Earnings

Amazon (AMZN) reports its FQ2 ’15 results after the closing bell tomorrow. Currently, the Estimize community have 106 estimates and are predicting an EPS figure of -$0.07 compared to Wall Street which predict -$0.17. Estimize are also predicting higher revenues of $22.422B relative to Wall Street’s $22.308B consensus.

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Amazon has been a fantastic investment year-to-date (YTD) returning a capital gain of 56.86% compared to the NASDAQ which has appreciated 9.04%. Amazon has also been able to outperform some of its key competitors (YTD) including eBay (EBAY) and Alibaba (BABA) who have returned 17.80% and -20.57% respectively.

Amazon’s success can be attributed to a whole range of impressive fundamentals. However Amazon’s revenue growth figures are certainly a major contributor to its success. In Amazon’s FQ1 ’15 results, the company reported YoY revenue growth of 15.08% which is substantially higher than its competitors including Best Buy Co (BBY) and Barnes & Noble (BKS) who recorded negative figures of -0.94% and -10.43% respectively.

Amazon’s continued success with respect to revenue growth has allowed the company to seal market share from big name players such as Walmart (WMT) and Best Buy (BBY). Amazon recently held its “Prime Day,” held for Amazon Prime members and topped expectations. Although the sales figures from Prime Day are not recorded in tomorrow’s release, the strong result is helping move Amazon’s share price higher. One hurdle Amazon may face with respect to revenue growth comes through a new market entrant in Jet.com. Jet officially opened on Tuesday and are promising to offer lower prices than Amazon.com. The business relies on a subscription model offering customers attractive membership rewards through lower prices. A recent study conducted by Boomerang Commerce found that Jet.com was cheaper than Amazon 81% of the time. Importantly, the study that was conducted used a small sample size of only 100 different products from various categories.

Despite all the positive fundamentals associated with Amazon at present, investors will want to obtain more guidance regarding management’s spending plans moving forward. Amazon has a track record of poor investment purchases including the well-publicized flop that was the Amazon Fire Phone. These decisions have resulted in Amazon recording EPS declines for three of the past four quarters (with the exception of the holiday quarter).

Tomorrow’s report will be an important one for Amazon as the company looks to beat expectations to ensure share price strength for the upcoming quarter. If the report disappoints however, the stock could experience a significant re-rating downwards. Amazon is currently trading near all-time highs and is vulnerable to falls if the market is unimpressed with the results.

(Photo Credit: Nic Taylor)

Source: Is Amazon Going to Soar to New All-Time Highs?

Qualcomm QCOM News

Qualcomm (QCOM) is expected to report earnings on Wednesday, July 22nd. The whisper number is $0.94, one cent behind the analysts’ estimate and showing no confidence from the WhisperNumber community. Whispers range from a low of $0.92 to a high of $0.97. Qualcomm has a 61% positive surprise history (having topped the whisper in 37 of the 61 earnings reports for which we have data).

Earnings history:

– Beat whisper: 37 qtrs
– Met whisper: 2 qtrs
– Missed whisper: 22 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:

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The strongest price movement of +0.7% comes within five trading days when the company reports earnings that beat the whisper number, and +5% within twenty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move is ‘positive’ (beat the whisper number and see strength, miss and see strength) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

QCOM715B

The company has reported earnings ahead of the whisper number in two of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings six cents ahead of the whisper number. Following that report the stock realized a 1.7% gain in five trading days. Last quarter the company reported earnings five cents ahead of the whisper number. Following that report the stock realized a 3.5% gain in five trading days. Overall historical data indicates the company to be (on average within thirty trading days) a ‘positive’ price reactor when the company reports earnings.

WhisperNumber provides detailed earnings analysis and earnings trade alerts. Learn more here.

