Amazon and Goosehead Insurance have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – July 29, 2025 – Zacks Equity Research shares Amazon AMZN as the Bull of the Day and Goosehead Insurance GSHD as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Carvana Co. CVNA, Group 1 Automotive, Inc. GPI and Lithia Motors, Inc. LAD.Here is a synopsis of all five stocks:Bull of the Day:Amazon stock has seen a sharp rebound in the last three months, surging more than +20% to help lead the unprecedented recovery among the broader indexes.That said, with tariff uncertainty starting to become somewhat benign in regard to affecting the stock market, Amazon stock looks poised to keep soaring ahead of its Q2 results on Thursday, July 31.Keeping this in mind, let's take a look at Amazon's Q2 growth expectations and a few catalysts that could keep lifting AMZN shares from here.Amazon's Q2 Expectations & The Zacks ESPAs a brief preview, Amazon's Q2 sales are thought to have increased 9% to $162.28 billion compared to $147.98 billion a year ago. On the bottom line, Amazon's Q2 earnings are expected to be up 8% to $1.33 per share from EPS of $1.23 in the prior period. Notably, Amazon has exceeded the Zacks EPS Consensus for 10 consecutive quarters with a very impressive average earnings surprise of 20.68% in its last four quarterly reports.More intriguing, the Zacks ESP (Expected Surprise Prediction) indicates Amazon could keep this compelling streak of beating earnings expectations going with the Most Accurate and recent estimate among Wall Street analysts having Q2 EPS pegged at $1.42 and 7% above the underlying Zacks Consensus (Current Qtr below).Amazon "Prime Week" Takes OffAs reason to believe Amazon could offer very favorable guidance for Q3, the e-commerce giant's Prime Day event has been stretched to four days (July 8-11) and recently shattered previous records. Being Amazon's largest sales event on record, U.S. online sales for what could now be deemed as "Prime Week" are thought to have hit $24.1 billion.It's noteworthy that AI-driven advertising was a large contributor. To that point, Adobe Analytics reported a 3,300% surge in AI-driven traffic during "Prime Week" after analyzing over a trillion visits to retail sites. This mind-blowing spike refers to traffic generated from generative AI tools like Amazon's AI-powered shopping assistant "Rufus" and its revamped next-generation voice assistant "Alexa+".Key Points of Amazon's AI ExpansionIn the grand scheme of things, Amazon is focused on using AI to supercharge its cloud division, Amazon Web Services (AWS), which is still the largest cloud service ahead of Microsoft's Azure and Alphabet's Google Cloud.1. Nova models: Amazon's proprietary generative and agentic AI models, integrated across Alexa+, shopping (Rufus), and AWS services.2. Custom AI chips: Continued development of its own custom AI chips, including the Trainium 2 and the upcoming Trainium 3, designed to outperform traditional GPUs in cost and efficiency.3. Amazon Bedrock: A marketplace for foundational large language models (LLMs) from leaders like Anthropic, Meta Platforms, Mistral, and others, allowing developers to build AI apps without managing infrastructure.4. Data Center Buildouts & Sustainability Push: New AI-ready data centers in Pennsylvania and North Carolina that are collocated with nuclear power facilities to complement investments in small modular reactors (SMRs) that power AI workloads with carbon-free electricity.Amazon's EPS Growth & RevisionsCorrelating with the rebound in Amazon stock, EPS revisions have continued to trend higher in the last 60 days for fiscal 2025 and FY26. Amazon's annual earnings are now expected to increase 13% this year and are projected to spike another 16% in FY26 to $7.28 per share.Furthermore, following the pandemic, FY26 EPS projections would reflect 248% growth with Amazon's post-split adjusted earnings being the equivalent of $2.09 a share in 2020. (Amazon did a 20-1 Stock Split in June of 2022).Conclusion & Final ThoughtsAs a reminder that Amazon's stock previously traded over $2000 a share before its most recent stock split, now appears to be an ideal time to buy AMZN before it gets more expensive.At the moment, the Average Zacks Price Target for Amazon stock is $254, suggesting 10% upside from current levels. However, it would be no surprise if this consensus price target is eventually lifted toward $300 or higher, considering the tech giant's businesses are starting to be streamlined by AI.Bear of the Day:With a Zacks Rank #5 (Strong Sell), Goosehead Insurance stock is flagged as the Bear of the Day again this year after landing this mark in late January. Since then, GSHD is down 20% as I previously mentioned how the California Wildfires could affect Goosehead Insurance more than other insurance companies due to its weaker balance sheet.However, even at $84 a share as opposed to a 52-week high of $130, Goosehead Insurance stock still appears to have more downside risk ahead and looks overvalued amid rising costs and increased competition.Goosehead's Operating Expenses Jump 25%Reporting its Q2 results last Wednesday, Goosehead Insurance's operating expenses jumped 25% year over year to $78.4 million from $62.7 million in the prior period.Notably, Goosehead is prioritizing long-term growth for short-term profitability, which can spook investors with Q2 EPS of $0.49 missing expectations of $0.53 despite sales of $94.03 million topping estimates of $93.91 million.This comes as the company is planning