42.30 +0.30 (0.71%)
Pre-Market: 7:00AM EST
|Bid||41.49 x 1400|
|Ask||0.00 x 1100|
|Day's Range||41.75 - 42.98|
|52 Week Range||39.81 - 73.35|
|Beta (3Y Monthly)||0.96|
|PE Ratio (TTM)||50.48|
|Earnings Date||Oct 30, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||67.00|
You've probably heard by now. Thanks to U.S.-China trade progress, supportive central bank policy, and a strong third-quarter earnings season, the stock market has surged to record highs in late 2019. As of this writing, the S&P 500 is trading north of the 3,090 mark, and is up an impressive 4% over the past month alone.One group of stocks that didn't get an invite to this party? Online retail stocks. The Amplify Online Retail ETF (NASADQ:IBUY) is actually down over the past month, and presently trades about 10% off its 2019 highs.Why the relative weakness in online retail stocks? A few things. Namely, there have been concerns that the 2019 holiday shopping season won't be that strong, because of tariffs and falling consumer confidence. There have also been concerns about valuation on online retail stocks, and as yields have powered higher over the past few weeks, those valuation concerns have become more relevant.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, U.S.-China trade tensions are easing, and consumer confidence metrics should rebound with the economic outlook now improving and labor markets still strong. Online retail stocks also now look about as cheap as many of them have ever been. Broadly, then, online retail stocks look attractively valued heading into what could be a big upward catalyst this holiday shopping season.The investment implication? Buy the dip in online retail stocks. * 7 Inexpensive, High-Dividend ETFs to Buy With that in mind, let's take a look at five online retail stocks that look particularly attractive amid recent weakness and ahead of the holiday shopping season. Online Retail Stocks to Buy: Etsy (ETSY)Source: quietbits / Shutterstock.com % Off 52 Week Highs: 45%Shares of online arts-and-crafts marketplace Etsy (NASDAQ:ETSY) plunged in late October after the specialty e-retailer reported mixed third-quarter numbers that included a lame fourth-quarter guide. Before the plunge, ETSY stock had already been trading weakly due to slowing growth concerns. Such concerns have only grown louder in the wake of the print.Today, ETSY stock trades almost 50% off its one year highs.But, this slowing growth narrative, which has driven the 50% plunge in ETSY stock is overstated. Growth is slowing because of noise related to the acquisition of Reverb, an online music gear marketplace which operates at lower margins and lower revenue take rates than Etsy. Naturally, as Etsy has integrated Reverb's numbers into its own numbers, revenue take rates and margins have been adversely impacted. Importantly, volume growth rates have not slowed.Over the next few quarters, though, Etsy will do everything it can to improve Reverb's take rates and margins. They will be successful in doing so, because they did it at Etsy. As Reverb's operating profile improves, so will Etsy's overall operating profile, and ETSY stock will bounce back. Amazon (AMZN)Source: Sundry Photography / Shutterstock.com % Off 52 Week Highs: 13%The king of e-commerce, Amazon (NASDAQ:AMZN), has seen its choke-hold over the online retail industry slip over the past few years.Long story short, other retailers -- namely, Walmart (NYSE:WMT) and Target (NYSE:TGT) -- have caught up to Amazon on the e-commerce front. Now, Amazon's competitive advantages in the online retail world are rapidly eroding and revenue growth rates have significantly decelerated. In response, Amazon is trying to regain competitive advantages, by rolling out things like free one day shipping. But, these initiatives have weighed on margins and have yet to boost top-line growth.Ultimately, Amazon is stuck in a slowing growth, falling margin dynamic at present. This dynamic has plunged AMZN stock into correction territory, while the rest of the market is at all-time highs. * 7 Food Stocks to Buy Now This dynamic will eventually reverse course. Free one-day shipping, at scale, will allow Amazon to regain some top-line momentum in 2020. At the same time, the lap will get easier (since it will factor in one day shipping costs), so margins will start to improve again in the back-half of 2020. This reversal to accelerating revenue growth and expanding margins will propel a rebound in AMZN stock. Stitch Fix (SFIX)Source: Stitch Fix% Off 52 Week Highs: 35%Profitability concerns have plagued online personal styling service Stitch Fix (NASDAQ:SFIX) for the past year. But, those profitability concerns could disappear in 2020, and as they do, SFIX stock could stage a big rebound.Stitch Fix provides personalized styling services for consumers, taking the work out of shopping so that consumers don't even have to shop to get new clothes. This convenience-first approach to shopping is interesting, and a lot of people are signing up for Stitch Fix. Revenue and client growth rates have been robust for several years. But, they are slowing somewhat, and this slowing is problematic because big investments in marketing and advertising are driving the growth. Thus, as revenue growth rates have come down, expense growth rates have not and margins have taken a big hit.In fiscal 2019, adjusted EBITDA margins fell back 190 basis points. It's no wonder SFIX stock presently trades 35% off its one-year highs.In fiscal 2020, though, Stitch Fix's margins could improve for two big reasons. First, revenue growth rates are expected to stabilize amid carry-over from strong marketing campaigns in 2019. Two, expense growth rates are expected to moderate as Stitch Fix optimizes its ad and marketing spend. The result? Adjusted EBITDA margins are expected to rise more than 200 basis points in fiscal 2020.As Stitch Fix's margins go from falling to rising, SFIX stock could similarly go from falling to rising. eBay (EBAY)Source: BigTunaOnline / Shutterstock.com % Off 52 Week Highs: 16%While the first half of calendar 2019 was great for e-commerce marketplace eBay (NASDAQ:EBAY), the second half hasn't been so great. Fortunately, recent struggles won't persist, and the first half of 2020 for EBAY stock should look a lot like the first half of 2019.For most of 2019, eBay was firing on all cylinders. New growth initiatives were driving revenue trend improvements, while disciplined cost control and cutting were pushing margins higher. EBAY stock roared 45% higher year-to-date through July. Then, the bad news hit. Mostly, revenue trends decelerated, margins stopped pushing and eBay canned its Chief Executive Officer. The convergence of these headwinds has caused EBAY stock to drop 16% from its July highs.These headwinds won't last. The implementation of new internet sales taxes across a variety of states, which has disproportionately disadvantaged small sellers, is the real reason why eBay's growth rates have slowed. Come 2020, these implementations will be in the rear-view mirror. Revenue growth rates will re-accelerate higher, which will allow for positive operating leverage to re-enter the picture. * 10 Cheap Stocks to Buy Under $10 Thus, in 2020, eBay should get back to its positive revenue growth, margin expansion growth narrative. As it does, EBAY stock should get back on a winning path. Chewy (CHWY)Source: designs by Jack / Shutterstock.com % Off 52 Week Highs: 38%The bull thesis on leading U.S. pet e-retail marketplace Chewy (NYSE:CHWY) is pretty simple. This is a strong company, with great growth prospects. But, the market initially overvalued these growth prospects. After a brief valuation reset period, CHWY