Tech Today: Google vs Amazon, Buying Tesla, Lattice's Turnaround

Here are some things going on today in the world of tech :

EverQuote IPO Zooms

The Nasdaq welcomes a new quasi-tech stock this morning, EverQuote (EVER) of Cambridge, Mass., which makes money referring consumers to insurance providers through its online marketplace over 160 insurance carriers.

The company made $126 million in revenue last year on which it had a net loss of $5 million. (More info is available in its S-1 prospectus filing with the SEC.)

The stock was priced last night at $18, above an initial range of $15 to $17, and is now up $3.50, or 19%, to $21.50.

Amazon's Expanding Ambition

Shares of (AMZN) are up $25.98, or 1.6%, to $1,685.49, after the company made a couple of announcements that are catching people's attention.

Amazon said it will acquire pharmacy startup PillPack. The Manchester, N.H.-based pharmacy, which has locations in various locations including Miami and Brooklyn, sends customers monthly " a personalized roll of pre-sorted medications, along with a convenient dispenser," to help ease the process of getting refills and keeping on top of dosages, according to its own press materials.

Amazon is reportedly paying $1 billion for the company, according to The Wall Street Journal's Sharon Terlep and Laura Stevens, citing multiple unnamed sources.

The company boasts of having a " PharmacyOS " that lets it coordinate its customers' shipments.

That announcement is hurting the shares of pharmacy stocks Walgreen's (WAG), CVS Health (CVS), and Rite Aid (RAD).

Additionally, Amazon said it will let individuals use its delivery technology to start their own delivery businesses of up to 40 vehicles. Amazon said startup costs can be kept as low as $10,000 and that an entrepreneur can make $300,000 annually in profit with such a business.

Regarding PillPack, Evercore ISI analysts Ross Muken and Anthony DiClemente write that despite the small size of PillPack, with just $100 million in annual revenue, this is a "net negative" for the pharmacy companies.

"It is undeniable now that AMZN is'entering the pharmacy space'," they write.

"We will now spend the next 12mo debating what exactly this means and the potential magnitude of risk. No matter your view on medium term EPS risk this will not be good for multiples."

As for the delivery-business announcement, R.W. Baird's Colin Sebastian, who rates Amazon at Outperform with a $1,800 price target, writes that building out "last-mile delivery" is increasingly important "as customer demand for 2-hour delivery increases with the increasing adoption of Prime Now."

He thinks getting partners for local delivery "will be crucial" as Amazon's Whole Foods "expands to more Prime Now markets (19 currently, more planned in 2018).

Also, "Amazon is likely to leverage these delivery services for 3P monetization," he thinks.

A Google Home in Every Pot?

Speaking of Amazon, Alphabet (GOOGL) needs to do something to counter the company's expanding grip on voice-based intelligent assistants with the " Echo " devices, according to Morgan Stanley's Brian Nowak.

By 2022, such devices are probably going to be in 70% or more of U.S. households, writes Nowak, and there will be one third more Echoes than of the competing Google device, " Google Home."

That leads Nowak to urge Alphabet's Google to give away the " Mini " version of its Google Home.

"We believe GOOGL should give away a Google Home Min i to every US (arguably global) household," he writes.

"We estimate the cost would be "only" $3.3bn...or ~3% of 2019 opex.

"One way to look at it, GOOGL's estimated US retail search profit over the next 5 years would cover this ~5X over.

"A larger personal assistant install base would also enable GOOGL to grow its emerging voice technologies (such as Duplex)."

Nowak rates Alphabet stock at Overweight, and today he raised his price target to $1,250 from $1,200.

Alphabet shares are up $6.81, or 0.6%, to $1,123.75.

Twilio's Opportunity

Shares of cloud-computing-based communications-tools vendor Twilio (TWLO) are up 35 cents, or 0.6%, to $54.65, after Argus Research's Jim Kelleher raised his rating on the shares to Buy from Hold, with a $75 price target, after concluding the company is in the "very early innings of a significant market opportunity," as the markets for its "communications platform as a service," or "CPaaS" software, "are vast and barely tapped."

"The company is growing its active customer base and, more important, generating an increased amount of revenue per active customer," writes Kelleher. He expects that the stock will "become increasingly attractive to investors once Twilio achieves and sustains non-GAAP profitability, which we expect to occur within the next 12 months."

