Tag Archives: Amazon

Alibaba with a massive Monster revenue growth of nearly 50% in 2017

Alibaba went public in 2014. The company is one of the world`s biggest with a market cap of 308,96 billion dollars. Its businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives.

Alibaba will go straight up from start today. Reason? The company is forecasting massive Monster revenue growth of nearly 50 percent in 2017. The target implies sales of up to $34,5 billion dollars, and this is the biggest underlying rise so far since its IPO in 2014.

 

 

The stock has gone straight up since its IPO in 2014 and the company is near its all-time high. Some investors are bullish but others are sceptical and warns of odd accounting and an opaque corporate structure.

Investors are divided in ways only stocks with strong charts and a shaky fundamentals tend to do.

To put the company in perspective, Amazones market cap is $478,81 billion. Amazons founder Jeff Bezos knew that the key to success in the market in electronic commerce was not to focus only on a bookstore.

Alibaba is more than a retailer. It also has Taobao, Tmall.com and Alipay to name a few. Over the past few years, it owns established businesses across commerce, cloud computing and media. So, the business model is very similar to Amazon.

Alibaba is the largest e-commerce player and cloud-computing provider in China. An exceptionally strong media empire that is underestimated with a strong growth outlook. Tmall TV is expanding. So are UCWeb, YouKu Tudou, Alibaba Music and Alisports.com in the category Media Entertainment.

Dimensional Fund Advisors LP purchased a new stake in shares of Alibaba Group Holding during the fourth quarter worth about $171,085,000. 35,17 percent of the stock is currently owned by hedge funds and other institutional investors.

Alibaba`s share price is $125,64 before the opening on Thursday. Goldman Sachs Group Inc reissued a «conviction-buy» rating and set a $135,00 price target on shares of Alibaba in a report on Friday, March 17th.

Watch out for Alibaba from start on Thursday. It will skyrocket.

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Wal-Mart spend a lot of money on e-commerce

More retailers are on the way with their Q2 reports, and this time I will take a closer look at Wal-Mart Stores Inc. The stock peaked at an all-time high early last year, but slid. Now, the stock is on the way up again. To the top.

Wal-Mart Stores are changing and that`s fast. They are on the way to change to an e-commerce business from the traditional retail business. The firm has invested a lot of money in improving back and front-ends of the e-commerce business.

 

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A couple of weeks ago, Wal-Mart acquired online retailer jet.com, for $3 billion. The company can feel the pressure from its biggest competitor Amazon, and their acquisition of jet.com will strengthen their e-commerce business.

Wal-Mart also sold its Chinese e-commerce business, Yihaodian. Everything was sold to the Chinese online retailer JD.com. All this is done to stay more focused on the international e-commerce presence.

CEO Doug McMillon said: «E-commerce growth here is too slow. The U.S number is better than the global number, but neither is as high as wed like. We can see progress against several of the necessary capabilities we need to win in e-commerce, but were still working on a few others. We need them all to come together to see stronger growth.»

The company has increased its labor costs in addition to a stronger dollar, and that in turn has given them a negative YoY profit growth for the last 5 consecutive quarters. Stiff competition from Amazon has also turned Wal-Mart`s revenue negative in the last two quarters of fiscal 2016.

Store sales have come in positive for the last 7 quarters, despite the downturn on the top and bottom-line. The world`s largest retailer with its market cap of $225,42 billion, is guiding for US same store sales growth in the range of 1% – 3%, and Wal-Mart come out with a report on Thursday.

The Estimize consensus is looking for earnings per share of $1,04 on $120,39 billion in revenue. Compared to a year earlier this reflects a 4% decrease in earnings and flat sales.

Earnings estimates have increased 3% since the last quarterly report, with sales estimates unchanged.

Wal-Mart Stores Inc will report on 18th August, before the markets open.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Amazon are fighting with Netflix and YouTube

Amazon continue to rise up and the average 12-month price target is about $750, which means the company has the potential to jump another 20%. Not a surprise for bullish investors were about 90% is bullish on that stock.

The e-commerce giant will post first quarter earnings on Thursday 28 April after market close, and it`s expected to post EPS of $0,64 on $28 billion in revenue which is three cents higher than Wall Street on the bottom line and around $60 million higher on top.

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Since the start of the quarter, estimates have fallen 6% for EPS but increased 2% for revenue. Despite the decline estimates, profits are anticipated to increase and so are revenue. Amazon have been posting losses, ut is coming off three straight quarters of profitability.

Amazon Prime and the dominance of Amazon Web Services (AWS) is expected to carry the retailer this year. They have doubled it membership in Amazon Prime for the past two years, and that is up 54 million, and almost half of all adults in the U.S have Prime subscriptions.

AWS is the leading in the cloud infrastructure industry, representing about 30% of the market, and large enterprises such as Netflix have migrated to AWS to be its platform provider which validates their credibility and reliability.

A study showed that Amazon had a better catalogue of Prime Video movies on TV shows compared to Netflix. According to Barclays, Netflix`s overall catalog has experienced a slide of up to 28% over the past year.

Mark Fahey revealed that Amazon offered a better deal in terms of amount and quality of video streaming compare to Netflix. Additionally, it had more titles with high ratings from users, and quality is of more importance than quantity.

Having a platform with a great library is not enough while quality that is offering constantly refreshed content will be vital in the future. it`s a shift from licensing non-exclusive content to original series and movies that one can get anywhere else.

Netflix has a budget of $5 billion on content in 2016 and that number will rise to about $6 billion in 2017. That doesn`t mean the entertainment value will increase. While Amazon and Netflix are fighting we can see a third player in this game, and that is YouTube with its amazing content.

