The Zacks Analyst Blog Highlights: Amazon, Netflix, eBay, Groupon and Costco Wholesale

 The Zacks Analyst Blog Highlights: Amazon, Netflix, eBay, Groupon and Costco

PR Newswire

CHICAGO, April 26, 2013

CHICAGO, April 26, 2013 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Amazon (Nasdaq:AMZN), Netflix
(Nasdaq:NFLX), eBay (Nasdaq:EBAY), Groupon (Nasdaq:GRPN) and Costco Wholesale
Corporation (Nasdaq:COST).


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Here are highlights from Thursday's Analyst Blog:

Amazon Mixed, Stock Still Climbs

After the bell Thursday, Amazon (Nasdaq:AMZN) reported mixed results for its
Q1: an earnings beat on slightly lower revenues and downwardly revised
guidance... and the stock is still up following the announcement.

Amazon, the world's biggest Internet retailer, posted earnings of 18 cents per
share on quarterly revenues of $16.07 billion. This was a beat on the bottom
line but a slight miss on the top for Amazon, whose stock continues to trade
near all-time highs.

This, despite a low-end guidance range for operating income of -$340 million
(far below Q212's $107 million), and a signal that International sales growth
may be slowing. After-market traders paused a minute before buying more
shares. But after climbing 2.2% at the close of regular trading, Amazon is up
another 2.5% as of now.

The Zacks Consensus Estimate was for 10 cents per share, which marks the first
time since Q1 2012 that Amazon has posted a positive earnings surprise. That
said, EPS was nowhere near last year's 28 cents per share, though revenues
were up 22% year over year.

Investors have grown accustomed to Amazon's ongoing long-term strategy of
investing capital into expanding its businesses and using its synergies to
venture elsewhere, and thus pay relatively less attention to the
quarter-to-quarter numbers. This explains how a company like Amazon that
hadn't posted an earnings beat in a year could still be trading at a dizzying
price-to-earnings multiple north of 180x.

At first glance, Amazon looks to be taking on Netflix (Nasdaq:NFLX) here a
bit, creating new TV content through Amazon Studios and its Prime Instant
Video, expanding and updating licensing agreements for content elsewhere. Much
the way Amazon used its vast resources to take on eBay (Nasdaq:EBAY) in online
retail options and Groupon (Nasdaq:GRPN) in deals on goods and services,
expanding entertainment content seems to be another area where CEO Jeff Bezos
is saying, "Game on!"

Costco Reaches New High

Shares of Costco Wholesale Corporation (Nasdaq:COST) recorded a new 52-week
high of $108.35 yesterday, before closing at $107.83, rising approximately
35.2% in a year's span. Based on the current price, Costco is 1.6% above the
Zacks Consensus average analyst price target of $106.11.

Moreover, it currently trades at a forward P/E of 23.7x, a 41.9% premium to
the peer group average of 16.7x. Additionally, the company's long-term
estimated EPS growth rate is 13.2%, higher than the peer group average of

We believe Costco's differentiated product range enables it to provide an
upscale shopping experience to its members, resulting in market share gains
and higher sales per square foot. Moreover, it maintains a healthy membership
renewal rate.

Costco remains committed to opening new clubs in domestic and international
markets. The company's diversification strategy is a natural hedge against
risks that may arise in specific markets.

This is evident from Costco's healthy comparable-store sales results, when
most of the retailers were struggling against the challenging macroeconomic
factors including higher taxes and a soft employment scenario along with
unfavorable weather conditions that restrained consumers from spending.

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