Monday, May 20, 2024
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including UnitedHealth Group Incorporated (UNH), Danaher Corporation (DHR) and Abbott Laboratories (ABT), as well as a micro-cap stock Ark Restaurants Corp. (ARKR). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
UnitedHealth shares have outperformed the Zacks Medical - HMOs industry over the past year (+10.8% vs. +10.6%). The company’s top line remains poised for growth on the back of a strong market position, new deals, renewed agreements and expansion of service offerings. The company’s solid health services segment provides diversification benefits.
The Government business remains well-poised for growth in the future. Adjusted net earnings per share are anticipated to be in the $27.5-$28.00 band in 2024, higher than the 2023 reported figure of $25.12. A sturdy balance sheet enables business investments and prudent deployment of capital via share repurchases and dividend payments.
However, membership in its global business continues to be a concern. High operating costs due to rising medical expenses are hurting margins. As such, the stock warrants a cautious stance.
(You can read the full research report on UnitedHealth here >>>)
Shares of Danaher have outperformed the Zacks Diversified Operations industry over the past year (+30.7% vs. +11.7%). The company’s Life Sciences unit is witnessing support from stable demand in the academic and applied markets. The segment has been witnessing positive responses toward its new products. The company’s commitment to return value to shareholders is encouraging.
Synergies from the Abcam acquisition bolster the company’s growth. Through its DBS initiatives, it has been able to reduce the impact of supply-chain constraints and inflationary pressures.
However, Danaher is plagued by weakness in the Biotechnology unit due to decreased demand in the bioprocessing business. Softness in the funding environment and lower underlying activity levels are affecting the high-growth markets’ performance. High debt levels may raise its financial obligations and drain its profitability. Given its international exposure, forex woes are weighing on its top line.
(You can read the full research report on Danaher here >>>)
Abbott shares have gained +3.2% over the past six months against the Zacks Medical - Products industry’s gain of +11.7%. The company’s pipeline is generating several new growth prospects, which will help sustain the positive momentum and contribute to the strong growth projection in 2024.
Alinity, the company’s next-generation suite of systems, is a key driver in the core lab diagnostics business. EPD's impressive stretch of strong performance stems from the company’s unique business model. Freestyle Libre CGM device is also on a great trajectory, continually outpacing market growth.
Within Nutrition, after a period of hiccups, Abbott has finally reestablished itself as the market leader in the infant formula business, underscoring strong customer confidence in the company's products. However, the slump in COVID-19 testing-related sales is hurting Abbott’s overall growth. Tough macro conditions also pose a concern for its operations.
(You can read the full research report on Abbott here >>>)
Shares of Ark Restaurants have underperformed the Zacks Retail - Restaurants industry over the past six months period (-3.8% vs. +1.6%). This microcap company of market capitalization of less than $100 million is facing rising operational costs in food and supplies, pressing margins. The company's sensitivity to economic shifts threatens dining spending, impacting revenues.
Lease obligations and the need to refresh premises could negatively impact cash flow. Shifts in consumer preferences and weather can disrupt operations. Reliance on key locations, rising labor and regulatory costs, competition, and cybersecurity risks pose threats.
Yet, Ark Restaurants' financial management, revenue resilience in the fiscal first quarter of 2024, diverse portfolio, and strategic expansion signal growth potential. Investments in infrastructure and operational efficiency aim at profitability. The company could potentially capitalize on the food service industry, which is projected to witness a robust expansion.
(You can read the full research report on Ark Restaurants here >>>)
Other noteworthy reports we are featuring today include Intuit Inc. (INTU), CME Group Inc. (CME) and Marathon Petroleum Corporation (MPC).
Director of Research
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Featured Reports
Intuit (INTU) Rides on Product Refresh, Higher Subscriptions
Per the Zacks analyst, Intuit is benefiting from frequent product refreshes, which help it to gain customers. Moreover, increase in subscriptions is driving stable revenue growth for the company.
CME Group (CME) Banks on Improving Top Line, Expenses Hurt
Per the Zacks analyst, its strong revenues driven by organic growth, steady market position and diverse product lines has led to significant growth. However, escalating expenses hurt its margins.
Electromechanical Group Segment Strength Aids AMETEK (AME)
Per the Zacks analyst, AMETEK is benefiting from strong Electromechanical Group segment, driven by positive contributions from Paragon Medical and Bison Engineering buyouts.
NetApp (NTAP) Performance Gains Strong Product Portfolio
Per the Zacks analyst, NetApp's performance gains from demand for product portfolio, especially an expanded all-flash product portfolio, amid data-driven digital and cloud transformation.
Technology Expansion Aids Envestnet (ENV) Amid Nil Dividends
Per The Zacks analyst, Envestnet's continuous focus on technology development is helping it improve operational efficiency. No plan to pay out cash dividends is a negative.
Solid Demand for VantageCloud Aids Teradata's (TDC) Progress
Per the Zacks analyst, Teradata is benefiting from strong demand for its VantageCloud solution and strong recurring revenue growth.
Agios' (AGIO) Progress With Pyrukynd Encouraging
Though Agios is entirely dependent on sole marketed drug Pyrukynd for growth, the Zacks Analyst is encouraged by the drug's label expansion studies in thalassemia and sickle cell disease indications.
New Upgrades
Marathon's (MPC) Buyback Focus Improves Shareholder Return
The Zacks analyst likes Marathon Petroleum's commitment to shareholder value through aggressive buybacks. Since May 2021, it has executed $35 billion in repurchases, nearly halving its share count.
Favorable Budget, Solid Contract Wins Aid Leidos (LDOS)
Per the Zacks analyst, increasing budgetary revisions by the U.S. administration should boost Leidos' growth. Steady contract wins also bolster this stock' revenue prospects
Enrollment Growth & Cost-Saving Plans Aid Adtalem (ATGE)
Per the Zacks analyst, Adtalem is benefiting from growth in enrollments and efficient cost-saving initiatives. Also, its focus on strategic collaborations and innovation bode well.
New Downgrades
Soft Demand to Hurt Capri Holdings (CPRI) Top Line
Per the Zacks analysts, sluggish demand for luxury fashion items is likely to hurt Capri Holdings' top line. We note that the company is seeing soft sales across its brands.
Healthy Demand for Premier Office Spaces Aids SL Green (SLG)
Per the Zacks analyst, healthy demand for premier office properties and a solid tenant base bode well for SL Green. However, elevated supplies of office spaces and high interest rates are concerning
Rising costs and Forex Woes Impede Envista' (NVST) Growth
The Zacks analyst is worried about Envista facing challenging macroeconomic conditions resulting in a significant escalation in its expenses. Adverse currency movement continues to pose concerns.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Top Stock Reports for UnitedHealth, Danaher & Abbott

