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BenzingaEditorial

E-Commerce Automotive Market Is the Next Big Thing and the U.S. Auto Parts Network Is The Player to Pay Attention on

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US Auto Parts

The global e-commerce automotive market is forecasted to grow with the highest CAGR from 2020 to 2029, according to a latest industry study by Market.us. And one of the market’s key players, U.S. Auto Parts Network, Inc. Common Stock (NASDAQ:PRTS) U.S. Auto Parts Network, Inc. is expected to report earnings for its third quarter that ended on September 30th on November 1 after the market closes. U.S. Auto Parts Network Inc that was established in 1995, together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories primarily in the United States and the Philippines. It offers a range of exterior and interior automotive parts and accessories to individual consumers through its large network of online marketplaces.

News that influenced the quarter

One of the largest online providers of aftermarket automotive parts and accessories has announced an appointment of Jim Barnes to its Board of Directors. Barnes is currently a CEO enVista, LLC, a supply chain and unified commerce consulting firm that he co-founded in 2002. Mr Barnes feels that the company is well equipped and positioned to grow its business by providing U.S. consumers with affordable auto parts. He seems as the perfect fit for the company to go forward and fuel that growth as the company has been facing a drop in its revenues. For this quarter’s earnings, analysts expect the company to deliver a year-over-year decline. When we look at the last four quarters, they only managed to beat analyst expectations once, with remainder being surprise-free. But even that’s better news than missing estimates. And many stocks can still lose ground even after exceeding estimates due to other qualitative factors influencing the investor’s sentiment. So let’s try to figure out what those catalysts might be.

Prior results

Through the first quarter, the company reported that 91% of its revenue comes from e-commerce and online marketplace with the remaining being offline or wholesale. When it comes to product portfolio, 57% of products are from the collision parts line, 31% of engine parts, and 11% is represented by performance and accessories. As for the latest annual filing, net sales were $289.5M with adjusted EBITDA $10.4M.

Previous quarter earnings

The specialty auto parts retailer reported ($0.04) earnings per share for the quarter, successfully meeting the Thomson Reuters’ estimate. U.S. Auto Parts Network did have a negative return on equity of 23.48% with a negative net margin of 3.21%. But the company had revenue of $73.69 million during the quarter with analyst estimates of $74.66 million.

Analyst expectations

The down-trending stock of U.S. Auto Parts Network, Inc. has declined 15.11% since October 25, 2018. It has underperformed S&P500 by 15.11%. But, it crossed above its 200-day moving average during trading on October 14th as the stock’s 200-day moving average of $1.21 was exceeded by shares trading as high as $1.55.
On average, analysts expect U.S. Auto Parts Network, Inc. to report $-0.03 EPS on November, 1 with $0 EPS for the current as well as the following fiscal year. Some anticipate $0.04 EPS change or 400.00% from last quarter’s $0.01 EPS. After having $-0.04 EPS previously, U.S. Auto Parts Network, Inc.’s analysts see -25.00% EPS growth. The stock decreased 1.24% or $0.02 during the last trading session, reaching $1.59.
There’s the ‘surprise’ potential which underlines the whole industry
Back on August 17th, after its prior quarter earnings were released, Zacks Investment Research upgraded their shares from a “hold” to a “buy” rating, by setting a $1.25 price target. So together with the unexpected growth of the e-commerce auto-parts industry, this industry peer is able to pull out a few surprises. One week ago, Lamp News reported that institutional sentiment increased to 0.86 in Q2 2019. Its ratio improved by 0.65 as it was 0.21 in the first quarter of 2019 fiscal year.

Competitors

One of its main competitors, Autozone Inc (NYSE:AZO) rose 2.77% on October 24 post its earnings report. What’s more impressive that its up-trending stock has risen 60.79% since October 27, 2018. But focusing more on e-commerce and speaking of the giant itself, Amazon (NASDAQ:AMZN) was just heavily beaten by Microsoft in getting the US$10 bn cloud deal so its throne is surely shaken up.
A giant of another kind, the Chinese Alibaba group (NYSE:BABA) is now a strong buy as its earnings report is on the horizon. But, the US-China trade dispute continues to loom over the stock. Although its fate might not be entirely tied to this scenario but we have to wait for October 31 to see if they can manage to beat estimates like they did last quarter. Yet, if shares fall short of estimates, there could be a significant material decline that would be a clear indicator that the trade war is influencing the business. We still have to wait to see the impact of the weakening economy and intensifying trade disputes, but one thing is clear: U.S. Auto Parts Network operates in a highly competitive environment.

Outlook

Even Amazon made losses several years after its listing, but all those who bought and held the shares from the company’s beginnings ended up making a fortune. And this is the reason why investors are often drawn to ‘seemingly’ unprofitable companies. The main concern for U.S. Auto Parts Network is the possible cash burn scenario which would bring the company to a distressful position. So the question that analysts want answered is can this company afford to keep investing in its growth? But, on the bright side, the company was debt free in June this year with its balance sheet showing US$890k in cash. Its balance of cash reserves and cash burns did alter significantly through the years but the company did have a positive cash flow last year. Unfortunately, its revenues are down sliding this year as they declined 5.1%. The good news is that it would be easy for the company to fund a year of growth by either taking out a loan or issuing new shares. So, if they can work on their offerings to enhance their sales, there are many reassuring factors to support its way forward- hopefully to growth.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

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BenzingaEditorial

Are spaceflights just around the corner?

