Hot or Not, Stock Market Edition: 03/25/2025

Here’s something new: Stocks are being rewarded for taking proactive measures against the impact of tariffs. Here’s what’s hot and what’s not RN: 

• HOT: Scholastic Corporation (NASDAQ: SCHL) works to mitigate tariffs; Team Inc (NYSE: TISI) reports losses below expectations. 

• NOT: Both KinderCare Learning (NYSE: KLC) and Landsea Homes Corporation (NASDAQ: LSEA) fall after missing earnings expectations. 

🔥 HOT: Team Inc (NYSE: TISI), an industrial inspection and assessment company, gained 19.1% on Friday, three days after reporting its fourth-quarter earnings. The company’s SEC filing for the fourth quarter of 2024 showed a loss of $0.82 per share, significantly better than the loss of $3.18 it posted for the same quarter in 2023. The company’s revenue declined a bit, going from $214.1 million to $213.3 million, but given the narrower loss, the slight revenue decline isn’t a concern. We give TISI a B Zen Rating due to the strong B scores it gets for Growth, Momentum, and Safety in our analysis.

🥶 NOT: Early childhood education company KinderCare Learning (NYSE: KLC) lost 22.2% on Friday after its latest earnings call showed a fourth-quarter loss of $133.6 million. The company profited $14.8 million during the fourth quarter of 2023, so this latest underperformance is concerning to investors who were expecting more from the company. KLC is down 23.9% YTD. We give the stock a C Zen Rating and a Hold recommendation since it maintained its full-year guidance and could right the ship before things get too out of hand.

🔥 HOT: Scholastic Corporation (NASDAQ: SCHL) gained 13.1% on Friday after the company’s CEO, Peter Warwick, revealed that the company has been preemptively diversifying its supply chain in order to mitigate the effect of President Trump’s tariffs. Scholastic also reported earnings on Thursday, posting a narrower loss than analysts expected to see for the fourth quarter of 2024. SCHL is down 1.9% on the year, but we give the stock a B Zen Rating due to the positive sentiment surrounding the stock (Here’s why smart money matters). If Scholastic can weather the tariff storm better than its competitors, it has the potential for some serious growth.

🥶 NOT: About one month ago, Landsea Homes Corporation (NASDAQ: LSEA) lost 20.8% after missing its earnings and revenue projections by 78.1% and 7.9%, respectively. One month later, the stock has barely recovered, sitting just 5.9% higher after an 8.5% loss on Friday. We’re not going to sugarcoat this: LSEA is a Strong Sell in our book. The company has lost 20.6% so far this year and is down more than 45% year-over-year. We give LSEA an F Zen Rating and don’t see much room for upside anytime soon.

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