The president's active use of Twitter (NYSE:TWTR) along with the importance of his tweets gives the company a "second chance to attract and retain users," says BTIG's Richard Greenfield, upgrading to Buy from Neutral
The $25 price target suggests 37% upside.
While not expecting Q4 results to thrill investors, accelerating user growth - particularly in the U.S. - might reignite takeover speculation.
The stock started the year with "sentiment challenges," says analyst Justin Post, noting worries about expenses and the threat from Snapchat. Following the Q4 earnings call, expense guidance is now known and priced in, and the metrics from the Snap prospectus suggest less competitive pressure than feared.
Q4 results were also stronger-than-expected, with solid user growth - particularly for Instagram - and untapped revenue drivers like messaging and live streaming.
Post and team add Facebook (NASDAQ:FB) to BAML's U.S. 1 List. The price target of $165 suggests another 26% upside (stock's already higher by 14.6% this year).
Elbit Systems Ltd. (NASDAQ:ESLT) was awarded a five-year contract worth ~$110M for the upgrade and maintenance of dozens of Mi-17 helicopters for an Asia-Pacific country.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, noted: "We are very pleased to have won this major helicopter upgrade project and for the opportunity to implement our unique and innovative avionic solutions. Elbit Systems is a world leader in the Eastern helicopter upgrade market, having completed and continuing to perform numerous programs which improve operational capabilities and facilitate safer flight, night and day. Since the "aging helicopter" market is growing rapidly and includes numerous Eastern platforms, we hope other customers will follow the selection of our modernization solutions".
Apple (NASDAQ:AAPL) is shaking up its Apple TV operating unit with the hire of Timothy Twerdahl, the former head of Amazon's Fire TV team who will fill a similar product marketing role in Cupertino.
The move suggests a renewed focus on the Apple TV and on providing more content for the device, an effort that has been stalled in the past by failed negotiations.
Sharp (OTCPK:SHCAY) may start building a $7B American plant in the first half of 2017, Reuters reports, taking the lead on a project initially outlined by its Taiwanese parent Foxconn (OTC:FXCOF).
The news comes as Japanese Prime Minister Shinzo Abe prepares to travel to the U.S to meet with President Trump, where he will likely unveil investments to create as many as 700,000 American jobs.
Q3 2017 results – revenue $68.1M (+42.6% Y/Y, $1.68M above estimates), EPS -$0.09 ($0.05 above estimates), loss from operations $4.9M, cash, cash equivalents and short-term investments $195.6M (vs. $197.3M Q/Q)
Q4 2017 projections – revenue $70.3M-$71.3M (+34% to +36% Y/Y; consensus $69.41M), EPS -$0.14 to -$0.16 (consensus -$0.15), loss from operations $7.7M-$8.7M
FY 2017 projections – revenue $260.4M-$261.4M (+44% Y/Y; consensus $257.87M), EPS -$0.52 to -$0.54 (consensus -$0.58), loss from operations $27.4M-$28.4M
New Relic founder and CEO Lew Cirne: "In the third quarter, we delivered record revenue, while delivering significant margin expansion. Our growth is fueled by two of the biggest strategic priorities in the enterprise today – the shift to cloud-based platforms, and digital initiatives to analyze the data generated by and through these platforms. When companies want to understand the performance of their applications and the resulting customer experience and business outcomes, they choose New Relic. We believe New Relic is uniquely positioned to meet these needs with our comprehensive and highly scalable cloud-based digital intelligence platform."
DirecTV Now (T +0.2%) has boosted premium offerings by adding Starz (LGF.A -0.1%, LGF.B -0.7%) and Starz Encore on the streaming service.
The add-on comes for $8/month and will feature three linear feeds (Starz, Starz Encore and Starz Kids & Family) along with more than 2,500 on-demand TV episodes and movies.
Starz sells its own over-the-top service for $8.99/month through an app that works as "TV Everywhere" for authenticated pay TV subscribers as well as its OTT offering.