stock now looks ready to head higher, supported by what should be a strong holiday showing.The fundamentals here are good. Americans love their pets more and more every generation it seems, and their appetite to spend money on their pets keeps going up and up. In this secular growth industry, pretty much all the sales happen in the physical channel, meaning there is a huge opportunity for e-retail expansion. Chewy is at the heart of that expansion, and could very reasonably turn into the Amazon of the pet care market within the next few years.The problem with CHWY stock, at least initially, was that everyone knew Chewy was a good company, so the valuation became bloated. On its first day of trading, CHWY stock jumped 60% to $35. That price tag was unwarranted. So, shares have dropped ever since. Now, they sit squarely around $23.Has this valuation reset period ended? I think so. According to my numbers, a $23 price tag for CHWY stock is sensible given its long-term growth prospects. At the same time, the holiday period should be really good for Chewy, because it seems that consumers this year are in a mood to spend big on pet gifts.Ultimately, solid holiday numbers coupled with a more reasonable valuation should turn the sinking ship of CHWY stock around over the next few months.As of this writing, Luke Lango was long ETSY, WMT, TGT, SFIX and EBAY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Stocks to Buy Under $10 * These 10 Stocks to Buy Make the Perfect 'Retirement' Portfolio * 5 Streaming Stocks to Buy for Huge Upside Over the Next Decade The post 5 Online Retail Stocks to Buy on the Dip appeared first on InvestorPlace.
Don’t count all beaten-down stocks out just yet. We mean the names that have seen share prices trend lower as a result of recent headwinds. While a decline in share prices is often interpreted as a signal to steer clear, Wall Street pros remind investors that this doesn’t always hold true. Buying stocks on recent weakness can be a solid investing strategy as it provides investors with the opportunity to snap up shares before they take off on an upward trajectory. However, pinpointing the perfect time to get onboard is no easy task.That’s why we recommend turning to TipRanks. The platform’s Stock Screener tool helped us zero in on 3 stocks that look like buying propositions given their recent shakiness. It gets even better as all the tickers have racked up considerable love from the Street in the last three months, enough to add up to a “Strong Buy” consensus rating.Let’s dive in. Etsy, Inc. (ETSY)It has been a tough quarter for the e-commerce company, to say the least. Nonetheless, some members of the Street believe that the 14% year-to-date drop represents a unique buying opportunity. While Etsy reported that gross merchandise sales and revenue for the quarter fell below the consensus estimates, it should be noted that this is likely as a result of the marketplace sales tax addition in 11 states and the slower-than-expected transition from shipping costs to item price. The company has also had to make up for a more condensed holiday window as well as accounting changes for Reverb, the online musical instrument marketplace it acquired back in August.Wedbush analyst Ygal Arounian highlights the fact that Etsy has yet to reap the benefits from its free shipping and ads segment. “We see a critical mass of new initiatives, highlighted by Etsy Ads and free shipping, that can drive stronger GMS growth and margin expansion over time. We particularly like the timing with both Etsy Ads and free shipping launching into the holiday season supported by Etsy’s brand marketing push, where it is seeing early signs of strong ROI on TV and Social,” he explained. As a result, Arounian argues that the pullback represents the ideal time to buy. Bearing this in mind, the analyst upgraded the rating to a Buy and set a $66 price target. At this target, Etsy shares could jump 62% over the next twelve months. (To watch Arounian’s track record, click here)Similarly, Wall Street is bullish when it comes to the e-commerce stock. With 13 Buy recommendations and 1 Hold assigned in the last three months, the message is clear: Etsy is a ‘Strong Buy’. To top it all off, its $67 average price target indicates 65% upside potential. (See Etsy stock analysis on TipRanks) Diamondback Energy, Inc. (FANG) Diamondback is an independent exploration and production (E&P) oil and gas company. Given its recent stumble, Wall Street wants to find out if FANG is gearing up for a recovery. FANG failed to impress investors with its performance in its most recent quarter, posting revenue that fell below estimates thanks to lower-than-expected realized oil, natural gas and NGL prices. Actual adjusted EPS/EBITDA also didn’t meet the Street’s expectations. Even so, Roth Capital analyst John White tells investors that FANG’s long-term growth narrative remains strong. “FANG expects realized prices to improve relative to the WTI crude oil price through the remainder of 2019 and 2020 as fixed differential contracts roll off and convert to FANG's commitments on the EPIC and Gray Oak pipelines or move to the current Midland market price,” he wrote in a note to clients.White adds that management’s full year 2020 average daily production guidance falls in-line with his forecasts. Taking all the above factors into consideration, the analyst decided to stay with the bulls. Along with the Buy rating, his $147 price target brings the upside potential to a whopping 91%. (To watch White’s track record, click here) All in all, other Wall Street analysts are betting on FANG. 14 Buys and 1 Hold received in the last three months add up to a ‘Strong Buy’ consensus. In addition, its $127 average price target suggests shares could climb 65% higher in the next twelve months. (See Diamondback Energy stock analysis on TipRanks) Agios Pharmaceuticals (AGIO)Agios is developing treatments for cancer and other rare diseases characterized by an identifiable genetic mutation. On the heels of this year's setback, BMO Capital’s George Farmer is coming to the biotech stock’s defense. Part of AGIO’s 26% year-to-date decline can be blamed on the delayed Tibsovo regulatory filing. The company announced on November 3 that the sNDA for its drug to treat advanced IDH1+ cholangiocarcinoma, a rare form of bile duct cancer, wouldn’t be filed before the end of the year like it previously planned. Instead, there will be a protocol-specified final OS (the length of time from the date of diagnosis or start of treatment that patients are still alive) analysis from the Phase 3 ClariIDHy trial before the filing takes place. Farmer argues that the FDA likely wants to be sure that Tibsovo doesn’t have a negative impact on OS before the agency reviews the sNDA. “In our view, results to date highly suggest that final data will ultimately support a neutral-to-positive impact of Tibsovo on overall survival in this Phase 3 trial,” he commented. He points out that AGIO also has other pipeline readouts slated for December that are capable of driving possible gains. To this end, Farmer advocates buying the dip in AGIO shares. On top of this, the analyst’s $45 price target leaves room for 31% upside potential. (To watch Farmer’s track record, click here) Based on the 7 Buys and 1 Hold published in the last three months, the consensus on Wall Street is that AGIO is a ‘Strong Buy’. It doesn’t hurt that its $60 average price target puts the potential twelve-month rise at 75%. (See Agios Pharmaceuticals stock analysis on TipRanks)
Accurate identification of toxic stocks and short selling those at the right time is the key to safeguard your portfolio from big losses.
