The Nasdaq 100 gained more than 4% after the Federal Reserve announced a 75 basis-point interest rate hike in response to the multi-decade high inflation for the second straight month. This marked Nasdaq's biggest rally since November 2020.
The stock market rallied yesterday despite the U.S. GDP contracting 0.9% for the second straight quarter. Better-than-expected corporate earnings could help Nasdaq 100 stay resilient near term.
So, we think it could be wise to invest in fundamentally sound Nasdaq 100 stocks Adobe Inc. (ADBE), Autodesk, Inc. (ADSK), Dollar Tree, Inc. (DLTR), and Gilead Sciences, Inc. (GILD).
Adobe Inc. (ADBE)
ADBE functions as a diversified software company internationally. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising.
Last month, ADBE announced innovations for its customer data platform (CDP), Adobe Real-Time CDP, to help brands transition from third-party cookies to first-party data. As businesses across all industries adopt Adobe Real-Time CDP, ADBE introduces enriched customer profiles with commerce, AI-powered targeting, new privacy and security tools, and Segment Match across channels.
Also, last month ADBE expanded its partnership with The Home Depot to improve the customer experience. As part of the company’s interconnected retail strategy, a smooth experience extends across e-commerce, an award-winning mobile app, and in-store services such as pickup lockers and an in-app product locator. With so many touchpoints, the ADBE partnership will provide comprehensive insights into the customer journey.
ADBE’s total revenue increased 14.4% year-over-year to $4.39 billion for the second quarter ended June 3, 2022. Its non-GAAP operating income grew 12% from its year-ago value to $1.97 billion, while its non-GAAP net income amounted to $1.59 billion, up 8.9% from the prior-year quarter. The company’s non-GAAP EPS rose 10.6% year-over-year to $3.35.
Analysts expect ADBE’s revenue to increase 12.9% year-over-year to $4.44 billion for the third quarter ending August 2022. The consensus EPS estimate of $3.35 represents a 7.7% improvement year-over-year for the third quarter ending August 2022. The stock has gained 10.2% over the past month.
ADBE’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Quality and a B for Sentiment. Within the F-rated Software - Application industry, ADBE is ranked #31 of 154 stocks
Click here to see additional POWR Ratings for Growth, Value, Stability, and Momentum for ADBE.
Autodesk, Inc. (ADSK)
ADSK provides 3D design, engineering, and entertainment software and services worldwide. The company offers AutoCAD Civil 3D, surveying, design, analysis, and documentation solutions for civil engineering, including land development, transportation, and environmental projects.
In April, ADSK announced that it is adopting Autodesk Construction Cloud and establishing a powerful construction management platform into its standard operating procedures (SOP). Teams across Evans will use Autodesk Construction Cloud to quickly onboard new employees, maximize coordination across project stakeholders, and minimize project errors.
In March, ADSK signed a conclusive agreement to acquire The Wild, a cloud-connected, extended reality (XR) platform, which includes its namesake solutions, The Wild, and IrisVR. This acquisition enables Autodesk to meet increasing needs for augmented reality (AR) and virtual reality (VR) technology advancements within the AEC industry and further support AEC customers throughout the project delivery lifecycle.
During the first quarter ending April 30, 2022, ADSK’s total net revenue increased 18.3% year-over-year to $1.17 billion. Its income from operations grew 59.7% year-over-year to $214.00 million, while its net income came in at $146.00 million. The company's EPS stood at $0.67 for the quarter.
ADSK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The stock also has an A grade for Quality and a B for Growth. Within the Software - Application industry, it is ranked #28.
In total, we rate ADSK on eight different levels. Beyond what we've stated above, we have also given ADSK grades for Stability, Value, Sentiment, and Momentum. Get all the ADSK ratings here.
Dollar Tree, Inc. (DLTR)
DLTR operates a discount variety of retail stores. It has two operational segments, Dollar Tree and Family Dollar. Dollar Tree segment provides consumable merchandise, including candy and food, health and personal care, as well as everyday consumables. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise.
In the first quarter ending April 30, 2022, DLTR’s total revenue increased 6.5% year-over-year to $6.90 billion. Its operating income grew 40.7% from its year-ago value to $731.50 million, while its net income amounted to $536.40 million, up 43.2% from its year-ago value. The company's EPS improved 48.2% year-over-year to $2.37.
The $1.59 consensus EPS estimate for the second quarter ending July 2022 represents a 29.7% improvement year-over-year. Analysts expect DLTR’s revenue to increase 7% year-over-year to $6.78 billion for the second quarter ending July 2022. The stock has gained 16.2% year-to-date.
It is no surprise that DLTR has an overall B rating, equating to Buy in our POWR Ratings system. DLTR has a B grade for Growth and Sentiment. In the A-rated Grocery/Big Box Retailers industry, it is ranked #26 of 38 stocks.
Click here to see the additional POWR Ratings for DLTR (Stability, Momentum, Value, and Quality).
Gilead Sciences, Inc. (GILD)
GILD, a biopharmaceutical company discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally. The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/ Eviplera, Stribild, and Atripla products.
This month, GILD, and the European Commission signed a new joint procurement agreement (JPA) that will ensure continued rapid and equitable access to Veklury for participating Member States across the European Union (EU) and European Economic Area (EEA). The agreement covers the acquisition of Veklury over the next twelve months and has the option to be extended for an additional six months.
For the first quarter ending March 31, 2022, GILD's total revenue increased 2.6% year-over-year to $6.59 billion. Its income from operations amounted to $197.00 million, while its net income came in at $12.00 million. The company's EPS stood at $0.02 for the quarter.
The consensus EPS estimate of $1.41 for the fourth quarter ended December 2022 represents a 104.9% year-over-year growth.
GILD’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value and a B for Sentiment and Quality. Within the F-rated Biotech industry, it is ranked #7 of 400 stocks.
In total, we rate GILD on eight different levels. Beyond what we've stated above, we have also given GILD grades for Stability, Growth, and Momentum. Get all the GILD ratings here.
ADBE shares were trading at $409.06 per share on Friday afternoon, up $5.56 (+1.38%). Year-to-date, ADBE has declined -27.86%, versus a -12.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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