greenbutterfly
- Piper Sandler on Monday published its preview of internet stocks as it prepares for third quarter earnings.
- The research firm said it is most positive on Google (NASDAQ:GOOGL), Pinterest (NYSE:PINS), and Reddit (NYSE:RDDT) while staying more cautious on Amazon.com (NASDAQ:AMZN) and Snap Inc. (NYSE:SNAP).
- On GOOGL, the research firm said the stock is its top pick and expects $86.5B in revenue and $26.5B in operating income for Q3. “Ad checks were positive, and Gemini integration into Search is driving higher spend by improving efficiency. We view antitrust fears as priced in. Plus, we like new CFO Ashkenazi and see an opportunity to lower opex/head.”
- Amazon (NASDAQ:AMZN) remains the top large-cap pick, but the research firm had mixed feelings at the time of publishing the note. They forecast ~$157B in revenue (+10% y/y) and $14.8B in op income for Q3. For Q4, revenue is expected in the $180-186B range and EBIT between $16-18B. “3Q24 guide was a break in the incremental margin improvements, and Street NTM EBITDA moved down for the first time in 5 quarters. On advertising, our buyer noted AMZN still has the best attribution, but lack of inventory growth driving higher CPCs is a limiting factor to further scaling spend.”
- On PINS, Piper sees itself as a buyer of shares and said it expects $892M in revenue (+17% y/y) and EBITDA of ~$212M in Q3. “Admittedly, the stock feels two steps forward, one step back, but execution continues despite shares down ~25%+ from highs. Checks have noted product changes that are driving better engagement, and we like the new CAPI/AWS feature.”
- On Meta Platforms (NASDAQ:META), Piper forecast about ~$40B in Q2 revenue (+16% y/y) and ~$24B in EBITDA. “Our checks were again positive, driven by a ‘compounding benefit’ from Advantage+Reels performance is improving, and Instagram is still great for E-Com. Compares are toughest in 1Q25, but META has already guided into a 3Q compare of 23% growth.”
- On RDDT, the firm said it remains a buyer on strong user growth, improving ads manager data, and the lowest incremental margin expectations versus peers into 2025-2026.
- On SNAP, Piper said checks remain “mixed-negative,” although the firm data on Snapchat+ suggests an acceleration in Q3.
- On eBay (NASDAQ:EBAY), Piper noted that its valuation is compelling at ~10x NTM EBITDA despite a +48% YTD run. “We remain buyers as 2H2H GMV growth becomes more likely. Plus, US GMV vs. non-store retail growth has improved consistently since 1Q22, and Street estimates now imply a step-down.”
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