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Reports for Thursday, July 23

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Report for Friday, July 24

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Under Armour (UA)

Under Armour (UA) will report its FQ2 ’15 results before the opening bell on Thursday. For Under Armour, while sales are expecting to continue their streak of YoY double-digit growth, bottom-line growth is expected to be negative. Estimize is looking for EPS of $0.07 vs. the Street’s $0.05 estimate, with revenues of $772.33M vs. $761.77M. This would mean a bottom-line decrease of 12%, but a sales increase of 27%.

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Under Armour is still benefitting from the popularity of athleisure wear, as are competitors such as Nike and Lululemon. Unlike certain athletic retailers which have struggled selling golf apparel as of late, such as Dick’s Sporting Goods, UA’s big bet on Jordan Spieth has paid off. After signing Spieth in 2013 when he wasn’t well-known, Under Armour’s golf-related earnings have doubled in the following two years. As wearables go mainstream, Under Armour will continue to benefit as they lead in that space with their smart apparel items.

McDonald’s (MCD)

McDonald’s Inc (MCD) will also report their FQ2 ’15 results before the opening bell on Thursday. Both Estimize and Wall Street are predicting an uplift in EPS QoQ but a fall YoY. The Estimize community forecasts an EPS figure of $1.25 compared to the Street which predict $1.23. Estimize predicts revenues to come in at $6.503B compared to Wall Street’s forecast of $6.454B.

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McDonald’s has faced considerable headwinds over the past 5 years as the US consumer continues to become increasingly health conscious. To make matters worse, competitors offering healthier alternatives and using meat from animals that are not fed with antibiotics or growth hormones have emerged including Chipotle (CMG). Also, other competitors such as Yum! Brands (YUM) and Panera Bread (PNRA) have also announced similar initiatives in reaction to market demands.

One of McDonald’s major issues is its same-store sales growth figures which continue to be in the red. With over 36,000 stores operating worldwide, this figure needs to be turned around in order for McDonald’s to regain its strength. Investors will be eager to hear from newly appointed CEO Steve Easterbrook and get a greater appreciation of how Easterbrook plans to strategize effective tactics to stimulate the company’s topline revenue growth.

Amazon (AMZN)

Amazon (AMZN) is also set to report its FQ2 ’15 results tomorrow after the closing bell. The Estimize community currently has 105 estimates and are calling for an EPS number of -$0.07 versus Wall Street which predict -$0.17. Estimize also forecasts higher revenues of $22.422B relative to Wall Street’s $22.308B consensus.

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Amazon has continued to deliver solid revenue growth numbers as the online retailer continues to steal market share from the likes of Walmart, Best Buy etc. Amazon recently held its “Prime Day,” held for Amazon Prime members and topped expectations. Although the sales figures from Prime Day are not recorded in tomorrow’s release, the strong result is helping move Amazon’s share price higher.

Despite all the positive fundamentals associated with Amazon at present, investors will want to obtain more guidance regarding management’s spending plans moving forward. Amazon has a track record of poor investment purchases including the well-publicized flop that was the Amazon Fire Phone. These decisions have resulted in Amazon recording EPS declines for three of the past four quarters (with the exception of the holiday quarter).

Tomorrow’s report will be an important one for Amazon as the company looks to beat expectations to ensure share price strength for the upcoming quarter.

Starbucks (SBUX)

Starbucks (SBUX) will also report its FQ3 ’15 results after the closing bell tomorrow. Both the Estimize community and Wall Street are predicting a strong uplift in EPS QoQ and YoY. Estimize are predicting an EPS figure of $0.42 versus Wall Street which predict $0.41. In terms of revenues, Estimize are expecting $4.864B compared to Wall Street’s forecasts of $4.861B.

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Starbucks continues to outperform competitors, returning 36.4% in capital gains to shareholders year-to-date (YTD) relative to Dunkin’ Brands (DNKN) and Krispy Kreme (KKD) who have returned 29.54% and -6.23% respectively. One of the key reasons why Starbucks has performed so well is due to its success in its technology investments. Similar to Domino’s (DPZ), Starbucks differentiated itself from its competitors through developing a solid technology framework which helps stimulate customer engagement driving same-store sales growth. At present, mobile transactions account for just under 20% of all transactions for Starbucks.

