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Exploring Amazon’s High PE Ratio

Exploring Amazon’s High PE Ratio
  • Amazon has historically pursued a topline focused strategy, which is being questioned by investors.
  • Amazon’s reinvestment is generating lower sales than before, raising questions on the strategy of reinvesting more to drive topline growth.
  • The cost trends in tandem with deteriorating trends in payables and inventory can take a toll on Amazon’s cash flow, the prime measure of the company’s performance.
  • Our Amazon stock analysis reflects our negative long term outlook on Amazon.
  Amazon’s (NASDAQ:AMZN) high PE ratio is always a matter of debate among investors. I was recently on a social network and noticed a debate following Amazon’s latest quarterly release. The argument was ...
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Twitter Earnings - Q2 2014 - Solid Quarter But Risky Bet

Twitter Earnings – Q2 2014 – Solid Quarter But Risky Bet
  • Twitter delivered exceptional revenue growth beating estimates by 10%.
  • Twitter showed improvements on all metrics.
  • Twitter is becoming more and more risky with rising valuations.
  Twitter (NYSE:TWTR) reported its Q2 earnings on 29 July 2014 and registered a huge jump in revenue to thrash estimates. The company’s Adjusted EPS also came out ahead of consensus estimates, adding to the positive movement in all reported metrics. To add to a great quarter on all fronts, the company also revised its full year revenue and adjusted EBITDA guidance upwards, driving the stock price through the roof in after-hours trading.   Twitter’s stock price is up over 28% in ...
Related Tickers: TWTR, FB continue reading ...

Twitter Earnings - Q2 2014 Preview

Twitter Earnings – Q2 2014 Preview
  • Twitter is likely to beat its own revenue guidance and analyst estimates.
  • Twitter engagement metrics should improve in Q2.
  • Twitter is a risky bet at its current valuations.
  If you are a Twitter (NYSE:TWTR) shareholder, chances are, you don’t have very fond memories of the company’s earnings announcements so far. There have only been two such occasions since the microblogging site went public late last year. However, on both occasions, the stock tanked following the earnings release. Twitter’s stellar growth was outweighed on both occasions by long term growth concerns tied to sluggish user growth and declining engagement metrics.   In this quarter however, we expect ...
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Yahoo Increases Efforts To Boost Core Operations

Yahoo Increases Efforts To Boost Core Operations
  • Yahoo reported disappointing Q2 2014 results with an increasing dependency on the company’s stakes in Alibaba and Yahoo Japan.
  • Yahoo undertook a series of actions in order to minimize this dependency and close the gap on its competition.
  • Yahoo’s short term disappointing results should be followed by long-term upside.
In the middle of June, the Internet giant Yahoo (NASDAQ:YHOO) reported disappointing Q2 2014 results that included a lower than expected EPS of $0.37 which was $0.01 lower than analysts consensus, and $1.04 billion revenues (Ex-TAC) which were below the company’s revenue outlook of $1.08 billion. Revenue figures incorporate a quarter-over-quarter decline in each segment ...
Related Tickers: YHOO continue reading ...

Line IPO Will Establish WhatsApp Valuation

Line IPO Will Establish WhatsApp Valuation
  • Line is expected to  IPO for more than $10 billion
  • The IPO should mitigate the existing fears of Facebook over-paying for WhatsApp.
  • Assuming Line can sustain a market capitalization in excess of $10 billion; WhatsApp will be worth more than $19 billion, assuming 1 billion monthly active users.
  • Owning Facebook will give investors better exposure to mobile messenger services.
  Line is pursuing an IPO with a valuation north of $10 billion. This is shortly following Facebook’s acquisition of WhatsApp for $19 billion.   This Line IPO will help put in perspective Facebook’s WhatsApp acquisition, valued at $19 billion . Whatsapp is thought to be an important ...
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Baidu Earnings Review Q2 2014

Baidu Earnings Review Q2 2014
  • Baidu delivered a solid quarter with strong growth and profitability.
  • Baidu beat EPS estimates by a whopping 26%.
  • Baidu is attractive at its current valuations for long term investment.
Your browser does not support the video tag.   Chinese search giant Baidu (NASDAQ:BIDU) delivered yet another strong quarter as it stomped past estimates with its earnings for Q2 2014. The company’s revenue growth remained solid and marginally beat estimates. The big surprise numbers this quarter were Baidu’s profit margins, which rebounded to higher levels even as analysts expected margins to contract further from Q1 levels. Baidu also ...
Related Tickers: BIDU, YNDX, GOOGL, GOOG continue reading ...

