Shares of companies such as Enbridge (NYSE: ENB), Zscaler (NASDAQ: ZS), and Canopy Growth (NYSE: CGC) were the major stock market movers in early market trading on September 6. Let’s see why.

 

Enbridge bets big on energy

Canada’s leading energy infrastructure company, Enbridge, is down 9% in early-market trading. The energy giant announced plans to buy three utilities from Dominion Energy (NYSE: D) in a deal valued at $9.4 billion, making Enbridge North America’s largest natural gas provider.

Enbridge’s deal indicates it expects natural gas to remain a key transition fuel as the world shifts towards clean energy sources to fight climate change. The company explained the assets it will acquire have long useful lives, providing it with stable cash flows in the upcoming decade.

The three utilities Enbridge is looking to purchase currently serve customers in Ohio, North Carolina, Utah, and Wyoming regions where utility bills are forecast to grow at a higher pace compared to the national average. These utilities serve seven million homes in the U.S.

After accounting for debt, the total transaction is valued at $14 billion, making the acquisition Enbridge’s largest since it purchased Spectra Energy for $28 billion in 2017. Currently valued at a market cap of $64 billion, ENB stock offers investors a tasty dividend yield of 8%.

 

Zscaler tops revenue and earnings estimates

Cloud security company Zscaler is down over 2% in early market trading even though it reported better-than-expected fiscal Q4 results for 2023 (ended in July). Zscaler reported revenue of $455 million with adjusted earnings of $0.64 per share. 

Comparatively, analysts forecast revenue at $430 million and earnings of $0.49 per share in Q4. In the year-ago period, Zscaler reported revenue of $318 million and earnings of $0.25 per share.

In the July quarter, Zscaler increased:

 

  • Deferred revenue by 41% to $1.44 billion
  • Billings by 38% to $719 million and
  • Net Income by over 150% to $101 million

 

Due to its widening profit margins, Zcaler reported a free cash flow of $101 million, accounting for 22% of sales.

“We concluded our fiscal year with strong top line growth and record operating profits. In less than two years, we doubled our annual recurring revenue, surpassing the $2 billion milestone. With cyber security as a high priority, IT executives are modernizing their legacy network security with our zero-trust architecture," said Jay Chaudhry, Chairman and CEO of Zscaler.

He added, “Our customers are realizing tremendous value from the new services and advanced capabilities delivered on our Zero Trust Exchange™ platform. We will continue to invest to delight our customers with more product innovations to capture the large opportunities ahead of us.”

 

Canopy Growth stock

The final trending stock on the list is Canopy Growth, which is up 9% today and 85% in the last three trading sessions. Last week, a Bloomberg report disclosed an unidentified "senior official" from the Department of Health and Human Services (HHS) has formally petitioned for the reclassification of marijuana, advocating for it to be considered less hazardous than it currently is. This news drove shares of Canopy Growth and other marijuana producers higher.

The senior figure within the HHS reportedly sent the request to Anne Milgram, the head of the Drug Enforcement Agency (DEA). According to Bloomberg, which claims to have viewed the letter, an unnamed spokesperson for the DEA confirmed its receipt.

The DEA uses a "scheduling" system to categorize controlled substances. Currently, marijuana is listed as a Schedule I drug, signifying that it has "no accepted medical applications and a high potential for abuse," placing it in the company of substances like heroin and LSD.

On the other hand, Schedule III drugs are those deemed to have "a moderate to low potential for physical and psychological dependence." Drugs like testosterone and anabolic steroids fall under this category.

      

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