Trend Micro and IGP Photonics have been highlighted as Zacks Bull and Bear of the Day

For Immediate ReleaseChicago, IL – June 4, 2025 – Zacks Equity Research shares Trend Micro TMICY as the Bull of the Day and IGP Photonics IPGP as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Broadcom AVGO.Here is a synopsis of all three stocks.Bull of the Day:Trend Micro has joined the growing number of cybersecurity stocks that have gained traction, including CrowdStrike, CyberArk Software, Palo Alto Networks and Zscaler.Outside of Zscaler, Trend Micro has outperformed most of its popular cybersecurity peers this year and is sitting on gains of over +40%. Offering endpoint, messaging, and web security software, what further separates Trend Micro is its more reasonable valuation, although the growth of these popular cybersecurity firms is starting to justify their premiums to the broader market.That said, Trend Micro's strong financial results and strategic growth initiatives are very compelling, with TMICY sporting a Zacks Rank #1 (Strong Buy) and landing the Bull of the Day.Vision One ExpansionAt the forefront of Trend Micro’s expansion is its Vision One unified cybersecurity platform, which is designed to provide advanced threat detection, risk management, and security automation across multiple environments for the enterprise.Simplifying security operations for businesses while providing proactive risk management, Trend Micro serves over 10,000 large enterprise customers worldwide, with Vision One being widely adopted by financial institutions, healthcare organizations, and government agencies.Highlighted as a leading XDR platform (Extended Detection and Response), enterprises have flocked to Trend Vision One because of the platform's ability to adapt to AI-driven threats, using machine learning to detect and respond to sophisticated cyberattacks. It’s also noteworthy that Vision One protects cloud-native applications and digital workloads, putting Trend Micro in a prime position to compete with Palo Alto Networks, Zscaler, and other cloud security leaders.Trend Micro’s Strategic PartnershipsAlso contributing to Trend Micro’s expansion is that it has multiple partnerships across various industries, including with cloud providers, other cybersecurity firms, and managed service providers:Microsoft – Integrates Trend Micro’s security solutions with Azure for enhanced cloud protection.Amazon’s AWS – Collaborates on cloud security and threat intelligence for AWS customers.Alphabet’s Google Cloud – Works together on AI-driven cybersecurity and cloud-native security solutions.Cisco Systems – Partners on network security and endpoint protection.VMware – Provides virtualization security for VMware environments.Consumer Business Expansion & Sales GrowthOutside of traditional cybersecurity for the enterprise, Trend Micro’s Scam Check Tool had 16,000 active users during Q1, boosting its consumer revenue by 14% from the prior year quarter. Based on Zacks' estimates, Trend Micro’s total sales are expected to be up 10% in fiscal 2025 and are projected to rise another 6% in FY26 to $2.11 billion.Notably, FY26 sales projections would represent 22% growth over the last five years, with Trend Micro’s top line more than doubling over the last decade in correlation with the need to combat the rising number of cyber threats.Positive EPS Revisions & Reasonable ValuationMost suggestive of more upside in Trend Micro stock is that FY25 and FY26 EPS estimates are up over 3% and 7% in the last 30 days, respectively. Trend Micro’s annual earnings are now expected to spike 30% this year to $2.05 per share, versus EPS of $1.57 in 2024. Plus, FY26 EPS is projected to rise another 16%.Making the positive EPS revisions very enticing is that TMICY trades at 37.4X forward earnings, with the next cheapest P/E valuation among its afore-noted cybersecurity peers being Zscaler at 95.5X. In terms of price to sales, Trend Micro also stands out with a forward P/S ratio of 5.4X, which is near the S&P 500 with CrowdStrike, CyberArk, Palo Alto, and Zscaler all trading at a least 14X or more.Bottom LineWhile many cybersecurity stocks are intriguing at the moment, investors who may be keeping their risk tolerance in mind could be more comfortable selecting Trend Micro. With its consumer business expansion supporting the growth of the popular Trend Vision One platform, more upside for TMICY looks justified at current levels when considering the premium investors are paying for cybersecurity stocks.Bear of the Day:Falling 30% year to date, the trend of declining earnings estimate revisions points to more downside risk for IGP Photonics stock.After much hype in recent years, investor sentiment has