|Bid||161.16 x 800|
|Ask||161.41 x 1000|
|Day's Range||158.55 - 161.49|
|52 Week Range||120.16 - 167.56|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||133.83|
|Earnings Date||Mar 2, 2020 - Mar 6, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||190.68|
I read an article on Bloomberg about Holocene Advisors. According to Bloomberg Holocene Advisors tripled its assets to $5.3 billion since its inception in 2017. That's probably because Holocene is a beta neutral hedge fund (I will explain what that means in a bit) and returned 9% in 2017, 3% in 2018, and 14% in […]
Amazon (NASDAQ:AMZN) has reported a significant decline in its Amazon Web Services operating margin in recent quarterly earnings. The operating margin of AWS declined from 31.1% in the year-ago quarter to 25.1% in the latest quarter, a staggering 600-basis points fall.Source: Rocky Grimes / Shutterstock.com Despite a 35% year-over-year growth in revenue, the operating income grew by a mere 6%, excluding foreign exchange. One of the main reasons behind this sudden fall in operating income is the changing dynamics within the cloud industry.Microsoft (NASDAQ:MSFT) is the chief rival of AWS. It reported 59% growth in its Azure cloud segment. The revenue base of Microsoft's cloud segment has increased to a level at which it is competing with AWS on even the most lucrative of cloud deals. Microsoft recently won a $10 billion cloud contract from the U.S .Department of Defense. Amazon was another of the main bidders.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPlus, Microsoft's multi-billion partnership with AT&T (NYSE:T) is also going smoothly. In the last few days, it has won a partnership with Salesforce (NYSE:CRM).We could also see Microsoft emerge as the chief cloud option -- outside of AWS -- for clients such as Walmart (NYSE:WMT). These factors can curb the growth of AWS and also squeeze its margins. This will be the biggest headwind for Amazon stock in the next few quarters. Negative Trends for AWSThe decline in overall operating income from Amazon was a bit shocking. Management cited growing shipping costs as one of the main reasons behind this decline. However, looking closely at all the business segments, we can see that AWS has played a key role in the fall of operating income. * These 7 S&P 500 Stocks Will Deliver a Repeat Performance in the Next Decade Amazon reported 35% year-over-year revenue growth in AWS. This is a bit lower than in previous quarters, but it is still quite good. However, the operating income of AWS increased by a mere 6%. This is a big change compared to the year-ago quarter. AWS is the main contributor to Amazon's operating income.Hence, single-digit operating income growth in AWS played a big role in pulling down the overall operating income of the company. This also led to the first decline in company-wide operating margin in the last few quarters. Slower revenue growth and falling margins are a major challenge for Amazon stock Microsoft Goes All-InMicrosoft is making an aggressive pitch to gain market share in the cloud segment. The revenue growth in Azure has been higher than in AWS for the past few quarters. In the latest quarter, Azure grew by 59% compared to 35% growth in AWS.Microsoft does not break down the Azure revenues, but the consensus estimate is that it is right behind Amazon in terms of cloud market share. The commercial cloud revenue of the company which includes Azure, Office 365 commercial and Dynamics 365 reported year-over-year growth of 36% to $11.6 billion. More importantly, management mentioned that the gross margin of this segment expanded by 4 percentage points on a year-over-year basis. They forecast that this expansion will continue into fiscal 2020. Microsoft Has the AdvantageIn the long term, Microsoft has a number of important advantages against AWS. One of the biggest is that it is not Amazon. Clients in industries like retail, finance, healthcare and content streaming would like to avoid taking cloud services from Amazon as it is their main competitor. For example, Walmart made a strategic partnership with Microsoft in 2018 to buy cloud services. If Walmart were to buy the same cloud service from Amazon, it would only strengthen its chief rival.This is true even in international markets. Microsoft is the cloud provider for Jio and Eros Now in India. Both of these companies view Amazon as a competitor.Microsoft has been able to increase its revenue from India to over $1 