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Space Flights Stock Market

Virgin Galactic Holdings, Inc. (NYSE: SPCE), an aerospace company, pioneering in private space flights and manufacturing of advanced air and space vehicles, announced the Q4 and end of year results. Company’s key goal is to open access to space, so it is safe and affordable. Q4 brought the company closer to that goal by finalizing the transaction with Social Capital Hedosophia and becoming publicly listed on the NYSE. All of that affected further operational readiness of the Spaceport America in New Mexico, which is used by tenants like Virgin Galactic, TMD Defense and Space, White Sands Research and Developers and SpinLaunch.

White Sands Research and Developers LLC is based in Las Cruces, and it offers engineering and aerospace services like software development, flight modeling, systems engineering and suborbital launch services. TMD Defense and Space is based in El Paso and they plan to test ballistic missiles in Spaceport. SpinLaunch is a company aiming to move payloads to space with a spaceflight mass accelerator technology.

Tickets for space

Virgin Galactic, bringing Virgin branded customer experience, wants its customers to have a unique experience, lasting more than one day. Not all that time will be spent in space, but the spaceflight should provide real space adventure, views of the Earth and several minutes without gravity. All of this attracted just below 8.000 registrations of interest in flight reservations. This successful increase of interest registrations came after spending the last couple of years upgrading the spacecraft, which has now successfully flown two test flights to space, carrying five people in total (on both flights together).

These registrations of interest in flight reservations cost $1.000,00, and it represents refundable deposit securing a privileged position for future ticket purchase. Previous tickets were sold for $250.000, but we can expect that the company will increase the price, once they restart with ticket selling.

Q4 and 2019 results

When looking at these results, we should have in mind that the company spent several years in development, updating and upgrading its spaceship, with no ticket sales. Q4 revenues were $529,000, summing up to almost $3.8 million for the whole of 2019. That is an increase from 2018 revenues of $2.8 million but 2019 being its first full year of results. Taking into consideration huge research and development expenses, as well as similar SG&A, it is not a big surprise that the company showed a net loss of $73 million in Q4 or $210.9 million for the whole 2019 as it aims to be profitable by 2021. On the other hand, the company finished the year with cash and cash equivalents of $480 million as of December 31, 2019.

Outlook indicators

Virgin Galactic stocks rocketed in 2020. Investors seem to prefer riskier, more imaginative business endeavors. Similar goes for Tesla Inc (NASDAQ: TSLA) as Elon Musk’s SpaceX and even Boeing Co (NYSE:BA) who have their sights set even higher: that being  the moon and eventually Mars. Space travel somehow goes with futuristic electric cars, preferably even with autopilots. But in the meaning, current tech giants’ stocks like Google (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN) with Bezos’ billionaire-backed venture Blue Origin are a trailing a bit, almost seeming as they are not interesting enough. But space flights do seem just to be around the corner.

Here are some interesting details which may give us a better idea  about when we can expect those spaceflights. Virgin Galactic started with the construction of astronaut training and flight preparation area by building the third floor at Spaceport America. The company also moved an additional 70 Virgin Galactic operations personnel from Mojave, CA to Spaceport America, bringing the total number of staff to 145. It also announced the $20 million investment by Boeing’s HorizonX Ventures, forming a strategic partnership. Future astronaut spacesuits will be made in cooperation with Under Armour (NYSE: UA), the company which also agreed to host the recently launched Astronaut Readiness program. All that activity cannot be without any reason. Hopefully, we will see how travel space looks like soon and maybe even gain an the International Space Station – and now that will even go beyond Harry Potter’s 9 and ¾ platform – no offence to J.K. Rowling intended!

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure .

IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Monday and Tuesday’s Market Tumble – Who Is Affected

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Stock Market Tumble

The market is suffering from earthquakes as companies continue to warn about the impact of the COVID-19 virus. Tech juggernaut Apple (NASDAQ:AAPL) was among the first who has already warned of a shortage of iPhones but other US companies are also starting to break a sweat. If the impact is as serious as some investors suspect, it could derail the longest economic expansion in US’s history. That means there are political implications too. Even for US President Donald Trump has made a roaring economy a central part of his re-election bid and such wobbles could make his case for another four years more challenging. Travel companies around the world also continued to suffer. In the UK, among the FTSE 100 the greatest drop was suffered by EasyJet (OTC:ESYJY) , which sank 16.7%, while British Airways owner International Consolidated Airlines Group, S.A. (OTC:ICAGY) was down by more than 9%.

