Author Archives: Scalper1

LinkedIn, Tableau Specter Haunts Apple Chips, Security Stocks

Tech stock declines piled on Monday, snowballing after badly received quarterly reports last week from the likes of LinkedIn ( LNKD ) and Tableau ( DATA ), whose stocks sheared off. Apple ( AAPL ) supplier NXP Semiconductors ( NXPI ), GoPro ( GPRO ) supplier Ambarella ( AMBA ) and cybersecurity bigwig Palo Alto Networks ( PANW ) all were down Monday following a brutal last week, among other decliners. IBD’s 26-company Computer Software-Security industry group was collectively down 6.9% in afternoon trading. The 41-company Electronics-Semiconductor Fabless industry group was down 2.7%. Ahead of the closing bell on the stock market today , Palo Alto stock was down 9%. Shares of CyberArk Software ( CYBR ), FireEye ( FEYE ) and Proofpoint ( PFPT ) were down about 9%, 9.5% and 10%, respectively. Shares of NXP and Ambarella were down 9.5% and 6.4%, respectively. Apple suppliers Avago Technologies ( AVGO ) and Skyworks Solutions ( SWKS ) both fell more than 5% while Cirrus Logic ( CRUS ) and Qorvo ( QRVO ) were each down about 2%. Only a handful of stocks escaped the high-tech sell-off — a continuation of a Friday deluge that saw LinkedIn stock lose nearly half its value on Wall Street after the professional networker announced a low 2016 forecast. Compounding the pressure, analysts see Big Data analytics software maker Tableau losing market share to Amazon.com ( AMZN ) and Microsoft ( MSFT ). Tableau, too, guided to current-quarter sales and earnings that missed the consensus expectation. Security vendors lost 7.4% and fabless chip makers closed down 4% on Friday. NXP Halves Apple Exposure NXP’s plunge looks incongruous after the Apple chip supplier’s Q4 beat last week, but comes on a day when techs are broadly down, and amid an acquisition. In the long run, picking up Freescale is making NXP an automotive powerhouse — sales in that segment bounded 45% year over year to $422 million. The Freescale deal also halves NXP’s Apple iPhone exposure as the smartphone giant deals with floundering demand. Apple chip suppliers Cirrus Logic, Qorvo, Qualcomm ( QCOM ) and InvenSense ( INVN ) recently issued March-quarter views that lagged the consensus . At least six analysts this month have rated NXP stock a buy, including two on Monday. A Jefferies analyst boosted his price target on NXP stock to 112 from 107. Ambarella stock sank as GoPro stock rocketed 10% as of Monday afternoon on its partnership with Microsoft. GoPro and Microsoft will partner on a patent-licensing agreement for file storage and other system technologies. “This agreement with GoPro shows the incredible breadth of technology sharing enabled through patent transactions,” Microsoft’s technology licensing president, Nick Psyhogeos, said in a press release. Last week, GoPro stock wiped out after missing Wall Street’s Q4 earnings views and guiding well below consensus Q1 expectations. Shares closed down nearly 9% on Feb. 4. But chip maker Ambarella missed the scrum and pulled ahead 5.1% that day. At least seven analysts cut their price targets on GoPro stock following the Q4 report. But at least three reiterated a buy rating, and another boosted his price target. Ambarella tried distancing itself from GoPro during its December quarter, instead highlighting the company’s expansion into drones and home security.

Will Global Economic Worries Slow Online Travel Giant Expedia?