To the annoyance of some shareholders, Etsy (NASDAQ:ETSY) shares are down a considerable 31% in the last month. The...
Shares of e-commerce marketplace eBay (NASDAQ:EBAY) started off 2019 with a bang, as revenue and margin trends at the company materially improved behind new growth initiatives and disciplined cost control. Through the end of July, eBay stock was up about 45% year-to-date.Source: ShutterStockStudio / Shutterstock.com Then, the bad news started to roll in.First, global trade tensions escalated in August 2019, and that created unease across the entire global economy and stock market. Second, eBay's CEO Devin Wenig stepped down in September. Third, in October, eBay reported mixed numbers which showed that both the revenue growth and margin expansion narratives were slowing for a variety of a reasons.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe convergence of these three headwinds over the past three months has put an end to the red-hot 2019 eBay stock rally. From their late July highs, shares have since shed about 15%.Is it time to buy the dip? I think so.In the big picture, nothing about the past three months materially changes the long-term growth fundamentals for eBay stock. Earlier this year, those fundamentals implied that eBay stock was fairly valued around $40 by the end of 2019. The same is true today. Thus, with eBay stock plunging toward $35, this dip looks more like an opportunity to buy at a discount than anything else. Don't Overreact to Near-Term PainThe past three months have not been good for eBay. Growth is slowing and will remain weak for the foreseeable future. But, the big-picture fundamentals here remain solid. That's all the stock needs to be worth buying here. * 7 Beverage Stocks to Stock Up On Third-quarter numbers reported in October confirmed that the eBay growth narrative is slowing. Specifically, the gross merchandise value growth rate dropped 2%, although it was up 5% in 2018 and flat in the second quarter. Organic revenue growth rates slipped to 3%, from 6% in 2018 and 4% last quarter. The culprit behind the slowdown? The implementation of new internet sales taxes across a variety of states, which has disproportionately disadvantaged small sellers and forced those small sellers to raise prices. Most of eBay's merchants are small sellers, so average transaction prices across the ecosystem have gone up, which has resulted in less buying across the whole platform.That's not a great dynamic.But, it's a near-term phenomena. Internet sales taxes are being enacted in most large states. Right now, because the taxes are new, they are causing noticeable price hikes. These price hikes will weigh on growth rates over the next few quarters.But, as these taxes become old news, the prices hikes will phase out, and market prices will normalize. As they do, this headwind will disappear, buying action will pick up on eBay and revenue growth rates will move higher. At the same time, management remains committed to cost-cutting and this sustained commitment to cost-cutting implies that margins will continue to expand over the next few years. The Fundamentals Remain SolidThus, we return to this idea that the big-picture, long-term fundamentals have not changed for eBay.Those fundamentals are quite simple. EBay is the internet's version of a global garage sale and it employs this garage sale model better than anybody else. Some consumers don't like the garage sale model. For those consumers, there's Amazon (NASDAQ:AMZN), Wayfair (NYSE:W) and Etsy (NASDAQ:ETSY). But, some consumers do love the garage sale model. For them, there's eBay.To be sure, the market of consumers who prefer the online garage sale model is clearly limited. That's why eBay is growing at a much slower rate than those other platforms. But, eBay is still growing its buyer base, and this sustained growth implies staying power in the secular growth e-commerce market.Staying power in the e-commerce market implies growth going forward.Given historical trends, broader retail and e-commerce sales growth rates, and eBay's competitive positioning, I think eBay most reasonably projects as a low single-digit revenue grower over the next few years. The expense base should continue to drop behind marketing optimization, more focused investments and more effective procurement. Margins will consequently move higher with steady pace. Buybacks will stick around.This combination ultimately implies that eBay can drive earnings per share towards $4 by fiscal 2025. Based on a market average 16 forward multiple, that equates to a fiscal 2024 price target for EBAY stock of $64. Discounted back by 9% per year (one point below 10% to account for the yield), that implies a fiscal 2019 price target of over $40. Bottom Line on EBAY StockIt's been a rough three months for eBay stock. But, while recent developments do imply limited growth over the next few quarters, they do not change the big-picture fundamentals here. Those big-picture fundamentals imply that eBay stock is worth about $40 today. Thus, for long-term investors, the recent pullback is nothing more than a buying opportunity.As of this writing, Luke Lango was long EBAY and ETSY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Sell Before They Roll Over * 5 Beaten-Up Stocks to Buy That Could Be Saved By An Acquisition * 4 Startup Stocks Getting Smashed The post The Recent Pullback in eBay Stock May Provide an Opportunity appeared first on InvestorPlace.
