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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.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com
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BenzingaEditorial

This Week’s Earnings Repertoire

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During the previous shortened week, COVID-19 outbreaks grew while vaccine developments provided a glimpse of hope of finally putting an end to COVID-19. This week, Zoom Video Communications, Inc. (NASDAQ: ZM), CrowdStrike Holdings, Inc. (NASDAQ: CRWD), DocuSign Inc (NASDAQ: DOCU), salesforce.com, inc. (NYSE: CRM), Five Below (NASDAQ:FIVE), and Kroger (NYSE:KR) are set to deliver their earnings reports.

Zoom

The question on everyone’s mind is can Zoom maintain its growth momentum? On Monday afternoon, Wall Street expects Zoom to report earnings of 76 cents per share on revenue of $693.95 million. Just one year ago, Zoom delivered earnings of 9 cents per share on revenue of $166.59 million. The economy might have plunged during the coronavirus pandemic, but Zoom stock skyrocketed as its cloud-based video collaboration platform became the textbook definition of the work and study-at-home lifestyle. However, its stock fell 15% with positive coronavirus vaccine developments so investors will be watching churn rates to see the percentage of users who are cancelling their subscriptions.

Crowd Funding

Software stocks altogether have gone on a massive rally March and cybersecurity stocks were among the biggest winners as companies needed additional security for their home-office setting. CrowdStrike surged as much as 202% year to date, with 93% and 13% gains over six months and last thirty days, respectively. But CrowdStrike also needs to show it can maintain its strong growth when corporations decide to return to an office setting.

Wall Street expects CrowdStrike to breakeven on revenue of $212.60 million. Exactly one year ago, it lost 7 cents per share while generating revenue of $125.12 million.

DocuSign

After close on Thursday, Wall Street expects the digital signature company to earn 13 cents per share on revenue of $361.15 million. One year ago, it earned 11 cents per share on revenue of $249.50 million. By providing individuals and businesses the ability to digitize an agreement process, it greatly benefited from remote work and social distancing. Its stock skyrocketed 80% during the past six months with almost 210% year to date, whereas the S&P rose only 12% during the same timeframe. But its valuation is being questioned with the upcoming vaccine. DocuSign needs to show it diversify its offerings, such as its contract lifecycle management platform.

Salesforce

Wall Street expects Salesforce to earn 75 cents per share on revenue of $5.25 billion. This figure equals earnings during the same quarter last year, whereas revenue amounted to $4.51 billion.

The company’s SaaS business model and its customer relationship management services have become a must have for developing companies. But after Dow Jones report that the cloud giant is in advanced talks to acquire Slack (NYSE: WORK) at an undisclosed amount, the stock retracted. With its negotiating and collaborating features Slack would immediately position Salesforce to challenge Microsoft’s (NASDAQ: MSFT) enterprise dominance it owes to Office365. But with Slack now valued at $22 billion,  it would Salesforce’s largest acquisition and based on how the market received the news, investors seem concerned.

Five Below

The youth-focused retailer has been one of the rare specialty retailers to outperform the COVID-19 storm that left many retailers fighting for mere existence. While temporary store closures did hurt its sales during fiscal first quarter, the retailer managed to bounce back to growth in its fiscal second quarter, with sales inching higher by 2%. But Five Below needs to show gains in both store expansion and sales growth to support management’s ambitious plans to expand its footprint.

Kroger

Although demand for consumer staples remains elevated, rivals like Walmart Inc (NYSE: WMT) and Costco Wholesale Corporation (NASDAQ: COT) reported slowing sales gains. Yet, Wall Street expects this leading grocery store chain to report head-turning growth metrics, while forecasting a revenue boost of 7% for the quarter.

The question of the week

Besides their earnings reports, the above companies have an important question to answer. Considering these companies greatly benefited from remote work, they need to prove they can keep their growth momentum even if positive vaccine developments encourage consumers to go back to offices and stores.