Q1 2017 projections – revenue $50M-$51M (consensus $51M), EPS $0.04-$0.05 (consensus $0.03), income from operations $3.3M-$4.3M, change in short-term billings -10% to 0%, free cash flow $10M-$12M
Jive Software CEO Elisa Steele: "Strong execution resulted in another quarter that exceeded our expectations as we achieved record revenue, continued to improve profitability, increased cash flow from operations and gained momentum across the business. . . . Based on the transformation work we did in 2016 to realign the company, we are strategically poised for success as we enter 2017. We have made great strides in our operational excellence initiatives, and have positioned Jive's unique value proposition in the market to solve the growing problems of digital fragmentation across the enterprise workplace. We have stabilized the business, and we are vigorously building the foundation for future growth while maintaining a disciplined cost structure. We are confident that we are doing all the right things to generate increased demand for our products, as well as drive long-term value for both customers and shareholders."
Q3 2017 results – revenue $881.2M (+59.6% Y/Y, $32.06M above estimates), EPS $1.05 ($0.19 above estimates), gross margin 57.8%, operating income $289.1M, net income from continuing operations $246.5M, cash flow from operations $290.8M
Dividend – Quarterly cash dividend of $0.361 declared, payable March 7, 2017 to shareholders of record February 21, 2017.
Q4 2017 projections – revenue $872M-$908M (consensus $861.68M), EPS $1.01-$1.11 (consensus $0.93), gross margin 58%-58.4%, operating expense 24%-25%, operating income 33%-34.4%, other expense $22.8M, income tax expense (benefit) 8%-9%, net income $241M-$266.4M, diluted common shares outstanding 238.4M-239.4M
Microchip Technology CEO Steve Sanghi: "Our December quarter financial results were extremely strong. Our non-GAAP net sales, gross margin percentage, operating profit percentage and diluted earnings per share all exceeded the high end of our updated guidance provided on November 29, 2016. We were not able to provide GAAP guidance for the December quarter due to our acquisition of Atmel. As a result of the 'go live' of our business system integration for Atmel on January 1, 2017, several of our customers requested early shipment of their product that was originally requested to be delivered in the early part of January. We believe the impact from these customer requests added approximately one percent to our December quarter revenue. Ordinarily we attempt to schedule these business system integrations in the middle of a quarter to minimize the impact on our quarterly revenue results. As a result, investors should view the true end market demand for our products in the fiscal third quarter to be about one percent lower than our reported GAAP and non-GAAP net sales and our fiscal fourth quarter 2017 true end market demand to be about two percent higher than the midpoint of our GAAP and non-GAAP net sales guidance."
Zillow Group CEO Spencer Rascoff: "Zillow Group had a fantastic year in 2016. We set records for annual revenue and site traffic, and ended on a strong note with solid fourth quarter results that were ahead of expectations. We executed on all of our strategic priorities for the year and completed the roll out of our self-serve account interface to Premier Agents nationally. In 2017, we are committed to further extending our audience leadership in the online real estate category. We expect to pass the $1 billion annual revenue mark in 2017, and we will press our advantage with continued investment across all Zillow Group’s brands and emerging marketplaces."
After hours (NASDAQ:ZG) $35, -5.81%; (NASDAQ:Z) $34.51, -6.4%.
Q4 2016 results – total revenue $82M (+59.7% Y/Y, $7.8M above estimates), EPS $0.00 ($0.05 above estimates), base revenue $75.2M (+73% Y/Y), income from operations $0.1M (vs. $5M loss from operations Y/Y)
Highlights – Active Customer Accounts as of December 31, 2016 36,606 (vs. 25,347 Y/Y), dollar-based net expansion rate 155% (vs. 172% Y/Y)
Q1 2017 projections – total revenue $82M-$84M (consensus $77.85M), EPS -$0.07 to -$0.06 (consensus -$0.04), base revenue $78M-$79M, loss from operations $6.5M-$5.5M, weighted average shares outstanding 88M
FY 2017 projections – total revenue $364M-$372M (consensus $352.57M), EPS -$0.19 to -$0.15 (consensus -$0.10), base revenue $351M-$355M, loss from operations $17M-$13M, weighted average shares outstanding 90M
Twilio co-founder and CEO Jeff Lawson: "Our fourth quarter and full year results demonstrate the power of our platform business model that starts with developers and extends to some of the largest enterprises in the world. As we look into 2017, we will continue to invest in innovation and growth with the goal of powering the software-based future of communications."
Take-Two Interactive (NASDAQ:TTWO) posted net revenues that grew 15% and a narrower net loss in its fiscal third quarter, and the digital share of its net revenues grew to half.