Uber Technologies (NYSE:UBER) reported its third-quarter results on Nov. 4. Although Uber beat analysts' average top-line and bottom-line estimates, Uber stock dropped on the news. Source: NYCStock / Shutterstock.com InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe Uber stock price fell some more over the next two days as investors continued to digest the earnings report. More importantly, the 180-day lock-up period expired, allowing insiders to sell Uber stock for the first time since UBER went public in May at $45. "We believe it will be an avalanche of selling from early investors and insiders as this train wreck since the IPO continues," Wedbush Securities analyst Dan Ives said, according to CNN Business. "We estimate roughly 763 mm shares will be unlocking with roughly 25% at a big risk of selling over the coming days. It's been dark days for Uber, but after this week, the lockup overhang will be in the rearview mirror and (Uber) stock should rebound from here."Although the ride-sharing app stock's average daily volume is 13.1 million shares, ten times that amount changed hands on Nov. 6, So, if Wedbush is on the money, the volume of UBER stock will be approximately 191 million shares over the next couple of days. * 7 Retail Stocks to Avoid for the Holidays After that, Wedbush's analysts expect Uber stock price to climb. Here's why. Profitability in 2021UBER expects to become profitable in 2021. Not everyone is convinced that the company will reach its target. "Right now, Uber CEO Dara Khosrowshahi is targeting 2021 as the year when his company will finally become profitable. But, with Uber digging billion-dollar holes, some analysts aren't expecting this milestone until 2025!" InvestorPlace contributor Louis Navellier wrote in an article published on Nov. 6. To illustrate Uber's risk, Navellier points to Etsy (NASDAQ:ETSY), another gig-economy stock, as an example of the right way to build a growth business. Etsy is growing its top line by 35% annually, but it's also generating profits. Etsy might not have as big a target market as Uber, but its shareholders probably sleep a lot better at night than the owners of Uber stock. However, if you can accept the above-average risk, Wedbush believes buying Uber stock in the mid-$20s could be a very nice entry point, given Uber's potential runway for growth. "We believe…100 million+ consumers on the platform and an unparalleled global monetization engine that is less than 3% penetrated today will translate into improved growth/metrics (and profitability in 2021) with a much higher share price from these levels," Wedbush's analysts wrote in a Nov. 5 note to clients. For the record, Wedbush has an "outperform" rating on Uber stock with a 12-month price target of $45, which is 67% above Uber stock price. Higher Potential MarginsAt the end of September, I wrote about how much analysts like Uber stock. And while I would never recommend Uber stock to anyone but the most aggressive of investors, arguments from Wedbush and others do have merit. In Wedbush's Nov. 5 note to clients, another sentence caught my attention."Uber also noted that the range of profitability in its most profitable markets ranges from 17% to 62% with nothing structurally different that would hold most markets from reaching those levels," the analysts wrote. Forget for a moment that the EBITDA, excluding certain items, of its Eats, Freight, Other Bets, and ATG & Other Technology Platforms was negative $591 million. Instead, focus on the fact that the adjusted EBITDA of Rides, its core business, was positive $631 million in Q3.Now imagine a Rides business that is generating 62% margins in all of its markets. That would translate into an adjusted EBITDA profit of $1.78 billion.The losses of its other segments would become a lot more reasonable. The Bottom Line on Uber Stock As I said previously, I'm not a big fan of investing in money-losing companies. I can count on one hand the number of times I've done so. Tesla (NASDAQ:TSLA) is the most prominent example. Regular investors have no business risking their hard-earned capital by investing in companies that lose money.However, if you can afford to lose it all, the risk/reward of Uber stock is finally tilting in the investors' favor. Is Uber stock on the comeback trail? I think so. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Sell Before They Roll Over * 5 Beaten-Up Stocks to Buy That Could Be Saved By An Acquisition * 4 Startup Stocks Getting Smashed The post Is Uber Stock on the Comeback Trail? appeared first on InvestorPlace.
E-commerce company Etsy has introduced several new business initiatives as it seeks to drive long-term value. But will it propel sustainable, profitable growth and boost Etsy stock?
Current ratio is a popular way for investors to assess the health of a stock’s balance sheet. Current ratio is a measure of a company’s ability to pay its current liabilities and obligations due within ...
BROOKLYN, N.Y. , Nov. 4, 2019 /PRNewswire/ -- Etsy, Inc. (Nasdaq: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, ...
The third-quarter 2019 earnings season is about halfway complete, and so far, the numbers have been really good. According to data from FactSet, 40% of S&P 500 companies have reported Q3 numbers. Of those 40%, about 80% have topped earnings expectations, while nearly 65% have topped revenue expectations. Both of those numbers are above the their five-year averages.In other words, companies are not just topping expectations this earnings season, but they are topping them more frequently than they have in the past. This series of positive earnings surprises has powered the S&P 500 to record highs in early November.But, not all stocks have participated in this big earnings surge to all-time highs. Instead, as is always the case, some companies have missed numbers big this earnings season, and some stocks have been butchered.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis gallery focuses on those stocks. Not the ones topping expectations and soaring to all time highs. Rather, the ones missing expectations and plunging to new lows.Which stocks belong in this category? More importantly, will these stocks stay stuck at their post-earnings lows, or will they bounce back? * 10 Stocks That Every 30-Year-Old Should Buy and Hold Forever Let's answer these questions -- and more -- by taking a deep look at seven cold stocks that were among the biggest earnings losers this season. Top Earnings Losers This Season: Etsy (ETSY)Source: quietbits / Shutterstock.com The Earnings Report: In late October, specialty e-retailer Etsy (NASDAQ:ETSY) reported third-quarter numbers that didn't quite live up to snuff, and included a cut to the full-year guide. Specifically, Etsy's revenues topped expectations, but revenue growth slowed dramatically quarter-over-quarter thanks to reduced take rate expansion.Third-quarter profits simply met expectations, as profit margins actually compressed year over year. Also, management reduced its full-year margin guide. In response to the mixed numbers, ETSY stock plunged 15% to its lowest levels of 2019.Where The Stock Is Going Next: ETSY stock will likely rebound from this big post-earnings selloff. The bad news in the Q3 print -- slowing revenue growth and falling margins -- is almost entirely a byproduct of Etsy acquiring Reverb, which operates at lower takes with lower margins. Etsy is still in the early days owning Reverb.Eventually, the company will improve Reverb's take rates and margins to be more on-par with Etsy's numbers. That should happen sometime in 2020. Once it does, the revenue growth trajectory will improve, and margins will zoom higher. That combination will drive a recovery in ETSY stock. Twilio (TWLO)Source: rafapress / Shutterstock.com The Earnings Report: Also in late October, cloud communications leader Twilio (NASDAQ:TWLO) reported mixed third-quarter numbers while delivering a lame fourth-quarter guide, the sum of which killed TWLO stock.At issue, although third-quarter numbers topped Street estimates, revenue growth is slowing, and is expected to keep slowing next quarter. Meanwhile, spending is dragging