What a disappointing miss by Amazon's earnings along with low operating income guidance! AMZN stock had a massive run since beginning of 2015. A stock that doubled within a year is nothing short of spectacular. However, analysts and investors had expectations that this giant online retailer could not deliver this quarter.
When a company posts smashing numbers quarter over quarter, year over year; one would think moon is the limit but it finally posted unlike-able results. However, over the years, company's operating expenses have risen at a tremendous rate, even faster than revenue or gross margin growth. Their international business segment reported loss of $541 million which is more than twice in the year ago time frame. Another culprit was the tax rate at 46.6% which was highest for any quarter.
Technically speaking, price dropped significantly that it created a professional gap (these types of gaps are hard to fill). A smart investor/trader should know that the game of supply and demand is controlled by big institutions. If they decide to hit the sell button, they can change the polarity of the trend with a blink of an eye.
I believe investors need to look at this company using fundamental and technical analysis to completely understand why they should or shouldn't invest in this company for longer term. First of all, its clear that growth is substantial for Tesla. With growth, comes expenses such as buying parts and partnering up with other crucial companies. Needless to say, Tesla has proving the increase in revenue, deliveries, and vehicle production. So fundamentally, this company is solid; infact it reminds more like when Apple emerged but it took a while for the stock to rise. Now, lets talk about technical point of view which many need to understand the basics of supply and demand. Chart analysis is clearly showing that price has been sideways since 2014 and one can easily conclude that there is not demand for the stock to rise (remember I am talking about technical picture not fundamental). Once the price, breaks out of 180-270 range; we will see a trend being developed. Now if fundamentals keep showing strong numbers, one can safely predict that the stock will turn bullish. Hopefully, you register for the model 3 because I wouldn't want to miss out on the federal rebate of upto $7500.
Apple slightly missed analysts expectations, however reported incredible 24% revenue increase from Apple Pay, Apple Music and other services. Subscriptions to Apple music have been climbing since its June 2015 debut. Apple expects to have more than 100 HomeKit-certified accessories available by year end. The numbers shows that Apple watch revenue is not making much of a dent and contributed to stock decline after hours. I think public is really thinking if it's really worth spending $369 for Apple watch? Despite the stock being down, the overall health of this company looks solid.
Google parent Alphabet Inc. the world leader in search technology reported numbers that were stronger than expected mainly due to strong Ad demand. Advertising revenues jumped 19% to $19.14 billion. Alphabet's other income resources like Nest, Verily, and Fiber still have to prove that they are generating enough cash flow. Most might not know but Android and YouTube are owned by Google.
As a chartist analysis perspective wise, stock is at a multi month resistance level that has been tested numerous times. Once its able to closes and stay above for couple of weeks, the possibility of new highs and continue to climb higher is much likely.
Another killer quarter by world's largest online merchant and also a fifth straight profitable quarter. It was mainly the results of global web sales and cloud services (the company's fastest-growing business) which outpaced street's expectations. Amazon's prime customers enjoy the ability to stream video like Netflix which in turn also enables them to spend more money on Amazon. Amazon's work force expanded by 47 percent in the second quarter year-over-year, including part-time employees. Technically speaking, AMZN been on a very healthy uptrend and above all key moving averages that technical traders likes to see for further acceleration.
Despite the fall of iPhone sales, the stock is up 6.5% and continue to impress investors by raising its outlook for current quarter. Apple sold 40.4 million iPhones during the quarter, down from 47.5 million a year ago. The company is definitely feeling pressure from its direct competitor, Samsung and their new Galaxy S7 smart phone. However, the company is making more growth investments in China and India to gain bigger piece of consumer base in both countries. Technically speaking, the stock is currently trading above 200 SMA which could bring in more institutional buyers.
Twitter posts weak revenue and disappointed with its outlook for 3rd quarter earnings as it continues to struggle with advertising aspect of business. User growth has also slowed which is only 1% higher than it had at the end of the first quarter. The company needs to monetize their content like its competitor, Facebook. However, the company will be starting to launch ads up to 30 seconds long into $10 billion dollars growth market. Technically speaking, stock is down 13% and testing 50 SMA which could act as support.
The online professional network reported top line results with revenue of $860.7 million for the first quarter but only lived a short rally to upside and a drop there after. Growth in LinkedIn’s marketing business increased from 20% to 29% year-over-year but growth in the company’s core hiring business slipped 5% to 27%. Overall, this company is seeing some growth in long term so investors might have to be patient before they see the stock moves up. From technical point of view, Stock is in major downtrend but in monthly timeframe chart. Its sitting at a support area which could bring more long term investors to park their money in. LNKD is included in 48 funds.
Amazon delivered its best quarter ever as the company benefited from surging growth in its lucrative cloud-computing business. Revenue growth accelerated in every factor versus the same period a year ago. Segments like prime video expansion, expansion of logistics operations in China, Amazon home services, Amazon education, and alcohol delivery ensures that this company will become every household to go service. As a chartist point of view, AMZN is more likely to be trading above all key SMA's and any pullback to decent support area can be looked as a buying opportunity.
