In this Zacks Investment Research Review, we explore whether this stock research platform is right for your investing toolkit.
Quick Summary:
Zacks a US-based Investment Research research firm. It’s known for providing independent research to investors. Zacks provides a myriad of services, including stock recommendations, investment research, portfolio management tools, and financial news and commentary.
Overall Rating:
Stock Analysis:
Tools & Features:
Ease of Use:
Price:
PROS
- Established Investment Research Company
- Easy to use Ranking System
CONS
- Focus on Earnings Estimate Revision is antiquated
- Price
What is Zacks Investment Research?
Zacks Investment Research is a financial research firm based in Chicago, Illinois. It’s known for providing independent research to investors. Zacks provides a myriad of services, including stock recommendations, investment research, portfolio management tools, and financial news and commentary.
The company was founded in 1978 by MIT researcher Len Zacks.
After spending years analyzing stocks, Len made an observation: earnings estimate revisions may be the most powerful force impacting stock prices.
This discovery led to the Zacks Rank system which expanded into an independent and quantitatively-driven stock research company. Zacks goal is to arm individual investors with reliable investment research so they can reach their investing goals.
The company offers a variety of services, including a free version, but its flagship product is Zacks Premium.
How Does Zacks Investment Research Work?
Zacks provides a myriad of services, including stock recommendations, investment research, portfolio management tools, and financial news and commentary:
- Earnings Estimates Revision: It’s Flagship stock ranking system, to help determine buys and sells
- Style Scores: These individual Style Scores of A, B, C, D or F for Value, Growth and Momentum are assigned to each stock
- Screeners: Pick and choose from more than 45 predefined screens
- Equity Research Reports: Zacks covers more than 1,000 of the most widely followed stocks.
Zack’s offers some of it’s features to users for free, but to take full advantage, a Zack’s subscription is required. The most popular paid subscription is ‘Zack’s Premium’, which is $249/year with a 30 day free trial. There are also more advanced subscriptions available, but for the individual user, those features really aren’t necessary.
Who Should Use Zacks Investment Research?
Zacks Premium is good for…
Individual Investors: Those looking for quantitative research and stock recommendations based on earnings estimate revisions.
Intermediate to Advanced Traders: Traders with some experience might benefit from their in-depth analysis and proprietary rating system.
Zacks Premium is not good for…
Novice Traders: Beginners might find the information overwhelming or too complex, without proper guidance or understanding of financial metrics.
Long-term, Passive Investors: Those who prefer a “buy and hold” strategy might not need the frequent updates and detailed analysis provided by Zacks.
Zacks Premium: Key Features
When it comes to the best investment newsletters, Zacks offers some worthwhile features.
Zacks Rank Tracker
Zacks Investment Research is most famously known for its Earnings Estimates Revisions Ranking System.
EPS revisions were a profound idea 50 years ago, but fast foward to 2023, and that speed at which information moves makes EPS Revisions analysis easier to come by.
Zack’s tracks over 3,000 analysts and over 200,000 earnings estimates, waiting for positive or negative revisions.
How EPS Revisions Work:
- If an analyst believes a stock is worth 20 times next year’s earnings (P/E of 20x) and has an earnings estimate of $2.00 per share. This would imply the stock’s fair value is $20 a share.
- If the analyst changes his forecast to $1.25 in EPS, the fair value would then be $25 per share
- (20x P/E x $1.25 est. EPS = $31.25).
- The Zacks Rank System says that when earnings estimates are revised(increasing) that stock price should increase too.
- Positive revisions are bullish and negative revisions are bearish.
- Zacks Rank uses daily earnings estimate revisions by aggregating the current revision data and classifying the underlying stocks into 5 groups ranging from “Strong Buy” to “Strong Sell.”
Style Scores
These individual Style Scores of A, B, C, D or F for Value, Growth and Momentum are assigned to each stock we cover. This enables you to narrow down the Zacks #1 Rank List to the stocks that best fit your own investing style. You can also find stocks with the best scores across the board using the VGM (Value, Growth, Momentum) Score of A, B, C, D or F. The VGM Score is not just an arithmetical average, but actually a calibrated weighting of each individual style score. Selecting stocks with a Zacks Rank of 1 or 2 and Style Score of A or B can lead to improved performance.
Industry Rank
Use the Zacks Industry Rank to find stocks with the most potential to outperform in the future. It sorts companies into more than 250 industry groups which enables us to calculate the average Zacks Rank for all of the stocks in the industry. Once the top industries are identified, look inside those industries to find the stocks with the highest Zacks Rank
Equity Research Reports
Zacks’ Equity Research Reports provides in depth research on more than 1,000 of the most widely followed stocks.
Each report features independent research from Zacks’ analysts and provides in-depth analysis on a company, its fundamentals and its growth prospects to firmly understand why a stock should be bought, held or sold.
Screeners
Pick and choose from more than 45 predefined screens strategically created by Zacks to outperform the market.
You can screen for the best Zacks Ranked stocks to match your trading style such as Value, Growth, Momentum or Income. See what else you can use to find your own winning stocks.
Top Stocks
This private list is made up of Zacks Rank #1 (Strong Buy) stocks – the top 5% with the most potential. It has more than doubled the S&P 500 with an average gain of +24.3% per year from January 1, 1988 to July 3, 2023. So it’s easy to understand why checking this list is a smart way to start each trading day.