diminished for the laser systems and components provider due to shrinking operating margins amid lower demand for materials processing products.To that point, IPGP has fallen mightily from its all-time peaks of over $200 a share, and unfortunately, the slide could continue as IPG's stock lands a Zacks Rank #5 (Strong Sell) and the Bear of the Day.IPG’s Q1 Results & Guidance Spooked InvestorsAlthough IPG was able to exceed its Q1 expectations in early May, sales fell 9% from the comparative quarter to $227.79 million. More concerning, earnings dropped 40% to $0.31 a share from EPS of $0.52 in Q1 2024. Attributing to the top and bottom-line decline were tariff-related costs, which have reduced demand for material product applications that rely heavily on IPG’s high-performance lasers.Furthermore, IPG warned that tariff-related delays could slow shipments and further impact its profit margins. Leading to much anguish, IPG expects Q2 EPS between $0.05-$0.25 versus $0.45 a share in the prior period, with sales expected at $210-$240 million compared to $257 million a year ago.Declining EPS Revisions & Stretched P/E ValuationCorrelating with softer-than-expected guidance, earnings estimate revisions have continued to decline for IPG. Notably, fiscal 2025 and FY26 EPS estimates have now dropped over 37% in the last 60 days, respectively.Making the trend of declining EPS revisions harder to bear is that IPG’s stock still trades at an overly stretched premium to the broader market at 63.6X forward earnings. It’s also noteworthy that IPGP is trading near its decade-long high in terms of price to forward earnings and is 177% above its median of 25.7X during this period.Bottom LineThere are many signs that point to it being time to sell IPG Photonics stock, with IPGP having an overall “F” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum. Ultimately, investing in the company’s unique laser services is not worth it right now.Additional content:Looking for AI Stocks? Use This Thematic Investing ToolZacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you.Let’s take a closer look at the Artificial Intelligence theme and analyze a top-ranked stock that the screen returned, such as Broadcom.   This screen features diverse companies involved in AI, ranging from creators of software and hardware that power AI to those applying and utilizing this technology through automation, diagnostics, cognitive tasks, and more.Artificial IntelligenceArtificial Intelligence (AI) refers to the technology that enables computers and machines to simulate human intelligence and problem-solving capabilities to perform the cognitive functions usually associated with human minds.In general, AI systems work by ingesting large amounts of data with fast, iterative processing and intelligent algorithms. It then analyzes the data using neural networks for correlations and patterns and allows the software to learn automatically from these patterns to make predictions.Broadcom Reports Strong AI RevenueBroadcom is evolving a broad portfolio of technologies to extend its leadership in enabling next-generation AI infrastructure. This includes foundational technologies and advanced packaging capabilities aimed at building the highest performance, lowest power custom AI accelerators.AVGO stock currently sports a favorable Zacks Rank #2 (Buy), with its earnings outlook shifting bullishly for its current fiscal year.  Its recent set of quarterly results brought several positives, with AI revenue of $4.1 billion melting 77% higher year-over-year. The quarter’s results were driven by robust demand for its AI solutions, with the company forecasting AI semiconductor revenue of $4.4 billion for Q2.Keep in mind that the stock is set to report quarterly results this week, with current consensus expectations indicating 42% year-over-year EPS growth on 20% higher sales. The company’s sales have remained strong over recent periods thanks to the above-mentioned AI frenzy, as shown below.Bottom Line: Find the Best AI StockZacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you.Upon running the Zacks Artificial Intelligence Thematic screen, top-ranked Broadcom was returned.For those interested in viewing all the Thematic lists, please click here >>> Thematic Screens – Zacks Investment Research.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. 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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/performance  for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Broadcom Inc. (AVGO): Free Stock Analysis Report Trend Micro Inc. (TMICY): Free Stock Analysis Report IPG Photonics Corporation (IPGP): 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