Ark Restaurants Corp. (ARKR) Q4 2023 Earnings Call Transcript
Ark Restaurants Corp. (ARKR)
Q4 2023 Results Conference Call
Company Participants
Christopher Love - Secretary
Michael Weinstein - Chairman and CEO
Anthony Sirica - President and CFO
Conference Call Participants
Jeff Kaminski - JJK Consultants
Presentation
Operator
Greetings, and welcome to Ark Restaurants Fourth Quarter and Fiscal Year Ended Results. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.
It is now my pleasure to introduce Christopher Love, Secretary. Thank you. You may begin.
Christopher Love
Thank you, operator. Good morning, and thank you for joining us on our conference call for the fourth quarter and fiscal year ended September 30, 2023. My name is Christopher Love, and I am the Secretary of Ark Restaurants. With me on the call today is Michael Weinstein, our Chairman and CEO; and Anthony Sirica, our President and Chief Financial Officer.
For those of you who have not yet obtained a copy of our press release, it was issued over the Newswires yesterday and is available on our website. To review the full text of that press release, along with the associated financial tables, please go to our homepage at www.arkrestaurants.com.
Before we begin, however, I'd like to read the safe harbor statement. I will need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance and therefore, undue reliance should not be placed on them. We refer everyone to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance and financial condition.
I'll now turn the call over to Michael.
Michael Weinstein
Before I start, I want to bring in Anthony, our CFO and President, to talk about our balance sheet and the write-off of the goodwill to try to give you better explanation.
Anthony Sirica
Good morning, everyone. Our balance sheet at year-end continues to be strong. Our cash position was about $13.5 million. Currently, it's probably tracking a little higher than that. Our debt is $7.2 million compared to $20-some-odd million last year, $24 million last year. As you might be aware, we paid off about $16 million of our notes late March, early April with our new credit agreement.
The only other significant change, as you read in the release, was a goodwill impairment of $10 million. As we got into the quarter close, we realized that there was a triggering event related to our goodwill assessment due to the decline in the stock price and the upcoming expiration of the Bryant Park leases and the related RFPs that were issued for the spaces.
So as a result, we performed a quantitative assessment based on the income approach utilizing a discounted cash flow analysis. The analysis took into account the estimating future after-tax cash flows, discounting them back to present value and the possibility that the leases may not be renewed.
So given all that, we also consulted with third-party experts. The impairment came up to about $10 million. And that's really the highlight of the balance sheet. On the P&L, Michael is going to talk about.
Michael Weinstein
Yes. So, the EBITDA for the year, and I'm going to get to the larger elephants in the room in a few seconds. But the P&L for the year or the EBITDA for the year was about $9.6 million. I would say pretty much on the conservative side, the redo of Gallagher's in addition to the capital improvement cost of some $2 million, probably cost us some $1.6 million, $1.7 million in cash flow.
The reason for that is that our deal going in when we redid the leases at New York-New York, is we agreed that even during the refurbishing periods, we would continue to pay rent. And in addition to paying rent, we were paying full payrolls, insurance premiums, everything related to the cost of operating a restaurant with the exception of the purchase of food and beverages. So food and beverage costs at Gallagher's were about 32% between the closing and the slow uptake on revenue when we reopened, there was about $2.2 million, $2.3 million in missing sales.
Gallagher's is actually now presently, at least this month, performing better than it ever performed. So we think the refurbishing is working in our favor, in terms of revenue. But during that period of time, I would put a number of 15, 16, 17, something in that area of lost cash flow. So the $9.6 million EBITDA, if we had not closed Gallagher's conceivably could have been $11 million plus.
We suffered dramatically the last four months and continue to suffer with sales at our full-service restaurants in Southern Florida. That means JBs, Blue Moon, Shuckers and up until recently, Rustic, which is now -- revenues are on pace with the prior year. But in the other three, we're down 10%, 15% on a weekly basis and it continues.
Our Hollywood property, which is a fast food facility within the Hard Rock Casino has been doing well and comping well. It just got a bump up because we now have table games, which were approved by the state for that casino, and we're seeing a pretty -- early on, we don't know how whether it's just a honeymoon period. But we're seeing a bump in sales in Hollywood and a slight bump in Tampa, where gaming has been expanded to table games.
Our properties in Alabama continue to perform well. Our Las Vegas sales are very strong. The efficiency in Vegas is up dramatically. We were forced when we replace management after Paul Gordon retired. We found that we were not strong enough in certain positions. We also had some poaching going on by other casinos, Fontainebleau this year came after some of our people.
In this particular Vegas market, payrolls are way up because competition for too few good workers is very keen. So, we're having payroll problems there. New York, our business was very good, continues to be driven in large part by events where there doesn't seem to be price sensitivity. Washington, D.C., we're doing good, but not great. That facility continues to underperform our expectations. We keep working on it....
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Ark Restaurants Corp. (ARKR) Q4 2023 Earnings Call Transcript