Amazon Earnings Report - Q2 2014

Amazon Earnings Report – Q2 2014
  • Amazon delivered a disappointing Q2 earnings report after market hours yesterday.
  • A topline beat was unable to quell investor fears who took note of the company's huge miss on the bottomline.
  • Investors are looking forward to earnings growth and Amazon will have to deliver on this metric, sooner than later, to sustain its current valuations.
  • Our Amazon stock analysis highlights the underside risks of Amazon’s stock, reflecting our long term negative outlook on the company.
  Amazon (NASDAQ:AMZN) announced its Q2 2014 earnings report after market close yesterday, July 24th. Amazon reported a loss of 27 cents per share on revenue of $19.34 billion. The stock ...
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Facebook earnings - Q2 2014

Facebook earnings – Q2 2014
  • Facebook topped analyst consensus Non-GAAP EPS estimates of 0.32, by reporting Non-GAAP EPS of 0.42.
  • Facebook beat estimates by 10 cents, as a result of aggressive cost control, paired with revenue growth at the upper end of the guidance range.
  • The eventual deceleration on an annualized basis will occur in FY 2015, as a result of a much larger base.
  Pretty much every analyst that attempted to make a guess on what Facebook (NASDAQ:FB) would report today, were embarrassed by how wrong they were, including me. Facebook offered better guidance, as more qualitative and quantitative factors pertaining to revenue growth were disclosed in the ...
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Baidu Earnings Preview - Q2 2014

Baidu Earnings Preview – Q2 2014
  • Baidu has diversified into multiple non-core business verticals.
  • Baidu's profitability will be in focus in Q2 2014.
  • Baidu is an attractive long term investment at its current valuations.
  China’s search giant Baidu (NASDAQ:BIDU) is due to announce its results for Q2 2014 on 24 July 2014. We’re looking forward to this earnings release for multiple reasons. Baidu has recovered from its lows earlier this year after China’s weak macro-economic outlook pushed the stock 22% lower. Since then, Baidu’s stock price has rebounded and surpassed its previous 52 week high. After the recent rally, Baidu’s valuations are now significantly higher than valuations of its peers. ...
Related Tickers: BIDU, GOOG, GOOGL, YNDX continue reading ...

Facebook Earnings Preview: Q2 2014

Facebook Earnings Preview: Q2 2014
  • Facebook’s revenue to top $3.6 billion for the second quarter of 2014.
  • Facebook non-GAAP EPS will exceed 0.41.
  • Growth in non-core web properties may surprise to the upside (WhatsApp, Instagram, Messenger).
  I think Facebook is set to report a fairly solid quarter. Investors should position to the upside, and should review conference notes carefully. I think revenues will come in well ahead of estimates due to user growth, pricing, and higher engagement. The three combined gives me reasonable suspicion that a sizeable earnings beat is in store.   What to expect from Facebook Q2 Earnings Facebook (NASDAQ:FB) doesn't provide guidance on their earnings conference calls, so ...
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Apple Earnings Report - Q3 2014

Apple Earnings Report – Q3 2014
  • Apple reported Q3 2014 EPS of $1.29, beating analyst estimates of $1.22 while missing the topline consensus estimates marginally.
  • The 20% earnings growth was driven by margin expansion and share repurchase program.
  • The margin expansion was on account of a favourable shift in product mix. Improving gross margins and further buybacks will continue to drive earnings growth over the next few quarters.
  • Our Apple stock analysis reiterates our positive long term outlook on the stock.
  Apple (NASDAQ:AAPL) announced its Q3 2014 earnings after market close yesterday. The company came out with strong numbers for the quarter, with the iPad sales being the only cause for ...
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Microsoft earnings - Q4 2014

