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October 2017

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Several key reasons for a negative sentiment include the ongoing presidential elections, the FED, and a weaker than expected earnings season

As the US capital markets continue to tumble, it is not a very good time for fresh entry, as investors may continue to lose on their investment. The recent turmoil in the S&P 500 index is perhaps the strongest losing streak after the great recession of 2008. While a lot of factors may be held responsible for a bearish sentiment among investors, more and more reasons continue to emerge. The recent jobless claims data received shows the highest number in the last three months.

Several key reasons for a negative sentiment include the ongoing presidential elections, the FED, and a weaker than expected earnings season. Although famous tech companies such as Facebook Inc. (NASDAQ:FB) have reported better results, weak guidance has been taken very negatively by investors, as shares of the social media giant continued to tumble in yesterday’s session. It won’t be wrong to term November as an unfavorable month for the Menlo Park-based company.

It should be noted that there hasn’t been a change in the fundamentals of companies. Such an instance is of e-commerce giant Alibaba Group Holdings Ltd, that reported impressive numbers, but its shares are now trading below the $100 mark. Going forward, The Country Caller expects the markets to remain dull, as the presidential election is due on Tuesday.

The event will play a major role in determining the position of markets in the near term, while the situation would improve in the long run. TCC therefore recommends investors to hold on to their positions, while they should wait for the big day before taking any further positions. All the technical indicators of the S&P 500 give sell signals, while the major support level of the index today is 2090.7.

Tesla Motors Inc mass market upcoming Model 3 is expected to face no delays for its roll out according to Global Equities

Tesla Motors Inc.’s (NASDAQ:TSLA) Model 3 is being marketed as a mass market product and has therefore attracted a lot of concern. Tesla has not yet proven its production capabilities with its Model S and Model X customers having to wait years to get a hold of their model. Global Equities however is confident that the company’s production ramp is in position with new information surfacing regarding the amount of preparation Tesla has given to its newest model. The sell side has an Overweight rating on the company’s stock as well as a $385 price target.

According to a note from Trip Chowdhry of Global Equities, just a day before Tesla’s Model 3 event, the Model 3’s chassis design was already ready in 2015. The Model 3 event is where potential Tesla customers will get their first chance to get an eyeful of the newest model. Global Equities’ previous coverage has pointed out their views regarding how well Tesla has improved its production platform and learnt from its mistakes. The latest news however is regarding the fact that Tesla’s Model 3 chassis was designed by Aston Martin’s Chris Porritt who also worked on the chassis for the luxurious and futuristic Model X. Porritt has apparently been working on the chassis for the car since 2014 and is a well-respected designer.

Previous notes by Global Equities highlighted the fact that the Model 3 would be using steel instead of aluminum which would not only shed material, labor and production costs for Tesla but also simplify the production process and allow the rate of production to be doubled. While steel will add more weight to the car, the tradeoff is that steel workers are easy to find and cheaper with respect to aluminum. Steel also costs less and is not only easier to work but easier and more cost effective to repair in case of damage. All these factors will allow Tesla to roll out the car on time and ensure a smooth and fast production process.

 

Vivint Solar shares shoot up over 38% through regular trading today after a research firm raises its rating on the stock

Deutsche Bank analyst Vishal Shah has raised his rating on Vivint Solar Inc. (NYSE:VSLR) from Hold to Buy, and has also raised his price target on the stock from $3.5 to $7.5 today. Subsequently, shares rose 40.04% to $3.69 as of 1:38 PM EDT today. Based on the last closing price of the stock, Mr. Shah’s raised price target reflects 185.17% upside potential for the stock.

For Vivint Solar and Sunrun Inc., the analyst said that both the stocks currently trade at discounts based on their operating assets’ valuations. “With the tax equity environment for VSLR improving, we believe the company remains in a strong position to achieve its 2016 installation targets,” said Mr. Shah. The analyst further added that the US residential market is seeing improved fundamentals after “a slow seasonal start.”

As for SolarCity Corp. (NASDAQ:SCTY), the analyst cut his price target from $49 to $32, based on his opinion that the stock is likely to continue declining in the near term owing to the company’s hefty capital needs in order to meet its 2016 operating objective. Following these comments, SolarCity shares slumped 4.00% to $22.78 as of 1:56 PM EDT Friday. However, in the long term, the analyst says shares would rise.

Mr. Shah said that he estimates Vivint Solar’s powerco assets at $5 per share, based on an 8% discount rate. On the other hand, he values Sunrun’s operating assets at $7 a share (assuming the same discount rate). Excluding renewals, the analyst says Vivint’s powerco assets would have a value of $3.5 per share, and Sunrun’s assets would be worth $4 a share.

As mentioned on Thomson Reuters, of the five analysts covering Vivint Solar, one maintains a Strong Buy, two maintain a Hold, while the rest have an Underperform rating on the stock. The Street currently has a $4.15 12-month mean price target on the stock, reflecting 57.79% upside potential based on the stock’s last close of $2.63.

A recent blog post shows the new set of exclusives for PlayStation users

Activision Blizzard Inc.’s (NASDAQ:ATVI) Destiny is set to receive its April Update next week and as with any update in the period before release, there is bound to be hype and creation of hype by developers of games. A while ago, it was announced that Sony Corp.’s (NYSE:SNE) PlayStation users are going to receive the exclusive Zen Meteor Sniper with the April Update and a recent blog post reveals details about the Sniper Rifle along with other exclusive gear.

According to this post on the official PlayStation Blog, the Zen Meteor Sniper Rifle is going to have a perk called Dynamite and this perk will grant explosive rounds and rapid kills with rounds is going to increase damage for 5 seconds. The other perk on the weapon is called “with a laser beam” which is going to cause an extra explosion when the extra round gained from Dynamite is fired. This weapon is going to be available via the usual sources of Year Two weapons which mean that you will be able to obtain it via decrypting engrams and via the Oryx fight. For those wondering, since the weapon is PlayStation exclusive, it will not be available via the weekend vendor Xur.

The other exclusive for PlayStation users is a sparrow called Velumbra which is going to be available after completing an exclusive quest named “Essence of Darkness.” There are no details mentioned about the activity but the screenshot suggests that the activity takes place in the Court of Oryx. Other than this, there is a set of armor that is exclusive to PlayStation users as well and details of these can be found on the post.

With that said, the April Update continues to amaze. The new features and gear incoming with the update is certainly going to be a treat for every guardian out there and we cannot wait for Tuesday, April 12 when the update goes live. Let us know what you think in the comments below.

Tesla generates $12-14 million in Tesla Energy revenue during 1QFY16 via delivering 25MWh of energy storage

Tesla Motors Inc (NASDAQ:TSLA) reported financial numbers for the first quarter of fiscal year 2016 (1QFY16), beating the consensus estimate and announcing a new production plan; though, the management’s future plans were too ambitious for Street analysts.

While everyone was focusing on the company’s automotive divisions after it generated about 400,000 Model 3 pre-orders, many probably missed out that Tesla Energy put on a great performance during the quarter. Tesla posted sales number for its battery-storage arm for the first time in 1QFY16 Shareholder Letter.

During the quarter, the automaker successfully delivered more than 2,500 home-battery systems the Powerwall and roughly 100 commercial batteries the Powerwall in four continents: North America, Europe, Asia and Africa. The total sales represented more than 25 MWh of energy storage.

Although the company did not reveal the contribution of Tesla Energy to its “Services and other” revenue stream, we can find an estimated revenue number from the product’s tag prices listed on TeslaEnergy.com.

We already know that the company has been only offering the 6.4kWh Powerwall system which is priced at $3,000. An overwhelming demand for the Powerwall version encouraged the company to solely focus on it. Thus, Tesla discontinued its 10kWh Powerwall system. With over 2,500 unit sales, it is safe to assume that Powerwall generated revenue of at least $7.5 million during 1QFY16.

Powerpack revenue computation is a bit complicated because it can be customized by customers in any way between 2 Powerpacks and 54 Powerpacks, along with bi-directional inverter and cabling and site support hardware. Here’s  the complete pricing and other details related to the commercial battery system.

Since we have no idea about the number of Powerpacks customers for those 100 units and their customized orders, we are taking into account the price of a unit which is $47,000. Excluding inverters and cabling/hardware, Tesla Energy generated $4.7 million from Powerwall sales. Including other equipments, the revenue sold increased to $6-7 million.

Thus, Tesla Energy revenue should be between $12 million to $14 million for the first quarter, which does represent strong start for the new business division. Merely four months after Tesla Energy unveiling in March 2014, the company had 100,000 reservations worth $1 billion for its battery systems.

The management expects the division’s strong momentum will “continue to build” and ensured analysts during the recent earnings call that the segment is not being constrained by Tesla’s vehicle requirement at the Gigafactory.

CEO Elon Musk sees more potential in the battery storage arm than the automotive division, as he stated: “And I think the growth rate of Tesla Energy is on a percentage basis only going to be far greater than the growth rate in cars.”

 

 

Exa Corporation’s executive shares his view on the Model 3’s design and aerodynamics

Tesla Motors Inc (NASDAQ:TSLA) Chief Elon Musk said during the Model 3 unveiling that the $35,000 vehicle will be able to travel at least 215  miles on a fully charged battery. Earlier this week, the company’s VP of Investor Relations Jeff Evanson confirmed that the automaker will be using a battery pack of smaller than 60kWh. 

The small battery capacity implies that the compact sedan’s aerodynamic performance will be essential to achieve the expected range, similar to its predecessors, even with higher battery capacity. During the Model 3 event, Mr. Musk also stated that the vehicle will achieve 0.21drag coefficient (Cd), making it the most aerodynamic mass-market vehicle ever built.

The world’s most popular EV maker uses Exa Corporation’s digital stimulation to design its vehicles. Electrek reported Exa VP of Ground Transportation Applications, Ales Alajbegovic’s views on the Model 3’s aero innovation, after viewing the product prototypes on March 31.

According to the executive, the “turbine-blade styling” of the vehicle’s new wheel designs, which are expected to be included in the production model, not only look appealing and fresh; it also directs the air flow under the vehicle’s body to reduce drag.

He added: “That’s smart. Tesla could have used an active aero solution that closed the vanes on the wheels at speed, but they chose not to. In fact, it appears there are no active aero devices on the Model 3, which reduces the cost of making it.”

Model 3’s grille-less front fascia is similar to that of the Model X and the new Model S. Regarding the mass-market sedan’s aerodynamic features of the front-end design, Mr. Alajbegovic said:

 “Here only the shape remains. A more wedged front end, such as used by rear-engined Porsches, might well be more desirable aerodynamically, but Tesla could be using the grille shape with its rounded edges to control the air flow over the top or round the sides of the car.”

He added: “The Model 3 also employs air curtains in the lower fender that exit ahead of the front tires to provide a drag-reducing air stream over the wheels, while helping the flow transition smoothly around the sides of the vehicle. The underbody is likely to be flat and smooth, ending with a rear diffuser to control the air coming from under the car.”

To illustrate the importance of aerodynamics, Ales estimates that by reducing the Model S drag figure from 0.32 to 0.24, Tesla managed to increase the range of the car by about 50 miles.

Upsight platform lifted from the game’s files

The data miners at PokemonGoHub have found something pretty interesting on Pokemon GO’s newly-updated files. Data mining has revealed that Upsight, a mobile marketing and user behavior tracking system, has been removed from the game after its 0.37.1/1.7.1 update. This could mean a number of things but the one that seems to be most exciting is related to the “Nearby” tracking system.

For those of you who are unaware of what Upsight is, let us help you out. Upsight is one of the most common tools accessible to developers which helps them track user interactions with certain actions or features, etc. For instance, if you were to test a brand new feature with only a handful of users, Upsight would be used to track and see, how the new feature is being treated.

As a result, when we talk about a feature which is only available to a few selected users, there is only one feature that comes to our minds, the “Nearby” tracker as it is currently only being used by players in San Francisco.

So, now that Upsight has been removed, does this mean the testing phase for this new tracker is over? If this is what is happening, that means the new tracking feature might be releasing for everyone. Hopefully, this is the case and we are introduced to this new feature in the game’s next update. For more details regarding Upsight and the “Nearby” tracker, check out PokemonGoHub’s official post here.

In related news, Pokemon GO Plus is finally available and can be purchased through Amazon, GameStop and Nintendo’s official website for a price of $34.99. However, due to the device’s massive demand, it is currently out of stock but players who pre-order the device will get it as soon as the next stock arrives which in late October. For more details, check out the link here.

Netflix users could face a slowdown in streaming service, which could lead to subscriber loss

In 2014, Netflix, Inc. (NASDAQ:NFLX) was in conflict with Internet Service Providers like AT&T and Comcast on low broadband speeds ruining its subscribers’ viewing experience. To settle the matter, the world’s leading online TV network signed interconnection deals with various ISPs.

Soon after, Donald Trump bashed net neutrality rules on Twitter: “Obama’s Attack on the Internet is another top down power grab. Net neutrality is the Fairness Doctrine. Will target Conservative Media.” Following his election last month, the debate on net neutrality has intensified as the Trump administration prepares to take over the White House from January 20. Net Neutrality is the principle that ISPs should allow access to all applications and content regardless of the source, without favoring or preventing any website or product. In simpler words, all Internet traffic should be treated equally.

At the UBS Global Media and Communications conference earlier this month, Netflix was asked whether a rollback in net neutrality rules in the US and other countries would affect its service and value proposition. The company replied that it has always demanded that all Internet content should be treated equally by ISPs.

According to Market Realist, a change in the rules could serve as a setback for the video streaming heavyweight which has been focusing on enhanced customer experience. It could imply that Netflix would require paying higher interconnection fees to ISPs or allow ISPs to throttle Netflix’s streaming, leading to a loss in subscriber base.

Moreover, a major portion of mobile data traffic consists of video that surges data consumption of wireless carriers. According to Cisco’s visual networking index (VNI), video comprised 61% of mobile data traffic in the US last year and it is expected to soar to 77% by the end of 2020. Earlier this year, Netflix introduced a “data saver” option which enables users with superior data plans to stream videos in high quality, while users with inferior plans can stream at low quality.

Apple is expected to launch a heavily upgraded iPad Pro 2 by March 2017

Apple Inc. (NASDAQ:AAPL) is currently working on multiple devices which has given the tech world a lot to look forward to. One of these devices is the iPad Pro 2 which is rumored to be a major upgrade from the current iPad Pro. Multiple sites speculate that the upcoming iPad Pro 2 will serve as a major rival to Microsoft’s next generation Surface Pro. Apple is clearly not messing around and wants to ensure that it regains its former title as top tablet manufacturer. Here is The Country Caller’s take on Apple’s upcoming iPad Pro 2!

The biggest upgrade for the next generation iPad Pro is Apple’s all new A10 processor, which will make it the most powerful iPad ever released. The A10 processor is designed to virtually improve the performance and efficiency of any device in which it is implemented. Taiwan-based semiconductor maker will manufacture the A10 processing chipset, which is also responsible for manufacturing Apple’s A9 processing chipset. However, the next-gen A10 processing chips will not be ready for mass production until early 2017, which will cause a delay in the release of the next generation iPad Pro.

The iPad Pro 2 is expected to sport a similar 9.7-inch retina display screen but unlike its predecessor, it is rumored to support 4K videos. Multiple sources speculate the iPad Pro 2 to come installed with graphic cards from AMD and NVIDIA. The next-gen iPad Pro is also expected to offer an upgraded 12-megapixel rear camera with iSight implementation and a 5-megapixel front facing snapper with Retina Flash support and HD FaceTime capabilities. On the other hand, the next generation iPad Pro 2 is expected to offer a similar 256GB of internal storage like its predecessor model.

Apple will release its next generation iPad Pro in March 2017 and the base model will retail at $799 at least. The company improved its original iPad Pro in every aspect and Microsoft should be well aware of a possible clash between its upcoming Surface Pro 5 and the iPad Pro 2. The Surface series might have finally met a worthy opponent in the form of Apple’s next generation iPad Pro.

Amazon shares climbed to a new 52-week high after BMO Capital made optimistic comments on Prime’s growth prospects

Amazon.com, Inc.’s (NASDAQ:AMZN) main ecommerce platform, Amazon Prime, has been the leading factor for the breathtaking performance of the online retail giant. In fact, Amazon stock’s price target has received a boost at the Street, solely on the back of strong expectation from Prime for the second half of 2016. The stock traded 1.92% higher at $804.91 as of 12:05 PM EDT today, carving a new 52-week high today.

BMO Capital updated its thesis on Amazon today, maintaining its Outperform rating and raising its price objective by $25 to $900, representing potential upside of 13.96% over the last closing price. While the ecommerce giant’s revenue forecast for the current quarter seems appropriate, the research firm bumped up its estimate for the last quarter which was already above the consensus estimate, accrediting enhanced confidence in Amazon Prime’s growth potential.

Daniel Salmon, the analyst at BMO Capital, estimated that Prime is heading into the second half of this year with 26 million more users than it had when it headed into the second half of the last year. The analyst emphasized on this, stating that Prime members are spending more compared to non-Prime members.

By the end of the second quarter of 2016, the company had 76 million Prime users; this number is expected to grow to 93 million by the year-end, according to the research firm. Mr. Salmon expects Prime user base to hit 163 million by the end of 2018.

He raised his revenue forecast from $45.6 billion to 46 billion for the 4QFY16, compared to consensus estimate of $44.6 billion. The earnings per share estimates for 2016 and 2017 were raised by $0.27 to $5.86 and by $0.32 to $10.29, respectively.

Additionally, BMO Capital expects Amazon to generate record Prime subscription fees of $6.9 billion this year, compared to the $4.5 billion it generated in 2015. If it does meet this estimate, the fees would more than double by the end of 2018.