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

Alibaba’s Sophisticated Monopoly Strategy Expands to EVs

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By being a Chinese multinational company specialized in e-commerce, retail, Internet, and technology, Alibaba Group Holding Limited (NYSE: BABA), or just Alibaba.com, has a lot of reasons to be under the spotlight. But over the last month, it was mentioned due to three main reasons: the suspended blockbuster IPO of Ant Financial, the most recent earnings that failed to dazzle investors, and the anti-monopoly rules aimed at giving regulators more control over monopolies.

Even though Alibaba CEO Daniel Zhang labeled these plans as “timely and necessary”, both Alibaba’s and other Chinese tech giants’ shares plunged earlier this month as much as 20% in just two weeks. Alibaba’s fintech affiliate, Ant Group was close to making a record with a $37 billion IPO on November 5th, with an estimated valuation of almost $300 billion. However, this blockbuster IPO, publicized as the largest in history, was suspended due to above-mentioned regulations. Alibaba, as a major shareholder with a 33% ownership stake in Ant Group, felt the impact of these imposed brakes directly. But there is so much more to Alibaba’s ground-breaking success than attracting sellers by eliminating listing fees. This company excels at identifying and seizing unique business opportunities.

EV News

There is no tech giant that can allow itself not to think ahead, what will be the next big thing. Many tech giants both in the US and China already teamed up with traditional carmakers, trying to be a part of the transition to electric and autonomous vehicles. Back in 2015, Alibaba joined forces with Shanghai Automotive Industry Corporation, one of the “Big Four” state-owned Chinese automakers, to create an operating system for EVs. This cooperation advances when Alibaba recently invested in Zhiji Motor, a new electric vehicle arm launched by SAIC. Huawei also plans to get into the car industry by providing Information Communication Technology equipment for the automakers. This type of cooperation is already seen in Chinese EV startups like Xpeng Inc (NYSE: XPEV) and Nio (NYSE: NIO), who are aiming to challenge other than Tesla (NASDAQ: TSLA) itself. Alibaba already has worked with  BMW (OTC: BMWYY) and Volkswagen Group’s owned (OTC: VWAGY) Audi over the years so it is no stranger to the automotive business.

What do investors fear?

Investors were not impressed with Alibaba’s last quarter earnings. The company achieved adjusted income of $2.65 per share with a revenue of $22.8 billion. Wall street’s expected earnings were $2.12 per share with revenues of $23.2 billion. However, when looking at the revenues in the Chinese currency, the estimate was 154.9 billion yuan, while the company achieved 155.06 billion. Maybe the investors expected more, having in mind the positive trend which Amazon (NASDAQ: AMZN) and other e-commerce companies are having. The fact is there are six companies which take up almost 60 percent of the global online purchasing pie, with Alibaba owning two of them. Other than two more Chinese companies with a substantial share,  there is eBay (NASDAQ: EBAY) and JD.com (NASDAQ: JD) who have simpler business models which are less exposed to antitrust measures. Due to strong competition, as well as tighter regulations and the law of large numbers, Alibaba’s e-commerce revenues will probably decelerate in the following year. Considering that this is where Alibaba generates most of its revenue, with which I subsidizes the growth of other core segments that are still unprofitable (Alibaba Cloud, Digital Media and Entertainment, and Innovation Initiatives), it’s no wonder that investors were not delighted.

Conclusion

November was a rough month for Alibaba, but it is recovering. Not to mention that Chinese economy has emerged as the fastest recovering economy from the pandemic, while also being projected to be the single economy to report YoY growth this year. Alibaba remains as an international e-commerce empire that keeps evolving with green development initiatives. Although Ant Group IPO has slim chance to take place next year, the IPO’s collapse won’t impact Alibaba’s near-term growth. However, it won’t generate cash or boost its earnings as Alibaba had planned.

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

Weekly Retail Recap

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This week has brought a bunch of retail earnings reports, showing that specialty stores are on their way back to health.

Urban Outfitters shows strength ahead of holiday season

Urban Outfitters (NYSE: URBN) reported its quarterly profits rose 38 percent as strength of its brands combined with reduced operating expenses drove growth. Stock climbed as earnings reached a record despite the pandemic. The retailers managed to earn $77 million, or a record 78 cents a share, even though revenue fell 1.8% YoY to $970 million, exceeding Wall Street expectations for both EPS of 45 cents and revenue of $931.5 million.