on profitability, and margins are in retreat. In response to these growth slowdown and big spending concerns, TWLO stock shed more than 10%, and presently trades about 40% off its all-time highs.Where The Stock Is Going Next: Much like ETSY stock, TWLO stock will rebound from this big earnings selloff. The rationale is simple. This is a big growth company centered around the idea that, because texting is the preferred form of communication among young consumers with much higher engagement rates than e-mail, texting will turn into the de facto business-to-consumer communication channel -- a service that Twilio is the best at providing. * 7 Retail Stocks to Avoid for the Holidays In the big picture, then, Twilio projects as a big grower for a lot longer. Today's slowdown is only natural considering growth rates are up above 70%. Margin concerns are ephemeral, as continued big growth will drive expansion in the long run. Ultimately, this is near-term pain in a long-term winner, meaning shares will rebound with time. GrubHub (GRUB)Source: Shutterstock The Earnings Report: U.S. food delivery giant GrubHub (NASDAQ:GRUB) threw up an earnings dud in late October that ultimately caused shares to sink 40% to their lowest level since April 2017. The numbers missed expectations across the board. Growth slowed meaningfully in the quarter. Margins took a big hit. Profits dropped.Even worse, the fourth-quarter guide came in well shy of expectations, calling for revenue growth to slow even more going forward, and for margins to keep dropping. Overall, it was a really ugly quarter that underscored that this growth company may be coming off the rails.Where The Stock Is Going Next: GRUB stock may remain weaker for longer. In a nutshell, GrubHub hasn't reported great numbers for a while. Growth has been slowing for several quarters. Margins have been under pressure for several quarters, too.Third-quarter numbers just underscored that these adverse trends are getting worse, not better, because the competitive landscape is only getting more crowded, and GrubHub's offerings are only becoming more commoditized. Until these trends reverse, GRUB stock won't rebound, and the present outlook is for these trends to continue for the foreseeable future. Beyond Meat (BYND)Source: calimedia / Shutterstock.com The Earnings Report: In late October, alternative meat leader Beyond Meat (NASDAQ:BYND) reported third-quarter numbers that topped expectations and were actually quite impressive. Revenues roared 250% higher versus the year-ago quarter, gross margins improved meaningfully, and the company reported a surprise profit, all thanks to the fact that Beyond Meat continues to lead the disruptive alternative meat category.But, management hinted on the conference call that forthcoming competition would force the company to dial up discounts. That spooked investors. As did the IPO lock-up expiration date, which hit the day after the report. In response to these discounting and lockup expiry concerns, BYND stock plunged more than 20%.Where The Stock Is Going Next: BYND stock will rebound from here. The company was hit by a perfect storm in late October with the lockup period expiring the day after a mixed earnings report, all against the backdrop of a stock that was up four-fold from its IPO price (so insiders were sitting on huge paper profits). This perfect storm has now passed. * These 7 Stocks to Buy Were Big Winners This Earnings Season Looking back at the fundamentals, things still look good. The alternative meat movement continues to disrupt the huge global meats market, and Beyond Meat remains at the epicenter of that movement. Revenues, margins and profits are all improving rapidly. These fundamental improvements will persist, and as they do, BYND stock will rebound from its huge post-earnings plunge. Twitter (TWTR)Source: Worawee Meepian / Shutterstock.com The Earnings Report: Toward the back half of October, social media company Twitter (NYSE:TWTR) reported third-quarter numbers that were just awful. It was a double miss quarter with a huge downside guide.Revenue growth slowed dramatically quarter over quarter amid revenue product issues and some adverse seasonality in the ad business. Margins tanked as slowing revenue growth resulted in negative operating leverage. The guide calls for these growth and profitability issues to persist into next quarter, too. In response, TWTR stock fell more than 20%.Where The Stock Is Going Next: TWTR stock will likely remain weaker for longer. Of note, Twitter's dramatic revenue slowdown comes against the backdrop of continued ad strength at Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Snap (NYSE:SNAP). So, this isn't a digital ad industry issue -- it's a Twitter issue.The implication is that the company is struggling to compete for ad dollars in an increasingly competitive digital ad landscape. Competition isn't going anywhere soon. Thus, unless Twitter changes up its ad business, today's slowdown will persist. That means margin compression will persist, too. So long as those two things continue, TWTR stock will likely stay under $30. Wayfair (W)Source: Jonathan Weiss / Shutterstock.com The Earnings Report: Furniture e-retailer Wayfair (NYSE:W) threw up a Q3 earnings dud in late October amid escalating global trade and tariff uncertainty. Revenues in the quarter were fine. But, that's about all that was fine.Third-quarter margins came under pressure thanks to Chinese tariffs pushing wholesale furniture prices higher. The guide calls for this margin pressure to worsen next quarter. Further, the guide also calls for revenue growth to slow meaningfully thanks to tough laps and global trade uncertainty. Big picture -- growth is slowing and margins are retreating, a double negative that has pushed shares to their lowest levels of 2019.Where The Stock Is Going Next: In the long run, Wayfair stock should rebound from here, because the secular growth tailwinds underpinning broader e-retail adoption in the furniture market remain vigorous, while Wayfair remains the de facto e-furniture marketplace. * 10 Companies Whose CEOs Care About All Stakeholders But, this company has long struggled with profitability, and those struggles are getting worse thanks to the trade war. So long as margins refuse to improve, Wayfair stock likely won't rebound from this selloff. Thus, the long-term recovery in Wayfair stock will be delayed by presently depressed margin trends. McDonald's (MCD)Source: CHALERMPHON SRISANG / Shutterstock.com The Earnings Report: Global fast food giant McDonald's (NYSE:MCD) surprised investors in mid-October when the company reported third-quarter numbers that missed on both the top and the bottom line -- a rarity for McDonald's.The last time the company reported a double miss quarter? Five years ago, in the fourth quarter of 2014. At issue, McDonald's organic sales drivers dried up, so the company relied heavily on discounts and promotions to drive sales growth, and this resulted in slowing growth and falling margins. MCD stock dropped to four-month lows in the wake of the double miss.Where The Stock Is Going Next: MCD stock will rebound from here. While third-quarter growth was driven by discounts and promotions, the McDonald's growth narrative at large is not. Instead, it's driven by menu innovations, technology enhancements and digital business expansion.Although these three drivers may have slowed in Q3, they won't slow forever. The company has ample room to expand its chicken offerings over the next few years, as well as further upgrade stores with more advanced ordering systems and it can further build-out the digital delivery business. These three drivers will power sustained healthy growth trends at McDonald's, and sustained healthy growth will power a recovery in MCD stock.As of this writing, Luke Lango was long TWLO, BYND, FB and MCD. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * These 7 Stocks to Buy Were Big Winners This Earnings Season * 5 Cheap Stocks Welcoming Insider Buying * 7 Earnings Reports to Watch Next Week The post 7 Earnings Losers That Were Hit Hard This Season appeared first on InvestorPlace.