The report on Thursday will provide investors with a greater understanding of how management plan on capitalizing on various strategies aimed at leveraging of the company’s strong online community to build sales.

Biogen (BIIB)

Finally, Biogen will release its FQ2 ’15 before the market opens on Friday. The Estimize consensus, pulling estimates from 26 different analysts, is 5 cents above the Wall Street consensus of $4.10. Estimize is calling for a revenue of $2.725B, just above the Wall Street consensus of $2.711B.

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Importantly, Biogen announced its results from its phase 1b study of aducanumab, a drug meant to slow Alzheimer’s cognitive declines. The trial was a success in some respect as it demonstrated acceptable safety and tolerability. However, unfortunately for Biogen, the results revealed that improvements on scales designed to measure mental function were not statistically significant at a dosage of 6 mg/kg. Despite the upbeat nature of management, this result has not given a definitive answer as to whether this drug is effective or not. Biogen shares opened this morning down circa 3% in response to the announcement.

Investors will be interested in gaining more information on the results and what management’s expectations are for the upcoming trial scheduled for later this year.

(Photo Credit: Just Joe ( I’m back…sort of ))

Source: 5 Stocks to Watch for Thursday and Friday.

Google Stock News

By Daniel Gordon

Search engine giant Google Inc (NASDAQ:GOOGL) posted its second quarter fiscal 2015 earnings on July 16, outpacing analyst predictions. While analysts had predicted earnings of $6.73 per share, the company posted $6.99 earnings per share on a non-GAAP basis. Company revenue also rose 11% from the same quarter of last year to $17.7 billion.

Google’s net revenue, which is calculated without including payments to advertising partners, outperformed analysts’ forecasts as well. While the company was predicted to net $14.28 billion, Google actually raked in $14.35 billion in net revenue.

Google’s new CFO Ruth Porat credited the strong Q2 results to continued growth in “core search, where mobile stood out, as well as YouTube and programmatic advertising.” Porat pledged to continue Google’s focus on “developing big new opportunities across a wide range of businesses” with careful attention to “resource allocation.”

On July 17, Raymond James analyst Aaron Kessler reiterated an Outperform rating on Google and raised his price target from $625 to $720. Kessler credited the company’s strength to video-sharing website YouTube, which is owned by Google, as a reason for his bullish rating. He also noted the increasing volume of YouTube advertisers, which rose 40% year-over-year, as a catalyst for Google’s success.

Aaron Kessler has a 59% overall success rate and an average return of +19.9% per recommendation when measured over a one-year horizon and no benchmark.

Similarly on July 17, RBC Capital analyst Mark Mahaney reiterated an Outperform rating on Google, raising his target price from $640 to $750. Mahaney referenced Google’s revenue growth, big margins, and the hiring of the company’s new CFO, whom the analyst believes is “part of the drive behind managing costs better at the company,” as the reasoning behind his bullish rating. He noted that revenue growth for the company has been “remarkably consistent for three years in a row for a $70 billion ad run rate business.” Mahaney continued, “[for] the first time in five years, operating margins were actually up year-over-year.”

On average, Mark Mahaney has a 65% overall success rate and an average return of +24.5% per recommendation when measured over a one-year horizon and no benchmark.

Unlike Kessler and Mahaney, Morgan Stanley analyst Brian Nowak reiterated an Equal-Weight rating on Google on July 17. Nowak attributed his more cautious rating to “increased competition from [social networking giant] Facebook, expensive investments in new products, and fewer clicks on desktops that are not sufficiently offset by mobile clicks.”

In a research note Nowak wrote, “Over 90% of the company’s net advertising revenue comes from Search – while we believe Search will continue to take share of global ad budgets and Google will retain its dominant share, growth in US and UK markets (~50% of Google search revenue) has slowed.”

