Tag Archives: technology

Alphabet Upgraded As Forex Headwinds Calm, Ads Strong

Alphabet ( GOOGL ), the parent of search leader Google, got a ratings upgrade and price target boost on Monday from Pivotal Research, which said it expects foreign-exchange headwinds to calm. Pivotal upgraded Alphabet stock to buy from hold, as well as hiking its price target to 970 from 800. Alphabet stock was up a fraction in afternoon trading in the stock market today , near 765. Alphabet reports Q1 earnings on April 21. Pivotal analyst Brian Wieser wrote in a research report Monday that he estimates Alphabet will log 16% revenue growth year over year in Q1, or 18% revenue growth excluding traffic acquisition costs — the fees Google pays to other companies to carry its ads. Alphabet’s dominant position in digital advertising alongside Facebook ( FB ) “is fundamentally unchanged, and we continue to expect Google to sustain double-digit growth rates in advertising on an ongoing basis,” wrote Wieser. The same factors that led to Alphabet’s growth in Q4 will continue, he said, including revenue from Google video wing YouTube and programmatic display-related ads. Wieser said he is watching display ad revenue because that growing share of Alphabet’s overall revenue mix is generally less profitable than search ads, “largely because of the needs to continually innovate on related products and provide service and marketing support to those products.” Programmatic advertising, for example, “does not eliminate the need for costly humans in the process of trading media, but instead requires different humans to manage these businesses,” he wrote. “This issue is exacerbated with YouTube, where content delivery and capital costs are even higher, and content costs are now a factor that both drives growth, but also constrains profitability.” Alphabet’s non-core, or “Other Bets,” are “likely to continue dragging on Alphabet overall , although at least their scale is relatively minimal overall,” said Wieser. For example, Nest, the smart home device maker Google bought for $3.2 billion in 2014 to compete with Apple ( AAPL ) in that growing market, is falling short of expectations, news site Re/Code reported last month. ITG Investment Research analyst Steve Weinstein, said in an industry note Monday he expects to see Alphabet post revenue of roughly $2 billion for “Google other” and $150 million for “Other Bets” for Q1, with total gross revenue coming in at roughly $20.57 billion, slightly ahead of consensus of $20.3 billion.

Details Of New Amazon Kindle Leaked Ahead Of Release This Week

Ahead of the expected launch this week of the newest  Amazon.com ( AMZN ) Kindle e-book reader, details of the device have been leaked, according to  online magazine Motherboard . The new device is going to be called Oasis and will be slightly wider than prior models, Motherboard reported. The device will have the same pixel density — 300 pixels per inch — as the Kindle Voyage but will be more than 20% lighter than prior models. The Verge, a tech news site, says that the new model will include a rechargable battery case  that will give the new Kindle 20 months of standby time. The report also noted that the leak could be a fake, but it “would be a pretty extensive one.” Seattle-based Amazon.com did not immediately return a request for comment. Amazon CEO Jeff Bezos last week tweeted that the device would be introduced this week. Amazon stock was up nearly 1% in afternoon trading on the stock market today , near 600. The company has an IBD Composite Rating of 79, where 99 is the highest. The CR tracks major metrics such as earnings and sales growth.

SAP’s Strong Pipeline Into Q2 Keeps Stock Near Recent High

While SAP ( SAP ) late Friday preannounced Q1 earnings and revenue that missed Wall Street views, investors Monday were buoyed by the German enterprise software company’s assurances that its pipeline is flowing strongly into Q2. SAP stock was up a fraction, near 77, in afternoon trading in the stock market today, just 7% off an 18-month high of 82.70 set July 25. In its release Friday, SAP CEO Bill McDermott said he expects “increasing momentum” in 2016. Shares of rival  Salesforce.com ( CRM ) were down a fraction Monday afternoon, but rival  Oracle ( ORCL ) was up a fraction. With final Q1 results scheduled for release April 20 before the open, SAP issued preliminary earnings of 0.64 euros per share minus items (73 cents at Monday’s exchange rate), up 9%, where Wall Street analysts expected 0.70 euros. It said revenue rose 5% to 4.73 billion euros (or $5.39 billion), short of the 4.85 billion euros and 4.82 billion euros that Evercore ISI and Wall Street projected, respectively, observed Evercore ISI in a research note. One euro was worth about $1.14 Monday. In a research note Sunday, Evercorse ISI analyst Kirk Materne said he’s looking for “more color” from SAP on April 20,  but “we expect the (Q1) license shortfall and comments around a slower start in the Americas are going to pressure shares on Monday despite SAP reiterating its full-year guidance and the comments around a ‘strong (Q2) pipeline.’ ” Materne maintained a buy rating on SAP stock, but said “we continue to favor Oracle ( ORCL ) and Microsoft ( MSFT ) in  mega-cap software.” RBC Capital Markets analyst Ross MacMillan maintained a sector perform rating on SAP stock but lowered his price target to 78 from 81. MacMillan noted that SAP’s Q1 cloud bookings of 140 million euros rose 22% year over year, and more than 25% in constant currency. “We view this as slightly disappointing” following Q4’s 75% “organic growth,” less than 50% in constant currency, “although do note that (Q1) is a seasonally weak quarter,” MacMillan said. “SAP also added over 500 new S4HANA customers, of which around 30% (i.e. about 150) are net new. While well below about 1,400 customer adds in (Q4), we would expect (Q1) to be seasonally weaker.” He said weakness in the energy sector and “some pull forward of demand” in Q4 due to S4HANA product promotions drove SAP’s softness in Q1. “As a result, we think there is limited read-through for other companies in enterprise software.” Got that, Salesforce.com sellers? “SAP’s fundamental growth drivers are rock solid, from our best-in-class S4HANA applications to our completeness of vision in the cloud,” said SAP’s McDermott in Friday’s release. “We expect increasing momentum as the year progresses, fully consistent with our guidance for the full year. SAP continues to be a highly profitable growth company.” HANA is SAP’s linchpin business software suite. CFO Luka Mucic said the Americas, dragged by Brazil, “got off to a slower start.”