Online travel agency (OTA) Expedia ( EXPE ) is set to report earnings after the close on Wednesday — and analysts polled by Thomson Reuters expect double-digit percentage growth amid challenges. Expedia is set to grow revenue by 26% to $1.71 billion in Q4, compared with the year earlier quarter revenue of $1.36 billion, according to the consensus view. EPS minus items is expected to jump 16% to $1, from 86 cents, according to the poll of analysts. Expedia stock was down about 3.5% in afternoon trading on the stock market today . The market overall was down on Monday on worries over the global economy and oil back under $30 a barrel. Expedia has an IBD Composite Rating of 52, where 99 is the highest. Analysts have been expressing concern for the health of online travel companies as of late, citing the slowing global economy and increased competition. In a research note Monday, RBC Capital Markets analyst Mark Mahaney wrote that web traffic to Expedia’s various properties has been slightly up during the quarter, but attributed it to the fact that the firm acquired Orbitz in September and in December HomeAway , a large alternative accommodations platform. Those acquisitions also make the quarter more difficult for analysts to model, Mahaney says. U.S. online travel trends are slightly negative, he says, based on web traffic data from ComScore ( SCOR ) that show single-digit growth that may be slowing. But, Mahaney wrote that bookings growth is likely to remain strong and that the economics of Expedia’s per-unit costs remain favorable and growing. “Expedia has been an improving execution story for some time now, and has emerged as an excellent play on the secular growth of Online Travel and as a strong integrator of assets,” Mahaney wrote in the research note. Mahaney says that he expects executives to issue guidance on earnings before interest, taxes, depreciation and amortization (EBITDA) of low double-digit growth in its core online travel bookings business. But, the slowing global economy may change that guidance. Though Expedia and rival OTA Priceline ( PCLN ) acknowledge that startup Airbnb — which lets people rent their home, room in a home, or apartment to travelers via its website — is a threat to their businesses, Priceline executives have thus far dismissed it as “not material.” Both Expedia and Priceline are adding inventory that’s similar to Airbnb’s, which in industry jargon are “alternative accommodations.” TripAdvisor Stock At Lowest Since 2013 Down more than 4%, near 56 in afternoon trading Monday, TripAdvisor ( TRIP ) stock has taken a beating thus far in 2016. The company is set to report Q4 earnings on Thursday. Analysts polled by Thomson Reuters expect the top line to grow at a modest 3% to revenue of $298.5 million, up from $288 million in the year-earlier quarter. EPS ex-items is expected to fall 6% to 33 cents from 35 cents. Cowen analyst Kevin Kopelman wrote in a research note earlier this month that TripAdvisor would be the OTA he would be most concerned about in a bear market.

Yelp Plunges After Out-Early Report Shows Key Metrics Slowed

Online consumer-review website Yelp ( YELP ) sank on Monday, in a tumultuous market, after posting Q4 earnings that showed a decline in the rate of growth of cumulative review and local ad accounts. Also, its CFO is on his way out. In addition to forecasting full-year 2016 sales growth of about 26% year over year at the midpoint of guidance, Yelp guided adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $90 million to $105 million, up from $69.1 million in 2015. Analysts polled by Thomson Reuters had modeled 2016 adjusted EBITDA of $106.82 million. Yelp stock was down 12% in early afternoon trading in the stock market today , near 16. Yelp stock is down 63% from where it was trading last year and is down nearly 83% from its all-time high of 101.75 brushed in early March 2014. The company’s earnings were released several hours in advance of its scheduled time on Monday due to “a vendor error by PR Newswire.” A conference call with analysts is scheduled for after the close. Growth in three key metrics slowed. Cumulative reviews grew 34% from a year earlier to 95 million, after growing 35% in Q3. Local advertising accounts grew 32% to 111,00 vs. 37% in Q3. App unique devices, or the number of unique mobile devices accessing Yelp’s apps, grew 38% to 20 million vs. 39% in Q3. Yelp claims that app users “were more than 10 times as engaged as website users based on number of pages viewed.” Diners seated via reservation platform SeatMe rose 120% year over year. Yelp is facing competition in online reviews from multiple fronts — including from Facebook ( FB ), Apple ( AAPL ), Amazon.com ( AMZN ) and Alphabet ( GOOGL )-owned Google — as other websites build or buy their own databases of user-generated reviews to attract viewers. Yelp also competes with online travel agency TripAdvisor ( TRIP ) and Priceline Group ( PCLN ), the world’s largest Web travel-service company. Thomson Reuters noted Yelp’s Q4 EBITDA as coming in light of the consensus analyst estimate: $17.54 million vs. the $21.9 million that analysts had anticipated. Yelp posted Q4 EPS ex items of 11 cents, down 40% year over year. Yelp reported that revenue rose 40% year over year to $153.7 million. That exceeded the $152.35 million that analysts polled by Thomson Reuters had wanted to see. “We are pleased with the progress we made on the key initiatives we set at the beginning of 2015,” said Yelp CEO Jeremy Stoppelman in a statement. “We have evolved to a mobile-centric company and have successfully completed our transition to a performance-based advertising business. In 2016, our priorities are to continue to build our core local advertising business, further increase engagement and awareness and grow transactions. With our rich, relevant review content and highly engaged consumer traffic, we are well-positioned to capture the enormous opportunity ahead of us.” Yelp guided Q1 revenue of $154 million to $157 million, up 31% year over year at the midpoint. Analysts have been expecting $154.4 million. The company announced that its chief financial officer, Rob Krolik, will be stepping down “in the coming months.” The company said it will start looking for a new CFO immediately. Yelp stock opened Monday at 17.08, down 5.6% from Friday’s close. Shares spiked briefly to 18.84 around the time of the midsession earnings release, then quickly dropped to the vicinity of 16. Yelp, LinkedIn ( LNKD ) and others “are trading lower due to Facebook and Google’s competitiveness,” said Chilton Capital Management economist Samuel Rines, in an email to IBD.