Here are some things going on today in the world of tech :
Google Q1 Cometh
Verizon Services Can Grow Again
Shares of Verizon Communications (VZ) are up 13 cents at $48.03, after Barclays's Amir Rozwadowski this morning raised his rating on the shares to Overweight from Equal Weight, while keeping his price target of $56, writing that the current price "overly discounts any number of factors that could improve its earnings trajectory," such as the prospect that its service revenue will be "reignited" by as soon as the middle of the year.
While the company's Q1 probably had "lower volumes" of subscribers - he thinks they were worse than consensus, losing perhaps 50,000 phone customers in the quarter - nevertheless, Rozwadowski takes heart in his belief the soggy quarter "won't affect the carrier's ability to deliver an improved year over year service revenue trajectory in the latter half of the year."
The upgrade comes ahead of Verizon's Q1 report tomorrow morning, before the opening bell.
Conspiracy Over eSIM?
Speaking of telecom, The Street is mulling the revelation on Friday by The New York Times's Cecilia King that the U.S. Department of Justice is investigating whether Verizon conspired with AT&T (T), as well as the global cellular standards-setting body, the GSM Association, to hamper the emerging technology of " eSIM," a programable SIM card that would let phones jump from one carrier to another.
The Times wrote that Apple (AAPL) was instrumental in bringing the scrutiny of the carriers.
Wells Fargo's Jennifer Fritzsche this morning counsels investors to "wait and see," as her DC sources are telling her the "investigation will continue to unfold as DoJ continues to review information from the carriers and GSMA" and that in her opinion " a collusion case may be difficult to prove."
She notes "a similar investigation was made in 2016 which concluded in no wrongdoing."
However, Walter Piecyk of BTIG explores the prospect Apple wants to be a carrier, writing that the technology could "provide some interesting new opportunities for Apple if it decided to build an MVNO on top of wholesale agreements with multiple carriers." He notes there's also a risk that eSIM could further prolong already low smartphone upgrade rates by consumers, in that "churning customers would no longer need to buy a new smartphone, as is typically the case."
I wrote for Barron's last fall that the eSIM could be the beginning of very hard times for the carriers as it lowers the attachment of customers to one single provider.
GRUB's Full Valuation
Shares of online-food-ordering pioneers Grubhub (GRUB) are up 84 cents, or 0.7%, at $102.51, after Gabelli & Co.'s Matthew Trusz this morning started the stock at a Hold rating, after concluding that the company has a "vast and underpenetrated addressable market" - the $200 billion domestic food market - and has "strong network effects" in its business, and a "market leading platform," but that it is all pretty much priced into the shares, with the stock trading at 7.5 times 2019 revenue and 29 times 2019's likely adjusted Ebitda.
Okta's Bright Prospects
Shares of identity-authentication software maker Okta (OKTA) are up 75 cents, or 1.8%, at $42.72, after Canaccord Genuity's Richard Davis this morning raised his rating the shares to Buy from Hold, after concluding that an "accumulation of favorable fundamental data" tells him that its "near- and especially long-term outlook will be better than investors expect."
Davis makes an intriguing analogy to MuleSoft (MULE), the software maker that is being bought by Salesforce.com (CRM) for $6.5 billion: "One roughly analogous way to think of Okta is that if MuleSoft connects applications to other applications and data, Okta is the other side of the same coin to the extent that Okta connects people to applications."
Davis thinks the company's addressable market has "no glass ceilings" until "the firm approaches at least the $2 billion revenue mark."
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