For Immediate Release
Chicago, IL – February 23, 2012 – Today, Zacks Equity Research discusses the e-Commerce Industry, including Priceline (PCLN - Analyst Report), Orbitz Worldwide , Google Inc and ValueClick Inc. .
A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/70086/e-Commerce+Stock+Outlook+-+Feb.+2012
We can strongly recommend very few stocks in the sector at this point. However, longer-term opportunities abound, as have been outlined below.
Online travel company Priceline (PCLN - Analyst Report) is in a strong growth market. Consequently, it should continue to benefit from international expansion and customers moving online. Domestic growth will likely be slower and mainly driven by the continued improvement in the economy.
While Orbitz Worldwide is a much smaller player with more limited resources, it too should benefit from these trends. However, expansion in China will be disappointing, as local players and the government continue to make operation difficult for U.S. players. Occupancy tax issues are likely to remain a point of contention and online travel agents have recently scored a few wins.
The search market is dominated by Google Inc , which has seen phenomenal growth rates over the last five years. The company is a leading innovator, using its engineering talent to extend its position in the computing platform to the mobile platform. The company has a huge cash balance that we were concerned was not being put to the best use. However, it remains acquisitive, which should further round out its product portfolio, build on current strengths and help expansion into new areas.
Google’s main challenge is the increasing competition from not just archrival Yahoo, but also challenger Microsoft, who’s Bing search engine continues to gain ground.
A much smaller provider of Internet advertising solutions and online marketing services, ValueClick Inc. should also benefit from the strength in the online advertising market (particularly display), the recently acquired Dotomi, international expansion, restructuring actions and strong cash flows. However, as firms with larger advertising budgets increase spending on Internet advertising, many of the services performed by ValueClick could be done in-house. This is a risk of investing in the stock.
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