This is the quarter where Take-Two has sworn off reporting cost of goods sold, gross profit, income from operations and net income and EPS on a non-GAAP basis.
Net revenues grew to $476.5M. Of those, digitally delivered net revenue was up 64% to $240.2M, paced by key contributors in Grand Theft Auto V and Grand Theft Auto Online, Sid Meier's Civilization VI, and NBA 2K17.
Of digitally delivered revenues, recurrent consumer transactions made up 39% (20% of total net revenue).
Total bookings were up 51% to $719M, vs. an expected $718M.
Segment revenues – Performance and Security Solutions $367M (+17% Y/Y), Cloud Security Solutions (component of Performance and Security Solutions) $102M (+41% Y/Y), Media Delivery Solutions $196M (-10% Y/Y), Service and Support Solutions $53M (+14% Y/Y)
Geographic revenues – U.S. $424M (+2% Y/Y), International $193M (+18% Y/Y)
Customer revenues by division – Media Division $301M (-1% Y/Y), Web Division $300M (+13% Y/Y), Enterprise and Carrier Division $15M (+26M Y/Y)
Akamai Technologies (NASDAQ:AKAM) CEO Dr. Tom Leighton: "We were very pleased with how well we ended 2016, with both revenue and earnings exceeding our expectations for the fourth quarter. Our strong results were driven by robust seasonal traffic, continued rapid growth of our Cloud Security Solutions and the success of our recently launched new products. As we look forward to 2017, we are very optimistic about the opportunities ahead of us and plan to continue investing in innovation and the expansion of our product portfolio."
BlackBerry (BBRY +1.9%) is opening up a new revenue stream with a new software development kit aimed at building various communications apps, including chat, video and voice.
The launch of the BBM Enterprise SDK puts the firm into competition with others offering these services: Twilio (TWLO -2.8%), Bandwidth and Nexmo (VG -1.1%).
The Communications Platform-as-a-Service offering will come via subscription and promises secure messaging (one-to-one and group chats), secure voice and video calling, secure file sharing/collaboration and real-time push notifications. BlackBerry's partner network will be able to more easily integrate real-time communications, it says.
The company intends to lean on its reputation for security as a differentiator, COO Marty Beard says. He declined to talk revenue details to Bloomberg but said it would "add to growth."
FactSet (NYSE:FDS) has logged a customer win as the Illinois Municipal Retirement Fund is going with it for its risk management system.
The fund's portfolio "requires a risk system that can provide multi-asset class, holdings-based investment risk analysis across the total plan, inclusive of private markets asset classes,” says IMRF Chief Investment Officer Dhvani Shah.
FactSet has more than 100 of the largest global asset owners as clients and its global plan sponsor base represents over $12T in collective AUM, the company says -- including large internally managed plan sponsors as well as externally managed ones like IMRF.
Allot Communications (NASDAQ:ALLT) has slid steadily today, now down 8.9%, despite a beat on top and bottom lines in Q4 earnings, in a retrenchment of 7% gains yesterday.
The company posted a non-GAAP operating profit of $1.8M for the quarter, narrowing the year's operating loss (non-GAAP) to $0.4M.
Book-to-bill ratio was below 1 for both Q4 and the full year.
Net cash and equivalents came to $113.7M as of Dec. 31, after positive operating cash flow of $4.2M.
The company's guiding to full-year revenues of $80M-$84M (with a stronger second half), vs. consensus for $82M, and a book-to-bill ratio above 1.
Motorola Solutions (MSI -5%), the subject of a bearish piece by Citron Research today, is pushing back in a statement denying assertions made by the firm.
Citron had argued that handset margins in the U.S. were outsized compared to Europe (83.6% gross margin vs. 9% in Europe), largely due to selling overpriced handsets into single-sourced government contracts. Margins would rebase sharply downward, it says, if Motorola were competing in an open platform.
The company says it's baseless to compare Europe with other locations since different countries' standards call for different technologies, and argues that its government contracts result from "robust competitive bidding processes," Bloomberg notes.
Having first launched in June 2016 with a select group of creators, YouTube (GOOG, GOOGL) is extending mobile live streaming to every creator with over 10K followers, and soon, to all users.
