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The Browser Underdog: Opera's Surprising Surge◉ Abstract Opera Limited (OPRA) presents a compelling investment opportunity, boasting an attractive valuation with a P/E ratio of 10.1x, significantly lower than the peer average of 66.5x. The company demonstrated strong financial performance in FY23, with 20% revenue growth reaching $396.8 million, accompanied by impressive cash flow growth of $82.8 million. Opera's debt-free status adds to its financial health. However, challenges persist, including its limited 2.4% market share in the competitive browser market, heavy dependence on browser revenue, and regulatory and technical risks. Despite these challenges, Opera's strengths and resilience, coupled with the industry's growth prospects, make it an attractive investment choice. Read full analysis here......... ◉ Introduction The internet browsing market is highly competitive, with approximately 5.3 billion monthly active users as of 2024. Google Chrome dominates the market with a 65.18% share, followed by Safari at 18.55%, Microsoft Edge at 5.26%, and Mozilla Firefox at 2.74%. The market is expected to continue growing, driven by increasing internet penetration, the proliferation of smart devices, and the demand for enhanced web experiences. Additionally, the shift towards mobile browsing, with mobile devices accounting for a significant portion of internet traffic, will further fuel this growth, leading to projected expansion and innovation in the industry. ◉ Key Growth Drivers 1. Increased Internet Penetration: Global internet user numbers are steadily rising, particularly in developing regions where access to technology is improving. 2. Mobile Device Usage: The shift towards mobile browsing is significant, with browsers like Chrome and Safari leading in mobile usage due to their integration with popular operating systems (Android and iOS) respectively. 3.Technological Advancements: Continuous improvements in browser technology, including speed enhancements, security features, and user-friendly interfaces, attract more users. 4. Focus on Privacy and Security: Growing concerns about online privacy have led to increased demand for browsers that prioritize user data protection. This trend benefits browsers like Firefox and Opera, which emphasize privacy features. 5. Integration with Ecosystems: Browsers that integrate well within their respective ecosystems (e.g., Safari with Apple devices) tend to retain users more effectively due to seamless functionality across devices. ◉ Major Players Today, our discussion will center on Opera, a niche browser vendor navigating the global internet browsing market dominated by Google Chrome and Safari. This report presents an in-depth examination of Opera's technical and fundamental metrics. ◉ Company Overview Opera Limited NASDAQ:OPRA is a Norway-based tech innovator, established in 1995. Listed on NASDAQ (OPRA), Opera boasts a global team of 500+ employees. Its diverse portfolio includes Opera Browser, Opera Mini, Opera GX, and Opera News. The company operates through four segments: Browser and Search, Advertising, AI-driven Content Discovery, and Fintech (Opera Pay). Opera's growth strategy focuses on emerging markets, AI enhancements, advertising expansion, and fintech development. ◉ Investment Advice 💡 Buy Opera Limited NASDAQ:OPRA ● Buy Range - 16.8 - 17.8 ● Sell Target - 23.5 - 24.5 ● Potential Return - 33% - 38% ● Approx Holding Period - 12-15 months ◉ Revenue Breakdown (FY23) ● Total Revenue: For the full year 2023, Opera reported total revenue of $396.83 million, up from $331.04 million in 2022, marking a 20% year-over-year growth. ● Advertising Revenue: Advertising revenue constituted approximately 59% of total revenue, amounting to around $234 million. This segment grew by 24% year-over-year, driven by the success of the Opera Ads platform and browser monetization strategies. ● Search Revenue: Search revenue accounted for about 15% of total revenue, totaling approximately $60 million, with a growth rate of 15% year-over-year. This growth is attributed to targeting users with higher monetization potential, particularly in Western markets. ● Technology Licensing and Other Revenue: This segment represents a smaller portion of the overall revenue, contributing roughly $0.1 million, reflecting the company’s ongoing efforts to monetize its technology beyond its core browser offerings . ◉ Strengths & Weaknesses The company has experienced significant growth and innovation in recent years. However, it also faces various challenges. Here’s a detailed analysis of its strengths and weaknesses: ● Strengths: 1. Innovative Features: ➖ Opera GX Gaming Browser: Tailored for gamers with CPU and RAM limiters, plus integrations with Twitch and Discord. ➖ Built-in Ad Blocker: Improves browsing speed by blocking ads and tracking cookies. ➖ Free VPN: Enhances privacy by encrypting traffic and hiding IP addresses, allowing access to region-restricted content. 2. Diverse Revenue Streams: Revenue comes from multiple sources, including advertising (about 59%) and search (around 15%), providing financial stability. 3. Financial Growth: Consistent revenue growth, reaching $397 million in 2023, with positive projections for 2024. 