Monday, May 11, 2026
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including UnitedHealth Group Inc. (UNH), Merck & Co., Inc. (MRK) and Qualcomm Inc. (QCOM), as well as two micro-cap stocks EVI Industries, Inc. (EVI) and Optex Systems Holdings, Inc (OPXS). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Ahead of Wall Street
The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens, attempting to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.
You can read today's AWS here >>> Inflation Numbers Out This Week: CPI, PPI
Today's Featured Research Reports
UnitedHealth’s shares have outperformed the Zacks Medical - HMOs industry over the past year (+2.6% vs. -0.2%). The company has shown steady revenue growth, driven by Optum and UnitedHealthcare. A strong market position and ongoing expansion initiatives, combined with rising healthcare demand, support sustained long-term growth.
UnitedHealth expects total revenues to be over $439 billion in 2026. Optum remains a key driver via pharmacy services, tech integration, and government solutions. Commercial membership also grew for UNH, supporting margins despite headwinds from government programs. Robust cash generation supports shareholder returns and financial flexibility.
However, rising medical costs continue to pressure margins, reflected in an elevated MCR despite recent improvement, while elevated debt and interest expenses strain financial flexibility. It is currently overvalued compared with the industry. The Zacks analyst reiterate our Neutral recommendation on the stock.
(You can read the full research report on UnitedHealth here >>>)
Shares of Merck have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+45.6% vs. +19.9%). The company’s first-quarter earnings and sales beat estimates. Its blockbuster drug, Keytruda, and new products have been driving sales. Animal Health is also contributing to growth. Though Keytruda will lose patent exclusivity in 2028, its sales are expected to remain strong until then.
Recent M&A deals have strengthened Merck’s pipeline while its late-stage pipeline and new launches are gaining traction. This progress has increased confidence that Merck can maintain growth even after Keytruda loses exclusivity.
However, it faces several near-term challenges, including persistent challenges for Gardasil in China, potential competition for Keytruda, and rising competitive and generic pressure on some of its drugs. Also, estimates have declined recently due to costs related to its various M&A deals.
(You can read the full research report on Merck here >>>)
Qualcomm’s shares have gained +58% over the past year against the Zacks Electronics - Semiconductors industry’s gain of +107%. The company reported mixed second-quarter fiscal 2026 results, with adjusted earnings beating the Zacks Consensus Estimates while revenue missed the same.
Qualcomm continues to pivot from a handset-centric model toward a broader connected processor portfolio. Solid traction in the automotive business augurs well, with more than 1 million cars operating ADAS and autonomy on Snapdragon Ride processors. Higher content per vehicle on the Snapdragon Digital Chassis, broader edge AI adoption across devices and data center traction are positives.
However, handset demand is tied to uncertain memory supply and pricing, which is keeping chipset shipments below end demand and driving a softer near-term outlook. Management expects China handset revenue to bottom in the fiscal third quarter, but near-term guidance still implies lower revenue and profitability.
(You can read the full research report on Qualcomm here >>>)
Shares of EVI Industries have outperformed the Zacks Industrial Services industry over the past year (+30.4% vs. -0.9%). This microcap company with a market capitalization of $257.89 million delivered solid top-line momentum, with revenues rising 24% in the December quarter and 20% for the first six months of FY26, alongside gross margin expansion to ~31%.
Improved mix, pricing discipline and operating leverage are enhancing earnings quality. Fiscal 2025 acquisitions contributed $40 million in revenues and $2 million in net income year to date. Operating cash flow improved to $5.1 million despite a $12.6 million inventory build, while a growing installed base and $9.7 million in lease receivables provide recurring service visibility.
However, earnings conversion remains pressured: net income dipped to $4.2 million as SG&A rose 26%, outpacing revenue growth. Inventory increased to $78 million, elevating working capital and demand-risk exposure. Debt rose to $58 million under a variable-rate facility, increasing sensitivity to higher rates. Shares trade at 0.73X EV/sales and 14.31X EV/EBITDA.
(You can read the full research report on EVI Industries here >>>)
Optex Systems’ shares have outperformed the Zacks Aerospace - Defense Equipment industry over the past year (+56.5% vs. +27.6%). This microcap company with a market capitalization of $70.76 million is demonstrating strengthening demand momentum, with Q1 FY26 orders rising 31.7% YoY to $7.9 million, driven by a doubling of periscope bookings and sharp growth in optical assemblies.
Recent multi-year contract awards totaling more than $6 million extend production visibility into 2027, supporting revenue durability. Quarterly revenues increased 11.6% to $9.1 million, led by a 55.9% surge in the Richardson segment, which now represents 58% of sales. Liquidity remains solid, with $5.8 million in cash, $21.2 million in working capital and no revolver borrowings.
