Hot or Not, Stock Market Edition: 01/06/2026

The year is young, but stocks are already making moves. Here’s what’s uptrending and downtrending in our Zen Ratings system:

• Hot: Elanco Animal Health (ELAN) gets upgraded; Expedia Group (EXPE) reaches new highs
• Not: Super Micro Computer (SMCI) downgraded to Strong Sell; PulteGroup  (PHM) slips ahead of earnings

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🔥 HOT: Animal health pharmaceutical company Elanco Animal Health (ELAN) is showing impressive momentum — the stock is up over 80% in the past year. (And as you might expect, it’s caught the attention of investors looking for steady growth in a niche market.) After all those gains, is it still worth exploring? Yes. For one, it has several promising new medications hitting the market. Second, it has strong support from Wall Street analysts (it has a Strong Buy consensus among the analysts we track), with a max price target suggesting over 30% upside in the coming year. It’s also A-rated (Strong Buy) in our Zen Ratings system — the highest possible rating. The Component grades tell a compelling story: it has an A for Growth, and above-average Bs for Momentum, Safety, Sentiment, and Value. It’s also in an A-rated industry, suggesting sector strength. Verdict: Add this one to your watchlist. The recent upgrade to Strong Buy appears well-deserved, and the stock's positioning in the top tier of its industry makes it worth considering for growth-oriented portfolios.

🥶 NOT: Homebuilder stock PulteGroup (PHM) just got downgraded from Hold to Sell in the Zen Ratings system. Why? First, serious headwinds: The homebuilding sector faces structural challenges from elevated mortgage rates and affordability concerns, and PHM appears particularly exposed to these headwinds. Second, expectations of a double-digit drop in profitability heading into the company's quarterly earnings report. Third, dismal Zen Ratings  data. The stock earns a D (Sell) Zen Rating, ranking in the bottom 10th percentile of stocks we track — ranking a troubling 19th out of 22 companies in the Construction industry with an F Industry Grade. Component grades show minimal bright spots: B grades for Financials and AI can't offset F for Growth, D for Sentiment and Safety, and C grades for Value and Momentum. 

While the company maintains solid financial metrics (hence the B Financials grade), the growth outlook has deteriorated sharply. Until we see concrete evidence that growth is stabilizing and industry conditions are improving, investors would be wise to look elsewhere.

🔥 HOT: Online travel giant Expedia  (EXPE) is currently riding a wave of momentum that's caught Wall Street's attention. The stock is up 52% in the past year and recently hit a new 52-week high following exceptional Q3 earnings. Related: It’s also currently the #1 ranked stock in the (B-rated) Travel industry. The stock earns an A (Strong Buy) Zen Rating, landing in the 96th percentile—a ranking that places it at the very top of its 15-company travel sector with a B Industry Grade. The components paint an interesting picture: B grades for Financials, AI, and Value show operational strength, while C grades for Growth, Momentum, and Sentiment suggest the market is still digesting the recent gains. Analysts have named EXPE a top pick due to "resilient consumer demand," and the company's RSI of 60.45 indicates room for continued upward movement without being overbought.

🥶 NOT: Is computer hardware maker Super Micro Computer (SMCI) in trouble? While news of Elon Musk's xAI data center expansion theoretically positions hardware suppliers like SMCI to benefit, the company has "not managed to accelerate its returns" according to recent analysis — the stock is down 40% in the past three months. Adding salt to the wound, a U.S. International Trade Commission investigation into Samsung — where SMCI is listed as a customer — could create supply chain headaches. All in all, SMCI finds itself in the penalty box — it just got a harsh Zen Ratings downgrade from Sell to Strong Sell (F rating). It also ranks a dismal 27th out of 28 companies in the Computer Hardware industry, which itself has D Industry Grade. The Component Grades reveal further damage: D grades for Growth, Momentum, Sentiment, and Safety, with only B grades for Financials and AI providing any silver lining. 

All things considered? There are better stocks out there right now. 

What to Do Next?

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