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  • UPS Access Point Network Could Help Improve Margins And Competitive Edge
    Thu, Oct. 9 UPS 1 Comment

    Summary

    • The primary benefit that UPS would generate from new services is improvement in margins.
    • Apart from that, it will give UPS an edge in the increasingly competitive logistics industry.
    • While competitors provide similar services, the difference between UPS's Access Point network and the FedEx and Amazon services is the scale.
  • Will Symantec Benefit By Separating Its Storage Software Business?
    Wed, Oct. 8 SYMC Comment!

    Summary

    • Symantec is reportedly in talks to spin off its storage software and security software businesses into independent entities.
    • The company entered the storage management software market in 2004 with the acquisition of Veritas Software for approximately $13.5 billion.
    • If Symantec spins off the storage management software business, it would add to the trend of tech majors breaking themselves into smaller pieces.
  • PepsiCo Earnings Preview: U.S. Beverages And Russia Sales In Focus
    Tue, Oct. 7 PEP Comment!

    Summary

    • Beverages and snacks giant PepsiCo is scheduled to announce its third quarter results on October 9.
    • The company’s stock is up over 12% so far this year, more than the growth in chief rival Coca-Cola’s stock and the S&P 500 Index.
    • Analysts expect Q3 revenues to be up 1.2%-1.8% year-over-year, following two quarters of relatively flat growth.
    • We estimate an $89.92 price for PepsiCo, which is roughly 4% below the current market price.
  • Why We Believe Constant Contact Is Worth $30
    Mon, Oct. 6 CTCT Comment!

    Summary

    • So far in FY14, the company's quarterly results were better than consensus estimates.
    • This outperformance from the company hasn't been rewarded by the market, with gains reigned in by profit booking activity.
    • Constant Contact managed to accelerate its year-on-year revenue growth rate from 13.4% in H1FY13 to 15.7% in H1FY14.
  • How Significant Can Keytruda Be For Merck?
    Fri, Oct. 3 MRK 5 Comments

    Summary

    • In this analysis, we will estimate Keytruda’s revenue generating potential.
    • The overall melanoma patient count in the U.S. is estimated at a little over 640,000.
    • If Merck can grab even 10% of the addressable patient pool, Keytruda can earn close to $5 billion in annual revenues.
  • The Positive Side Of The Split Between eBay And PayPal
    Thu, Oct. 2 EBAY 6 Comments

    Summary

    • With the spin-off, PayPal will become more nimble and focused, which is necessary given the recent innovations in the payment processing industry.
    • Additionally, eBay will have more cash to fund its own operations instead of fueling PayPal's growth.
    • Investors are likely to benefit from capital gains as a spin off is usually a tax-free transaction and could unlock hidden value by increasing transparency.
  • Here's Why We Believe Cree Is Still Worth $58
    Thu, Oct. 2 CREE 9 Comments

    Summary

    • Despite reporting strong earnings growth this year, Cree’s stock price has declined by approximately 40% year to date.
    • Lower gross margin, doubts regarding the company’s capability to sustain its growth in the long term, and rising competition are some of the key factors contributing to the negative sentiment.
    • Our price estimate of $58 for Cree is at a 40% premium to the current market price of $41.
  • Amazon's CEO Believes In India's Growth Story
    Tue, Sep. 30 AMZN 19 Comments

    Summary

    • Amazon's management is showing a strong belief in India's growth story.
    • The country's GDP growth could get back on track this year and recent developments suggest there is a lot of interest from investors in e-commerce companies.
    • We believe India's e-commerce market will grow multi-fold over the next five years and, at some point, the Indian government will allow foreign direct investment in the country.
  • Key Growth Drivers For SanDisk's Embedded Storage Division
    Tue, Sep. 30 SNDK 5 Comments

    Summary

    • The growth in the number of smartphones and tablets sold worldwide should contribute positively to SanDisk’s embedded storage division.
    • Despite an expected decline in average selling prices for NAND flash per gigabyte in the coming years, the company expects its addressable market to grow at a CAGR of nearly 10% in the next few years.
    • We expect embedded storage to generate over $2 billion in revenues for SanDisk by the end of the decade.
  • Zynga Not Out Of Troubled Waters
    Mon, Sep. 29 ZNGA 10 Comments

    Summary

    • Zynga's web bookings are declining and the company expects its full-year bookings to total between $695 million and $725 million.
    • NFL Showdown game app saw lower than expected downloads and the upcoming game Loony Tunes Dash again suggests a lack of creativity and originality.
    • The company's licensing agreements with big brands continue to cast a doubt over its ability to create original gaming content.
  • Harley-Davidson's Lower Near-Term Outlook Might Not Mean That It Is Past Its Glory Days
    Mon, Sep. 29 HOG 2 Comments

