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  • Why Costco Seems A Little Overpriced
    Thu, Feb. 5 COST 28 Comments

    Summary

    • The retailer's stock has been up just 18% in the last one year, despite sturdy growth in comparable sales amid a weak retail environment.
    • It appears that the market is not reacting too positively to Costco's steady growth anymore, due to the anticipation that it will continue in the future without any hurdles.
    • Still, we believe that the company might be a little overpriced.
  • Sirius XM Earnings Preview: Steady Subscriber Additions And Bottom Line Growth To Continue
    Wed, Feb. 4 SIRI 23 Comments

    Summary

    • We believe Sirius XM’s growth continued in the fourth quarter, driven by healthy growth in new car sales between October and December.
    • We do not expect there was significant improvement in Sirius XM’s new vehicle penetration rate, since it is already on the higher side (70%).
    • Our current price estimate for the company stands at $3.49, which is roughly inline with the current market price.
  • Pandora Earnings Preview: Margins And Monetization In Focus
    Tue, Feb. 3 P 12 Comments

    Summary

    • Due to the company's aggressive investment in sales and marketing, its profits likely remained under pressure.
    • Similar to Q3 2014, Pandora's ad monetization likely grew, both sequentially and year-over-year, driven by a continued uptick in its mobile ad business.
    • Generally, the fourth quarter is seasonally stronger for Pandora as compared to the third quarter, which should be reflected in its Q4 revenue per member.
  • Higher Volumes Help Colgate-Palmolive Beat Currency Troubles In Q4
    Tue, Feb. 3 CL 1 Comment

    Summary

    • Colgate-Palmolive reported strong fourth quarter and full year results.
    • The company fought back foreign currency headwinds on the back of across-the-board volume expansion, ably supported by price hikes.
    • The company expects the combination of a benign commodity cost environment, the continuation of savings from the Funding the Growth program, and increased selling prices in emerging markets to facilitate gross margin expansion in 2015.
  • Yelp Earnings Preview: Will Local Ad Revenue Growth Keep Up With Expectations In Q4?
    Tue, Feb. 3 YELP Comment!

    Summary

    • While the company continues to report growth in its core local ads business, the pace of growth is related to the duration of its presence in the regions where it operates.
    • We believe the pace of local ads growth will slow down as cohorts within the U.S. mature and revenues from newer regions kick in.
    • in this earnings announcement, growth in the local ads business will be the key focal point and will give us an indication of expected revenue growth in the coming quarters.
  • Symantec's Revenues Set To Decline In Q3 As Restructuring Continues
    Tue, Feb. 3 SYMC 2 Comments

    Summary

    • Symantec is currently in the midst of several restructuring measures in an attempt to revitalize itself.
    • For the third quarter, Symantec is guiding revenue to be in the $1.65 billion to $1.69 billion range, which is a decrease of 1% to 3% year on year.
    • We have a price estimate of about $25 for Symantec, which is almost level with its current market price.
  • Spotify Is Quickly Catching Up With Pandora
    Mon, Feb. 2 P 13 Comments

    Summary

    • While Pandora reported just 5.2% growth in its active listeners to 76.5 million in Q3 2014, Spotify added more than 10 million users in the last two months.
    • With its bottom line already under tremendous pressure, the last thing Pandora would want is competition getting intense.
    • Our price estimate for Pandora stands at $24, implying a premium of over 40% to the current market price.
  • Broadcom Q4 Earnings Review: Better Than Expected Performance In Reportable Segments
    Fri, Jan. 30 BRCM Comment!

