Things To Watch For As Internet Earnings Season Continues This Week - Alibaba Gr Holding (NYSE:BABA), Amazon.com (NASDAQ:AMZN)

Following last week’s positive report from Netflix, Inc. NFLX, several internet firms will be reporting their earnings numbers this week. Those key names include Alphabet Inc GOOG GOOGL, Amazon.com, Inc. AMZN, Facebook Inc FB and Alibaba Group Holding Ltd BABA.

The upcoming results come amid positive e-commerce data, which bodes well for leading internet firms.

“Overall, our checks suggest continuing positive online spending trends in Q4, although F/X headwinds and widespread product discounting (e-commerce) could limit upside,” Baird analyst Colin Sebastian wrote in a note.

Looking ahead, Sebastian expects outlooks from Internet firms to reflect ongoing high levels of investments reflecting multiple long-term secular growth opportunities.

Internet Roundup

Following are Wall Street’s brief take on the upcoming quarterly earnings of leading internet companies:

Alibaba: Cantor Fitzgerald analyst Youssef Squali expects third-quarter results to come in line with Street expectations, driven by growth in active users and rising monetization amid resilient Chinese consumer spending.

Alphabet: Baird says third-party data points suggest stable and healthy search spending growth, while mobile commerce strength over the holiday period should offset ongoing pricing pressures.

Amazon: Sebastian says Amazon is the key beneficiary of positive e-commerce/cloud spending trends, pointing to another strong top line/GMV growth, although margins likely remain under pressure from ongoing investments.

Cimpress NV CMPR: Squali expects second-quarter results to come in line with his estimates, with double-digit growth core Upload and Print and slight recovery in core Vistaprint growth. However, the results could be hurt by currency fluctuations.

eBay Inc EBAY: “We expect 4Q16 results to come in line with Street expectations, and show further progress in management's initiatives to revive topline growth through improvements to its structured data, machine learning, user experience and merchandising,” Squali wrote in a note.

Facebook: Sebastian’s checks show continued traction in product ads, with incremental Instagram spending could also provide some upside.

Paypal Holdings Inc PYPL: Squali anticipates solid fourth quarter results, in line with consensus estimates, on strong growth trends in mobile commerce along with surge in active users, rising engagement and greater penetration of merchants.

On other small and mid-cap firms, Sebastian expects generally positive reports from ChannelAdvisor Corp ECOM, Shutterfly, Inc. SFLY, Yelp Inc YELP and Wayfair Inc W on healthy mobile/e-commerce trends. That said, the analyst noted that margin issues could weigh a bit on Shutterfly and Wayfair.

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