European Wax Center and 1-800-FLOWERS have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – June 10, 2025 – Zacks Equity Research shares European Wax Center EWCZ as the Bull of the Day and 1-800-FLOWERS.COM FLWS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Baidu, Inc. BIDU, Alibaba BABA and Tencent TCEHY.

Here is a synopsis of all five stocks.

Bull of the Day:

European Wax Center is a leading personal care and waxing services brand with a broad network of franchised locations across the US. While the company has struggled since going public in 2021, shedding more than 70% of its value in the years following its IPO, recent performance suggests a major turnaround is underway.

After years of underperformance, EWCZ is now generating consistent profits, benefiting from improving margins and operational efficiency. More importantly, the stock has caught the attention of Wall Street, with both earnings estimates and share price momentum shifting sharply in its favor.

The stock has surged 63% over the past month alone, yet still trades at a bargain valuation, suggesting that this may just be the beginning of a longer-term recovery. With analyst sentiment improving and the business fundamentals strengthening, European Wax Center appears to be a high-upside opportunity.

European Wax Center Shares Surges on Earnings Revisions

European Wax Center has seen a sharp turnaround in sentiment, driven by a wave of upward earnings estimate revisions. Over the past month, analysts have significantly raised their projections, giving the stock a Zacks Rank #1 (Strong Buy) rating. Current year earnings estimates have nearly doubled, up 97% in the last month, while forecasts for next year have jumped by 65%.

Earnings are expected to grow at an impressive 18.4% annually over the next three to five years, suggesting strong long-term potential. Despite this growth, the stock remains remarkably inexpensive, trading at just 8.6x forward earnings. With a PEG ratio of only 0.46, the valuation leaves ample room for multiple expansion, while also helping to cushion downside risk.

Operationally, EWCZ has been consistently outperforming expectations. The company has beaten earnings estimates in each of the last four quarters, delivering an average surprise of 187%. That trend looks set to continue, with the Zacks Earnings ESP (Expected Surprise Prediction) currently forecasting a 6.32% beat for the upcoming quarterly report. With both momentum and valuation on its side, European Wax Center is quickly shaping as a compelling opportunity.

EWCZ Stock Price Momentum Accelerates

After a prolonged downtrend that lasted more than three years, European Wax Center appears to have finally found its footing. The stock has carved out a clear bottoming pattern and is now showing strong signs of a sustained reversal. Following a period of consolidation in the second half of May, shares broke out decisively in early June, confirming the trend change with a renewed surge in buying interest.

Momentum has only accelerated since then. On Monday, the stock jumped nearly 9%. This follows a broader rally of more than 60% over the past month, as both technical and fundamental signals have aligned.

While some investors may be hesitant to initiate a position after such a sharp rally, the stock’s deeply discounted valuation helps reduce the downside risk.

Should Investors Buy Shares in European Wax Center?

With a new CEO stepping in earlier this year, European Wax Center is undergoing a strategic refresh at just the right time. The leadership change adds another catalyst to a turnaround already supported by rising profits, bullish earnings revisions, and strong price momentum. For investors willing to look past the company’s rocky post-IPO history, EWCZ offers a compelling mix of growth potential and value.

Bear of the Day:

1-800-FLOWERS.COM is a well-known floral and gift delivery company that operates across multiple brands, offering everything from fresh flowers to gourmet food baskets. Once considered a go-to for online gifting, the company has faced mounting challenges in recent years. Sales growth has sagged, and the stock has reflected that pressure, falling sharply from its pandemic-era highs.

More concerning, however, is the shift in the company’s bottom line. Earnings have turned deeply negative, and analysts have responded by slashing estimates further, casting doubt on any near-term recovery. This wave of downward revisions has earned FLWS a Zacks Rank #5 (Strong Sell), suggesting that more downside could be ahead.

The broader retail and mail-order industry has struggled amid shifting e-commerce dynamics and changing consumer spending habits. Given these variables, 1-800-FLOWERS.COM may continue to struggle until some fundamental business improvement.

FLWS Stock Falls as Analysts Slash Estimates

Investor sentiment around 1-800-FLOWERS.COM has deteriorated sharply, and recent analyst actions have only added to the pressure. Over the past month, earnings estimates have been cut severely. Current-quarter projections have been slashed by 70%, while full-year FY25 estimates have dropped by a staggering 900%. Looking further ahead, FY26 estimates have been lowered by 243%, signaling a deep lack of confidence in the company’s earnings outlook.

At the heart of the issue is declining demand for FLWS's core products. Since peaking in 2022, annual revenue has fallen by 23%, reflecting waning interest in the company’s offerings amid a more competitive and cost-conscious consumer environment. Unfortunately, that downtrend appears far from over—sales are expected to decline another 8.3% this year, followed by a further 0.7% drop in fiscal 2026. With revenue shrinking and profitability under pressure, the path to recovery remains uncertain.

Should Investors avoid 1-800-FLOWERS.COM Stock?

With persistent revenue declines, mounting losses, and aggressive downward revisions from analysts, 1-800-FLOWERS.COM faces serious headwinds. The company’s lowest Zacks Rank reflects a deteriorating earnings outlook and limited near-term visibility into a turnaround. While the brand still holds name recognition, the business will likely need to make meaningful operational and strategic changes to regain investor confidence.

