5 Internet Stocks Cantor's Youssef Squali Is Buying Before Earnings

• Youssef Squali of Cantor Fitzgerald offered five tech names he is positive on ahead of their earnings report.
• Squali is positive on: Alibaba Group Holding Ltd BABA, LinkedIn Corp LNKD, Paypal Holdings Inc PYPL, Twitter Inc TWTR, and Yelp Inc YELP
• Alibaba and Twitter are first of the group to report results on Tuesday.

Youssef Squali, a tech analyst at Cantor Fitzgerald, offered five companies he is positive on ahead of their upcoming third-quarter results.

Alibaba: Lowered Expectations

Alibaba is scheduled to report its second-quarter results on Tuesday.

Squali is estimating Alibaba will earn $0.52 per share on revenue of $3.249 billion, short of the consensus estimate of $0.54 per share and $3.362 billion.

Squali is expecting Alibaba to show "strong growth" in its GMV (gross merchandise volume) which is projected to rise 25.3 percent year-over-year to $113.4 billion. Meanwhile, the analyst is expecting a decrease in monetization revenue of 2.17 percent to $2.459 billion as the ongoing shift to mobile implies a lower (although improving) monetization rate versus desktop.

Squali is also expecting the following topics to be discussed: 1) update on local consumer demand, 2) progress on Tmall Global, 3) update on its expanded presence in Europe, and 4) initiatives targeted at increasing mobile monetization.

Shares remain Buy rated with an unchanged $88 price target.

Related Link: Brean Not Buying LinkedIn This Earnings Season

LinkedIn: Positive On Talent Solutions

LinkedIn is scheduled to report its third-quarter results on Thursday.

Squali is expecting LinkedIn to earn $0.42 per share on revenue of $749.5 million, an estimate that is virtually in-line with the consensus estimate.

Squali is expecting a 38 percent year-over-year growth in Talent Solutions as the segment benefited from market share gains. The analyst is also expecting the company to show continued strength in the Professional Services segment with an expected 38.4 percent year-over-year increase in revenue.

Squali is expecting LinkedIn to announce an in-line fourth-quarter guidance consisting of $846.5 million in revenue and $196.3 million in EBITDA.

Shares remain Buy rated with an unchanged $260 price target.

PayPal: ‘Robust Growth' In Merchant Services

PayPal is scheduled to report its third-quarter results on Wednesday.

Squali is expecting the company to earn $0.29 per share (in-line with the consensus estimate) on revenue of $2.260 billion, short of the $2.274 billion analysts are looking for.

Squali is expecting PayPal to show "robust growth" in its Merchant services (78 percent of TPV), with TPV growth in the low-mid 30 percent level. The analyst also suggested the company could have benefited from a weaker Chinese currency as it is the top payments process for exporters, including Alibaba.

Squali is also expecting PayPal to provide an updated full year fiscal 2015 (and fourth quarter) outlook, which currently stats at 15-18 percent year-over-year growth and $1.23 to $1.27 in earnings per share.

Shares remain Buy rated with an unchanged $45 price target.

Related Link: Here's What Bob Peck Is Expecting Out Of Twitter...

Twitter: Focus On User Metrics

Twitter is scheduled to report its third-quarter results on Tuesday.

The company already pre-announced its third-quarter results and management expects revenue and adjusted EBITDA to be at or above the high end of its prior guidance of $545-560 million and $110-115 million, respectively.

Squali is modeling Twitter's MAU (monthly active users) to grow 11.9 percent year-over-year to 321 million, reflecting five million net new users. While the projected growth falls short of the eight million the company attracted in the second quarter, it is nevertheless "consistent with the lower visibility into MAU trends noted by management in recent months."

Squali added that the new Moments launch and an upcoming integrated marketing campaign should be incremental to user growth in the fourth quarter and throughout next year.

Shares remain Buy rated with an unchanged $50 price target.

Yelp: ‘Solid' Results Despite Weakness In Stock

Yelp is scheduled to report its third-quarter results on Wednesday.

Squali is estimating the company will report an in-line print and lose $0.06 in the quarter on revenue of $141.8 million.

Squali argued that Yelp's stock has been "slammed" as of late, but local and mobile will drive "solid" results. The analyst noted that comScore's third-quarter traffic data implied a 21.6 percent multi-platform unique visitor increase, while total minutes rose 6.5 percent year-over-year.

Squali noted that while traffic data doesn't necessary translate to local advertising revenue growth, it is an indication of "healthy usage" and "value proposition" for the end-user.

Finally, the analyst is expecting Yelp to announce an in-line fourth quarter guidance for revenue and EBITDA of $151.9 million and $21.7 million, respectively.