Here's is the summary of rating action by DA Davidson analyst Tom Forte:
- eBay Inc EBAY: Buy/$45.
- GrubHub Inc GRUB: Neutral/$48.
- Wayfair Inc W: Neutral/$78.
- Liberty Interactive QVC Group QVCA: Buy/$33.
- Quotient Technology Inc QUOT: Buy/$18.
EBay Has Multiple Levers For Improving Operating Performance
Forte sees multiple levers for eBay's management to improve its operating performance. Additionally, the analyst sees opportunities to drive shareholder value, including share buyback, with the potential of initiating a dividend to attract a new class of investors.
The firm expects eBay's revenues to grow 4.1 percent CAGR between 2017 and 2020, with EBITDA expected to expand 80 basis points to 37.2 percent over the three-year period.
GrubHub Consolidates Online Restaurant Delivery
DA Davidson said GrubHub is both advancing and consolidating the online restaurant delivery category, as it builds a first-party delivery effort, servicing several restaurants and acquiring several regional operators.
However, the firm expects minimal long-term margin expansion due to an increasing mix of first-party orders. At current valuation, the firm thinks the shares reflect its favorable view of the company and its long-term prospects.
The firm estimated revenues to grow at a CAGR of 19.3 percent between 2017 and 2020 and EBITDA margin to remain flat at 26.7 percent.See also: 5 E-Commerce Stocks To Watch
Quotient Technology Has Built A Network Effect
Forte noted that Quotient Technology has built a network effect by creating value for consumers, retailers and consumer packaged goods companies. The analyst also noted that the company is leading promotions into the future, including converting physical coupons into digital.
The analyst sees 15.9 percent CAGR in revenues over the next three years and an 800 basis-point improvement in margins to 22.9 percent in 2020 from 14.7 percent in 2017.
QVC: Built To Compete Against Amazon
DA Davidson sees QVC Group as a part of a second group of companies groomed to be able to compete with Amazon for the long term, with the group comprising QVC, Zulily and 38 percent of HSN, Inc. HSNI. The firm feels QVC shares are attractive at current levels, even when considering the near-term concerns of sales declines at QVC and HSN.
The firm expects modest revenue growth and international expansion over the next three-year period.
Wayfair: Disrupting The Home Category
The firm sees Wayfair as disrupting the home category, with the company touted as one of the best retailers leveraging technology to drive sales.
"At current valuations, we believe the share price reflects our favorable view of the company and its long-term growth prospects," the firm added.
Led by international expansion, the firm expects strong revenue growth and margin improvement over the next three-year period.Related Link: Gramercy Property Trust: An Alternative Way To Trade The E-Commerce Boom
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