Square's no Amazon

Shares of payments pioneer Square (SQ) are up 8 cents to $60.17, after SunTrust Robinson Humphrey's Andrew Jeffrey raised his price target to $66 from $45, even though he's keeping the stock at a Hold.

Jeffrey writes that the company is "bending Payments ecosystem rules and behaviors in its direction by deeply embedding itself" in small businesses, and he's especially hopeful about the payoff from its "Square Cash" initiative.

But, he's hesitant about recommending the stock, because, he writes, the reason being, " We don't see Square as the next Amazon."

"The company has carved out an enviable growth niche, demonstrating an ability to monetize an ecosystem where others have not," writes Jeffrey. "Conversely, barriers are low, in our view, evidenced by rapid growth of new solutions, like Clover. Square is also exposed to small and medium businesses, which fare poorly in recessions."

"We believe investors will see a better entry point, even if SQ rallies near-term."

In similar fashion, Citigroup's Peter Christiansen reiterates a Neutral rating on Square, while raising his price target to $67 from $47, writing that the company's opportunity is large, but that he expects competition from the likes of PayPal (PYPL) and First Data (FDC) to "intensify" as Square goes "up-market."

Now Is the Time to Buy Tesla

Now is the time to buy shares of Tesla (TSLA), contends Baird analyst Brian Kallo, ahead of what is expected to be its announcement on July 3rd of its production run rate for the Model 3 sedan, which CEO Elon Musk has promised will be cruising along at 5,000 units per week.

Writes Kallo, who has an Outperform rating on Tesla shares, and a $411 price target, "We believe an update on the Model 3 production timeline could be a positive catalyst."

My colleague Teresa Rivas has more here.

Tesla stock today is up $9.36, or almost 3%, to $353.86.

Warming to T-Mo's Sprint Deal

Shares of T-Mobile US (TMUS), which is in the process of trying to buy Sprint (S), are down 2 cents to $59.32 despite an upbeat note from Wells Fargo's Jennifer Fritzsche, who this morning raised her rating on the shares to Outperform from Market Perform.

Fritzsche writes that she's been talking with some D.C. policy-type sources who have given her somewhat greater confidence the T-Mo-Sprint deal will get done.

"We are more optimistic on the odds of deal approval," she writes, "In our view, we believe the FCC in particular will be open-minded and view the competitive environment through a wider lens.

"In our view, the T/TWX approval also showed an acknowledgement that the competitive environment and landscape has rapidly changed over the past few years."

Fritzsche thinks that "In either scenario, however (deal or no deal), TMUS's valuation is quite compelling at current levels, in our view."

Re-programming Lattice

Shares of programmable-chip maker Lattice Semiconductor (LSCC) are up 32 cents, or 5%, to $6.50, after Dougherty & Co.'s Charles Anderson started coverage of the stock with a Buy rating, and a $10 price target, writing that new management, and the input of activist Lion Point Capital, may prompt a " re-rating " of the stock.

The company "is in the infant stages of a shift that began in March with longtime CEO Darin Billerbeck's retirement and a subsequent agreement with shareholder Lion Point Capital to add three new independent directors," writes Anderson.

"We feel like we've seen this movie before," he writes, referring to Integrated Device (IDTI) and Cypress Semi (CY) both bringing in fresh blood and seeing their shares re-rate.

The key is Lattice going "up-market," serving more of the automotive and industrial and high-performance computing markets versus its traditional sales into consumer goods.

Lattice sells chips that compete with Xilinx (XLNX) and with Intel's (INTC) Altera programmable chip business.

Apple Finds New OLEDource

Apple (AAPL) has been relying on Samsung Electronics (005930KS) as the sole supplier of organic-light-emitting diode displays for its iPhone, but that will soon change, as LG Display (LPL) begins cranking out some small supply of the displays, writeMin Jeong Lee and Sam Kim of Bloomberg, citing comments from multiple unnamed sources.

The authors claim the LG parts will start showing up in one model of iPhone later this year.

Apple shares are up 97 cents, half a percent, to $185.14, while LG Display stock is down 21 cents, or 2.6%, to $7.88.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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