Until there's evidence of stabilizing sales, improving margins, or a clear growth catalyst, FLWS remains a stock that investors may want to steer clear of.

Additional content:

Baidu Trading at a Discount: Time to Buy the Stock?

Baidu, Inc. is currently trading at a discount relative to its industry and historical metrics, with its forward 12-month price-to-earnings (P/E) ratio sitting below its five-year average, as shown below. It currently has a Value Score of B.

This is a deep discount to the broader tech sector and even to Chinese peers. By comparison, Alibaba has a forward P/E of 10.96 and Tencent has 16. Meanwhile, the Zacks Computer and Technology sector is currently trading at 26.22X.

Baidu Valuation

In terms of Baidu’s share price performance, its shares have gained only 1.8% so far this year. Meanwhile, its peers Alibaba and Tencent have surged 40.8% and 24.2%, respectively, during the same time frame. The Zacks Internet – Services industry has lost 6.3%, and the Zacks Computer and Technology sector has gained 1.3% year to date.

Let’s analyze BIDU’s current strengths and risks to determine if the stock warrants an investment at this stage.

Baidu’s Growth Drivers

Baidu’s most immediate opportunity lies in the continued rapid scaling of its AI Cloud business. In the first quarter of 2025, AI Cloud revenue surged 42% from a year ago to RMB 6.7 billion, accelerating from 26% growth in fourth-quarter 2024. This segment now makes up 26% of Baidu Core revenue, up from 20% a year ago—a clear sign that AI Cloud is becoming a central growth driver. Triple-digit growth in generative AI and foundation model-related revenue within Cloud further suggests strong demand tailwinds. As China’s enterprise AI adoption deepens, Baidu’s Qianfan MaaS platform—with its broad model library, industry-leading inference cost efficiency, and support for multimodal and reasoning models—positions the company to consolidate its share in this expanding market.

Another major opportunity is Baidu’s autonomous driving business. Apollo Go provided approximately 1.4 million rides in first-quarter 2025, up 75% year over year, and management confirmed that the service is now fully driverless in mainland China and entering new global markets such as Dubai, Abu Dhabi, and Hong Kong. The fleet of more than 1,000 driverless vehicles and the unique, sub-$30,000 unit cost of the RT6 purpose-built robotaxi give Baidu an edge in scaling autonomous mobility. New partnerships, such as with CAR Inc., could further support asset-light, scalable growth.

Baidu’s AI-powered search transformation also represents a significant long-term opportunity. As of April 2025, about 35% of mobile search results contained AI-generated content, up sharply from 22% in January. Management expects this penetration to keep rising in the second quarter. While monetization is in early testing, the ability to monetize long-tail queries and new formats could eventually expand Baidu’s ad revenue base beyond the limits of traditional search.

Baidu’s Challenges to Overcome

While user experience and engagement metrics are improving with AI search, monetization approaches are still being rebuilt from scratch, with management cautioning that the transformation will place notable near-term pressures on revenue and margin. There is uncertainty around how quickly and effectively Baidu can convert AI-driven engagement into sustainable ad revenue.

Again, AI chip supply constraints are an external risk. U.S. export restrictions on advanced AI chips could affect Baidu’s ability to support large-scale training and inference for its models. Management emphasized its flexibility with domestic chips and software optimizations, but the risk remains that supply limitations or performance gaps in domestic chips could hinder Baidu’s AI Cloud scalability or competitiveness.

Competitive intensity is rising in both AI cloud and AI search. Chinese tech giants are racing to release advanced models, improve inference cost structures, and capture enterprise cloud spend. Moreover, large platforms with massive user traffic (e.g., Tencent, Alibaba) are integrating AI into their ecosystems, increasing competitive pressure.

Margin pressure from elevated AI investments is another consideration. In the first quarter, Baidu reported negative free cash flow of RMB 8.9 billion, largely due to heightened AI investments. With R&D intensity declining (R&D expenses were 16% of Baidu Core revenue this quarter, down from 21% from a year ago), Baidu must balance innovation speed with financial discipline.

Earnings Estimates Trend & Growth Rate for Baidu

Over the past 30 days, the Zacks Consensus Estimate for Baidu’s current-year earnings per share (EPS) has decreased, as you can see below, depicting analysts’ concerns over the company’s prospects.

How to Play BIDU Stock Now?

Despite trading at a seemingly attractive discount, Baidu’s near-term risks outweigh its potential rewards. The company faces rising uncertainty in monetizing its AI-driven businesses. While AI Cloud growth is robust, it remains vulnerable to escalating competition from peers like Alibaba and Tencent, both of whom are outpacing Baidu in stock performance. Furthermore, Baidu’s AI search transformation is still in its infancy, with unproven monetization strategies likely to pressure revenue and margins in the coming quarters.

The company is also exposed to U.S. AI chip restrictions, which could impair the scalability of its models. Baidu’s negative free cash flow and declining R&D intensity raise additional concerns about its ability to maintain a technological edge. The recent downward trend in EPS estimates underscores analysts’ growing caution. With stronger-performing alternatives in the Chinese tech space and rising operational headwinds, now appears an opportune time for investors to exit BIDU stock. BIDU currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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