Burlington Stores tops Q3 estimates but warns on weak start to Q4

While sales were challenged due to a weak August which saw deficient inventory levels and delayed back to school purchases, Burlington Stores (NYSE: BURL) saw comparable store sales trends improve significantly throughout the other two months of the quarter. The company did not provide any formal guidance, but revealed that the undergoing quarter has gotten off to a weak start.

Dick’s Sporting Goods came out with solid earnings and big news

Dick’s Sporting Goods (NYSE: DKS) reported solid earnings Tuesday, with sales at stores open for at least one year growing 23.2% over last quarter. But its major news was that the CEO Ed Stack is stepping down after 36 years in which he transformed his family’s small business into a national presence, took the company public and enacted a strong stance on the US gun debate. The current president Lauren Hobart will be promoted to this role on February 1, and by doing so, she will become company’s first female chief executive.

Nordstrom’s turnaround is real

The iconic fashion retailer reported better than expected third-quarter results. Nordstrom (NYSE: JWN) delivered the quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.01 per share but significantly below last year’s $0.81 per share. This has been a hard year for the retailer who saw its shares lose about 42.7% since the beginning of the year while the S&P 500 gained approximately 10.7%.  But after being crushed by the pandemic, Nordstrom now managed to crush Q3 earnings estimates, proving that it is already on the road back to health. COVID-19 gave a severe blow to the retailer due to its focus on selling dressy apparel for work and social events, resulting in sales sinking more than 40% YoY during the first six of the year. But this month, Nordstrom stock has doubled with growing hopes of upcoming COVID-19 vaccines. Also on a bright note, the company is poised to exceed its cost-cutting goals this year, including substantial and permanent reductions to its overhead costs.

American Eagle Outfitters – Sometimes a Beat Just Isn’t Enough

American Eagle Outfitters (NYSE: AEO) posted quarterly earnings of $0.35 per share exceeding Zacks consensus which looked for the company to post $0.33. However, revenue numbers didn’t fare quite so well as it amounted $1.03 billion for the quarter ended October 2020, missing the Zacks Consensus Estimate by 2.08%. This compares to year-ago revenues of $1.07 billion. The company did not provide any fourth quarter or full year guidance. For Q4, Street analysts forecasted sales declining only 1% this current quarter but profits are expected to drop another 14%, with an overall loss for the year.

Gap fell short

The Gap Inc (NYSE: GPS) shares tumbled as earnings fell short, but the retailer remains optimistic about the holidays.It expects fourth-quarter sales to be about equal to or slightly higher than a year ago as consumers can’t spend on entertainment and travel, the expectation is that this budget will be directed to discretionary goods during the gift giving season. But fiscal third-quarter earnings fell short of estimates as Old Navy and Athleta sales gains did not manage to offset the increased marketing costs aimed at defining core brands and growing market share.

Shares fell more than 10% in after-hours trading, having risen more than 51% since the start of this year, Gap has a market cap of $10 billion. Gap earned $95 million or earnings per share of 25 cents versus the expected $140 millionand 32 cents by Refinitiv data on a revenue of $3.99 billion versus the $3.82 billion expected.

Same-store sales were up as sales were boosted in large part by the company’s digital business, which surged 61% and accounted for 40% of total sales during the quarter. Gap said it added more than 3.4 million new customers online.

Retailers are hoping for a ‘holiday miracle’

It seems that recovery from the pandemic is underway despite a spike in COVID-19 infections across the globe. Arising number of cases could still hamper both sales and traffic in physical stores. Retailers such as Abercrombie & Fitch (NYSE: ANF) and Macy’s (NYSE: M) have cited this threat of temporary store closures. But retailers are hoping that the enthusiasm brought on by the holidays might be strong enough to conquer consumer fears of being infected by actually going shopping.  One thing is certain – in a changing apparel retail environment, the above clothing retailers now have the opportunity to fully demonstrate how vital online shopping really is.

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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