Furthermore launches Super Chat, a monetization feature for live streams enabling viewers to purchase highlighted messages within the chat feed and have them pinned for up to 5 hours to the top of the chat window.
The cryptocurrency had soared all the way to $1,100 in the first days of 2017 before quickly crashing back to about $750. That's turned out to be a V-shaped move though, as bitcoin today returned to $1,060.
Pick your excuse, but the tumble in bitcoin came about as Beijing promised to crack down on exchanges. Its rebound comes as instead, Chinese authorities reached a much more modest agreement, with exchanges instituting a 0.2% trading fee while boosting money laundering controls.
There's also the new administration in D.C., and the hope that the first bitcoin-focused ETF (Pending:COIN) will gain SEC approval as soon as March.
From $142, analyst Michael Walkley notes strong iPhone share among premium-tier worldwide smartphone market within Q4 and CY 2016, observing 92% of industry profits for Apple during the quarter (from 106% in Q3, attributed to improving profit at Samsung following recall of the Galaxy Note 7).
Further: "Given the Galaxy Note 7 issues and strong demand for iPhone 7 Plus models, we believe Apple will extend its leading market share of the premium-tier smartphone market installed base during 2017. We believe these trends enabled the iPhone installed base to exceed 570M exiting C2016 driving record December quarter services revenue. We also believe the impressive installed base should drive strong iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns. While we anticipate a stronger upgrade cycle in C2018 with the 10-year anniversary iPhone 8, our surveys indicate solid iPhone 7 demand that should bridge the gap until a new form factor iPhone is likely released in September. We anticipate steady iPhone 7 sales through the 1H/C’17."
Analyst Troy Jensen (Piper Jaffray): "We believe FN's positive results are another incremental data point that gives us additional confidence robust demand for 100G Telecom and Datacom optics will continue throughout 2017. As a result of management's superior execution and history of providing conservative guidance, we see the opportunity for estimates to go higher in FY17 and FY18." Target to $58 from $55 prior, remains Overweight.
Stifel analyst Patrick Newton raises target from $50 to $52 and maintains rating at Buy, noting expectation for strength in optical communications fundamentals to continue as well as a tailwind for OM% through FY 2018 (June) as utilization increases at Fabrinet West.
Elsewhere, Needham & Company analyst Alex Henderson reiterates Fabrinet at Strong Buy with a $56 target, considering shares to be "significantly undervalued" while noting trade at a 35%-55% discount to other CMS operations despite having greater growth, greater margins, $5 per share of cash on its balance and no debt.
America Movil (NYSE:AMX) is down another 2% so far today, making a decline of 5.7% since it posted its worst loss in 15 years last week.
But Barclays sees upside nonetheless, noting outsize currency effects and sticking with a $14 price target on NYSE-traded shares -- implying more than 16% upside in stock appreciation.
"A higher-than-expected mix of equipment sales in Mexico coupled with FX headwinds and rising interconnection costs impacted the company’s ability to translate better-than-expected top line metrics into improved profitability," writes analyst Amir Rozwadowski.
"The company continues to make incremental progress in delivering steady improvement in its Mexican wireless business," he adds. "Net adds (both prepaid and postpaid) were better than expected. ARPUs increased ~3% quarter on quarter following ~1% gains last quarter, and led to easing declines in the carrier’s regional wireless service revenues."
ViaSat (NASDAQ:VSAT) is making a move today, now up 2%, as Raymond James upgrades to Outperform ahead of earnings with some broadband-growth bullishness.
Consumers' appetite for high-speed Internet has the company poised for meaningful revenue growth, analyst Ric Prentiss says, and an upcoming launch of ViaSat 2 will provide some capacity relief.
Meanwhile, the company's at an attractive entry point after lackluster stock performance since a $437M equity raise in November (shares are down 5.6% in that time frame).
Prentiss has a price target of $72, implying 9% upside from current pricing.
U.S. solar industry (NYSEARCA:TAN) employment in 2016 grew at the fastest pace in at least seven years, creating one out of every 50 new jobs in the U.S. last year, according to a report from the Solar Foundation.
