Tag Archives: grpn

Yelp Downgraded On Slowing Growth, While Competition Mires Groupon

Yelp ( YELP ) and  Groupon ( GRPN ) got hit with bearish analyst reports Wednesday, but  Angie’s List ( ANGI ) got a more positive note. Yelp stock dropped Wednesday after the consumer review website was downgraded to sell from neutral by investment bank UBS. Yelp stock was down 2.5% in afternoon trading in the stock market today , near 20, and has tumbled more than 55% in the past 12 months. UBS cited concerns over the potential of product innovation taking a hit as user growth declines. “Yelp will enter a period of slowing revenue growth and heightened margin pressures, driven by increased competition in Yelp’s core business and share gains by larger digital ad companies,” wrote UBS analyst Eric Sheridan. Decelerating traffic growth and rising hiring costs in sales and marketing also are concerns, said Sheridan. “An additional worry is the lack of operating profit to re-invest to drive innovation that might counter-act the platform strength of Alphabet ( GOOGL ) subsidiary Google and Facebook ( FB ),” Sheridan said. He added that “the companies which will succeed in the fight for local advertising budgets are those that have established large mobile user bases. In our view, Yelp (despite its efforts) has lagged in user growth, product innovation and necessary tech investments.” Groupon Pressure Mounting Business pressure is also unlikely to ease anytime soon for online daily deals marketplace Groupon, Sheridan said in another report Wednesday. Groupon stock has plunged nearly 50% in the past 12 months and was down 10.3% Wednesday afternoon, near 4. While showing signs of progress in its transformation to an e-commerce marketplace, Sheridan said, “there is still a long road ahead in strengthening the company’s positioning in the local ad and/or local ecommerce market.” Groupon is being buffeted as Google, Facebook and others “are increasing their efforts to capture local ad dollars, while Amazon.com ( AMZN )‘s same-day delivery service reduces the benefit of a local marketplace,” Sheridan said. Angie’s List Revenue Estimates Hiked Good news came to Angie’s List ( ANGI ) in the form of a revenue outlook boost from Pacific Crest Securities, which praised the online review site’s recent decision to drop its current membership model and replace it with free access to its business ratings and reviews as part of a tiered subscription plan. The addition of the free tier “should reignite user growth,” wrote Pacific Crest analyst Evan Wilson in a research report Tuesday. Pacific Crest upped its 2016 estimate for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for Angie’s List to $34 million, up 58%. “While it’s difficult to model, we think the news of a free Angie’s List will drive an inflection of user traffic and subsequently be much more attractive to service providers,” Wilson wrote. “We think the benefits will accrue fully in 2017, and 2016 has become a tough-to-forecast transition year.” Angie’s List stock was down a fraction in afternoon trading Wednesday, near 8.

4 Top China Tech Stocks Rally Amid Bargain Hunting

Loading the player… Despite ongoing concerns of slowing growth in China, U.S.-listed Chinese stocks are rising in big volume today as global markets rally and some investors hunt for bargains. Let’s take a look at four Chinese tech stocks that are making notable moves: NetEase ( NTES ), Ctrip ( CTRP ), Alibaba ( BABA ) and Baidu ( BIDU ). NetEase jumped 9.7% in heavy volume to retake the critical 200-day line. The stock hit resistance at that level on Friday. Shares are now trading about 18% below their high reached at the end of last year. The gaming company reports quarterly results next Wednesday. Analysts expect earnings to rise 30%. Travel booking site Ctrip also climbed in big volume, rising 7.7%. The stock is now above its 200-day line and trading about 30% below its intraday high reached in November. Alibaba’s 9.8% quick-turnover pop put the shares back above their 10-day line. The stock is still trading below its 50-day and 200-day lines, however, which recently crossed in a bearish manner. Alibaba is trading 29% below its 52-week high. The Chinese e-commerce giant disclosed a 5.6% stake in Groupon ( GRPN ) on Friday, which has sent the discount deal provider’s shares skyrocketing 41%. Groupon reported better-than-expected quarterly earnings last Thursday. And search leader Baidu gapped up in fast trade early in the day, but the stock pared more than half of its gains and was up 4%. Shares are about 30% below their 52-week peak. Baidu is looking at an offer from two executives to buy its 80% stake in online video platform iQiyi in a deal valued at $2.8 billion.

Twitter Following Yahoo Down The Path To ‘Ex-Growth,’ Downgraded

Twitter ( TWTR ) stock sank again Tuesday after getting downgraded by Stifel analyst Scott Devitt, who warned of sluggish growth in 2016 for the social media site. Stifel lowered its rating on Twitter stock to sell from hold, but it maintained its price target of 14. Twitter stock was down more than 9% in afternoon trading in the stock market today , near 16 and near its all-time low of 15.48, touched on Jan. 20. Twitter stock has struggled below its IPO price of 26 since mid-December. Twitter stock is down 37% from its IPO price and is down 57% in the past 12 months. “We think the company will be challenged to reach its near- and long-term financial expectations given its current usage trajectory,” wrote Devitt in an industry note late Monday. Due to “a lack of product innovation and limited sense of urgency,” Devitt said, “Twitter’s monthly active user growth continues to slow and is at risk of turning negative in 2016.” “If Twitter is in the early stages of following a similar path to ex-growth as AOL ( AOL ) and Yahoo ( YHOO ) experienced before it — as seems to be the case — then there is likely more downside for Twitter common stock,” Devitt said. “More recently, Groupon ( GRPN ) and Zynga ( ZNGA ) were notable Internet companies that quickly rose to prominence followed by a rapid decline in their share prices. Although these companies are not at Twitter’s scale, both still have 50 million users and once had many more.” Facebook ( FB )continues to generate over twice as much ad revenue per U.S. monthly active user as Twitter, said Devitt, and Facebook users spend 10 times as much time on Facebook’s site than Twitter users spend on Twitter. Twitter has long been rumored as a takeover candidate. Besides facing competition from Facebook and others, Twitter is struggling to expand its user base. It has launched programs to reel in “logged out” users who visit Twitter’s site but don’t have accounts of their own, making them less coveted by advertisers. Twitter posted Q3 earnings and revenue that beat Wall Street views, but its user growth slowed and its Q4 sales guidance missed analyst estimates. For Q4, Twitter guided revenue of $695 million to $710 million, up 46% at the midpoint, but analysts had modeled $739.7 million. Analysts polled by Thomson Reuters expect Q4 EPS ex items of 14 cents, up 17%. Twitter is set to report Q4 earnings after the close Feb. 10.