Facebook and Its Wide Range of Future Outcomes
Facebook could either be a 1) a dud, 2) pretty much what it is now, or 3) the new Internet. We dig into these scenarios and arrive at an expected fair value for each.
AMZN
Microsoft’s ‘Surface’ is No Apple Killer, But It Will Hurt Computer OEMs
Tech-giant Microsoft announced its Windows 8 tablet, “The Surface.” We don’t expect it to kill the iPad, but we think it’s positive for Microsoft and a negative for Google and computer OEMs.
Digging Into May Retail Sales: Were They Actually Bad?
May retail sales were down 0.2% from April, but up 5% from May 2011. We think investors should remain focused on the big picture.
Ulta’s Strong First Quarter Shows Tremendous Execution
We are re-evaluating our fair value estimate of Ulta after the firm beat expectations and raised its target store forecast by 20%. Ulta could be in the middle innings of a massive growth phase.
How Would a Double Dip Impact Retailers?
Though we don’t think a double-dip recession in the US is around the corner, we outline our views on how the general economy and employment trends impact same-store-sales performance across the consumer spectrum.
Strong First-Quarter Results from Dick’s Sporting Goods Bode Well for Athletic Apparel
Dick’s Sporting Goods posted strong first-quarter results, but the potential impact from encroaching online competition remains unclear. We think Nike is a much better idea for investors looking to gain exposure to the athletic retail space.
Amazon’s Investments Drive Sales Growth
E-commerce stalwart Amazon reported first-quarter sales and earnings that blew past consensus estimates. However, we remain on the sidelines based on valuation (the first and most important component of our Valuentum Buying Index).
Walmart’s Fiscal Fourth-Quarter Results and Outlook Disappoint; US Comparable Sales Performance Continues to Improve
Walmart (WMT) reported disappointing fiscal fourth-quarter results Tuesday that showed improving domestic traffic trends but modest bottom-line expansion. Though the firm’s outlook fell a bit lower than what we were expecting, we don’t expect to make a material change to our fair value estimate for the world’s largest retailer. Consolidated net sales for its fiscal fourth quarter increased 5.8% from the same period a year ago, with 4.5 percentage points of the increase coming from organic means. Walmart International led the charge in sales growth, advancing 13.1% in the period (8.5% organic), while revenue at Sam’s Club expanded 6.8% (5.4% excluding fuel). Both of these increases, however, lagged the full-year growth pace in the respective segments, suggesting decelerating fourth-quarter revenue … Read more
Amazon’s Fourth-Quarter Earnings Leave Much to Be Desired
On Tuesday, Amazon.com (AMZN) reported fourth-quarter results that disappointed most investors. Though traders continue to dabble in the firm’s shares, we would continue to steer clear of the online retailer. Our fair value estimate range for the company remains unchanged. Net sales increased 35% in the fourth quarter, falling below the firm’s full-year growth rate and disappointing even the most conservative forecasts. Operating income declined significantly during the period, while net income also fell by more than half, to $0.38 per share. On a full-year basis, the company earned $1.37 per share, down 45%. Though revenue growth missed consensus expectations and earnings performance was poor, the company still hauled in over $2 billion in free cash flow for the year. … Read more
Amazon Posts Miserable Fourth Quarter Profit Guidance; Sales Expansion Still Impressive
Amazon (AMZN) reported third-quarter results that may turn out to be the biggest disappointment of earnings season so far. The online retailer reported earnings per share of 14 cents, which is 37 cents less than the same quarter last year (a 73% decline in net income) and also well below expectations. Fourth-quarter guidance also indicates that the company expects operating income to be between a $200 million loss and a $250 million gain, a huge range. We think the rollout of its suite of Kindles at ultra-low (and perhaps money-losing) prices is the primary reason behind the wide profit expectations. But there was also good news that came out of the Amazon’s report. Net sales increased 44% (39% excluding currency impact) … Read more