Microsoft earnings – Q4 2014
  • Microsoft beats on earnings and revenues excluding the impact from Nokia.
  • It will take a full year for Microsoft to break-even on Nokia.
  • The company's EPS for Q1 2015 will be $.64 based on a break-down of costs using guidance.
  • Microsoft could beat on earnings in the next quarter if management is able to keep costs within tight control.
  • Satya Nadella communicates that a united ecosystem will keep Windows relevant to application developers.
  Microsoft (NASDAQ:MSFT) reported EPS of $.55 per share, which is below the consensus earnings estimates of $.65. The miss on earnings came from the Nokia acquisition. Excluding the impact from the Nokia acquisition, ...
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Apple Quarterly Earnings Preview: Q3 2014

Apple Quarterly Earnings Preview: Q3 2014
  • Apple is set to report its Q3 2014 earnings today (July 22) after market close.
  • Increased iPhone sales will drive topline growth with a favorable sales mix leading to margin expansion in Q3 2014. The Q4 2014 guidance will be critical as it will provide a view into Apple's upcoming product line-up
  • Our Apple stock analysis reiterates our positive long term view on Apple, in anticipation of the upcoming product line-up to be unveiled in Q4 2013.
  Apple (NASDAQ:AAPL) is scheduled to report its Q3 2014 results after the bell on July 22nd, Tuesday. One of the corporations in the world, with a ...
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eBay: An Attractive Investment In The Ecommerce Space

eBay: An Attractive Investment In The Ecommerce Space
  • Valuations of eBay are better than most blue chips in the eCommerce industry which is why investors are focusing on it.
  • In the present situation, eBay’s core business is generating most of the revenues while Paypal accredits around 40 percent.
  • Paypal is going to become eBay’s biggest source of revenue in the coming years.
  The debate about the future of e-commerce has been raging on for some time. There are those who argue that e-commerce will make traditional brick and mortar businesses redundant (or at least make them a lot less relevant) while there are those who argue that e-commerce is a bubble ...
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Netflix Q2 2014 Earnings Preview

Netflix Q2 2014 Earnings Preview
• Netflix, the largest streaming service provider, is scheduled to report its Q2 2014 earnings after market close today. • The subscriber growth will be driven by a greater variety and uniqueness of content boosted by releases of in-house content and new content partnerships during the quarter. • We expect the company to report a strong growth in earnings as well as topline, driven by subscriber growth and price increases during the quarter.   Netflix (NASDAQ:NFLX) is scheduled to report its Q2 2014 results after the closing bell on July 21. Here is a quick take on what to expect in the quarterly results. Netflix ...
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Google Q2 2014 Earnings Review

Google Q2 2014 Earnings Review
  • Google registered strong revenue growth in core and non-core businesses.
  • Google’s profitability declined marginally while other key metrics improved.
  • Google is an attractive long term investment option at its current stock valuations.
  Your browser does not support the video tag. Google (NASDAQ:GOOG) reported its numbers for Q2 2014 on 17 July 2014 after market hours. The internet search giant reported a better than expected revenue growth, but Google’s EPS missed estimates. Google’s stock price was up about 1.5% after market hours, reacting to the earnings release. Among other things, Google announced a change at the ...
Related Tickers: GOOGL, GOOG continue reading ...

Upcoming Alibaba IPO makes Yahoo a buy

Upcoming Alibaba IPO makes Yahoo a buy
  • Display ad pricing declined, even as ad sales increased. The net impact was a moderate decline in revenue.
  • Yahoo! continues to consolidate its ad business via Gemini (ad platform).
  • Yahoo! missed analyst consensus earnings estimates by a cent, the minor miss isn’t a big problem, but the inability to lower tax expenses on the Alibaba proceeds weakened sentiment.
  • Guidance for the next quarter wasn’t very compelling, indicating that Yahoo’s! growth initiatives are expected to become more effective in fiscal year 2015.
  Yahoo (NASDAQ:YHOO) stock declined in after hours trading as the company wasn’t able to generate year-over-year revenue growth, missed analysts’ earnings estimates, and offered ...
Related Tickers: YHOO, BABA continue reading ...