Amazon has expanded its web services in five new regions this year, including China, India, and the U.K. Heavy investments in global expansion on top of Google and Microsofts ascension in cloud computing will put pressure on Amazons margins.

Expected growth in cloud computing and IoT should make a great outlook for Amazon as they continue to expand their web services.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Google will deliver milk to your door

Google are expanding and  have a new strategy to make a huge impact into customers daily life. They want to deliver milk on your door. Yes, milk and other perishable goods like meat, tomatoes, bread and eggs, and the first delivery starts next Wednesday.

Google have become the worlds most valuable company, and earn money on ads, internet-connected thermostats and high-speed service. They have the worlds best search engine and almost everybody in the world can use the site, but what about the grocery delivery?

That`s not so easy as a search engine and of course it will be impossible to deliver to the whole world, so they will start in Los Angeles and parts of San Francisco. This delivery service is part of Google Express, which partners with retailers in some U.S cities.

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We know that Wal-Mart will expand their e-commerce business and Amazon Fresh is already in the same business and have taken a great stake in the market. Other competitors are Fresh Direct, Safeway and Instacart Express, but this business is complicated and not so easy.

Many of the companies are struggling to earn money because the margins are too small with about 2% on grocery sales. In addition to low profit margin you have high delivery costs and sometimes more expensive food.

Google said they will take advantage of holding inventory in costly warehouses and keep the cost down by making deliveries from there. Amazon deliver from their own. Online grocery shopping is a $11 billion business with 9,6% annual expected growth, but the margins are low.

Annual membership for Google Express will cost $95 and fresh-food deliveries will cost $2,99 per order. Non-Express members will pay $4,99 an order.  They also have bold goal which is to deliver within two hours.

Google will collaborate with Costco Wholesale Corp, Whole Foods Market and Smart & Final Stores in San Francisco. Furthermore, they will deliver from Smart & Final, Costco and upscale grocer Vincente Foods in Los Angeles.

A good friend of mine started a similar project 18 years ago. He is innovative and smart, but the concept was short-lived and he lost millions. It`s not because the concept was bad, but I think he was way to early in the market.

The same happened with Webvan Group. They went bankruptcy in 2001 and lost nearly one billion. Timing is important, so Google are launching Google Express in right time I think. So is it with my friend. He started with the same project last year.

Google Express has been around for a while, and this is a coming competitor to Amazon. You can order from many stores on Google Express, like Staples, Toys R Us, Target and Barnes & Noble to name a few. They deliver in Manhattan, Chicago, San Jose, Boston and Washington DC.

Google Express is a pilot project and if it works in Los Angeles and San Francisco, they will expand to other cities near you.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Wal-Mart have huge challenges

Wal-Mart is an interesting case. While the stock market have plummeted, Wal-Mart have been strong so far in 2016. Up over 8%. Wal-Mart announces earnings on Thursday and what can we expect from a retailer with so many challenges in the market right now?

Estimize calls for EPS of $1,45, which is one penny lower than Wall Street. Revenue expectations of $130,513B are greater than the Street`s consensus of $130,461B. Revenue estimates have fallen by almost $1B in the last 3 months.

This quarter it is expected to post a 10% decline in EPS YoY, with revenue estimated to fall 1%. Declining expectations have to do with guidance Wal-Mart gave in October, lowering FY 2015 guidance and claiming YoY sales growth would be flat due to wage hikes and FX headwinds. WMT

Wal-Mart have 11,600 stores and know that the market have changed to a more difficult retail climate. Wal-Mart said in January that it will close 269 stores worldwide, but it also said that in the next year it plans to open about 140 new stores nationwide.

In the U.S, Wal-Mart will also shut down all 102 Wal-Mart Express locations, which is a pilot program that started five years ago. It will close 23 Neighborhood Market locations, 12 Wal-Mart supercenters, 7 stores in Puerto Rico, 6 discount centers and 4 Sam`s Clubs.

Many claims that Wal-Mart have strong competitions from Amazon, and Wal-Mart said it will focus more on e-commerce and expanding pick-up services for customers. The retailer will open 50-60 new Supercenters, 85-95 new Neighborhood Markets and 7 to 10 new Sam`s Clubs across the U.S in fiscal 2017.

The retailer was a leader in grocery sales from mid-1990s to 2000s. Grocery still makes up about 55% of its revenue.

Wal-Mart`s ”click and collect” concept, where customers can order online and then get their merchandise at the store, give the workers more fear that this could be the beginning of more cuts in the future.

A big surprise for many was Wal-Mart`s announcement to raise base wages for its U.S workers. Wal-Mart is a cost-conscious retailer and it raised hourly wages to a minimum of $9 last April, and is set to bump them up to $10 this February.

The federal government has not raised the minimum wage since 2009 when  it lifted it from $2,15 per hour to $7,25 per hour.  Some cities are planning to raise wages to $15 per hour.

Wal-Mart is not the only one to close its stores. Sears Holding Corp will close a number of Kmart stores, while Macy`s will close 40 and cut 4,800 jobs. E-commerce and an improved superstore experience are growth drivers for Wal-Mart, but wages can be a challenge in the future.

Amazon are more efficient and generate $650,000 in revenue per employee. To compare, Wal-Mart generate $220,000 and this is a disadvantage for Wal-Mart with 2,2 million employees vs Amazon`s 154,000.

The average employee at Costco makes $21 per hour, so Wal-Mart have a lot of challenges now.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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