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. It operates restaurants in New York City; Washington, D.C.; Las Vegas, Nevada; Atlantic City, New Jersey; Florida; and Alabama, as well as fast food concepts and catering operations. The company was incorporated in 1983 and is based in New York, New York.

	Change	Change by industry	Min.	Max.	Volume
Yesterday	0.07%	7.48%	$9.470	$9.540	10.37K
Week	-2.26%	6.98%	$9.470	$9.775	32.73K
Month	-22.26%	9.13%	$9.470	$12.440	231.63K
3 Months	-2.56%	23.58%	$8.250	$12.595	4.35M
6 Months	-12.20%	14.83%	$8.250	$17.760	6.66M
Year	-30.91%	18.05%	$8.250	$17.760	15.03M
3 years	-40.62%	150.00%	$8.250	$22.450	52.14M
5 years	-26.13%	93.19%	$8.250	$24.660	173.60M
All time	-23.75%	308.92%	$7.190	$43.480	168.69M

	ARKR	By industry
Yesterday	2.72%	1.06%
Week	4.63%	3.79%
Month	9.20%	10.98%
3 Months	21.51%	22.19%
6 Months	49.23%	30.43%
Year	68.49%	45.17%
3 years	84.31%	80.83%
5 years	112.63%	108.72%
All time	—	—

Ark Restaurants Corp.

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