billion on the back of the cloud push. This trend could repeat in other important international regions where Amazon provides retail services. Amazon is also focusing on its financial platform, which makes it a competitor to traditional financial players. Microsoft does not compete in this segment, making it a better alternative compared to AWS.MSFT also has the advantage of high margins in other segments. While Amazon depends heavily on AWS to boost its profits, Microsoft has a more diversified profit base. This allows Microsoft to give greater discounts to gain market share. We have already seen this in the growth rates of Azure mentioned above. If Amazon wants to show respectable growth in AWS, it would need to give higher discounts. This will end up hurting its operating margin in this segment as well as the overall margins. Impact on EarningsMicrosoft cloud growth will be the biggest headwind for Amazon stock in the next few quarters. It should be noted that recent estimates have valued AWS at a standalone valuation of over $500 billion, almost 60% of Amazon's market capitalization. If the revenue growth in this segment falls substantially or there is a further decline in AWS operating margins, we could see a bearish sentiment towards AMZN stock.AMZN stock's trailing price-to-earnings ratio is close to 80. This is quite high if the company shows a negative trend in earnings per share. The fall in operating margin in the latest quarter has led to a big decline in EPS and also reduced future EPS estimates.Investors should closely monitor the revenue and margin trends in AWS over the next few quarters. This will show if the recent results were due to some seasonal issue or if they are part of a long-term headwind. My Takeaway on AMZN StockMicrosoft is rapidly growing its cloud revenue which makes it a major challenge for AWS. In the latest quarter, Microsoft's Azure showed a revenue growth of 59% compared to 35% by AWS. The gross margins of the cloud operations of Microsoft have also expanded by 4% while the operating margin of AWS has declined by 6 percentage points compared to the year-ago quarter.Microsoft can continue to use its huge resources to build its cloud business. It will also be at an advantage due to the fact that it is a better option than AWS for many cloud consumers who view Amazon as their competitor. If the current trend of declining margins in AWS continues in the next few quarters, it could lead to negative sentiment towards AMZN stock.As of this writing, Rohit Chhatwal did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * These 7 S&P 500 Stocks Will Deliver a Repeat Performance in the Next Decade * 7 Tech Stocks to Stuff Your Stocking With * 7 Sinfully Good Casino Stocks That Could Win the Jackpot in 2020 The post Amazon's Cloud Battle With Microsoft Weighs on AMZN Stock appeared first on InvestorPlace.
We found three cloud-focused software stocks using our Zacks Stock Screener that investors might want to consider buying for 2020...
After leaving its chief operating officer position vacant for nearly a year, Salesforce fills it with this seasoned executive and bolsters its potential succession planning.
Salesforce announced today that it has named Bret Taylor as president and chief operating officer of the company. Prior to today's promotion, Taylor held the position of president and chief product officer. In his new position, Taylor will be responsible for a number of activities, including leading Salesforce’s global product vision, engineering, security, marketing and communications.
Fresh off opening its Ohana Floor in its Salesforce Tower London, the tech behemoth said Thursday it plans to double its workforce in Denver in eight years.
Salesforce is expanding its presence in Denver, with a new office at 17th Street Plaza in Lower Downtown and plans to double its workforce over eight years. The company plans to move into the building at 1225 17th St. starting in late 2020, according to a blog post by Salesforce. Salesforce, a global leader in customer relationship management, or CRM, first came to Colorado in 2013.
Salesforce (NYSE: CRM), the global leader in CRM, today announced that Salesforce President and Chief Product Officer Bret Taylor has been appointed President and Chief Operating Officer. In this role, Taylor will lead Salesforce's global product vision, engineering, security, marketing and communications. Taylor will continue to report to Chairman and co-CEO Marc Benioff.