    Summary

    • Harley-Davidson's stock has declined by over 12% in the last three months, falling by roughly 3% in the last week.
    • The American maker of cult heavyweight motorcycles had a rough sales patch since hitting its peak in 2006.
    • What could worry Harley’s investors and enthusiasts is slowing volume-growth, which has declined sequentially in the last couple of years, and is expected to fall again this year.
  • Intuitive Surgical: Concerns Remain But Expansion Into Emerging Markets Could Revive Growth
    Mon, Sep. 29 ISRG 12 Comments
  • Intel's Collaboration With Tsinghua To Expand Its Footprint In The Chinese Mobile Chip Market
    Fri, Sep. 26 1 Comment

    Summary

    • Tsinghua Unigroup is a government-affiliated private equity firm funded by Tsinghua University in China.
    • Intel will invest $1.5 billion for an approximate 20% stake of the holding company under Tsinghua Unigroup, which will own Spreadtrum Communications and RDA Microelectronics.
    • Spreadtrum and RDA are fabless semiconductor companies in China, developing mobile chipset platforms for smartphones, feature phones and other consumer electronics.
  • A Look At Loan-To-Deposit Ratios At The Country's Largest Banks
    Thu, Sep. 25 JPM, BAC, C 1 Comment
  • Market Potential For Baidu's Popular PC Faster Software
    Wed, Sep. 24 BIDU 6 Comments

    Summary

    • Baidu made news this week by announcing that its PC Faster software completed over 70 million downloads worldwide.
    • PC Faster is a software that tunes personal computers to enhance performance features.
    • Baidu claims PC Faster will be free forever, but we feel the immense market potential could lead it to turn this software into a revenue stream.
  • China Unicom's 3G - 4G Subscriber Adds Slow Down In August On Growing Competition, Dual 4G Strategy
    Tue, Sep. 23 CHU 2 Comments

    Summary

    • China Unicom reported a marked decline in 3G and 4G subscriber additions in August with about 1.3 million adds, compared to over 2.5 million in July and over 3 million in June.
    • In terms of high speed (3G and 4G) user gains, this was the carrier's weakest monthly performance in over three years.
    • China Unicom's performance was dwarfed by market leader China Mobile as well as smaller rival China Telecom.
  • What Justifies A $445 Price Estimate For Netflix?
    Tue, Sep. 23 NFLX 16 Comments

    Summary

    • To justify $445, Netflix will have to accelerate its profit growth in international markets, resort to further price increases and demonstrate business stability.
    • There exists upside potential from higher growth in average monthly revenue per subscriber.
    • International expansion could push quarterly net additions to as high as 2 million, but would lead to a negative impact on profits in the short term.
  • Growth In Client Base Could Offset Impact Of Weak U.S. Job Market On Paychex's Earnings
    Mon, Sep. 22 PAYX Comment!

    Summary

    • Paychex is set to release its first quarter fiscal year 2015 earnings result on Wednesday, September 24, before the market opens.
    • The weak job additions and increasing number of people dropping out of the labor force is not a good sign for Paychex's checks per client metric.
    • With the deadline of adherence to provisions of the Affordable Care Act approaching, adoption of Paychex's products catering to the Affordable Care Act should help increase its clients.
  • Oracle: Weak Hardware, New License Sales Dim Earnings As Management Changes Loom
    Fri, Sep. 19 ORCL Comment!

    Summary

    • Oracle's quarterly earnings per share stood at $0.62, at the lower end of its quarterly guidance and lower than analyst estimates of $0.64.
    • Oracle's cloud sales grew 31% to reach $475 million, compared to $363 million in Q1FY14.
    • Fiscal first quarter sales for new licenses stood at $1.37 billion, 2% lower than its fiscal Q1 2014 sales of $1.4 billion.
  • Google's Android One Initiative: The Impact On Samsung
    Thu, Sep. 18 SSNLF 6 Comments

    Summary

    • Through Android One, Google is looking to improve the user experience on low-priced smartphones, enticing customers in emerging markets to upgrade.
    • We believe the move could pose a threat to Samsung, the world's largest smartphone manufacturer.
    • The initiative could potentially compound Samsung's market share woes in emerging countries, where we expect much of the growth in the smartphone market to come from.
  • Google's Android One Platform: More Than Just Phones
    Wed, Sep. 17 GOOG, GOOGL 6 Comments

    Summary

    • Google One targets the low-end smartphone segment in emerging markets.
    • While newly launched phones are currently available in India, the company plans to roll them out to other developing countries in the coming months.
    • The wide launch strategy signals that competition in the smartphone industry in emerging countries is heating up, albeit at a lower price point.
  • DirecTV's Latin America Operations See Subscriber Growth, But Declining Currencies Stall ARPU Growth
    Tue, Sep. 16 DTV Comment!