Latest effects on other stocks and markets

Which stocks and markets will suffer the most from the outbreak will depend on several factors, like where the virus will spread, the number of affected people, market position and what market mostly relies on the infected area, etc. Some markets may fight for a while, but eventually, they are bound to feel the impact. This means that the entire U.S. stock market could be exposed. The last few days have been full of heavy selling at a quick pace, and the market felt down for four days straight.  The S&P 500 index fell for approximately 3%, the Dow Jones Industrial Average for 3.15%, as well as NASDAQ composite for 2.8%. Some of the best ETFs also suffered some decreases. The iShares Expanded Tech-Software Sector ETF (IGV) dropped 2.8%, while the Innovator IBD 50 ETF (NYSE:FFTY) slipped 3%. The VanEck Vectors Semiconductor ETF (NYSE:SMH) had a similar result and lost 2.9%. These several days of heavy selling really placed the market under pressure on Monday and Tuesday, but after that tumble for several days, the indexes and indicators started coming back to normal and higher values.

Tesla Inc

Tesla Inc. (NASDAQ:TSLA) stock has been in a negative trend since the week began, and it  fell more than 7% on Monday, mainly due to fears of the spread of the pandemia and its effect on the world economy. Having in mind that one of three Tesla’s Gigafactories is in Shanghai, the virus outbreak might be a significant slowdown and temporary barrier for Tesla’s plans. Having in mind that the company is quite dependent on its China factory, while the competition has a little better diversification of its assets, Tesla might be more concerned than other auto manufacturers. This comes at a not-so-great time as Tesla has been working on meeting all the requirements to add its stocks to S&P 500 index in order to push its stock further.

Bob Chapek steps in as Disney’s new CEO

Prematurely stepping down of Disney’s (NYSE:DIS) long-serving CEO Bob Iger pushed Disney’s stocks to its lowest values since April 2019. First, the stock fell during Monday’s tumble for 4.3% and continued to decrease on Tuesday for 3.6%. Bob Chapek, who has led Disney Parks, Experiences and Products since 2018, will take over as CEO. The initial plan was that Iger resigns in 2021. But he will stay with the company, directing future “creative endeavors”.

Salesforce co-CEO also steps down

Keith Block, Salesforce’s (NYSE:CRM) co-CEO since 2018, announced he is stepping down, leaving the company founder Marc Benioff as the single CEO. This all came after several straight days of stock decrease. Maybe this was a surprise for some, since many saw Block as next in line as Salesforce’s sole CEO if Benioff decided to withdraw. The announcement also stated that Block will remain close to the company on advising position.

Outlook

The Fed sees the Coronavirus as the threat to global growth. Moreover, some analysts find it could burst some bubbles, as in the case of Tesla. Investors have been trying to make sense of what the coronavirus means for businesses since January, but many fear that the market has underestimated its impact and that we’re in for a severe correction.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure.

IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Technology Lesson for the New Era – Can You Do It Twice?

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Microsoft News

Whether we like it or not, the big tech firms have shaped our everyday lives and continue to influence them. But recent times have also brought increased legislation as lawmakers do their best to limit the power and influence of these companies. It remains to be seen whether they will succeed as there is an abundant range of both and the good that technology has brought into our existence. But what is interesting is that this constantly-changing landscape has one consistent theme. And that is companies that dominate one paradigm shift rarely dominate the next, even if they see them coming. It’s almost like saying that invention comes only once? Then again, there are some giants who might even manage to break this pattern.

The kingdom of PCs and Clouds and Mobiles

IBM (NYSE:IBM) saw PCs coming yet it outsourced the most valuable aspect of the technology to Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC). Microsoft and Intel in turn dominated PCs, yet they did not manage to do the same with the mobile market. And they saw it coming way before Apple (NASDAQ: AAPL) even introduced the iPhone – so well done to Steve Jobs. Apple has made us go crazy over the iPhone indeed but it has been relatively unsuccessful in the cloud sector compared to its competitors.

Can you see a pattern? Or not!

Focusing further on Microsoft and Apple as examples: Microsoft dominated PCs, missed in mobile, but retooled and is now a giant in cloud services. A giant so big that it has beaten Amazon (NASDAQ:AMZN)  in winning the Pentagon’s JEDI contract. Although Amazon is still determined in not letting happen and the judge stopped the contract from realisation until the lawsuit is resolved, the potential of Microsoft, the reason for which it was chosen, is undebatable.

Apple was a leader in very early PCs only to lose that battle to Microsoft and Intel, so it was able to retool its entire business to focus on mobile. But that ultimately made it difficult to build a big cloud business, even though Apple was early in offering cloud services to consumers. And now? Apple is repositioning  itself on being a service company. No need to feel sorry for Apple as it recently reported its record first quarter results. Will Apple TV Plus manage to eclipse the emperor Netflix (NASDAQ:NFLX) who also surpassed expectations for its latest quarter, along with intense competition from Disney (NYSE:DIS) and others is an entirely different question! And all bets are in!

The takeaway

These companies were built with an idea to disrupt the status quo but the truth is that they are back at square one when the next shift begins. And the pace is only getting quicker.  In the end, they also find themselves asking the same questions as the companies they disrupted before- why change everything about your disrupt your highly profitable core? That core business is afterall, one’s ‘baby’. So to make it less painful, it seems the best thing to do is shift the direction immediately after it’s become apparent you’ve lost just one round and leapfrog to a new one that you can build a business around. Baby steps are key, even for giants as this can only make them flexible enough to follow through change.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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