Current Market Trends and Outlook

Wall Street is betting on forthcoming rate cuts by Jay Powell and the Fed in September to alleviate the strains on the slowing U.S. economy. The corporate earnings scenario for the second quarter and beyond remains promising. Despite this, a degree of profit-taking is anticipated in the near term, especially as the S&P 500 and Nasdaq appear somewhat overheated.

Investors, however, seem inclined to continue purchasing stocks going into July, with bullish momentum seemingly prevailing. This surge is fueled by anticipated rate reductions and the impressive trajectory of profit growth.

Stock Analysis: Hims & Hers Health, Inc. (HIMS)

Hims & Hers Health, Inc. (HIMS) is an online health company experiencing rapid expansion. Originating from offering treatments for erectile dysfunction and hair loss in men, HIMS has diversified its offerings to encompass health and wellness solutions for both genders. Its portfolio includes generic prescription medicines and telehealth services in areas such as sexual health, skincare, mental health, and hair care. Following its public listing through a SPAC in 2021, the platform now boasts nearly 2 million subscribers and is eyeing the burgeoning market for weight loss medications.

In May, Hims & Hers introduced compounded GLP-1 injections for eligible customers, providing access to medications with the same active ingredients as Ozempic® and Wegovy® without the current supply chain challenges and costs associated with branded options. This addition reinforces its weight loss portfolio. Moreover, HIMS is expanding its non-prescription product sales by forming wholesale agreements with major retailers like Target.

In the first quarter, Hims & Hers registered a 41% increase in subscribers to reach 1.7 million, leading to a 46% surge in sales and a shift from an adjusted loss of -$0.05 per share to a profit of +$0.05. Encouraging momentum and efficiency enhancements prompted HIMS to raise its full-year guidance, enhancing confidence in achieving long-term Adjusted EBITDA margin targets of 20%-30% compared to 12% in the initial quarter.

Growth Prospects and Stock Performance

Revenue projections for Hims & Hers entail a 44% increase in FY24 and a further 31% uptick in the subsequent year. This growth trajectory aims to elevate revenues from $872 million in FY23 to $1.64 billion by 2025. Earnings per share for HIMS are anticipated to transform from a loss of -$0.11 in the previous year to a gain of +$0.20 in the current year, nearly doubling by 2025.

Amidst an impressive surge in its EPS estimates, HIMS stock has witnessed a 533% enhancement in its FY25 forecast over the last year. The buoyant EPS outlook has enabled Hims & Hers to secure a Zacks Rank #1 (Strong Buy), with its most recent EPS estimate surpassing consensus figures by 20% for FY24 and 30% for FY25.

HIMS shares have exhibited a remarkable ascent of 125% in 2024 and 275% over two years, in stark contrast to the Zacks Medical Products market’s decline of 13%. Despite this splendid performance, the stock has retraced by 20% from its June peaks, hovering around $20 per share, having failed to break above its initial post-IPO highs. HIMS might receive support close to its 50-day moving average, as it dips below neutral RSI levels.

Ero Copper Corp. (ERO): An Overview

Copper, renowned for its excellent conductivity, plays a crucial part in the global energy transition. Projections suggest a twofold rise in global copper demand by 2035, propelled by the surge in alternative energy, extensive infrastructure investments, the expansion of electric vehicles, and much more. While copper prices have slightly retreated from recent peaks, Ero Copper’s stock is recuperating swiftly.

Based in Vancouver, B.C., Ero Copper is a significant copper producer with mining operations spread across Brazil. Benefitting from a successful phase over recent years, the company’s growth prospects are robust.

Ero Copper is targeting a doubling of its annual copper production by 2025 through a new mining venture. The Tucumã Project, almost finished by 100% physically, is slated to commence copper concentrate production in early Q3 2024.

Revenue estimates predict a 55% surge for Ero Copper in 2024 and a further 49% increase in 2025, propelling revenues from $427.5 million in 2023 to nearly $1 billion by FY25. Alongside this, the company is expected to expand its operations.

Ero Copper’s Remarkable Earnings Surge and Stock Growth

Financial Triumph: Ero Copper’s Earnings Surge

Ero Copper’s adjusted EPS skyrocketed by 95% in FY24 and an impressive 91% in FY25, soaring from $0.87 per share in the previous year to an impressive $3.24 per share in 2025. This meteoric rise in earnings performance has not been a one-time fluke, as Ero’s earnings outlook has been on a consistent upward trajectory in FY24 and FY25, making it a standout contender in the market with a coveted Zacks Rank #1 (Strong Buy).

Stock Market Dominance: Meteoric Rise in Ero Copper Shares

Ero Copper shares have surged by a staggering 45% in 2024, leaving its highly-ranked Mining-Non Ferrous industry peers far behind with a mere 25% gain. Despite this phenomenal growth, Ero Copper’s stock still trades at a significant 10% discount below its average Zacks price target. Trading 10% below its industry average, ERO is back above its 21-day and 50-day moving averages, hinting at a potential breakthrough to reach fresh all-time highs if its forthcoming guidance captivates Wall Street on August 1.

Market Value: Ero Copper’s Undervaluation

Surprisingly, even as Ero Copper hovers about 5% below its peaks, the company’s stock trades at an impressive 63% discount compared to its industry peers. Furthermore, trading at a compelling 50% below its recent peaks at 8.9X forward 12-month earnings, Ero Copper presents itself as a tantalizing investment opportunity in the current market landscape.

Industry Momentum: Copper’s Resurgence in a Changing Energy Landscape

The ongoing energy transition coupled with the rapid expansion of energy-intensive sectors such as data centers and AI has been propelling copper’s resurgence to the forefront of the market. Ero Copper emerges as a strong contender for investors seeking exposure to this burgeoning industry, offering a combination of an accessible stock price (around $23 per share) along with substantial growth potential and intrinsic value.

Infrastructure Investment: A Lucrative Window of Opportunity

Against the backdrop of a massive initiative to revamp the deteriorating U.S. infrastructure, a wave of opportunities is poised to sweep across the nation. The imminent bipartisan effort, marked by its urgency and inevitability, is expected to funnel trillions into infrastructure projects, heralding a golden age for savvy investors aiming to capitalize on this transformative period.

“Will you get into the right stocks early when their growth potential is greatest?”

Zacks’ Special Report has been released to guide investors in identifying the prime candidates to benefit from the wave of construction and renovation activities slated for roads, bridges, buildings, cargo hauling, and energy transformation on an unprecedented scale.