However, gross margin declined and operating income fell sharply due to mix pressure and higher G&A. Backlog decreased to $37.9 million, with notable softness in periscopes and laser filters. Shares have outperformed over the past year and trade at 1.54X EV/sales and 8.68X EV/EBITDA, discounts to industry.
(You can read the full research report on Optex Systems here >>>)
Other noteworthy reports we are featuring today include Micron Technology, Inc. (MU), S&P Global Inc. (SPGI) and Quanta Services, Inc. (PWR).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
UnitedHealth (UNH) Rides On Solid Optum Business, Rising Costs Hurt
Merck's (MRK) Growth Outlook Stable Despite Keytruda Patent Cliff
Qualcomm (QCOM) Rides on Automotive Traction, Edge AI Adoption
Featured Reports
Rising AI Spending, Inventory Improvement Aid Micron (MU)
Per the Zacks analyst, Micron is benefiting from the boom in AI spending and inventory improvement across multiple end markets, which are fueling the demand for memory chips.
IHS Markit Buyout Aids S and P Global (SPGI) Amid Rising Costs
Per the Zacks analyst, the IHS Markit buyout has significantly enhanced S and P Global's data and analytics offerings. However, escalating expenses is worrisome.
Investments Aid American Electric (AEP) Amid Regulatory Challenges
Per the Zacks analyst, American Electric makes systematic investments to maintain and upgrade the reliability of its infrastructure. Yet, ongoing regulatory challenges continue to remain concerns.
Edwards (EW) Rides on Solid TMTT Sales Amid Dull Macro Scenario
The Zacks Analyst is impressed with Edwards' strong TMTT sales globally, which grew 51.9% year over year in first quarter. Recent dull macroeconomic trends remain as headwind for the company.
Estee Lauder's (EL) Sales Benefit From Solid Online Business
Per the Zacks analyst, Estee Lauder is benefiting from strong online sales momentum, supported by growth across Amazon Premium Beauty, TikTok Shop and other digital platforms globally.
SharkNinja (SN) Ride Innovation and AI Momentum to Drive Global Growth
Per the Zacks analyst, SharkNinja is benefiting from strong product innovation, accelerating international growth and AI-driven efficiencies. Fiscal 2026 sales are expected to grow 11.5-12.5% y/y.
Commercial Construction Market Aids Griffon (GFF), Costs Ail
Per the Zacks analyst, Griffon is experiencing strength across its commercial construction end market driven by increase in demand for rolling steel door. However, high costs remain a woe for it.
New Upgrades
Quanta (PWR) Gains on Robust Public Spending and Acquisitions
Per the Zacks analyst, Quanta is benefiting from higher utility and large-load customer spending and acquisitions, while record backlog and expanding programmatic awards support multiyear visibility.
Expansion of Non-Mortgage Products Aids LendingTree (TREE)
Per the Zacks analyst, LendingTree's reduced dependence on mortgage-related sources of revenues and expanding product options across insurance categories is expected to support its financials.
SM Energy's (SM) Oil-Focused Operations in Premium Shale Basins Aid
Per the Zacks analyst, SM Energy's expansion of oil-focused operations in the Permian Basin, Uinta Basin and Eagle Ford regions enhances its production outlook.
New Downgrades
Rising Capital Requirement and High Debt Levels to Ail Honda (HMC)
Per the Zacks analyst, rising capital requirements tied to the joint venture with LG Energy Solution are likely to hurt the company's cash flows. High debt level also remains a concern.
Yield Pressure and Macro Woes Hurt Norwegian Cruise's (NCLH) Prospects
Per the Zacks analyst, Norwegian Cruise faces yield pressure as deployment and execution stay misaligned and bookings lag. Also, soft Europe demand, Middle East disruptions, and high fuel costs ail.
Increasing Transaction Fees Aid Cboe Global Markets (CBOE)
Per the Zacks analyst, Cboe Global is set to grow on rising transaction fees driven by trading volume growth and non-transactional revenues. However, rising expenses weighing on margin ail.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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QUALCOMM Incorporated (QCOM): Free Stock Analysis Report
UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report
Quanta Services, Inc. (PWR): Free Stock Analysis Report
Merck & Co., Inc. (MRK): Free Stock Analysis Report
Micron Technology, Inc. (MU): Free Stock Analysis Report
S&P Global Inc. (SPGI): Free Stock Analysis Report
Optex Systems Holdings Inc. (OPXS): Free Stock Analysis Report
EVI Industries, Inc. (EVI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).