Other Noteworthy Features
In addition to the features listed above, Zack’s also offers:
- ETF and Mutual Fund Rankings: In addition to individual stocks, Zacks ranks ETFs and mutual funds using a similar methodology. This helps investors identify potential investment opportunities in different fund categories.
- Economic Analysis: They provide insights and analysis on economic indicators and trends that may affect investment decisions.
- Advisory Services: For investors looking for personalized guidance, Zacks offers investment advisory services, customized portfolios, and professional consultations.
Price and Value
Zachs offers a free version and 3 tiers of paid memberships, with Zacks Premium being their flagship offering and most reasonably priced.
The pricing of a Zack’s subscription is roughly in-line with its competitors. That said, it’s not a terrible idea to try the premium version for 30 days, and simply cancel if you don’t like what they offer.
Free Version:
The free version of Zacks Investment Research provides a range of resources that allow investors to gather information and insights without a subscription. Here’s a breakdown of what’s typically included:
- Limited Research Reports
- Access to some Investment Ideas
- Limited Portfolio tools
- Some Earnings Estimates
Keep in mind that the features and accessibility of the free version may vary over time, and the whole point is to entice you to sign up, by likely limiting access to the most desirable stocks or information.
Zacks Premium [Most Popular]:
A Zacks Premium Membership is their flagship service. You’ll get unlimited access to all the features of the free version, plus you can try all the features free for 30 days:
- Daily updates of the Zacks Rank
- Full access to the Zacks #1 Rank List
- Equity Research Reports
- Focus List portfolio of 50 longer-term stocks
- Premium screeners and much more
- Subscription: $249/year with 30 Day Free Trial
Zacks Investor Collection:
The Zacks Investor Collection is a bundle of our top subscription services for long-term investors.
All the features of Zacks Premium plus:
- Stocks under $10 Strategy
- Premium Research Tools like Screeners and Equity Research Reports
- Home Run Investor
- Value Investor
Subscription: $59/month or $495/year with 30 Day Trial for $1
Zacks Ultimate:
Zack’s Ultimate is the exclusive level of membership available. This tier provides access to everything in the Investor Collection and Premium level membership, plus:
- Private picks from all of Zack’s portfolio recommendation services
- Sample Investment approaches to identify your trading style
- Expert commentary and recommendations
Subscription: $299/month with 30 Day Trial for $1
Best Alternatives to Zacks Investment Research
Don’t fret. If Zacks Premium isn’t right for you, below are our most popular alternatives to Zacks.
1. Motley Fool Stock Advisor
Motley Fool’s Stock Advisor is a very popular alternative to Zacks Premium.
- Why it Stands Out: The Motley Fool Stock Advisor shines with its specific stock recommendations, backed by detailed analysis and a strong track record of performance. This valuable feature aids investors of all levels in identifying potential investment opportunities in the stock market.
- Best For: Both novice and experienced investors who appreciate guidance on stock picks and investment strategies
- Pros: Provides specific stock recommendations, offers in-depth reports, and a solid track record of performance.
- Cons: Requires a subscription; not all recommended stocks may suit every investor.
- Price: $199/year
- Current Promotions: $79 for the first year
Read our complete Motley Fool Stock Advisor Review.
Seeking Alpha
- Why it Stands Out: Seeking Alpha’s unique crowd-sourced content model allows for an array of analysis and opinions from different investors and industry experts, providing a comprehensive view of market trends and investment options.
- Best For: Investors looking for diverse perspectives and those interested in a broad spectrum of investment types.
- Pros: Wide range of topics covered, content is crowd-sourced from a variety of investors and industry experts.
- Cons: Premium content requires a subscription; quality of analysis may vary due to crowd-sourced nature.
- Price: $239/year
- Current Promotions: $4.95 for the first month
or Read our complete Seeking Alpha Review.
3. Action Alerts Plus
Action Alerts PLUS is another common alternative to Zacks Premium.
- Why it Stands Out: Action Alerts PLUS stands out for its transparency, giving subscribers full access to its portfolio and real-time trade alerts. The service prioritizes education, explaining the reasoning behind each decision to help subscribers understand investment strategies. It provides actionable investment advice, detailed recommendations on what to buy, at what price, and when to sell. Subscribers gain from monthly members-only calls, fostering learning and direct communication with the team.
- Best For: Investors seeking real-time alerts on trades and insights into market trends.
- Pros: Strong Emphasis on Investor Education, 14 Day Free Trial, Easy-to-use Interface
- Cons: Oriented towards short-term trading, Requires Active Management
- Price: Starts at $16.67/mo
- Current Promotions: Free for 14 Days
Or read our complete Action Alerts Plus Review.
Final Thoughts: Is Zacks Worth It?
Like an stock picking service out there, Zacks should be a tool, not an end. You can’t simply sign-up buy the stocks they list, and expect to make $50,000 the next week.
It just doesn’t work like that.
That said, there are some helpful investing tools and they do offer stocks picks as well, but you still need to do your own research, and invest in companies that have a business model that makes sense to you.
Hope this Zack’s Premium Review was helpful, and Happy Investing!