On average, Brian Nowak has a 56% overall success rate and an average return of +5.3% per recommendation when measured over a one-year horizon and no benchmark.

Out of 30 analysts polled by TipRanks, 24 analysts are bullish on Google and 6 are neutral. The 12-month average price target for Google is $702.96, marking a 0.48% potential upside from where the stock is currently trading. On average, the all-analyst consensus for Google is Moderate Buy.

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Report for Monday, July 20

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Reports for Tuesday, July 21

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International Business Machines (IBM)

International Business Machines (IBM) is expected to release second-quarter 2015 results on July 20, after the market closes. Last quarter, IBM posted earnings of $2.91, decreasing from $5.81 the quarter prior. The Estimize consensus, pulling estimates from 68 different analysts, is set two cents above the Wall Street consensus of $3.80. Estimize is calling for a revenue of $20.968B, just below the Wall Street consensus of $21.001B.

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For the last two years, revenue growth YoY has been negative. Moreover, seven of previous consecutive eight quarters IBM earnings have missed both the Estimize and Wall Street consensus, so it would not be a surprise if this trend continues.

Yahoo (YHOO)

Yahoo! Inc (YHOO) reports its FQ2 ’15 results after the closing bell on Tuesday. Both Estimize and Wall Street are predicting a fall in EPS year-on-year (YoY). The Estimize and Wall Street consensus is predicting an EPS figure of $0.18. The Estimize community have assumed a revenue figure of $1.029B compared to the Wall Street assumption of $1.028B. Yahoo’s stock has underperformed YTD with a negative capital return of -21.52%. The NASDAQ has managed to rise 9.77% (YTD).

imageInvestors have begun to feel nervous due to the possible changes to how the IRS taxes corporate spinoffs. Yahoo! still has a circa $30B stake in Alibaba and any IRS changes may impact its strategy to spinoff the rest of its stake. Yahoo! successfully booked $9.4B when Alibaba successfully listed on the NASDAQ in September last year. Yahoo! CEO Marissa Mayer has recently told investors that the spinoff process is “proceeding as planned.” Investors will be eager to hear management’s comments on the spinoff and the timeframe in which the sale is expected to be completed.

Pressure continues to mount on Marissa Mayer as she approaches her 3 year anniversary as CEO. In order for Yahoo! to build momentum, Marissa will need to begin to demonstrate to investors that she has what it takes to increase Yahoo’s top line revenue growth. With a disappointing FQ1 ’15 result, Yahoo! needs a solid report tomorrow in order to stop the share price plunge.

Chipotle (CMG)

Chipotle (CMG) reports its FQ2 ’15 after the closing bell on Tuesday. Wall Street is predicting an uplift in EPS to $4.42 and the Estimize community are forecasting EPS of $4.47. Estimize are expecting revenues to be $1.224B compared to Wall Street’s prediction of $1.216B.

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Chipotle continues to struggle relative to its peers including McDonalds (MCD), Yum Brands (YUM), Sonic (SONC) and Starbucks (SBUX) year-to-date (YTD). The trendy burrito chain has been growing rapidly over the past 5 years, however analysts are expected growth to slow moving forward. In addition to the reduction in growth figures, Chipotle has been recently faced some headwinds which may hurt its bottom line. Firstly, issues with pork suppliers caused Chipotle to completely remove its pulled carnitas from the menu forcing Chipotle to identify another pork supplier from Britain. Also, increasing beef prices have likely had a negative effect on the company’s profitability through increasing costs.

Microsoft (MSFT)

Microsoft (MSFT) will also report on Tuesday afternoon when they release their FQ2 ’15 results. Year-to-date (YTD) Microsoft has underperformed the NASDAQ posting a lackluster 0.05% capital gain compared to 9.77% achieved by the index.

