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Smith & Wesson, H&R Block, Netflix, Amazonand Comcasthighlighted as Zacks Bull and Bear of the Day

CHICAGO, April 21, 2014 /PRNewswire/ -- Zacks Equity Research highlights Smith & Wesson (Nasdaq:SWHC-Free Report)  as the Bull of the Day and H&R Block (NYSE:HRB-Free Report)  as the Bear of the Day. In addition, Zacks Equity Research provides analysis onNetflix, Inc. (Nasdaq:NFLX-Free Report), Amazon (Nasdaq:AMZN-Free Report) and Comcast (Nasdaq:CMCSA-Free Report).

Zacks Investment Research, Inc., www.zacks.com.

Here is a synopsis of all five stocks:

Bull of the Day:

Stocks in the firearm industry were extremely hot in 2013 as worries over new laws spurred many to buy up guns and ammo before fresh regulations could come into effect. However, any big changes to nationwide gun legislation haven't really taken place, cooling demand for many firearms across the country.

Yet even with the lack of legislative impetus, many stocks in the firearm industry remain well-positioned for further gains, and are actually looking quite promising for 2014 as well. This is particularly true when investors take a closer look at one of the most famous names in the industry, Smith & Wesson (Nasdaq:SWHC-Free Report).

The Springfield, Massachusetts-based arms maker is probably best known for its pistols and revolvers, but the firm is also involved in a variety of rifles and firearm-related products as well. The company is over 150 years old, and it has stood the test of time selling its defense products to individuals, police, military and federal workers.

While the fear of increased gun legislation has certainly boosted volatility in SWHC over the past few years, the stock has moved significantly higher regardless of these worries, and even as these concerns have cooled in recent months, SWHC has remained a top performer. In fact, the stock has added over 80% in the past two years, while it is sporting a 27% gain in the past six months compared to a roughly 7.5% move higher for the S&P 500 in the same time frame.

Bear of the Day:

With tax season finally over, one company is probably still fresh in Americans' minds; H&R Block (NYSE:HRB-Free Report). This Kansas City-based tax preparation company offers up tax advice, do-it-yourself tax return preparation, and advances on tax refunds across the country.

And though while many Americans certainly used their services this past tax season, competitive pressures are certainly building for this company. This is largely thanks to the advent and popularity of Intuit's TurboTax software which is eating away at HRB's core market.

Thanks in part to this pressure, HRB stock has been struggling as of late, as it has underperformed some of its key peers in the past year. Plus, it hasn't helped that HRB has seen sluggish results in international markets too, as this has forced the company to post pretty horrendous results at earnings season, suggesting that HRB has great trouble in meeting expectations.

In fact, over the last four quarters, HRB has missed the Zacks Consensus Estimate every time, with an average surprise of -226%. The company's 'best' miss did come in the key tax season quarter though, but even then the firm missed by nearly 2% when compared to the Zacks Consensus Estimate.

With this recent weakness in mind and some serious competitive pressures building on its lofty stock, it shouldn't be too surprising to note that many earnings estimates have been falling for HRB as of late. In the past 30 days, not a single estimate has gone higher for HRB's earnings outlook, while several have gone lower.

Additional content:

Will Netflix (NFLX) Beat Earnings Estimates?

Netflix, Inc. (Nasdaq:NFLX-Free Report) is set to report first quarter 2014 results on Apr 21. Last quarter, it posted a 21.5% positive surprise. We note that Netflix has outperformed the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 30.4%.

Let's see how things are shaping up for this quarter.

Growth Factors

Netflix is facing intensifying competition from the likes of Amazon (Nasdaq:AMZN-Free Report), Hulu Plus and HBO. This could lead to lower subscriber growth. Moreover, increasing content costs remain a significant headwind.

Netflix's agreement with Comcast (Nasdaq:CMCSA-Free Report) to pay a fee to improve streaming quality is also expected to increase its operating cost. The additional burden may compel Netflix to increase subscription pricing, which can negatively impact subscriber growth.

Nevertheless, the company's growing subscriber base will continue to be a major growth factor in the near term. Further, the company's partnerships with cable television providers Virgin Media (in the U.K.) and Com Hem (in Sweden) will boost international subscriber base, going forward.

Earnings Whispers?

Our proven model does not conclusively show that Netflix is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP:  Most Accurate estimate stands at 83 cents, which is coincides with the Zacks Consensus Estimate. Hence, the difference is of 0.0%.

Zacks Rank: Netflix's Zacks Rank #1 (Strong Buy) when combined with a 0.0% ESP makes surprise prediction difficult.

We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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