    Summary

    • Revenue of $2.14 billion was at the high end of the guided range, and non-GAAP EPS of $0.90 for the quarter came in ahead of the consensus estimate.
    • Excluding cellular baseband (which the company exited in June), reportable segment revenue was down 3% and up 10% year-over-year as the broadband, connectivity and infrastructure businesses performed as expected.
    • Broadcom expects continued geographic expansion to fuel growth in its broadband business and sees opportunities for new technologies, like NFC and wireless charging, to drive long-term growth.
  • Google Earnings: Strong Mobile Performance Backed By Programmatic Platform Boosts Revenues
    Fri, Jan. 30 GOOG, GOOGL 8 Comments

    Summary

    • The company reported 15% year-on-year growth in revenues, to $18.10 billion.
    • However, operating income declined marginally to $4.40 billion, primarily due to an increase in investment in research and development and spending on SG&A.
    • Pricing pressure on online ads continued to drive a 3% year-over-year decline in cost-per-click. However, aggregate paid clicks, which represent the number of ads served across Google properties, grew 14% year-over-year.
  • Why We Are Revising Our Price Estimate For Netflix
    Fri, Jan. 30 NFLX 14 Comments

    Summary

    • Netflix overcame the disappointing third quarter results and its international operations continue to strengthen.
    • Netflix’s international expansion could have a significant impact on both its subscriber additions as well as contribution margins.
    • We are revising our price estimate for Netflix to $376 based on the following analysis.
  • Activision Blizzard To Retain Dominance In FPS Domain
    Thu, Jan. 29 Comment!

    Summary

    • The FPS genre is becoming more popular, and Activision Blizzard has dominated the FPS domain for the last five years, primarily driven by the Call of Duty franchise.
    • Activision went into the holiday period with two new and highly awaited titles - Call of Duty: Advanced Warfare and Destiny.
    • Call of Duty has generated over $9 billion of life-to-date revenues and around 150 million units sold to date.
  • Qualcomm Reports A Strong Q1'15 But Lowers Guidance For Fiscal 2015
    Thu, Jan. 29 QCOM 10 Comments

    Summary

    • At $7.1 billion and $1.34, revenue and non-GAAP earnings per share for the quarter were up 7% and 6% year on year, respectively.
    • Our price estimate of $72 for Qualcomm is in line with the current market price.
    • We are in the process of updating our model for the Q1 2015 earnings release.
  • Constant Contact Q4 Earnings Preview: Toolkit And SinglePlatform Will Continue Driving Revenues
    Wed, Jan. 28 CTCT Comment!

    Summary

    • The introduction of Toolkit as an "integrated online marketing suite," coupled with SinglePlatform's 100% year-on-year top line growth, are primary reasons for revenue growth.
    • The healthy top line growth trickled down to the bottom line too.
    • The three revenue drivers for Constant Contact are: new customer additions, Average Revenue Per User and customer retention. For the first nine months of 2014, it performed well in terms of all three drivers.
  • Electronic Arts Q3 Earnings: Record Digital Revenue Drives Growth
    Wed, Jan. 28 EA Comment!

    Summary

    • EA's non-GAAP net revenue reached $4.337 billion, and digital receipts accounted for more than half of the revenues ($2.178 billion) for the first time ever, up 17% y-o-y.
    • The company's core sports titles - FIFA 15, Madden NFL 15, and Hockey Ultimate Team - recorded a massive 82% y-o-y growth.
    • 2014 proved to be a huge success for EA, as it was the No. 1 publisher on all the major platforms in the world.
  • Juniper Earnings: Profit Beats On Cost Cuts, Sales Still A Concern
    Wed, Jan. 28 JNPR Comment!

    Summary

    • Juniper reported Q4 net income of 41 cents a share in the fourth quarter.
    • In terms of guidance, the company said that it was expecting overall revenues of $1.2-$1.6 billion for the first quarter of 2015.
    • Our $28 price estimate for Juniper is about 15% ahead of the current market price.
  • Revenues Continue To Lag As Yahoo Firms Up Plans To Spin Off Alibaba
    Wed, Jan. 28 YHOO 12 Comments

    Summary

    • Yahoo's core advertising revenues continued to disappoint as the revenues decreased marginally by 1% year on year to $1.253 billion.
    • Yahoo continued to report growth in its total mobile unique visitors, which grew to over 575 million in the quarter.
    • At present, we have a $47.29 price estimate for Yahoo, which is in line with the current market price.
  • Expedia Boosts Its North American Dominance By Acquiring Travelocity
    Tue, Jan. 27 EXPE 4 Comments