(Bloomberg) -- The embattled co-working company WeWork completed the first of what it hopes will be a series of asset sales by finding a buyer for Conductor, a unit that makes marketing software used by Visa Inc. and Samsung Electronics Co.Seth Besmertnik, who co-founded Conductor before selling it to his college classmate Adam Neumann, will stay on as chief executive officer of the newly independent entity, the companies plan to announce Thursday. Besmertnik and other investors will contribute $15 million to fund operations and grant Conductor’s 250 or so employees majority ownership of the business through founder-class stock. Conductor and WeWork declined to disclose terms of the sale.For WeWork, selling off side businesses and turning attention back to co-working is a primary element of the turnaround plan set by the company’s new management. In October, SoftBank Group Corp. agreed to take a majority stake in WeWork, after a failed initial public offering put the company in danger of running out of money and cost Neumann the CEO job. SoftBank helped bring in new leaders, who are eliminating 2,400 jobs. WeWork is in talks to sell another business, Managed by Q, to a group of investors that includes the co-founder of that startup. And WeWork said Thursday that it’s shuttering a unit called Spacious that it acquired less than four months ago.Recent events have weighed heavily on morale inside WeWork. Conductor executives hope the new employee stock plan will raise spirits. In addition to holding a majority of stockholder votes, staff will be asked to elect a representative to the board. “This will ensure, in the long term, the company is always acting in the best interest of all the shareholders and that the employees have access to information about how we’re running the company,” Besmertnik said.Besmertnik helped start Conductor in 2010, eventually amassing more than 400 customers using its software to design marketing campaigns and optimize websites for search engines. Conductor had raised more than $60 million in venture funding, a laudable figure for a corporate software company but far from the more than $12 billion Neumann took in for WeWork.Investors had entrusted Neumann to build a global empire of office space for rent. WeWork’s valuation kept climbing, and Neumann seemed to be unstoppable. WeWork paid $126 million, not including performance bonuses, for Conductor last year. The deal would give Conductor cash to invest in research and development and double the size of that team. In return, Neumann gained a new channel of communication with Citigroup Inc., Salesforce.com Inc. and other Conductor customers right as WeWork was trying to recruit larger companies, which made up 25% of its membership at the time.The deal also reunited Besmertnik with Neumann, nearly two decades after they met as students at Baruch College in New York City. Both men dropped out to pursue business careers before returning later to earn degrees. Onstage at an industry conference a month after the acquisition, Besmertnik embraced Neumann, who greeted Conductor employees as family. “Welcome home,” Neumann said.Besmertnik said that while WeWork’s meltdown has been hard on the Conductor team, he’s grateful to have been a part of the company. Artie Minson, one of two men who replaced Neumann as CEO, praised Besmertnik in an emailed statement and said the divestiture is “a positive step forward for both WeWork and Conductor.” The buyout was partly financed by Besmertnik, along with Selina Eizik, the chief operating officer at Conductor, and Jason Finger, a founder of the Grubhub Inc.-owned food delivery app Seamless.Speaking from his New York office, which is lined with action figures and features a whiteboard covered in inspirational quotes (“The world is a reflection of you.”), Besmertnik said he’s focused on enforcing a strong company culture and a “people-first approach.” He hopes the new stock ownership program for employees sets an example for other businesses to follow, he said: “I’ve always felt the system wasn’t fair. If there happens to be a new CEO or a new board that doesn’t have the same willingness to fight for the people, employees stand to get the short end of the stick.”(Updates with Spacious closure in the third paragraph.)To contact the author of this story: Candy Cheng in San Francisco at email@example.comTo contact the editor responsible for this story: Mark Milian at firstname.lastname@example.org, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Software stocks rallied in early 2018 and 2019, then pulled back as some analysts questioned their valuations. Heading into 2020, many software stocks have rebounded from a September-October swoon.
(Bloomberg) -- High-multiple software stocks have struggled over the past few months as analysts reassess their growth prospects and valuations, and the group could see additional weakness in 2020, creating an environment where more-defensive legacy names are more favored, analysts said on Wednesday.