U.S. stocks gained about 1% on Friday, as the S&P 500 and Nasdaq Composite kicked off the month of November with record highs. Energy and Industrial names led the way higher this week, while the Real Estate and Utility sectors lagged.Ideal Economic SituationBulls were encouraged by an upbeat October employment report on Friday. The U.S. economy added 128,000 non-farm payrolls in the month, which exceeded expectations. In addition, results from the August and September were both revised higher.Just 48 hours earlier, the initial reading of third-quarter GDP growth came in ahead of the consensus analyst estimate. Also on Wednesday, the FOMC voted to cut interest rates for the third consecutive meeting.Earnings Parade Marches OnAlmost lost in the sea of “Goldilocks” economic data is that we just ended the busiest week of the third-quarter earnings season. Apple (AAPL) and General Electric (GE) were the big earnings-related winners this week.On the other hand, Internet names like Etsy (ETSY), Grubhub (GRUB), Pinterest (PINS) and Wayfair (W), all experienced sizable declines, after disappointing investors with their profit outlooks.Of the 356 S&P 500 companies that have reported so far, 76% have exceeded earnings expectations. This is well above the historical average, although aggregate profit remains on track to decline fractionally in the third quarter.Knowing what and when to buy can be challenging for any investor. However, the fact remains that attractive investments are out there, if you’re willing to dig a little deeper.One such real estate name with a solid dividend and strong earnings momentum is worth a closer look and is our Stock of the Week below…Stock of the Week: VICI Properties (VICI)The company operates as a real estate investment trust (REIT), with over 22 entertainment properties, casinos and hotels, including Caesar’s Palace.The stock gained nearly 4% this week, as management delivered a better-than-expected quarterly profit this past Wednesday.Looking ahead, these gains should keep on coming. Here’s why:VICI earned $0.35 a share in the third quarter, as revenue fell 4% from the previous year, to $222.5 million. Management noted the upside was driven by higher leasing revenue in the period and boosted full-year profit guidance by 4%.The higher guidance was also influenced by the $843 million cash acquisition of the JACK Cleveland Casino and Thistledown Racino the company announced earlier in the week.VICI will lease the property back to JACK Entertainment for an initial term of 15 years, at an annual rent of $65.9 million. The deal is expected to close in early 2020 and be immediately accretive to the company’s earnings.Following the acquisition news and guidance boost, Deutsche Bank analyst Carlo Santarelli boosted his price target of the stock on Friday, citing:“We continue to like VICI's aggressive style and its ability to leverage relationships and expand its tenant base. Further, VICI has done a very nice job accessing the capital markets at opportune times to solidify their capital structure and promote accretion. We think the growth pipeline remains a competitive advantage. As such, we remain favorably inclined and we reaffirm our Buy rating. Our price target goes to $28 from $27.”In addition to its growth potential, VICI also rewards investors with steady income. Management pays a quarterly dividend of $0.2975 a share (4.85% yield) that it boosted back in September. The next payout will likely be declared in December.In the meantime, the company carries a Smart Score of 10/10 on TipRanks. This new proprietary metric utilizes Big Data to rank stocks based on 8 key factors that have historically been a precursor of future outperformance.On top of the positive aspects mentioned already, Smart Score says that VICI has seen insider buying, in addition to positive sentiment from hedge funds and financial bloggers. (See VICI stock analysis on TipRanks)This is just 1 of the 20+ stocks selected for the Smart Investor portfolio. That’s where we share more detailed insights on our weekly stock picks. You may also want to learn more about how we use TipRanks indicators to find stocks that are primed to outperform. (To discover the Smart Investor portfolio click here)
Shares of Etsy (NASDAQ:ETSY) plunged in late October after the specialty e-retailer reported mixed third-quarter numbers that included a lame fourth-quarter guide. The broad implication? The Etsy growth narrative is slowing, with the revenue growth trajectory flattening out and margins starting to come under pressure.Source: quietbits / Shutterstock.com Heading into the print, ETSY stock was trading at nearly 54-times forward earnings. That multiple wasn't priced for a growth slowdown. So, when the Q3 print implied that a slowdown was coming, Etsy stock reasonably tumbled. As of this writing, shares of ETSY are down more than 15%. * 7 Stocks to Buy in November But, taking a step back, this sell-off in ETSY stock could turn into a golden buying opportunity.