    Summary

    • DirecTV, one of the largest pay-TV operators in Latin America with more than 12 million subscribers, has been growing at an average rate of 25% annually over the past few years.
    • While the company has been consistently growing its subscriber base, depreciating regional currencies has stalled ARPU growth over the past few quarters.
    • Given the currency trends in the region, we expect ARPU to continue to decline in the near term and stabilize in the medium to long run.
  • Alibaba's IPO Price Likely To Boost Yahoo's Stock Price Estimate
    Mon, Sep. 15 YHOO 45 Comments

    Summary

    • Yahoo has performed exceedingly well over the past month as its price has soared from $35 to over $40.
    • The primary reason for this trend has been Yahoo's 22.5% investment in Chinese online retailing giant Alibaba.
    • Yahoo will sell 121.73 million shares at Alibaba's market debut and provide underwriters an option to purchase an additional 18.26 million shares.
  • GE Intensifies Focus On Infrastructure Businesses With Sale Of Its Appliances Unit
    Tue, Sep. 9 GE 12 Comments

    Summary

    • On Monday, September 8 2014, GE announced sale of its appliances unit to the Swedish appliances maker, Electrolux.
    • GE tried to sell this unit back in 2008 as well, but talks with potential buyers at the time got stalled due to the onset of the financial crisis.
    • We currently have a stock price estimate of $28.33 for GE, about 8% ahead of its current market price.
  • Adobe Is Overvalued At $71
    Wed, Aug. 27 ADBE 3 Comments

    Summary

    • Adobe has rallied from $31 in August 2012 to its current market price of over $71.
    • The rally coincides with the launch of Adobe's Creative Cloud and its rapid adoption among creative professionals.
    • We believe the current market valuation of Adobe is stretched, even as the company has entered the digital marketing market to diversify its product portfolio.
  • Cloud Migration, Salesforce1 Could Help Sustain Salesforce.com's Impressive Topline Growth Trajectory
    Fri, Aug. 22 CRM 2 Comments

    Summary

    • Interestingly, the company provided a breakdown of sales by product offering for the quarter.
    • Revenues from subscriptions to its Service Cloud and Marketing Cloud stood at about $319 million and $122 million, respectively, during Q2 2015.
    • The Salesforce1 platform generated revenues of approximately $182 million during Q2'15.
  • How The Cisco-NetApp FlexPod Impacts EMC And VMware
    Tue, Aug. 19 EMC, VMW 1 Comment

    Summary

    • Cisco recently announced that the joint sales of FlexPod had crossed $3 billion since its introduction four years ago.
    • Among the large players in the integrated infrastructure market, EMC was third behind FlexPod.
    • However EMC's growth in the segment was the highest among the leaders, which helped the storage giant gain significant share.
  • Intel's Acquisition Of LSI's Networking Business To Boost Its Presence In IoT
    Fri, Aug. 15 INTC 15 Comments

    Summary

    • IoT includes all the other computing devices apart from PCs, tablets and smartphones.
    • Intel is driving significant innovation in this area as its invests, both to extend its architecture into the very low power space and to acquire IP and capabilities.
    • Our price estimate of $33 for Intel is just a bit below the current market price.
  • A Look At The Key Challenges For BlackBerry's Software Business
    Thu, Aug. 14 BBRY 255 Comments

    Summary

    • The company has been counting on the loyalty of its large yet declining user base of government institutions and corporations.
    • The company's transformation into a profitable software and services player isn't going to be an easy task.
    • Its software and services revenues fell by around 29% year-over-year during the previous quarter and competition in the MDM and security space is heating up.
  • China Mobile Earnings Preview: Subscriber Adds, Operating Costs And VAT In Focus
    Wed, Aug. 13 CHL 4 Comments

    Summary

    • In the upcoming earnings release, we expect the company’s revenue growth to sustain its momentum backed by aggressive expansion in the 3G and 4G market.
    • A recent report in the Chinese media suggested that the carrier is likely to trim its total subsidy costs by RMB 10 billion this year, owing to profitability concerns.
    • The rise in operating expenses, in addition to the recent introduction of Value Added Tax in the telecom industry, is likely to weigh on China Mobile’s net profit in the second quarter as well.
  • Nvidia Unveils The Architectural Details For Project Denver
    Tue, Aug. 12 NVDA 6 Comments

    Summary

    • Nvidia unveiled the architectural details of its first custom-designed CPU, code-named Project Denver.
    • Nvidia believes the chip will rival some mainstream PC-class CPUs at significantly reduced power consumption.
    • Our price estimate of $18.83 for Nvidia is in line with the current market price.
  • Applied Materials Earnings Preview: Rising Display, Semiconductor Demand To Drive Growth
    Tue, Aug. 12 AMAT 1 Comment

    Summary

    • Applied Materials believes that its growth momentum will continue throughout 2014, backed by stronger investment from its semiconductor and display customers.
    • The company expects to complete its merger with Tokyo Electron in the second half of the year.
    • Applied remains focused on creating a strong pipeline of new, highly differentiated products to enable future inflections in logic, memory and display.