.S. steel companies. There are two key nuances that investors ought to be aware of here. First, Nucor's infrastructure is built entirely around electric arc mini-mills. These facilities use electricity to recycle scrap steel into "new" steel. That technology is, to simplify things, more flexible than older blast-furnace technology, which uses iron ore and metallurgical coal to make primary steel. Blast furnaces can be very profitable when operated at high utilization rates. So during the industry's upturns, companies like United States Steel and Cleveland-Cliffs, which both make heavy use of blast furnaces, can practically mint money. But when steel demand and prices fall, those companies often bleed red ink. Because of the flexibility of Nucor's electric arc mini-mills, it can maintain profitability through all but the worst industry downturns. On top of this strong core, Nucor has built a business creating products with the bulk steel it produces. It produces things such as building components, computer racks for data centers, and even many of the vital parts needed to support the electrical grid. In short, Nucor to takes the commodity it produces and turns it into higher-margin products that often have more sustainable demand throughout all parts of the steel cycle. All told, Nucor is likely one of the best-run steel mills in the United States, if not the world. But, to reiterate, no steel company can entirely avoid the cyclical nature of its industry. So Nucor's stock tends to swing between periods of material price advances and material price declines. Right now it is in the middle of a decline, with the shares off more than 45% from their early 2024 high. If you look at a long-term chart of the company's share price performance, that drop, while severe, isn't particularly remarkable, historically speaking. This brings us to its recent stock price advance: It's up by around 8% from the low it hit in April. That could have been an inflection point, or Nucor could just be in the midst of another zigzag , and preparing to head lower again. The key here is to think longer term while most other investors are thinking short term. The chart above depicts the relative magnitudes of the declines from its peak prices that Nucor's stock has experienced over time. The chart below simply tracks the price. Notice that, despite those steep slides, Nucor's stock has trended generally higher over time. That's because management is always reinvesting in the business so that it can grow. It often invests more down during downturns so it can come out the other side of one a better company than when it entered it. When you look at Nucor as a potential investment, the goal shouldn't be to attempt to time the perfect entry point. It should be to get it "about right" and buy when Wall Street appears to be scared. Sure, you'll probably want to wait until its downturn is pretty deep, like it is today. Which hints that now is, indeed, a good point to buy this dominant steelmaker. Warren Buffett likes to simplify his investment approach to three points: Buy good companies when they appear attractively priced, and then hold them for the long term to benefit from long-term company growth. Nucor appears to fulfill the first two pieces of that formula today -- the third one is up to investors. If you have the fortitude to buy when others are selling, Nucor's price drop could be a buying opportunity. The rally since April could be the start of an upturn or it could be a random price move. Don't get too caught up in that short-term price change, focus on the bigger picture and the long term opportunity that still exists. History suggests that it is better to be about right than miss a buying opportunity in Nucor. Before you buy stock in Nucor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nucor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Nucor. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Buy Nucor's Rallying Stock? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-05-2025
- Automotive
- Yahoo
EVgo (NASDAQ:EVGO) Surprises With Q1 Sales, Stock Soars
Electric vehicle charging company EVgo (NASDAQ:EVGO) announced better-than-expected revenue in Q1 CY2025, with sales up 36.5% year on year to $75.29 million. The company's full-year revenue guidance of $360 million at the midpoint came in 2.3% above analysts' estimates. Its GAAP loss of $0.09 per share was in line with analysts' consensus estimates. Is now the time to buy EVgo? Find out in our full research report. EVgo (EVGO) Q1 CY2025 Highlights: Revenue: $75.29 million vs analyst estimates of $74.21 million (36.5% year-on-year growth, 1.4% beat) EPS (GAAP): -$0.09 vs analyst estimates of -$0.09 (in line) Adjusted EBITDA: -$5.93 million vs analyst estimates of -$6.61 million (-7.9% margin, 10.3% beat) The company reconfirmed its revenue guidance for the full year of $360 million at the midpoint EBITDA guidance for the full year is $2.5 million at the midpoint, above analyst estimates of $1.76 million Operating Margin: -44.4%, up from -58.7% in the same quarter last year Free Cash Flow was -$25.24 million compared to -$35.15 million in the same quarter last year Gigawatt-hours Sold: 83 at quarter end Market Capitalization: $369.9 million 'EVgo once again achieved a record level of revenues, starting 2025 off on a strong foundation,' said Badar Khan, EVgo's CEO. Company Overview Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States. Sales Growth A company's long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, EVgo's sales grew at an incredible 75.9% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers. EVgo Quarterly Revenue We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. EVgo's annualized revenue growth of 95.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. EVgo recent performance stands out, especially when considering many similar Renewable Energy businesses faced declining sales because of cyclical headwinds. EVgo Year-On-Year Revenue Growth This quarter, EVgo reported wonderful year-on-year revenue growth of 36.5%, and its $75.29 million of revenue exceeded Wall Street's estimates by 1.4%.