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThere are three big reasons why the dip in Etsy earnings look compelling. First, the long-term growth fundamentals remain healthy and support the stock at levels closer to $50. Second, the optics surrounding the stock should improve once near-term acquisition-related noise passes. Third, the technicals imply that ETSY stock is plunging into oversold territory, and historically speaking, such plunges have been followed by big bounce-back rallies.I think now may be the time to get bullish on Etsy stock. ETSY Fundamentals Remain StrongThe first big reason to like ETSY stock on the dip is that the fundamentals remain strong.At its core, Etsy is a specialty e-retailer which has created an unrivaled ecosystem of online buyers and sellers in the arts, crafts, and other creative goods market. This is a relatively small market, so Etsy won't ever get that big. But, Etsy dominates the online portion of the market, and dominance in an e-commerce niche means that Etsy will continue to grow with the secular growth e-retail market for the next several years.That market projects as a 15%-plus grower into 2025, assuming Etsy continues to control its 0.15% market share. At the same time, margins should continue to improve with scale, since the costs of operating a website aren't that big, and many of the input costs are relatively fixed.Big picture: Etsy projects as a 15%-plus revenue grower into 2025, with upside margin drivers, and that should produce sustainable 20-25% profit growth. Assuming so, 2025 earnings per share could land around $3. Based on a consumer discretionary sector average 21-times forward earnings multiple and a 10% annual discount rate, that equates to a 2019 price target for ETSY stock of roughly $46. Etsy Stock Optics Will Improve in 2020The second big reason to like Etsy stock on the dip is that the optics surrounding the stock will improve in 2020.Right now, ETSY stock is getting killed because: 1) the pace of revenue rate expansion is slowing, causing a material slowdown in revenue growth despite steady 20%-plus gross merchandise sales growth, and 2) margin expansion is similarly slowing, and adjusted EBITDA margins are expected to drop this year.Both of these negative developments are almost exclusively the result of Etsy acquiring Reverb, an online music gear marketplace. Reverb has a materially lower revenue take rate than Etsy, as well as lower adjusted EBITDA margins. Consequently, while Reverb is boosting gross merchandise sales growth thanks to new sales volume, those new sales are happening at lower take rates and with lower margins. This is causing the slowdown in revenue growth and margin expansion rates.Etsy is still in the early days of incorporating Reverb into its operations. In 2020, the company will likely do all it can to improve Reverb's take rates and margins. As they do that, Etsy's overall take rates and margins should improve. Improvement therein should breathe life back into ETSY stock. The Technicals Are FavorableThe third big reason to like ETSY stock on the dip is because the technicals imply that a sizable rebound is just around the corner. Click to EnlargeSpecifically, the Relative Strength Index on Etsy stock has is rapidly plunging into oversold territory. As the attached chart illustrates, ETSY stock's RSI has dropped into oversold territory five times over the past year. Each time, the stock reversed course sharply, and turned a big sell-off into a big rally.Given the favorable fundamental and optical support here, it is fairly likely that ETSY stock stages a similar technical reversal this time it plunges into oversold territory. Bottom Line on ETSY StockEtsy stock plunged on mixed third-quarter earnings which simply weren't good enough to support the stock at a $50-plus price tag. But, while the numbers weren't great, they were still pretty good -- meaning if current weakness drags shares down to $40, then this sell-off will turn into a great buying opportunity.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities, but may initiate a long position in ETSY within the next 72 hours. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Buy-and-Hold Stocks to Play Investing's Biggest Trends * 7 Stocks to Buy in November * 5 Strong Buy Stocks Under $5 With Massive Upside Potential The post 3 Big Reasons Why Etsy Stock Looks Good on the Dip appeared first on InvestorPlace.
Etsy is tumbling Thursday after sharpening some of its 2019 guidance, but analysts see long-term potential at the online marketplace for apparel and accessories.
Etsy (ETSY) delivered earnings and revenue surprises of 0.00% and 1.70%, respectively, for the quarter ended September 2019. Do the numbers hold clues to what lies ahead for the stock?
Etsy stock fell Wednesday even though the company reported third-quarter results that beat on revenue and matched estimates on earnings. The report indicated a contraction with profit.
Shares of Etsy Inc. tanked 10% in the extended session Wednesday after the online marketplace company reported third-quarter per-share profit in line with expectations and tweaked its 2019 guidance. Etsy said it earned $15 million, or 12 cents a share, in the quarter, compared with $20 million, or 15 cents a share, a year ago. Revenue rose to $198 million from $150 million a year ago. Analysts polled by FactSet had expected earnings of 12 cents a share on sales of $193 million. Etsy said it expects revenue between $809 million and $815 million for 2019, compared with a previous guidance of revenue between $797 million and $809 million. The company also changed its 2019 Ebitda guidance to between $179 million and $187 million, from a previous guidance of $177 million and $193 million. Shares of Etsy had ended the regular trading day down 3%.
Reports Consolidated Year-Over-Year GMS Growth of 30.1%; Revenue Growth of 31.6%; Raises Full-Year Guidance for GMS and Revenue Growth to reflect the acquisition of Reverb BROOKLYN, N.Y. , Oct. 30, 2019 ...