    Summary

    • In August 2013, Expedia inked a strategic marketing agreement with rival Travelocity.
    • Expedia’s technology platform began powering Travelocity’s U.S. website in Q1 2014.
    • The 2013 agreement between Expedia and Sabre, provided Expedia with the option to acquire certain assets from Travelocity at a later date.
    • Expedia will gain a greater market share, primarily in North America, as a result of this acquisition.
  • Amazon Earnings Preview: Can Company Deliver A Beat This Quarter?
    Tue, Jan. 27 AMZN 40 Comments

    Summary

    • As some early indicators suggest, the company's top-line growth could continue to outperform in Q4 due to a solid holiday season.
    • Amazon's same stores sales rose at over twice the overall e-commerce growth rate during October and November, helped in part by an early start to the holiday season.
    • However, the same figure dropped somewhat in December, but still remained above the broader market's growth rate.
  • Samsung's Q4 Earnings: Weakness In Smartphones Could Be Tempered By Semiconductor Growth
    Tue, Jan. 27 SSNLF 2 Comments

    Summary

    • Samsung is expected to publish its Q4 2014 earnings on Thursday.
    • The company has provided preliminary earnings guidance numbers, indicating that consolidated sales could dip by roughly 12% year-over-year.
    • Trefis has a $1,170 price estimate for Samsung, which is slightly below the current market price.
  • Weak Economy In Russia And Supplier Issue In China Drives Down McDonald's Revenue Growth In 2014
    Tue, Jan. 27 MCD Comment!

    Summary

    • McDonald’s released its annual figures for the fiscal 2014 year on January 23.
    • 2014 was a challenging year for The Golden Arches, as some operational headwinds and issues in the Asian market pressured the company’s financial performance.
    • We have a $96 price estimate for McDonald’s, which is roughly 5% above the current market price.
  • Qualcomm Earnings Preview: License Business Remains Uncertain But 3G/4G Continues To Be Strong
    Mon, Jan. 26 QCOM 6 Comments

    Summary

    • The company continued to see growth in the QCT segment (Qualcomm CDMA Technologies), driven by rising penetration of 3G and 3G/4G multimode devices.
    • Its QTL (Qualcomm Technology Licensing) segment faces challenges in China. China is a major source of growth for Qualcomm's 3G/4G LTE chipsets.
    • Qualcomm expects to resolve the licensing issue in China soon, but remains uncertain of the timing.
  • Expedia And Priceline: Mobile Application Releases And The Trends That Govern These Launches
    Fri, Jan. 23 EXPE, PCLN 9 Comments

    Summary

    • Expedia announced the release of two new products called Real Time Feedback and Sell Tonight - tools which will be useful for both travelers and hoteliers.
    • Priceline's accommodation site, Booking.com, announced the launch of Booking Now - a mobile application that aims at providing a customized booking experience to its users.
    • The application releases by the two online travel behemoths point toward the importance of quick-turnaround bookings, primarily completed on the mobile platform.
  • SSD Sales Offset Weakness In Retail Channel As SanDisk Posts Mixed Q4 Results
    Fri, Jan. 23 SNDK Comment!

    Summary

    • Revenues were slightly lower than the company's guidance given at the end of Q3 due to weakness in its retail channel and lower iNAND product sales.
    • Growth from solid state drive sales, which rose by over 48% y-o-y to $538 million for the quarter, offset the decline in revenues generated by removable storage products sold via the retail channel.
    • SSDs contributed 31% of SanDisk's net revenues in Q4 and 29% for the full year, up from 21% in the prior year quarter and 19% in 2013.
  • Enterprise And Compute Storage To Drive Seagate's Earnings
    Fri, Jan. 23 STX 2 Comments

    Summary

    • Seagate Technology is scheduled to announce its Q2 FY 2015 earnings Monday.
    • The company expects the strong demand for enterprise storage and notebook hard drive units to continue through the fourth calendar year quarter as well.
    • We have a $58 price estimate for Seagate’s stock, which is almost 10% lower than the current market price.
  • Texas Instruments To Close 2014 On A Strong Note: Earnings Preview
    Thu, Jan. 22 TXN Comment!

