Thursday Morning's Market Insights: Cisco Systems, Inc. (CSCO), Twitter Inc (TWTR), Tesla Motors Inc (TSLA), Expedia Inc (EXPE)

By Shira Gonen

Cisco Systems, Inc. CSCO is up close to 5% in pre-market trading after the company released second quarter fiscal 2016 earnings yesterday after market close.  Revenues for the quarter came in a $11.92 billion, surpassing analysts' estimates of $11.76 billion. Earnings of $0.53 per share for the quarter were generally in line with consensus estimates of $0.54 per share. Prior to earnings, analysts were focused on fewer international orders, macro concerns marked by demand fluctuations due to the strengthening dollar, and the effects of switching upgrade cycles. In the release, CEO Chuck Robbins stated, "We delivered a strong Q2, and are managing the business extremely well in a challenging macro environment."

In reaction, analyst George Notter of Jefferies upgraded the stock from Hold to Buy and increased his price target to $27.50 from $26.00 following earnings. He states, "Cisco's results and guidance were consistent with our prior views – they hit the quarter and guided down modestly relative to Street expectations. Their commentary about the macro environment was better-than-feared. With the recent swoon in the share price, we think the risk/reward is attractive and we're upgrading the name to a Buy rating."

According to TipRanks' statistics, out of the 21 analysts who have rated the company in the past 3 months, 16 gave a Buy rating, 1 gave a Sell rating, and 4 remain on the sidelines. The average 12-month price target is $30.25, marking a 35% upside from where shares last closed.

Twitter Inc TWTR is down 9% in pre-marking trading following its earnings report yesterday after market close. The company posted revenues of $710 million and earnings of $0.16 compared to analysts' estimates of $710 million and $0.12, respectively. The earnings were most notably marked by a lack of user growth, the first time since its IPO, as the company reported 320 million monthly active users for this quarter, the same number from last quarter, with a decline in some foreign markets. CEO Jack Dorsey stated product changes going forward, including a shift in focus going forward to leveraging real-time experiences through the platform as a way to "[focus] on what Twitter does best: live." Related, the company announced news of a tweet timeline shift by relevance vs order last week. However, this announcement received negative attention on Buzzfeed shortly after, leading to hashtag #RIPTwitter

Following earnings, top ranked analyst Mark Mahaney of RBC Capital reiterated a Sector Perform rating, cutting his price target to $23 from $34. The analyst remains neutral on the stock due to flat user growth, declining ad revenue growth, and flat margin guidance. However, he remains positive regarding the company's product enhancements. He states, "We remain cautious, though current aggressive product moves are the right steps."

According to TipRanks' statistics, out of the 23 analysts who have rated the company in the past 3 months, 10 gave a Buy rating, 3 gave a Sell rating, and 10 remain on the sidelines. The average 12-month price target is $26.05, marking a 74% upside from where shares last closed.

Tesla Motors Inc TSLA is up 2% in pre-market trading following the company's earnings release yesterday after market close. The company posted revenues of $1.75 billion versus consensus estimates of $1.8 billion, and a loss of 87 cents per share, versus analysts' estimates of 12 cents per share. However, the company issued positive 2016 guidance as well as provided positive sales updates for its Model S cars in 2015, marking a 51% increase from the previous year. Of particular interest was its projection to deliver between 80,000-90,000 vehicles in 2016, a significant increase from last year's guidance.

Prior to earnings, analysts were concerned regarding falling Model S demand and production delays of the Model X, as well as the unclear timing of the Model 3 launch, set to release in 2017. However, CEO Elon Musk quelled some of these concerns, confirming via twitter that the company will be taking reservations for the newest Model 3 starting on March 31, 2016, requiring a $1000 deposit. He also stated that production of its newest Model X, the crossover, is on track.

After earnings, analyst Ben Kallo of Robert W. Baird reiterated a Neutral rating on the stock, lowering his price target to $230 from $282. He states, "Financial results missed estimates across the board, although TSLA reiterated 2016 guidance of 80k-90k deliveries and expects to ramp automobile gross margins throughout 2016. Similar to past years, the company has lofty assumptions which Bears may argue are unachievable, but we remind investors that TSLA has historically achieved or come close to its long-term targets (despite occasional setbacks). That said, we continue to wait for additional proof points of the Model X ramp before becoming more constructive."

According to TipRanks' statistics, out of the 12 analysts who have rated the company in the past 3 months, 5 gave a Buy rating, 2 gave a Sell rating, and 5 remain on the sidelines. The average 12-month $273.30, marking a 90% upside from  where shares last closed.

Expedia Inc EXPE is up 10% in pre-market trading after the company posted earnings yesterday after market close. The company posted earnings of $1.938 billion in sales and adjusted earnings of $0.77 per share, compared to estimates of $1.72 billion and $1.02 per share, respectively. Total bookings and revenue for the quarter increased by 40 and 29%, respectively, y/y. Most notably, the company expects 25-24% growth in EBIDA in 2016 due to several acquisitions last year, such as vacation rental site Home-Away, designed to compete with Airbnb. CFO Mark Okerstrom stated, "Our M&A team is always open for business."

After reviewing the earnings results, Piper Jaffray analyst Michael Olson remains sidelined on the stock, reiterating a Neutral rating and $130 price target. The analyst commented, "Expedia reported Q4 EPS and bookings below consensus, but the mid-point of guidance for CY16 EBITDA is slightly ahead of the Street at $1.63B vs. consensus of $1.62B. Importantly, Expedia management suggested that broader macro concerns around the travel environment do not appear to be having a material impact on the company's performance. Notably, the performance of recently acquired HomeAway in Q4 was better than expected, suggesting that the trajectory of this acquisition is off to a favorable start; we expect a significant positive impact from the implementation of a traveler booking fee on HomeAway in 2H'16 and into '17, which appears to be factored into FY16 guidance to some degree."

According to TipRanks' statistics, out of the 8 analysts who have rated the company in the past 3 months, 5 gave a Buy rating, while 3 remain on the sidelines. The average 12-month price target is $145.67, marking a 54% upside from where shares last closed.