Companies including SunPower (NASDAQ:SPWR), Sunrun (NASDAQ:RUN) and Canadian Solar (NASDAQ:CSIQ) are hiring as they gear up for an expected 29% increase in installed capacity this year as costs continue to fall, making panels more cost-competitive with fossil fuels; other relevant tickers include FSLR, SCTY, TSL, YGE, JKS, JASO, VSLR.
Still, installation growth in the U.S. is slowing, as some utilities scale back after meeting state mandates; Bloomberg says PV installations in 2017 are expected to total 10.8 GW after surging 72% to 12.4 GW last year.
Nokia (NYSE:NOK) is up 2.4% after Morgan Stanley bumps its rating to Overweight, looking for what could be a turning point in 2017 and 28% upside to current prices.
Earnings are set to stabilize and cost cuts should finally start showing real results, says analyst Francois Meunier.
"As a result we believe investors will regain confidence in the earnings forecast after a very weak 2016 and could start focusing on 2018, with the Apple royalties eventually coming back," he writes.
"The shares trade on 8.2x EV/EBIT 2017, which we believe is low compared to the more normalized 10x we would use for valuation in the sector. On top of this, earnings are depressed because of Apple."
Motorola Solutions (NYSE:MSI) is taking a turn for the worse, down 3.9%, after short seller Citron Research points to a vulnerability in its reliance on overpriced government contracts.
Device sales make up 76.7% of Motorola's bottom line, Citron says, and that comes from selling pricey handsets into single-source contracts, "taking advantage of both tax payers and the first responder community."
Handset sales in the U.S. have an average 83.6% gross margin, vs. 9% in Europe, Citron notes.
Competition on an open platform is the company's "Kryptonite," it says. Citron thinks gross margins will re-based to mid-30s and head to single digits through either government scrutiny or technology evolution.
Twitter (TWTR +3%) intends to identify and restrict creation of new accounts for people permanently suspended from its platform, remove Tweets in search results deemed to contain sensitive content and those from blocked and muted accounts, and collapse "potentially abusive and low-quality replies so the most relevant conversations are brought forward."
Not the first update to this end, or likely the last, Twitter continues in search of ways to balance free expression with overall user experience.
As the FCC works to bring a lengthy broadcast incentive spectrum auction to a close, bidding is speeding up.
The auction's already met a number of conditions to close after the current stage, but bidding will continue until it goes silent in the 416 markets.
Late yesterday, bidders in round 37 of stage four raised the total to $19.41B. Today will mark the last day of four one-hour rounds, John Eggerton notes; tomorrow, the auction moves to six 40-minute rounds and the asking price for spectrum increases by 10%.
Through an arrangement formed in October 2016, Amazon has begun deploying Workday Human Capital Management [HCM].
The win follows a large deal Workday (WDAY +1.6%) struck with Wal-Mart Stores last month, indicating further strength among major prospective customers.
Funding comes from a syndicate led by affiliates of Clutterbuck Capital Management, a longtime shareholder in the company.
The move gives Straight Path more flexibility as it goes over strategic alternatives.
The new financing comes via a senior secured loan through which the lenders have gotten about 252,000 warrants with a $34.70 strike price. Shares are trading at $34 currently.
“Our obligations over the next 9 months to the FCC are covered, and we can now turn our focus to exploring strategic alternatives for the company in order to maximize shareholder value," says CEO Davidi Jonas.
Carl Bass to depart role of Autodesk president and CEO, remaining involved to assist in transition process as well as on the company's board of directors. A search, internal and external of Autodesk, for a new CEO has commenced, with an interim CEO office formed.
Autodesk further reiterates Q4 and FY 2017 forecasts, anticipating revenue, EPS and subscription additions to post at the high end of prior-issued ranges.
From Neutral, analyst Joel Fishbein notes that excluding any unfavorable macro environment shifts, Check Point Software Technologies (NASDAQ:CHKP) remains set to benefit from several market and company-specific catalysts.
Further: "Company specific drivers, including enterprise customers consolidating spend with fewer vendors, continued annuity blade penetration, and the mix toward higher-end products, are expanding the market opportunity and should help offset some competitive pressures. Moreover, as competition eases amidst ongoing vendor consolidation, recent investments (opex up double-digits over the past two years) should yield some leverage, yielding both a higher growth and increasingly profitable company."
Views rises in threats, data breaches and network security spending as generating 8%-10% rates of revenue growth.
