For Immediate Release
Chicago, IL – November 16, 2010 – Zacks Equity Research highlights: Micromet Inc. (MITI) as the Bull of the Day and Capella Education (CPLA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Healthways (HWAY), Express Scripts (ESRX) and Caribou Coffee Company Inc. (CBOU).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Bull of the Day:
Micromet Inc.'s (MITI) third quarter 2010 loss (excluding special items) of $0.12 per share was narrower than the year-ago loss of $0.22 per share and the Zacks Consensus Estimate of a loss of $0.19 per share. The reduced loss was attributable to an increase in revenues and a fall in operating expenses.
We are pleased with the broad pipeline at Micromet. Moreover, the company's efforts to develop the pipeline are also encouraging. Furthermore, we believe that the collaborations with major players provide the required muscle to Micromet to develop its pipeline.
Consequently, we have trimmed our loss per share estimates for 2010 and 2011 and upgraded the stock to Outperform. Our target price is currently $9.50 per share.
Bear of the Day:
The regulations proposed by the Department of Education demonstrate potential risk that looms over the education sector currently. It might weigh upon students enrollment and Capella Education's (CPLA) profits.
Capella is witnessing falling students enrollment. We observe that the growth in enrollments in third-quarter 2010 has decelerated sequentially. After increasing 32.1% in the second quarter, the rate of growth in enrollment dropped to 25.7% in the third quarter. Capella now expects enrollment to rise within the range of 16% to 17% in the fourth quarter, reflecting a soft increase compared with previous quarters.
Following this, a negative sentiment is palpable among the analysts covering the stock leading to a downward revision in the Zacks Consensus Estimates. The dwindling prospects compelled us to downgrade our recommendation to Underperform.
Latest Posts on the Zacks Analyst Blog:
U.S. Well-Being Nudges Up Slightly
Healthways (HWAY) and Gallup recently announced the results of the Gallup-Healthways Monthly U.S. Well-Being Report for October 2010. The overall index, The Gallup-Healthways Well-Being Index, stood at 66.5 in October, up very marginally from 66.4 in the preceding month, which was the lowest score year to date in 2010. The minor up-tick in October was driven by a slight upward movement in the component indices, namely, Life Evaluation Index, the Emotional Health Index and Work Environment Index.
The Emotional Health Index reversed a four-month losing streak by nudging up to 79.3 in October. The number of participants who reported doing something interesting rose to 64.3% in September, the highest level achieved by this metric, which was subsequently maintained in October.
The Life Evaluation Index, a measure of human optimism for the future, moved up slightly to 49.3 in October after dropping to its lowest mark (in more than 14 months) of 48.4 in September. This metric continued to be depressed by the low percentage (52.6%) of Americans who were thriving. The average rank for everyday life in October was 6.9 on a 10-point scale, which marks the second consecutive month of lower than 7.
A third component of the composite measure, the Work Environment Index, showed some enhancement in October, moving up from 47.6 in September to 48.1. It is noteworthy that the Work Environment Index was above 50 throughout 2008, so its current levels – including two consecutive months of nadir in August and September – reveal that the metric is yet to recover from the economic downturn.
Healthways is a prominent vendor of specialized and composite solutions, enabling recipients to maintain or improve their wellbeing and, consequently, reduce systemic healthcare costs. The company's solutions are intended to keep people healthy and mitigate lifestyle risk factors that can cause disease and optimize care for those with chronic illness. Healthways competes with Express Scripts (ESRX) among others.
Gallup is known for providing timely and pertinent research on opinion. The company employs scientists in disciplines such as economics, sociology, management and psychology. Its consultants identify and monitor behavioral economic indicators on a world-wide basis, thereby enabling companies to increase organic growth.
Caribou Coffee Beats by a Penny
Caribou Coffee Company Inc. (CBOU), the second largest company-owned premium coffeehouse operator in the United States, posted third quarter 2010 earnings of 8 cents per share, beating the Zacks Consensus Estimate by a penny. The third quarter earnings also surpassed the year-ago quarter's 3 cents. The better-than expected results were driven by double-digit growth in top line and higher margin.
Caribou Coffee's net sales in the reported quarter climbed 11.8% to $70.2 million and also outperformed the Zacks Consensus Estimate of $67.0 million. The top line was driven by a strong growth across all the three lines of business. Coffeehouse sales rose 3.9% year over year to $56.6 million, as comparable-store sales jumped 4.4%, resulting from a higher traffic and rise in average guest check.
Commercial sales leaped 71.6% to $11.3 million, driven by sales of $2.0 million of raw coffee beans at 13-year high price as well as by sales growth in consumer packaged goods business. Franchise revenues spiked up 34.6% to $2.3 million.
Cost of sales and related occupancy cost escalated 17.4% to $32.7 million, driven by sales increase in the quarter, whereas general and administrative expense increased 17.6% to $7.4 million. Moreover, operating expense upped 2.9% to $25.1 million as Caribou Coffee continues to invest in product and marketing initiatives to drive traffic.
Total operating income soared to $2.6 million from $0.7 million in the year-ago quarter and operating margins were up 150 basis points (bps) to 2.6% as operating cost based on revenues dropped 310 bps due to operating efficiencies. Additionally, depreciation and amortization expenses also declined 110 bps to 4.4% as capital spending was lower than the year-ago quarter.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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CARIBOU COFFEE (CBOU): Free Stock Analysis Report
CAPELLA EDUCATN (CPLA): Free Stock Analysis Report
EXPRESS SCRIPTS (ESRX): Free Stock Analysis Report
HEALTHWAYS INC (HWAY): Free Stock Analysis Report
MICROMET INC (MITI): Free Stock Analysis Report
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