Yahoo
05-05-2025
- Business
- Yahoo
Treasury secretary touts ‘golden age economy' in Milken speech but says little on tariffs
U.S. Treasury Secretary Scott Bessent told a gathering of power brokers in Beverly Hills that President Trump's controversial trade policies should be viewed as one leg of a three-pronged vision that, along with tax cuts and deregulation, will usher in a new era of American prosperity. Speaking at the annual Milken Institute Global Conference, Bessent described the policies as laying the groundwork for a 'golden age economy' that would be powered by an expanded U.S. manufacturing base and increased energy investment. 'I hope you can see the bigger picture now,' said Bessent in prepared remarks before an interview with conference founder and onetime junk-bond king Michael Milken. The Treasury secretary said little, however, on President Trump's controversial tariff policies, aside from describing China as the biggest piece of 'this trade puzzle,' and stating that a 'big, beautiful rebalancing' is possible. Currently, many companies are uneasy over the impact of tariffs on prices and supply chains, following President Trump's decision to impose a 10% levy on countries around the world, and a 145% levy on China. The tariffs have sparked fears of renewed inflation and have already translated into plunging imports at major U.S. ports. On Monday, Bessent predicted that 'in the end, trading relations will be stronger' but did not offer a specific timeline. Meanwhile, the Trump administration has touted its negotiations with dozens of countries but has yet to announce concrete deals. In speaking with Milken, Bessent repeatedly raised concerns about the growing U.S. debt and the current deficit-to-GDP ratio, which grew to over 6% in 2024—a level that is largely unprecedented outside of wartime. The Trump administration's goal, said Bessent, is to bring that rate down by 1% each year until it is around 3%, while also reinvigorating growth with tax cuts and deregulation. In the meantime, the U.S. is also confronting the growing expense of servicing the national debt as the yield on Treasury bills has grown, including a spike in April. Bessent, however, explained those recent yield increases as primarily part of a cyclical process, and predicted they will soon reverse as the U.S. returns to noninflationary growth. Since being confirmed as Treasury secretary in January, Bessent has emerged as one of the most influential figures in the Trump administration, where he has pursued a more pragmatic agenda than some others in the cabinet. This has led to clashes that have pitted Bessent against Commerce Secretary Howard Lutnick and Trump advisor Elon Musk, including a shouting match where Musk reportedly blasted the Treasury secretary as a 'Soros agent.' An expert in foreign exchange and the first openly gay Treasury secretary, Bessent previously ran a major hedge fund and taught economic history at Yale University. This story was originally featured on Sign in to access your portfolio
Yahoo
30-04-2025
- Business
- Yahoo
KLA Corporation (NASDAQ:KLAC) Posts Better-Than-Expected Sales In Q1, Provides Encouraging Quarterly Revenue Guidance
Semiconductor manufacturing equipment maker KLA Corporation (NASDAQ:KLAC) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 29.8% year on year to $3.06 billion. Guidance for next quarter's revenue was optimistic at $3.08 billion at the midpoint, 2.7% above analysts' estimates. Its non-GAAP profit of $8.41 per share was 4% above analysts' consensus estimates. Is now the time to buy KLA Corporation? Find out in our full research report. Revenue: $3.06 billion vs analyst estimates of $3.01 billion (29.8% year-on-year growth, 1.8% beat) Adjusted EPS: $8.41 vs analyst estimates of $8.08 (4% beat) Adjusted EBITDA: $1.43 billion vs analyst estimates of $1.37 billion (46.8% margin, 4.8% beat) Revenue Guidance for Q2 CY2025 is $3.08 billion at the midpoint, above analyst estimates of $2.99 billion Adjusted EPS guidance for Q2 CY2025 is $8.53 at the midpoint, above analyst estimates of $7.98 Operating Margin: 41.3%, up from 31.2% in the same quarter last year Free Cash Flow Margin: 32.3%, down from 35.5% in the same quarter last year Inventory Days Outstanding: 244, up from 227 in the previous quarter Market Capitalization: $91.42 billion Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, KLA Corporation's 15.6% annualized revenue growth over the last five years was excellent. Its growth surpassed the average semiconductor company and shows its offerings resonate with customers, a great starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy). We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. KLA Corporation's recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.2% over the last two years was well below its five-year trend. This quarter, KLA Corporation reported robust year-on-year revenue growth of 29.8%, and its $3.06 billion of revenue topped Wall Street estimates by 1.8%. Beyond the beat, this marks 4 straight quarters of growth, implying that KLA Corporation is in the middle of its cycle - a typical upcycle generally lasts 8-10 quarters. Company management is currently guiding for a 19.7% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its newer products and services will not catalyze better top-line performance yet. At least the company is tracking well in other measures of financial health. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business' capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production. This quarter, KLA Corporation's DIO came in at 244, which is 19 days above its five-year average, suggesting that the company's inventory has grown to higher levels than we've seen in the past. We enjoyed seeing KLA Corporation beat analysts' revenue, EPS, and EBITDA expectations this quarter. We were also glad its revenue and EPS guidance for next quarter exceeded Wall Street's estimates. On the other hand, its inventory levels materially increased. Still, this quarter had some key positives. The stock remained flat at $702.69 immediately after reporting. So do we think KLA Corporation is an attractive buy at the current price? 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