For the upcoming quarter, the Estimize community is predicting an EPS figure of $0.58 and a revenue target of $22.673B which is higher than Wall Street’s predictions of an EPS number of $0.39 and a revenue figure of $21.994B.

Microsoft currently has a mixed bag of fundamental drivers are present. On the one hand, Microsoft’s cloud business is a very strong positive but its PC and subscription revenues are facing pressure as the demand for PC’s globally decline. The increased desirability of smartphones and tablets is only expected to further negatively impact PC sales in the future. It is up to Microsoft to manage this transition and enable its business to thrive in the coming decade.

Finally, Investors will be interested in obtaining more information with respect to management’s recent announcement to abandon the Nokia phone business. Details with respect to the costs involved of the restructuring including worker redundancy packages will be expected.

Apple Inc (APPL)

With plenty of market anticipation, Apple Inc (AAPL) will report its FQ3 ’15 results on Tuesday this week after the closing bell. Estimize and Wall Street are assuming lower EPS and revenue numbers for FQ2 QoQ. Apple continue to be a market darling with a year-to-date (YTD) capital return of 17.21% compared to the NASDAQ index which has managed to rise 9.77%.

Estimize currently have over 400 estimates for Apple, and are expecting EPS to be $1.85 and revenues to come in at $49.320B. Wall Street, to no surprise are predicting lower figures than Estimize and forecast EPS of $1.79 and revenues of $49.092B.

Investors will be eager to hear more information regarding the company’s expansion into China. The opportunity for Apple to increase its revenues through expansion in China is significant, but does not come without risk and investors are aware of this. Domestic threats such as OnePlus and Xiaomi are potential competitors which may limit Apple’s ability to continue to accumulate market share. Further, with the current share market plunge occurring in China and falling consumer confidence, spending on luxury items such as iPhones may feel the pinch in China till all is resolved.

(Photo Credit: davidgsteadman)

Source: Top 5 Stocks for Monday and Tuesday this Week.

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Goldman Sachs reported this morning, on July 15th, and the results are a clear reflection of several macro events. Goldman’s EPS came in at $4.75, growing 16% YoY. The Estimize community was looking for $3.98, higher than Wall Street’s prediction of $3.70. Goldman was able to beat out both of these estimates, which they also did last quarter, when YoY growth was 48%. The company has demonstrated a pattern of positive EPS growth over the past two years. In regards to revenue, both Wall Street and Estimize predicted that revenues would decrease by at least 15% this quarter from $10.617B last quarter. Sales ended up only falling 1% QoQ, to $9.069B, beating both the Estimize consensus for $9.043B and Wall Street’s estimate of $8.753B.While the non-GAAP results came in strong, they exclude a large litigation charge related to pre-crisis mortgage practices that lowered the GAAP result by $2.77. But this is not the only challenge the bank faced in the second quarter. The events in Greece and China impacted the equities division as investors were more cautious about trading amid uncertainties surrounding the global economies and domestic interest rate environment. Weaknesses in rates could have also led to a decline in investment banking revenues. On the other hand, there were several positive macroeconomic factors this quarter. Specifically, there was falling unemployment, a flexible monetary policy, as well as a progressive housing sector. Moreover, on July 1st, Goldman was credited for the most M&A deals in the US and around the world (176 and 112, respectively) for the first half of 2015, giving a boost to investor confidence.

Overall, the big beat from Goldman Sachs today wasn’t much of a surprise, as they typically surpass estimates by a large margin, but results did show that missteps made during the financial crisis still loom. Of the five big banks that reported this week, only Wells Fargo missed the Estimize EPS consensus, with Morgan Stanley on deck for Monday.

Don’t forget to place your estimate for GS for the next quarter here.

(Photo Credit: Financial Times Live)

Source: Why did Goldman’s earnings plummet today?

Thought Leader Discussions

Gevo, Inc. GEVO Stock News

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Gevo, Inc. (NASDAQ: GEVO) Before we get into this interview, I'd like to extend a special thanks to my friend Joey who both set up the...