Quarterly reports are underway, and investors are watching closely for the lowdown on some of the market’s biggest players. It’s not unusual to find rapid shifts in a stock’s share price after earnings are reported, especially if the company says something unexpected – an earnings beat, or a revenue miss, or a revision to forward guidance will all have an impact on investors’ perceptions.So, we’ve opened up TipRanks’ Earnings Calendar, a nifty tool for sorting through the earnings schedule, to find three popular stocks, all with Strong Buy consensus ratings, that are reporting earnings today. We’ll report on their current status; it will be up to you to watch for the earnings releases after markets close.Twilio (TWLO)Up first is Twilio, one of Silicon Valley’s cloud server companies. Specifically, Twilio offers a cloud communications platform on the popular software-as-a-service model. Twilio’s cloud software allows customers telecommunications access through the computer server. Customers can use Twilio to send or receive telephone calls, text messages, video, or chat, and the platform has security systems – user verification and authentication – built in.Twilio brings in upwards of $650 million in annual revenue, but like many cutting-edge tech companies it frequently operates with an earnings loss. However, in Q2, reported at the end of July, the company showed a non-GAAP earning of 3 cents per share after revenues jumped 86% year-over-year. Looking ahead to Q3, the forecast is for positive EPS of 1 cent and a 70% annual revenue gain to $287.9 million.Twilio’s earnings curve has been on an upward trajectory in recent years. In the last 8 quarters, TWLO has beaten the revenue forecast every time, and the EPS forecast six times. Both earnings and revenues have been revised upwards in multiple times in the last three months.Wall Street’s analysts are impressed with TWLO. Writing from Piper Jaffray, Brent Bracelin, ranked number 9 overall in TipRanks’ analyst database, gives the stock a solid Buy rating with a $141 price target, suggesting over 30% upside. (To watch Bracelin's track record, click here)Bracelin noted, "After declining 29% from the 52-week highs, the stock's risk/reward appears favorable for a profitable share gainer with a $1B-plus run-rate in a secularly growing category within a $66B total addressable market." In other words, this is a stock that is primed for explosive growth.Monness analyst Brian White highlights some different numbers in his note on Twilio. He says, “We believe Twilio will at least meet our 3Q:19 revenue estimate of $288.5 million (up 71%) and our EPS forecast of $0.02… We are projecting 3Q:19 base revenue of $278 million (up 80% YoY) and variable revenue of $10.4 million… We expect Twilio to add 7,500-8,000 customers in 3Q:19, reaching a total of well over 169,000 customer accounts (vs. 161,869 in 2Q:19).” White’s price target is highly bullish, at $175, indicating confidence in a 66% upside potential.Wall Street’s confidence backing this cloud communications app maker is strong, with TipRanks analytics showcasing TWLO as a Strong Buy. Based on 9 analysts polled in the last three months, eight are bullish on Twilio, while only one remains sidelined. The 12-month average price target stands at $149.33, marking a 40% upside from where the stock is currently trading. (See Twilio stock analysis on TipRanks)Etsy Inc (ETSY)Etsy is the popular e-commerce website catering to the “craft” market. The company’s registered merchants lean heavily toward purveyors of craft supplies, handmade items, and vintage goods. The merchandise is varied, including jewelry, handbags, clothing, art, and toys. In a sense, Etsy brings the world of craft fairs onlineIt’s a successful online craft fair, with more than 60 million individual items listed by more than 2 million merchants and visited by over 39 million buyers. The company brought in more than $600 million in revenue last year, derived from listing and transaction fees charged to sellers, services provided to sellers, and miscellaneous fees from third parties.Looking forward, analysts are predicting 12 cents EPS from Etsy, which would be a slight decline from last year’s Q3 EPS of 15 cents. Among possible headwinds for Etsy is a recent trend among several states to collect sales taxes on out-of-state merchants selling to in-state residents. Nine states added such regulations in 2019, including California which alone counts for 12% of the US population.While a shift toward an unfavorable tax regime may slow down Etsy, the Street doesn’t not expect it to cause serious harm. Needham analyst Rick Patel writes, “We expect benefits from Etsy Ads, but believe it'll take time to ramp. Despite our view for a bumpy 3Q, we remain bullish on Etsy’s LT opportunity to drive GMS growth (better search results, helped by Google Cloud), improve its take rate (conversion for seller services), and expand margins.” Patel gives ETSY a $75 price target, suggesting an upside of 38%. (To watch Patel's track record, click here)Also bullish is 5-star analyst Darren Aftahi of Roth Capital. He believes that the headwinds are baked into ETSY shares now, and writes, “We look for 3Q results slightly below consensus... While growth is likely to decelerate at a greater rate amid tougher comps, we believe ETSY can remain a ~20%+ topline growth story through FY20, as marketing initiatives and platform updates continue to filter through as growth catalysts.” His $76 price target implies a 39% upside potential.This 'Strong Buy' stock is no Wall Street secret. After all, in just three months, the stock has attracted 9 "buy" ratings from best-performing analysts. With a return potential of nearly 40%, the stock's consensus price target stands at $74. In other words, optimism backs this e-commerce story. (See Etsy stock analysis on TipRanks)Facebook (FB)Does Facebook really need an introduction? Mark Zuckerberg’s giant tech company has become the 800-pound gorilla in the world of social media, dominating its industry, setting trends, and generally changing the way people interact, with each other and with the interwebs.The company derives its income from advertising sales, which has led to its voracious appetite for data collection. Targeted ads and selective reach are the lifeblood of the company, and their success has led directly to its $55 billion-plus in annual revenues. When the company reports earnings later today, the analysts are expecting an EPS of $1.91, or an 8.5% increase from the year-ago quarter.Facebook needs to meet that forecast. The company missed expectations on the last two quarters, badly, due in part to reputational problems and in part to a record-breaking $5 billion fine from the Federal Trade Commission for violations consumer privacy rights. It was a testament to the company’s strength that it had the cash available to simply pay up, albeit at a serious cost to reported EPS.Writing from Credit Suisse, Stephen Ju raised his price target on FB by $10, to $260, and said in his extended comments, “…our primary focus is a return to FCF growth in 2020… We maintain our Outperform rating based on the following: potential better-than-expected ad revenue growth on product innovation (Instagram Checkout, Search in Marketplaces, etc.), Street models are too conservative and underestimate the long-term monetization potential of other billion-user properties like Messenger and WhatsApp, accelerating free cash flow growth in 2020.” Ju’s new price target suggests an upside of 37%.Michael Pachter, of Wedbush, sees a 39% upside to FB, setting a $265 price target. As the bottom line, he says simply, “We expect Facebook to continue its rapid growth overseas and to increase monetization of under-penetrated Instagram, WhatsApp, and Messenger.”Facebook’s Strong Buy consensus rating is supported by 14 Buy ratings and 4 Holds. The stock sells for $189, and the average price target of $235 suggests room for a 24% upside. (See Facebook stock analysis on TipRanks)
A new report from the International Council of Shopping Centers forecasts that 85% of American adults will shop during Thanksgiving weekend. International Council Shopping Centers CEO Tom McGee joins Yahoo Finance’s Zack Guzman and Kristin Myers, along with Clearnomics Founder and CEO James Liu, to discuss.