Once again Facebook results blow past the estimates and that's 12 straight quarters of beating the street. Shares rose 9% post earnings announcement. Facebook continue to attract advertisers, specially mobile advertising which was up 80% from fourth quarter. This social media platform has 1.65 billion monthly active users, which is almost half of all internet users around the world. Another important factor, investors should be aware of is, three-for-one stock split to create a new class of non-voting shares. Technically speaking, FB is trading above all key moving SMA's which makes this stock bullish. Facebook is the only tech industry that didn't disappoint the street unlike Google, Microsoft, Apple and Twitter.
Twitter shares sharply lower after company missing first-quarter revenue expectations and provided a downbeat outlook. However, the company reported 310 million monthly active users for the first quarter, which was a 3% year-over-year increase, and compares to 305 million in the previous quarter. Twitter yet remains unprofitable and has long ways to prove itself to the global market. Technically speaking, stock is under major short interest and if squeeze happens, it could push the stock up higher. TWTR all time low is 13.91 and if it breaks that, it could see further downside.
LinkedIn's earnings and guidance sends stock crashing more than 35%. The professional online network company was hurt by increased spending to 217 million from 153 million to develop products.
LinkedIn hired 1300 more new people around the world and poured more dollars into research and development last year. They recently unveiled a cleaner, faster version of its mobile app to drive more user engagement, ultimately attracting more advertisers and paying subscribers. LinkedIn hit 414 million members in the fourth quarter. I think the market over exhausted the move to the downside. This company remains solid and obviously growing and adding new jobs and developments. Technically speaking, the stock is coming to a decent area to buy back.
Yahoo reported revenues of $1.2 billion, a flat performance with earnings of 13 cents. Yahoo earned 30 cents a share in the same period a year ago. The internet giant is losing momentum fundamentally and technically as well. Due to the intense competition from Facebook and Google, CEO Marrisa Mayer said it would cut about 15% of its workforce and close offices in five locations across the world. Looks like, Yahoo wants to fix things at the business and cut costs by $400 million a year. It anticipates having about 9,000 employees and fewer than 1,000 contractors, a workforce that is roughly 42% smaller than it was in 2012. Yahoo is also separating its Alibaba stake from its operating business so it can shift most of the resources in its search business. The stock is down more than 32% from a year ago.
Microsoft tops expectations, reported better-than-expected adjusted earnings and revenue for its latest quarter. The cloud business continued to grow including its Azure cloud computing platform, growing 5 percent to $6.3 billion. Microsoft Surface revenue was up 29% during the quarter. Surface business generated $1.35 billion in revenue in the last quarter and that is huge on its own. In fact, Apple and Google are following Microsoft's footsteps and releasing Surface like tablets. Microsoft is still struggling in the phone business though as they shifting its focus to smaller number of flagship devices. Overall gaming revenue increased 5 percent, to more than $4 billion. The company’s sales of video games were up 47 percent due to Minecraft and the launch of Halo 5.
According to the newer developments, Microsoft is poised for growth. One can say, Microsoft is back !
LinkedIn, the largest professional social network gave a delightful surprise to wall street that beat expectations, sending stock up more than 10%. The company would've made 78 cents per share if they didn't factor in employee stock compensation. Premium subscriptions rose to 21% and sales from hiring rose 34%. But what's more important and one of the key factors that an ideal investors looks for is guidance. In that case, LNKD raised full year guidance. Technically speaking, the stock is now trading above all key moving sma's.
No doubt Amazon services are being used in every household but why is the stock down so much despite their cash flow increase, net sales increase. Look at the technical side of it. Weekly/Daily chart has shows weakness. The technical term is lower highs and lower lows. I posted this chart for my clients and gave some entry points. I'll briefly discuss in here as well. Around 279-291 is crucial point to add this into your portfolio bucket. Another point to look for a bounce is around 302-309. Remember always look for beat up stocks but with great fundamentals, AMZN is just that.
Facebook is growing no doubt so as the stock and reached all time high on day of its earnings, However, notice how stock has been dropping ever since then. Also note Facebook is filling the gap around 71 area. For swing traders there is an opportunity to add around 68-70 area, next support is around 66. Remember, buy at wholesale and sell at retail. Always buy on pullbacks. Set alerts and increase your profit potential by lowering risk. Long term investors also note, its big positive if price stays above 200 SMA in daily chart.
Technically, TWTR gapped up on the earnings and made a high of 48.00 and continued to sell off. Lot of profit taking is going on. Possible bounce could be anticipated around 42-43 area. Since the gap was created by big institutions, smart investors also keep an eye at them. TWTR if falls can fill the gap around 39 which will provide great opportunity for long term positions. TWTR uptrend has started so add on pullbacks. Always use protective stop losses.
16% increase in content obligations in the last quarter, 37% year over year. Membership growth may be slowing down, but costs keep piling up.
Netflix increasing the prices on their plans probably contributed to fewer members signing up. Competition by $1 rental kiosks is increasing as well.