The Zacks Analyst Blog Highlights: Expedia, Amazon.com, China Dangdang, Facebook and Agilent Technologies

Zacks Equity Research
August 1, 2014

For Immediate Release
 
Chicago, IL – August 01, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Expedia Inc (EXPE-Free Report), Amazon.com Inc. (AMZN-Free Report), China Dangdang (DANG-Free Report), Facebook (FB-Free Report) and Agilent Technologies (A-Free Report).
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday’s Analyst Blog:

Expedia Books Earnings Beats

Expedia Inc (EXPE-Free Report) reported Q2 earnings after the bell today. EPS crushed the Zacks Consensus Estimate of $0.68, by posting an EPS of $1.03. Revenues also beat the Zacks Consensus Revenue Estimate of $1.444 billion, but announcing Revenues of $1.49 billion. This is a year over year growth of 44% for Earnings and 24% in Revenue.

The major diver behind the growth was Gross Bookings, which rose 29%, outpacing the consensus estimate of 23%-24%. Further, room night growth rose 28% beating the consensus estimate of 23%. Moreover, Booking.com, eLong, and Travelocity all saw strong growth numbers as well. Finally, management announced a 20% increase in their dividend, raising it to $0.18. 

In afterhours trading, Expedia is up over 1% on mild volume. 

Amazon Invests $2B to Expand Ops in India

Online retailing giant Amazon.com Inc. (AMZN-Free Report) recently announced that it is planning to invest $2 billion (INR12,000 crore) to expand its operations in India.

The news comes on the heels of the recent announcement by Flipkart, India's largest e-tailer, to raise funds worth $1 billion, further heating up the competition.

Amazon stated that India is a fast growing e-Commerce market which offers ample expansion opportunities. The additional investment will support its online retail business and enhance the customer and seller experience in the country.

Amazon forayed into the Indian market in Feb 2012 with the launch of Junglee.com, a site which allows customers to compare prices online and read customer reviews but not purchase items directly.

In Jun 2013, Amazon launched its online marketplace in India where it sells books, films, TV shows, mobile phones and cameras among other items through its website Amazon.in. Seeing the overwhelming response in India, Amazon plans to further increase its investments in India and gain from the country’s rapidly-growing online retail market.

According to the global management consulting firm Boston Consulting Group (BCG.V), India is the third largest country after U.S. and China in terms of Internet users and is now on the verge of a digital revolution. The firm expects Internet users in India to increase threefold from 120 million in 2011 to 330 million by 2016.

According to BCG, India is, however, far behind other countries like China and the United States in terms of online shopping. Nevertheless, given the Internet-savvy population, BCG predicts that there is room for further growth.

Naturally, established U.S.-based e-Commerce players like Amazon will try to make India the future e-Commerce hub. Recently, the company announced its plan to build five more fulfillment centers in India, bringing the total number of large warehouses to seven. These warehouses help online retailers to store products and handle shipments and returns quickly.

With the expansion of Amazon, we can expect more fulfillment warehouses to serve major Indian metropolitan areas.

As Amazon is way ahead of the other online retailers due to its product selection, pricing, deals and platforms, the company could give strong competition to local players, primarily Flipkart. The company, in our view, is performing true to its form recording revenue growth and generating significant cash flow quarter upon quarter (discounting seasonal variations).

However, uncertainty regarding its investment plans and the probability of incurring losses in the near term keep us on the periphery regarding the shares.

Amazon currently has a Zacks Rank #5 (Strong Sell). Stocks that have been performing well and are worth considering include Ecommerce China Dangdang (DANG-Free Report), Facebook (FB-Free Report) and Agilent Technologies (A-Free Report), all carrying a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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