Amazon’s AWS (Amazon Web Services) segment is expected to continue to play an increasing role in total company revenue, according to current Visible Alpha consensus. AWS as a percentage of total revenue is slated to increase by over 300 basis points over the next two years, from 9.0% of total company revenue in 2016 to 12.3% in 2019.
Netflix (NFLX) will report 1Q17 results after the market close on Monday, April 17th. While investors will pay special attention to NFLX’s ability to grow its international subscriber base, they will also keep an eye on the company’s efforts to improve its margins. The current Visible Alpha consensus estimates show steadily increasing margins (Operating, EBITDA and Free Cash Flow) over the long term, even in light of steadily decreasing revenue growth and an expected increase in content spending in both original and licensed content.
Costco reported March monthly sales last week that demonstrated continued comparable store sales acceleration. The company reported 6% comparable store sales growth (including gas and FX) for March. As a result of the positive number, estimates have been revised upward for the company through the rest of the year as well as into 2018. Investors are expecting comparable store sales to accelerate as several tailwinds help, including the removal of the tobacco headwind, easing deflation trends, increasing membership fees, and a credit card change.
One week ago, Urban Outfitters (URBN) released its 10K which disclosed that 1Q (ending April) quarter-to-date trends were down mid-single digits. This compared to consensus estimates at the time of -1.0% for the quarter. While March was likely negatively impacted by the Easter shift (which was in March last year but is in April this year), analysts reacted negatively to the data and have now shifted comparable stores sales estimates downward for the quarter from -1.0% to -2.5%.
Comcast analysts have become increasingly optimistic on the company’s video division over the last 6 months. While still declining, analysts think the rate of decline will be much slower than expected (declining from 4.2% growth in 2017 to 3.3% in 2019). For example, for the fiscal year 2019, Visible Alpha revenue consensus for Comcast’s video segment has been revised up by 280 basis points in the last 6 months (0.5% year over year growth compared to 3.3%). The revenue growth is expected to be driven by an increase in Average Revenue Per User (ARPU), demonstrating Comcast’s increasing ability to monetize its userbase. Analysts estimate ARPU to increase almost 10.5% by 2019 compared to the $86 video ARPU seen in 2016. The number of subscribers is expected to remain flat.
Martin Pyykkonen, Consulting Analyst
Pandora’s newly introduced on-demand Pandora Premium music service has dominated headlines for the company in recent months. Street analysts expect it to play a key role in the company’s future, with current Visible Alpha consensus expecting to form almost 65% of overall revenue by 2022.
Martin Pyykkonen, Consulting Analyst
After the 2008/2009 recession, CBS’ stock was hit particularly hard for having the highest revenue dependency relative to its large M&E peers. Since this time, the company has aggressively pursued increasing non-advertising revenue as a percentage of total revenue. This non-advertising revenue is expected to be generated from the company’s retransmission (cable/satellite distributors) and reverse compensation (local TV stations) businesses.
Martin Pyykkonen, Consulting Analyst
Martin Pyykkonen, Consulting Analyst
Current Visible Alpha consensus for AMZN’s 4Q16 total revenue is above the company’s mid-point guidance for the quarter of $42.5 to $45.5 billion. Based on traditional retailers’ reported 4Q16 results so far, it’s evident that AMZN gained further market share vs. brick-and-mortar retail sales in the recent holiday period (which is typically > 30% of retailers’ total annual sales).