to boost its tech investments in AI and expand its franchise, but was hit with impairment charges for existing underperforming leases.Goosehead's Stretched Valuaiton & Increased CompetitionThe real elephant in the room is that although Goosehead Insurance still has relatively promising growth prospects after going public in 2018, GSHD trades at a stretched 47.5X forward earnings multiple compared to its Zacks Insurance-Multi line Industry average of 9.8X.Holding less than 1% of the market share as it relates to the U.S. personal lines market, Goosehead is vulnerable to larger industry players like American International Group and Prudential Financia , which trade at much more reasonable valuations. On the other end of the spectrum, Goosehead is being pulled into an AI arms race from emerging rivals like Lemonade Inc. and Oscar Health that are also aiming to challenge traditional insurance brokers.It's noteworthy that in terms of a more formidable valuation metric for up-and-coming companies, such as price to sales, Goosehead Insurance also trades at a stretched forward P/S ratio of 9X compared to the industry average of 1.5X.Goosehead's Insolvency ProblemMore concerning is that at the end of Q2, Goosehead Insurance's balance sheet revealed that the company now meets the criteria for potentially being insolvent. In this regard, Goosehead has $567 million in total liabilities, which is unpleasantly above its total assets of $437 million.Bottom LineOne of the general rules of thumb when investing in stocks is to avoid insolvent companies, especially if it's not a "cheap" penny stock under $5 a share or less. Unfortunately, Goosehead Insurance stock has checked this red flag and is experiencing a decline in EPS revisions for fiscal 2025 and FY26 following the Q2 earnings miss, which correlates with its Zacks Rank #5 (Strong Sell) rating.Additional content:Is Carvana Set to Lead as Auto e-Commerce Adoption Accelerates?Carvana Co., a leading e-commerce platform for buying and selling used cars, is reshaping the traditional car purchasing and selling process by emphasizing a broad selection, competitive pricing, quality assurance, transparent transactions and a pressure-free experience. Its proprietary technology and vertically integrated model enable a considerably lower variable cost structure compared to traditional dealerships, while delivering substantial customer value through a seamless, high-quality car buying and selling experience.Per the Federal Reserve Economic Data, e-commerce has steadily increased its share of non-automotive retail for over two decades and reached roughly 18% of such transactions in 2023. Although the automotive retail sector has adopted e-commerce more slowly than other retail categories, continued consumer comfort with making high-value purchases online is expected to drive greater digital penetration in this space as well.Given the vast and fragmented nature of the used vehicle market, combined with the broader expansion of online retail, Carvana sees a significant opportunity for sustained growth. The company aims to capitalize on this by further utilizing its established e-commerce and logistics infrastructure, expanding monetization through additional products and services and addressing various points in the car buying and ownership cycle, such as vehicle service contracts and auto insurance. Its technological capabilities and process automation are expected to enable differentiated offerings in these areas. CVNA carries a Zacks Rank #3 (Hold) at present.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Unlike Carvana, which operates exclusively online, competitors such as Group 1 Automotive, Inc. and Lithia Motors, Inc. follow a hybrid model, integrating digital features into their traditional dealership networks.Group 1 introduced AcceleRide in 2019 to allow customers to purchase new or used vehicles entirely online. The platform allows Group 1's customers to explore various financing options, assess trade-in values and select home delivery. To enhance convenience, AcceleRide also incorporates manufacturer rebates and incentive offers, along with the ability to finalize all trade-in information digitally.Lithia's digital retail platform, Driveway, is designed to give customers full control over their vehicle ownership journey. Through Driveway, users can access a broad, nationwide selection of new, used, and certified pre-owned vehicles, with the option to have their purchase delivered directly to their home or picked up from one of over 290 Lithia locations within the Driveway network.Carvana's Price Performance, Valuation and EstimatesCarvana has outperformed the Zacks Internet – Commerce industry year to date. CVNA shares have surged 63.3% compared with the industry's growth of 11.4%.From a valuation perspective, Carvana appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.42, higher than its industry's 2.17.EPS Estimates RevisionThe Zacks Consensus Estimate for 2025 and 2026 EPS has moved up 5 cents and 8 cents, respectively, in the past seven days.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339https://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.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 https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Group 1 Automotive, Inc. (GPI): Free Stock Analysis Report Lithia Motors, Inc. (LAD): Free Stock Analysis Report Carvana Co. (CVNA): Free Stock Analysis Report Goosehead Insurance (GSHD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks