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Analyst Blog

We reaffirm our long-term Neutral recommendation on Liberty Interactive Corp. . The company reported mixed financial results for the third quarter of 2013. While total revenue surpassed the Zacks Consensus Estimate, net income fell below the same. Currently, Liberty Interactive has a Zacks Rank #3 (Hold).

Why the Reiteration?

We believe that the TV home shopping business will continue to flourish. The QVC division has transformed itself into a powerful global brand, which may boost Liberty Interactive’s revenues in the double-digits. The strategy undertaken by Liberty Interactive to offer QVC programs on wireless platforms, such as smartphones and tablets, was a huge success.

On the other hand, continuation of global economic headwinds and volatility in the foreign exchange rates may result in a fluctuating top line in the near future. Meanwhile, the stock price has soared over 50% in the last year and is currently trading at the high-end of its 52-week price range. This may restrict any above-market gain anytime soon.

In Aug 2013, Liberty Interactive Launched a new broadcast channel called “QVC PLUS”. This channel currently airs all the live broadcasts (TV shows) of the existing QVC channel at a delay of three hours. Management has decided to introduce some special programming in the QVC PLUS channel in the future to broaden QVC’s offerings. QVC PLUS is available to DIRECTV (DTV - Analyst Report) customers.

Liberty Interactive holds approximately 38% in HSN Inc. (HSNI - Snapshot Report) and about 22% of the equity and 57% of the total votes of all classes of TripAdvisor Inc. (TRIP - Snapshot Report) common stocks.

QVC recently launched a new social shopping platform called “toGather”. Using this platform, users can track popular products and exchange views with other members of the site. toGather will provide an integrated shopping cart, a full product catalogue and recommendations from an active user community.

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