The Zacks Analyst Blog Highlights: Amazon.com, Apple, Google, Gaiam and Pandora - WSET.com - ABC13

The Zacks Analyst Blog Highlights: Amazon.com, Apple, Google, Gaiam and Pandora

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SOURCE Zacks Investment Research, Inc.

CHICAGO, June 6, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amazon.com Inc.'s (Nasdaq:AMZN-Free Report), Apple (Nasdaq:AAPL-Free Report), Google (Nasdaq:GOOGL-Free Report), Gaiam Inc. (Nasdaq:GAIA-Free Report) and Pandora (NYSE:P-Free Report).

Zacks Investment Research, Inc., www.zacks.com

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

Amazon to Launch Smartphone June 18?

Rumors of Amazon's intentions to launch a smartphone have been making the rounds for long. Speculations revived regarding the release of Amazon.com Inc.'s (Nasdaq:AMZN-Free Report) 3D smartphone, when the giant online retailer announced an event to be held on June 18 in Seattle to be hosted by chief executive officer ("CEO") Jeff Bezos for a product launch.

Amazon made the announcement through a 50-second video broadcast on YouTube showcasing people's reaction while trying out the device outside the frame. However, Amazon did not provide further details. This naturally prompted rumors that the e-commerce company is set to launch a high-end 3-D smartphone, which would intensify its competition with Apple (Nasdaq:AAPL-Free Report) and Google (Nasdaq:GOOGL-Free Report).

A smartphone is actually quite a good idea for Amazon since it would expand its current lineup of devices and further help sales of digital books, music and movies.

Per Wall Street Journal (WSJ) reports in April, Amazon officials demonstrated the sample handset models to developers from San Francisco and Seattle. Apparently, the phone will be available in both high-end and low-end versions, the high-end version offering a screen, which will present 3-D images without the support of special 3-D glasses.

Moreover, the devices will be integrated with retina-tracking technology, which will be embedded in four front facing cameras, enabling users to view 3D images with naked eyes.

Although Amazon has been successfully entering different markets, it might have to struggle to establish itself in an already crammed smartphone market. Per IDC reports, the smartphone market grew 21% last year. Apple and Samsung Electronics Co. dominate the industry and together constituted 46.6% of the total market in 2013, as reported by the research firm Gartner.  Amazon's late entry could make growth difficult.

However, Amazon can have an edge over its competitors, given its special glasses-free 3D image viewing feature and retina-sensing display technology. Also, the device will provide a more compact software-hardware amalgamation, thus offering an improved user experience.

Amazon currently holds a Zacks Rank #3 (Hold). Gaiam Inc. (Nasdaq:GAIA-Free Report), which carries a Zacks Rank #2 (Buy), is a better-ranked stock from the same sector and is therefore also worth considering.

Pandora Listener Hours Up in May

Despite intensifying competition, Pandora (NYSE:P-Free Report) recently announced that listening hours jumped 28.0% to 1.73 billion in May, 2014, which reflected steady growth in the U.S. web-based radio market.

However, shares of Pandora were down 2.8% to $23.91 on June 4, 2014 following the U.S. Justice Department's decision to review decade-old files for paying licensing fees to songwriters and composers. This may in turn adversely affect the royalties paid by Pandora  and other such music streamers.

Although this may emerge as a major headwind for Pandora, we believe the company's growing popularity will be a major positive in the long run.

Pandora's share of the total U.S. radio listening market surged to 9.13% compared to 7.29% in the year-ago month. However, its market share declined from 9.28% in Apr, 2014.

We believe that the slight monthly decline in market share is primarily due to the strong competition from Apple, The iPhone-maker's $3.0 billion deal to acquire Beats Electronics poses significant threat to Pandora over the long term.

Pandora exited the month with almost 77.0 million active listeners in comparison to 70.8 million listeners a year ago. Moreover, the number of active listeners increased from 76.0 million in Apr, 2014.

Earlier, on Mar 6, 2014, the company had announced that the May 2014 listening metric will be its final metric to be released on a monthly basis. However, the company will continue with the prevalent practice of providing listener metrics on a quarterly basis in its periodic filings.

It is noteworthy that Pandora enjoys a first mover advantage in the music streaming industry. We believe that Pandora's already popular service, driven by its effective discovery engine and well established infrastructure places it well to compete.

Nevertheless, we believe that rising costs related to licensing and intense competition are the major headwinds in the near term.

Currently, Pandora has a Zacks Rank #3 (Hold).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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