Google Q2 2014 Earnings Preview

Google Q2 2014 Earnings Preview
  • Google's core and non core businesses are likely to improve in Q2.
  • Google's profitability is likely to improve in Q2 2014.
  • Google is an attractive investment for the long term.
  Your browser does not support the video tag. Internet search giant Google (NASDAQ:GOOG) is scheduled to report its earnings for Q2 2014 on 17 July 2014. After Google’s announcement to sell off its Motorola segment to Lenovo during the early part of Q1, expectations from Google’s quarterly earnings were higher. However, the company delivered slightly disappointing numbers pushing the stock lower by about 3.5% on the ...
Related Tickers: GOOGL, GOOG continue reading ...

Amazon Q2 2014 Earnings Preview

Amazon Q2 2014 Earnings Preview
  • ChannelAdvisor same store sales data for Q2 2014 suggests Amazon toppling revenue estimates for the quarter.
  • However, the stock’s movement post Q1 2014 earnings suggests investors might be beginning to value earnings growth over revenue growth.
  • The company has taken various steps to boost bottomline over the last two quarters.
  • We re-iterate our negative long term outlook on Amazon stock, with concerns surrounding the company’s ability to deliver significant earnings growth.
  ChannelAdvisor last week announced its June 2014 same stores sales (SSS) report for the e-commerce sector. The report, as noted in our earlier post on Amazon sales and ChannelAdvisor reports, is a fair ...
Related Tickers: AMZN continue reading ...

Google Stock Valuation Videograph

Google Stock Valuation Videograph
  • Google has solid revenue growth, profitability and cash flows.
  • Google's long term outlook looks strong as non-core business also accelerates.
  • Google valuations are attractive for long term investment.
Your browser does not support the video tag.   Google’s (NASDAQ:GOOG) stock price has risen by about 13% from its lows earlier this year following a disappointing Q1 2014 earnings release. Though Google’s results were a tad disappointing, the company’s financials weren’t as bad in absolute terms. At its current valuations, Google is an attractive investment for the long term. Google has been one of our top stock ...
Related Tickers: GOOGL, GOOG, BIDU, YNDX continue reading ...

Facebook Is In For A Solid Q2 2014

Facebook Is In For A Solid Q2 2014
  • Facebook ad partner Nanigans has released its Facebook advertising report.
  • The report points to solid growth in the CPC and CPM prices on the social network, with a higher CTR pointing to better targeting of ads.
  • In view of the report we look forward to a solid topline and earnings growth in Facebook’s upcoming Q2 2014 earnings release.
  Facebook (NASDAQ:FB) is scheduled to report its Q2 2014 results after market hours on the 23rd of July. Facebook has seen rapid revenue growth over the last few quarters with mobile contributing a greater share to its ad revenues in each successive quarter.  Given below is ...
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Why TripAdvisor's Revenue Might Surprise In Q2 2014

Why TripAdvisor’s Revenue Might Surprise In Q2 2014
  • TripAdvisor is poised for a solid Q2 2014.
  • Acquisitions and new features will drive growth.
  • TripAdvisor is a risky bet at its current valuations.
  TripAdvisor’s (NASDAQ:TRIP) stock price is up 22.5% since our last coverage of the stock. We thought it was expensive at $85 a share and we still think it’s a risky bet at $103. We think TripAdvisor will benefit from its recent acquisitions, and the launch of new features like bookings and offline accessibility. Approaching the company’s Q2 2014 earnings release we are optimistic about the company’s financial performance. That said, the stock may have already factored in all the positives, ...
Related Tickers: TRIP, PCLN, OPEN continue reading ...

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