Author Archives: Scalper1

Own Facebook Stock? Here’s Why Snapchat Should Be On Your Radar

Loading the player… Social media stocks Twitter ( TWTR ), Facebook ( FB ) and LinkedIn ( LNKD ) all report quarterly earnings this week, with one analyst saying digital media investors should have privately held Snapchat on their radar “at a minimum.” SunTrust Robinson Humphrey on Monday said that Snapchat’s users are growing, potentially taking away some growth from Facebook, Instagram and Twitter. Snapchat users also have deeper engagement, which is taking more time away from other platforms. And advertisers are shifting some of their budgets to Snapchat, which puts the advertising revenue of the publicly traded players at risk. SunTrust says Twitter is most at risk from Snapchat’s rise. The disappearing picture app now has a valuation of about $16 billion, while Twitter has a $12 billion market cap. Twitter reports after the close on Tuesday. Analysts see revenue up 39%, while earnings jump 43%. Shares are in an extended downtrend and are trading nearly 60% below their 52-week high. Twitter rose 2.8% intraday. Meanwhile, the Wall Street Journal reported Monday that Facebook is developing a “stand-alone camera app” that could be seen as a rival to Snapchat. The report comes as Facebook’s demographics continue to skew older, while Snapchat — which turned down a $3 billion buyout from Facebook a few years ago — has a strong hold on the teen market. The social networking giant is expected to see earnings and sales rise 48% when it reports after the close on Wednesday. Shares are trading 6% below a cup-with-handle buy point at 117.09. The stock is trying to find support at the 50-day line for a third straight session, but it’s just below that level intraday on the stock market today  as it falls a fraction. Meanwhile, LinkedIn reports Thursday. Earnings are projected to rise 5%, much slower than the 54% bottom-line growth seen last quarter. The stock is trading more than 50% below its 52-week high. LinkedIn climbed 2.5% Tuesday.

Eli Lilly Q1 Sales Beat Views, But Earnings Miss As Expenses Mount

Big pharma Eli Lilly ( LLY ) issued mixed first-quarter earnings and guidance Tuesday, sending its stock down in early trading. Lilly’s earnings, excluding one-time items, shrank 5% from the year-earlier quarter to 83 cents a share, missing analysts’ consensus by 2 cents, according to Thomson Reuters. Revenue rose 5% to $4.87 billion, beating consensus by $45 million. Lilly added 5 cents to its 2016 EPS guidance range, now $2.68 to $2.78. It also raised its sales guidance slightly to $20.6 billion to $21.1 billion. At the same time, it shaved a percentage point off its gross-margin guidance, now 76%, as it also lifted its guidance for R&D and sales, general and administrative spending. Lilly stock was down nearly 2% in morning trading on the stock market today , below 77. Improved foreign-exchange rates were responsible for much of the upside, along with a 5-cent-a-share tax benefit in Q1. At the same time, the bottom line was hit by rising R&D expenses, including a $55 million milestone payment to biotech partner Incyte ( INCY ) upon the submission for approval of their jointly developed drug baricitinib. On the level of individual products, diabetes drug Humalog provided the biggest surprise, with its $606 million in Q1 sales falling 11% from the prior year and missing consensus by $100 million, according to Evercore ISI. Lilly said demand for the drug had actually increased, but so had rebates and discounts that Lilly negotiated with payers. Lilly said it does not expect the downtrend to continue the rest of the year. Revenue from a newer diabetes drug, Jardiance, doubled compared with last year, though since Lilly splits the take with partner Boehringer Ingelheim, it only received $38 million in Q1. U.S. sales beat expectations, and Lilly said it’s taking more share of the growing SGLT2 class of diabetes drugs, perhaps accounting for the underperformance of Johnson & Johnson ‘s ( JNJ ) SGLT2 drug Invokana, as shown in J&J’s Q1 report last week. Leerink analyst Seamus Fernandez wrote that while there were various upsides and downsides to the report, “we expect a limited impact as investor concerns about a significant Q1 miss diminish, and the focus shifts to abemaciclib data at ASCO (the American Society of Clinical Oncology meeting in June) and the conclusion of Expedition 3 (trial of solanezumab in Alzheimer’s disease) in Q4 2016,” he wrote in his research note.

Adobe Teams With Box To Improve Digital Document Workflow

Digital media software company Adobe Systems ( ADBE ) has teamed up with online document storage firm Box ( BOX ) to improve enterprise document workflow. Through the partnership announced Tuesday , Adobe will provide Document Cloud services to Box customers. Those services include e-signatures and the ability to edit PDF documents directly in Box. Adobe created the PDF, or portable document format. The partnership’s goal is to help transform document workflows, Bryan Lamkin, Adobe executive vice president and general manager of digital media, told IBD. Too many document workflows today still involve paper for signatures when they could be kept entirely electronic, he said. Adobe teamed up with Box because it’s a popular service among businesses for storing and sharing documents securely, Lamkin said. Box customers have stored more than 2 billion PDF documents on the service. “We want to go to where the PDFs are,” Lamkin said. “It’s a very natural partnership to team up with Box.” Box CEO Aaron Levie concurred. “Our job, and Adobe’s mission as well, is to transform the way that organizations and businesses are working with their digital information,” Levie told IBD. “What you’ll see in this partnership is what the future of the digital landscape looks like, where you have two best-of-breed companies coming together and leveraging our respective platforms to drive new experiences in the cloud.” Access to Adobe Document Cloud services, such as Acrobat DC and Adobe Sign, from the Box website is expected by the end of May. The ability to add a Box account to Acrobat DC and Acrobat Reader on the desktop is expected around the same time. Adobe, an IBD Leaderboard stock, was down a fraction, near 95.50, in morning trading on the stock market today . It hit a record high of 98 on March 18. Box stock was up more than 1% Tuesday morning, near 13.50. UBS analyst Brent Thill on Tuesday reiterated his buy rating on Adobe with a price target of 114. After meeting with Adobe’s management, Thill concluded that Adobe has “plenty of runway for years” from its current business pursuits. Adobe’s annual revenue run rate of $5.5 billion is a fraction of the company’s total addressable market of $48 billion, he said. Adobe has three cloud computing businesses: Creative Cloud, Marketing Cloud and Document Cloud. The biggest is Creative Cloud, which includes software for creative professionals such as Photoshop, Illustrator and InDesign. Marketing Cloud provides online marketing and advertising services. Document Cloud leverages Adobe’s popular online document-sharing product Acrobat and its ubiquitous PDF format. RELATED: Adobe Stock Gets Price-Target Hike But Seen As Fairly Valued