“There is a greater level of concern that the global economy could enter into a recessionary environment next year,” wrote Gregg Moskowitz, an analyst at Mizuho Securities. As a result, “there may be an increased risk of a rotation to value stocks that could cause multiple compression among higher growth companies.”Despite a potential risk to stock multiples, the firm expects software demand to remain robust next year, particularly in the sub-sectors of cybersecurity and cloud computing. It added that “barring a significant recession,” many companies would “navigate these issues very well,” and views both Microsoft Corp. and Salesforce.com Inc. as well positioned.Salesforce was also singled out by Cowen, which named the company as one of its “best ideas” for 2020.Next year “could prove to be a volatile year for higher multiple stocks given trends we’ve seen over the last few months,” Cowen analyst J. Derrick Wood wrote. In contrast, he said, Salesforce looks like “an attractive defensive growth investment,” given its lower valuation and “positioning around high growth/high value segments of software.”A basket of high-multiple software stocks tracked by Goldman Sachs fell as much as 2.6% on Wednesday, and the index was on track for its sixth straight decline, its longest streak of declines since October 2018. Even with the recent decline, the index remains up more than 40% in 2019.Among the names falling on Wednesday was Slack Technologies, down over 6%, Coupa Software, off about 4% and Zscaler, which fell 3.5% despite bullish commentary from BofA. Atlassian Corp. sank 5.7%, while Domo Inc. was off 4.2%. Cornerstone OnDemand and HubSpot each fell more than 3%. Separately, Zendesk fell 1.7%, on pace for a fifth straight decline.UBS analyst Jennifer Swanson Lowe on Wednesday wrote that small- and mid-cap software-as-a-service companies were “working through the bumps,” even as the overall demand environment for software was “healthy” going into the end of the year.The comments followed a UBS conference, where companies like Zendesk, Hubspot and Domo “highlighted strong secular demand trends, but also scaling challenges,” according to a report. Lowe added that software pertaining to security, cloud computing and automation were among the categories with “strong market momentum.”A key catalyst for the software sector will come Thursday afternoon, when Adobe Inc. is scheduled to report its fourth-quarter results. In focus is whether the company is able to maintain revenue growth above 20%; Wall Street is currently expecting growth of 21%, according to data compiled by Bloomberg.“How investors react to Adobe’s earnings and commentary could presage how software companies and their underlying stock prices will behave in 2020,” wrote Richard Davis, an analyst at Canaccord Genuity.He said the 20% growth threshold “has taken on a near mythical importance,” and suggested that if companies fail to maintain this level, investors may start “changing their tune” on whether they are comfortable with growth that doesn’t come with operating leverage.To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Steven Fromm, Jeremy R. CookeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Salesforce.com (CRM) has been upgraded to a Zacks Rank 2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
(Bloomberg) -- Oracle Corp. will move its marquee annual user conference to Las Vegas, abandoning its longtime venue of San Francisco due to the rising cost of visiting the city and its homeless crisis.Oracle’s OpenWorld will be held in Las Vegas beginning next year, the San Francisco Travel Association said Tuesday in a statement. The travel group, in an email reported earlier by CNBC, said the software company committed the conference to Las Vegas for three years, costing San Francisco an estimated $64 million. Oracle, headquartered about 22 miles south of San Francisco in Redwood City, California, told the travel authority that its conference guests were unhappy with San Francisco’s dirty streets and costly hotel rates, according to CNBC.Las Vegas is a key destination for technology conferences. Amazon.com Inc.’s cloud-computing arm, Dell Technologies Inc., Adobe Inc. and Hewlett Packard Enterprise Co. are just a few of the companies that host conferences in the desert city -- drawn to its large venues and inexpensive hotel room rates.Oracle declined to respond to requests for comment on the move.Oracle also holds OpenWorld conferences in Dubai, London, Singapore and Sao Paulo. The company encourages customers and partners to “register for an OpenWorld near you,” reducing the importance of the San Francisco gathering, where the company unveils new software products. The San Francisco OpenWorld generally attracted about 60,000 attendees. For years, the conference has been overshadowed by Dreamforce, rival Salesforce.com Inc.’s annual confab that the company describes as the world’s largest software conference. Dreamforce had more than 170,000 registered attendees in November.San Francisco hasn’t been a happy home for OpenWorld or Dreamforce for years, with residents complaining about street closures caused by the conferences and a surge of pedestrian traffic downtown. Local hotels swell room rates in anticipation of demand among attendees.Oracle held the first official OpenWorld conference at San Francisco’s Moscone Center in 1996, according to its website. The company’s user gatherings date back to 1982, when 50 attendees gathered for International Oracle Users Week at a hotel in San Francisco.To contact the reporter on this story: Nico Grant in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew Pollack, Robin AjelloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of SAP SE (NYSE:SAP) based on that data and […]
Salesforce shares closed Monday, Dec. 9, at $157.48, up 15% year to date and in bull market territory at 31.1% above the Dec. 24 low of $120.16. The daily chart for Salesforce shows that the stock began 2019 with a strong upward surge. The close of $148.44 on Sep. 30 was also an input to my analytics, and the fourth quarter value level for Salesforce stock is $136.12.
Salesforce (NYSE: CRM), the global leader in CRM, today announced that Bill Patterson, EVP & GM, Service Cloud, will participate in an investor meeting hosted by Goldman Sachs & Co. on Tuesday, Dec. 10, 2019 at 5:00 p.m. (PT) / 8:00 p.m. (ET) in San Francisco, CA.
Adobe shares have surged 36% in 2019 to outpace its broader market's 24% climb. So, is now the time to buy Adobe with the company set to report its Q4 fiscal 2019 financial results on Thursday, December 12?