Here are some things going on today in the world of tech:
IPO Domo Jumps on Debut
Another day, another tech IPO : Domo (DOMO), the North Fork, Utah, startup founded eight years ago whose software is part of the traditional "business intelligence market" but refashioned for a mobile ear.
The company's apps let executives see data about their business operations such as visualizing sales.
The company had $108.5 million in revenue in the fiscal year ended in January, up 46% from the prior year, on which it lost $176.56 million. It has amassed a shareholder deficit of $765.2 million as of April, though that's a $99 million equity position after adjustments.
Domo shares priced last night at $21, toward the higher end of the expected $19 to $22 range, and are now up $4.44, or 21%, to $25.44.
Let 1,000 Apple Flowers Bloom
Among those who ponder Apple's (AAPL) future growth, some are looking for bold new markets-such as Rob Cihra of Guggenheimwho is contemplating the $2 trillion automotive market -while others are insisting Apple need only steadily grow many small product categories.
In the latter camp is Amit Daryanani with RBC Capital, who opines that AirPods, those white, wireless earbuds that came out two years ago, are the key to Apple's growth.
AirPods are contained in the "Other" category of revenue, which amounts to as much as $20 billion this year for Apple, and which includes other things such as Apple Watch and AppleTV. Daryanani thinks the biggest source of the 30%-plus growth in Other is the AirPods. And he thinks the buds may at some point have $6 billion to $7 billion in revenue as they approach a 20% "attachment rate" with respect to the iPhone.
For Daryanani, the takeaway is that while the "massive scale of iPhone revenue" means "creating a single product that moves the needle for AAPL is incredibly difficult," by contrast, "consistent development of new products like AirPods at 2-3 year cadence could ultimately lead to Other Products becoming a meaningful growth vector for AAPL and something not entirely appreciated by investors."
Daryanani reiterates an Outperform rating on Apple and a $210 price target.
Apple's New Lineup
Speaking of Apple, the various analysts at BlueFin Research Partners this morning opine that Apple has decided to dump the " SE," a lower-end model of iPhone that sells for $349, and uses an older chip and older form-factor.
"It is our understanding that AAPL has canceled the SE2 platform, which was rumored to also launch in September," writes the firm.
"This model was originally scheduled to be released around the WWDC in June 2018, so it is not entirely surprising that the SE2 has been cancelled altogether."
Without citing sources, the analysts opine Apple's new lineup for the fall includes one new model of iPhone that uses a traditional LCD screen, measuring 6.1 inches, called the " iPhone 9," and two models that will have OLED displays, called the " 11" and " 11 Plus," with the first measuring 5.8 inches, and the latter, 6.5 inches.
I would note that Dutch gadget site LetsGoDigital has a concept rendering of an iPhone with three cameras, possibly using the third lens for greater optical zoom, up to 5 times. The speculation is based on earlier speculation by Forbes. Read the brief via Google Translate.
Apple stock today is up 82 cents at $186.32.
Tesla Employees Talk of Missing Targets
With Tesla (TSLA) headed toward next week's all-important production update, expected Tuesday the 3rd, Salvador Rodriguez with Reuterslate yesterday warned that employees are predicting Tesla will miss its goal of hitting a production rate of 5,000 per week, citing comments to Reuters by three unnamed line workers.
One worker identified particular bottlenecks, such as the paint department not having enough capacity to treat new units needing the paint job. Another employee said that units built in a makeshift assembly line added under a tent have needed to be "reworked."
There's some difference of opinion today on how to think about those upcoming production numbers.
Instinet's Romit Shah, reiterating a Buy rating on Tesla stock, writes that he anticipates "share price volatility on the back of the Q2 delivery report next week."
But he expects Tesla will make its target "through an extrapolation of peak daily production."
On the other hand, Pierre Ferragu with New Street Research writes that he "doesn't much care" about what the number ends up being."
He's looking for a "run-rate exiting the quarter to be between 3,500 and 5,000," which would be "fantastic," in his words. But all that "doesn't matter much to us," as "Whether the company hits 5,000 units per week now, or later this year has virtually no incidence on the future of the company."
"This is the reverse principle of the Lorenz butterfly. Today's production run rate has virtually zero predictive power to units produced next year."
Tesla shares today are down 91 cents at $349.02.
Amazon's Big Moves
Analysts continue to asses Amazon's (AMZN) two big announcements yesterday, its purchase of pharmacy startup PillPack, and its effort to equip small businesses to be package-delivery-service providers.
My colleague Teresa Rivasdetails the thinking of Bernstein analyst David Vernon on the delivery initiative, saying that such a service will be a more costly way to transport goods than either Fedex (FDX) or UPS (UPS). Vernon doesn't consider Amazon's initiative a direct threat to either carrier, Teresa writes.
On the matter of PillPack, a number of individuals have cut price targets on the pharmacy stocks- CVS (CVS), Rite Aid (RAD), and Walgreens Boots Alliance (WBA).
Jefferies & Co.'s Brian Tanquilut actually cut his rating on Walgreens to Hold from Buy, and cut his target to $65 from $85, writing that the PillPack deal "enlarges the overhang" on the whole group.
Raymond James's John Ransom, who has a Market Perform rating on the shares, writes that management yesterday sounded "unconcerned confidence" about the Amazon move, "citing that PillPack had been for sale for some time, is not a new concept, and that their strategy doesn't change as they seek to become an ever more convenient and essential part of the more complex and evolving pharmacy landscape."
But Tanquilut is not convinced there's nothing to worry about. "While we tend to view reactions in the market today as a bit much, we also remain somewhat skeptical of the mysterious plan that WBA management is yet to more fully elaborate on," he writes.
All the pharmacy stocks are down again today. Amazon shares are up $6.10, or 0.4%, to $1,707.55.
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