    Summary

    • As revenue from the wireless business almost phased out in Q1 2014, TI witnessed strong top line growth in 2014.
    • For the first three quarters of fiscal 2014, TI's revenue grew 6.5% compared to the same period last year.
    • TI's net income increased by 20.9% during the same period.
  • Microsoft Earnings Preview: Hardware And Cloud Sales In Focus
    Thu, Jan. 22 MSFT 7 Comments

    Summary

    • The aim of changes at Microsoft is to assure the company's businesses accommodate the major changes underway in computing, including Big Data, mobility and the cloud.
    • Microsoft is increasingly pursuing its devices and services strategy to reduce its reliance on PCs and expand its footprint in the mobile hardware domain.
    • CEO Satya Nadella has said Microsoft's cloud computing business (which includes Azure, Office 365 and Dynamics CRM online) is on track to generate $4.4 billion in revenue this fiscal year.
  • IBM Earnings: Revenues And 2015 Guidance Disappoints As Restructuring Continues
    Thu, Jan. 22 IBM 10 Comments

    Summary

    • IBM continued to report a marked slowdown in business due to weak client spending, anemic demand in the software sector and divestitures of sizable businesses.
    • The company reported 12% a year-over-year decline in revenues to $24.1 billion.
    • We are in the process of updating our IBM model. At present, we have a $204 Trefis price estimate for IBM.
  • Intuitive Surgical Earnings Preview: Da Vinci Xi Adoption, International Sales In Focus
    Thu, Jan. 22 ISRG 1 Comment

    Summary

    • In the previous quarter, the company surprised the market with better-than-expected results, reporting year-over-year (y-o-y) growth in overall revenue, da Vinci unit sales as well as procedure volumes.
    • We expect gross margins to decline further in the near term due to higher costs owing to overall lower production and the company’s focus on new products such as the da Vinci Xi and da Vinci Sp (which have slightly lower margins).
    • However, we expect margins to improve in the long run as production volumes increase and its new products gain more acceptance.
  • SAP Posts Strong 2014 Results, Cloud Business To Drive Future Growth
    Wed, Jan. 21 SAP Comment!

    Summary

    • SAP reported detailed fourth quarter and full year earnings on Tuesday.
    • The company beat its revenue guidance on the back of explosive growth in its cloud business and the continued success of SAP HANA.
    • We are currently revising our $86 price estimate for SAP to reflect 2014 results.
  • Earnings Review: AMD Focuses On Reigniting Its PC Business And Continued Growth In New Markets
    Wed, Jan. 21 AMD 25 Comments

    Summary

    • Q4 2014 revenue declined 13% sequentially and 22% year-on-year, which was in line with company guidance.
    • The company feels confident that it is taking the right actions to return the PC business to a healthy trajectory starting in the second quarter.
    • AMD is focusing on introducing a strong product portfolio in 2015.
  • Verizon Earnings Preview: Postpaid Subscriber Adds, Margins, Churn In Focus
    Tue, Jan. 20 VZ 6 Comments

    Summary

    • For the fourth quarter, the company expects postpaid gross adds to grow both sequentially as well as year-over-year.
    • However, growing competition and the ongoing price war in the U.S. wireless market will continue to put pressure on Verizon's EBITDA margins in the fourth quarter.
    • The company's churn rate is likely to be negatively impacted as price sensitive customers switch to other less expensive service providers.
  • SSDs To Drive SanDisk's Q4 Results As iNAND, Retail Sales Stagnate
    Tue, Jan. 20 SNDK Comment!

    Summary

    • SanDisk expects SSDs to stay at similar levels through the first three quarters due to the expected growth in enterprise storage demand and new products.
    • The company revised its revenue guidance for Q4 due to lower than anticipated iNAND product sales through the quarter.
    • We currently forecast SanDisk's embedded storage revenues for the full year to be about 8-9% lower than 2013.