Well, January is over, but the first trading day for February showed us that the volatility is still here for the markets. Given the huge run-up on Friday, that’s not surprising as many investors are still reeling from a bad January, and shifting portfolios to account for the downside. One thing is for sure, companies that are blowing away numbers are getting rewarded, just like those who miss are getting hit.
In this week’s research report from Jefferies, the growth stock calls lean to some top technology names. Some blew away numbers, some missed, and some are still set to report the quarter. They all make good sense for aggressive growth accounts.
This is the absolute leader in online retail and a dominate player in cloud storage business, but it missed estimates badly and got hit hard last week. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers. In addition, the company serves developers and enterprises through Amazon Web Services (AWS) that provides compute, storage, database, analytics, applications and deployment services that enable virtually various businesses.
Jefferies notes that the fourth-quarter results were below Wall Street estimates on almost all metrics, and the guidance for the first quarter was somewhat mixed. While the North American revenues rose a solid 24% to $21.5 billion, they came in below the Jefferies estimate of $22.9 billion. While the stock was pounded, the analysts remain buyers on this weakness, as they still maintain that the e-commerce giant has a distinct fulfillment advantage, and remains a core technology holding.
The Jefferies price target for the stock is a gigantic $775. The Thomson/First Call consensus price target is $738.51. The stock closed Monday at $574.81.
The huge social media leader posted gigantic numbers that truly blew most of Wall Street away. Facebook Inc. (NASDAQ: FB) has Instagram, which the Jefferies team sees tripling revenues by 2017. In addition, Premium video and Graph Search capabilities are strengthening the social media giant’s earnings flow.
Jefferies has noted in the past that Facebook and Instagram account for 5% and more of users’ total media time, but the company doesn’t come close to capturing 5% of total advertising budgets. Instagram advertising opened up in the fourth quarter. The company reported revenues for the December quarter that were 10% ahead of the Jefferies estimates.
Like most Wall Street analysts, Jefferies notes that Facebook remains the top beneficiary of the adoption of mobile Internet trends, with total U.S. internet time spent on Facebook and Messenger. Other metrics continue to explode, and the key is there are no viable challengers anywhere in sight. Positive monthly data use, easier growth comparisons and positive data on ad revenue drivers are the top catalysts. The analysts view Facebook’s longer term opportunities as almost unmatched by its mega-cap consumer Internet peers.
The analysts also note that the holidays for 2015 may be the time when advertisers truly embraced mobile ads on a global basis. With 1.5 billion global users who spend the large majority of their mobile time on Facebook, the company continues to own the social media stratosphere.
Jefferies recently raised its price target to $145 from $135. The consensus target is $132.75, but could still jump. The shares closed Monday at $115.09.