Companies with a market capitalizations of more than $10 billion are classified as large-cap stocks. So far this year, the bullish stock markets and renewed investor focus on growth stocks have driven multiple mid-cap companies to significant increases in their market value. The S&P Midcap 400 index has gained 44.7% year-to-date, outperforming the 17.7% returns of the benchmark S&P 500 index, which represents large-cap stocks.
Given the impressive corporate earnings so far this year and surging reflation trades, mid-cap stocks are poised to hit fresh highs soon, increasing their market-caps to boot.
Fundamentally sound mid-cap stocks Manhattan Associates, Inc. (MANH), DICK’S Sporting Goods, Inc. (DKS), Playtika Holding Corp. (PLTK), and AutoNation, Inc. (AN), all of which currently possess a market capitalization of more than $8 billion, are expected to become large-cap stocks soon.
Manhattan Associates, Inc. (MANH)
With a market capitalization of $9.37 billion, Atlanta, Ga.-based MANH is a developer and provider of supply chain commerce solutions. The company operates through three geographical segments: the Americas, Europe, Middle East and Africa (EMEA), and the Asia Pacific (APAC).
On June 15, MANH announced that grocery chain Hy-Vee Inc. had chosen to implement Manhattan’s transportation management system (TMS). Also, in June, the company announced that Graybar, a leading distributor of electrical, communications, and data networking products, had chosen to implement Manhattan Active Warehouse Management to optimize its warehouse operations. MANH’s services are in demand, with many top brands optimizing their operations with its solutions, demonstrating its dominance in the market.
On May 25, MANH introduced the Manhattan Active® Transportation Management, a landmark advancement in its supply chain efficiency and optimization. With this introduction, the company expects to provide solutions with unprecedented levels of flexibility and agility and meet modern demands for unified solutions.
MANH’s total revenue increased 1.9% year-over-year to $156.85 million in its fiscal first quarter, ended March 31. Its operating income grew 5.1% from its year-ago value to $25.43 million. Its cash and cash equivalents balance were up 161.9% from the prior-year quarter to $197.17 million over this period. The company’s non-GAAP EPS increased 7.5% year-over-year to $0.43.
A $634.04 million consensus revenue estimate for the current year indicates an 8.1% improvement from the last year. Its revenue is also expected to rise 8.8% year-over-year in the next year. Analysts expect the company’s EPS to come in at $1.82 in the next year, indicating a 10.3% rise year-over-year. Moreover, MANH surpassed the Street’s EPS estimates in each of the trailing four quarters. MANH has gained 41.8% year-to-date and 56% over the past year.
MANH has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
MANH has a grade of A for Quality, and B for Sentiment. It is ranked #28 among the 132 stocks in the Software - Application industry.
Click here to view additional MANH ratings for Growth, Momentum, Value, and Stability.
Click here to check out our Software Industry Report for 2021
DICK’S Sporting Goods, Inc. (DKS)
DKS in Coraopolis, Pa., is a leading omnichannel sporting goods retailer that offers an array of sports goods, fitness equipment, golf equipment, and hunting and fishing gear products. The company operates through brick-and-mortar stores as well as its e-commerce platform. DKS has a $9.29 billion market capitalization.
On June 1, DKS announced its plans to open seven new and relocated stores across the U.S. This expansionary initiative should attract more customers and expand the company’s market reach significantly. Earlier, in May, DKS announced the opening of four new stores in four states.
DKS’ revenues increased 118.9% year-over-year to $2.92 billion in its fiscal first quarter, ended May 1. Its operating income grew 355.6% from its year-ago value to $475.81 million, while its net income improved 352.2% year-over-year to $361.76 million over the period. The company’s EPS increased 299.4% year-over-year to $3.41.
A $10.86 billion consensus revenue estimate for its current fiscal year indicates a 13.3% improvement from the last year. Analysts expect the company’s EPS to come in at $8.93 in the current year, indicating a 45.9% rise from its year-ago value. DKS also surpassed the Street’s EPS estimates in each of the trailing four quarters. DKS has gained 85.8% year-to-date and 136.3% over the past year.
DKS has an overall B rating, which equates to Buy in our proprietary rating system. In addition, the stock has an A grade for Momentum and Quality. It is ranked #17 among the 34 stocks in the A-rated Athletics & Recreation industry.
Beyond what we’ve stated above, we have also rated DKS for Value, Sentiment, Growth, and Stability. Click here to view all DKS ratings.
Playtika Holding Corp. (PLTK)
PLTK develops mobile games in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company owns a range of casual and casino-themed games. It distributes its games to end customers through various web and mobile platforms. It has a $9.28 billion market capitalization of
On June 17, PLTK announced the appointment of Erez Rachmil as its Chief Technology Officer (CTO). Erez Rachmil has more than 15 years’ experience in technology and IT, which also includes roles at large corporations such as Intel, HP, and Amdocs. With this appointment, the company should experience strong growth and an expansion in exploring strategic technologies.
PLTK’s revenues increased 19.6% year-over-year to $638.9 million in its fiscal first quarter, ended March 31. Its income from operations stood at $130.3 million, up 15.1% from the same period last year. Its cash and cash equivalents balance rose 604.4% from the prior-year quarter to $966.4 million over this period.
Analysts expect PLTK’s revenues to increase 10.3% year-over-year to $2.62 billion in the current year. The $0.83 consensus EPS estimate for the current year indicates a 245.8% rise from the last year.
It is no surprise that PLTK has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The stock also has a B grade for Value and Quality. Among the 23 stocks in the Entertainment - Toys & Video Games industry, PLTK is ranked #2.
To see additional PLTK ratings for Growth, Sentiment, Stability, and Momentum, click here.
AutoNation, Inc. (AN)
AN is an automotive retailer that operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles and parts and services, such as automotive repair and maintenance and wholesale parts and collision services. It has a market capitalization of $8.27 billion. AN is based in Fort Lauderdale, Fla.
On May 25, AN opened AutoNation USA San Antonio, which is the first of five additional stores that the company plans to open this year. The company plans to have more than 130 AutoNation USA stores in operation from coast to coast by the end of 2026. This should enable the company to leverage the AutoNation brand to capture a larger share of the used vehicle market.
AN’s revenues increased 54% year-over-year to $6.98 billion in its fiscal second quarter, ended June 30. Its operating income was up 163% from its year-ago value to $530.2 million. AN’s net income came in at $384.9 million, representing a 38% rise year-over-year. The company’s EPS increased 52% year-over-year to $4.83.
The Street expects AN’s revenues to rise 10.2% year-over-year to $5.96 billion in the current quarter, ending September 2021. The $2.42 consensus EPS estimate for the current quarter represents a 1.7% improvement year-over-year. In addition, AN surpassed the Street’s EPS estimates in each of the trailing four quarters. Shares of AN have gained 122.1% over the past year and 67.2% year-to-date.
It’s no surprise that AN has an overall rating of A, which equates to Strong Buy in our POWR Ratings system. AN has an A grade for Value, and a B for Momentum and Quality. Of the 25 stocks is the B-rated Auto Dealers & Rentals industry, it is ranked #2.
To see additional POWR Ratings for Growth, Stability, and Sentiment, click here.
MANH shares were trading at $144.54 per share on Tuesday afternoon, down $2.70 (-1.83%). Year-to-date, MANH has gained 37.42%, versus a 17.93% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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