4. Strategic Partnerships: Collaborations with major tech companies enhance service offerings and market reach. ● Weaknesses: 1. Limited Market Share: Holds only about 2.4% of the global web browser market, significantly trailing competitors like Google Chrome. 2. Heavy Dependence on Browsers: About 82% of revenue comes from web browsers, making the company vulnerable to shifts in user preferences and market trends. 3. Regulatory Vulnerability: Risks associated with changes in affiliate marketing regulations and data protection laws could impact revenue. 4. Technical Challenges: Users report stability issues and bugs that affect overall experience. ◉ Technical Aspects ● Weekly Chart ➖ In July 2023, the stock peaked at around the 27 level but then encountered considerable selling pressure, leading to a drop towards the 10 level. ➖ Following an extensive period of consolidation, the price has recently achieved a breakthrough and is trending upwards. ● Daily Chart ➖ The daily chart reveals the formation of an Inverted Head & Shoulders pattern. ➖ After a recent breakout, the stock price is currently consolidating just above the breakout level, with expectations of future increases. ◉ Technical Indicators 1. RSI (Daily Chart) ➖ Current RSI of this stock is 66.42, which indicates the strength of buyers. 2. ADX & DI (Daily Chart) ➖ Increasing ADX value above 20, indicated the strength of the trend, thereby uptrending ADX confirms the bullish or bearish supportive decisions. Along with the rising ADX, and the +DI is above (or crossing) -DI, indicates the long trades should be favoured. 3. MFI (Daily Chart) ➖ The current MFI is 59.04, suggesting that the stock is not in an overbought state. 4. EMA’s (Daily Chart) ➖ The stock price is currently positioned above all key EMAs, indicating robust momentum. ◉ Relative Strength ➖ The chart highlights Opera's impressive outperformance of the Nasdaq Composite index, driven by a substantial 50% annual return. ◉ Revenue and Profit Analysis ● Year-over-Year ➖ Opera Limited reported strong financial performance in fiscal year 2023, with revenue reaching $396.8 million, representing a 20% increase from $331 million in fiscal year 2022. ➖ The company's EBITDA also saw significant growth, rising 35% to $69.2 million from $51.2 million in the prior year, while the EBITDA margin expanded to 17.4% from 15.5%. ● Quarter-over-Quarter ➖ Opera Limited's quarterly performance ending September 2024 was equally impressive, with revenue climbing 12% to $123.2 million from $109.7 million in the preceding quarter and 21% from $102 million in the same quarter last year. ➖ Additionally, EBITDA increased 5% to $27.3 million, and diluted earnings per share (LTM) edged up to $1.78 from $1.75 in the previous quarter. ◉ Valuation 1. P/E Ratio ● Current P/E vs. Peer Average P/E ➖ Analyzing the P/E ratio reveals that OPRA stands at 10.1x, highlighting a substantial undervaluation when compared to the peer average of 66.5x. ● Current P/E vs. Industry Average P/E ➖ Within the US software sector, OPRA's P/E ratio of 10.1x is markedly lower than the industry average of 41.9x, signaling that it is relatively inexpensive. 2. P/B Ratio ● Current P/B vs. Peer Average P/B ➖ Examining the P/B ratio, OPRA's current figure of 1.8x falls short of the peer average of 5.5x, indicating a relative undervaluation. ● Current P/B vs. Industry Average P/B ➖ When juxtaposed with the industry average, OPRA's P/B ratio of 1.8x points to a notable undervaluation, as the industry average stands at 3.7x.3.7x. 3. PEG Ratio ➖ A PEG ratio of 0.07 implies that the stock is undervalued in relation to its anticipated earnings growth. ◉ Cash Flow Analysis ➖ In the fiscal year 2023, operational cash flow saw impressive growth, soaring to $82.8 million, a significant rise from the $56.7 million recorded in fiscal year 2022. ◉ Debt Analysis ➖ The company proudly maintains a completely debt-free status, showcasing its strong financial health. ◉ Top Shareholders ➖ Arrowstreet Capital's stake in the company stands at 1.23%, indicating a 4.9% reduction in holdings from the prior quarter. ◉ Analyst Price Target ➖ The 12-month consensus price target for Opera stands at $24.20, implying a substantial potential appreciation of 32% from current levels, presenting an attractive investment opportunity. ◉ Conclusion Opera's attractive valuation and impressive financial performance make it a compelling investment opportunity. However, the company's financial outlook is not without challenges. Market uncertainty and unforeseen events pose risks, while its e-commerce monetization efforts remain vulnerable to market volatility and competition. Additionally, Opera operates in a highly competitive browser market, where intense rivalry could impact user engagement, retention, and revenue. Despite these challenges, the industry's significant growth prospects support a positive outlook, driven by Opera's strengths and resilience, making it an attractive investment choice.
Editors' picks
NASDAQ:OPRALong
by NaranjCapital
3
Silver Gains Traction: Short-Term Upswing Expected● Silver continues to exhibit a robust uptrend, having recently touched an all-time high of 34.9 before retracing to its key support zone around 29.8. ● Following a successful bounce off this level, the metal is now regaining momentum, positioning itself for further gains. ● Notably, the immediate resistance level – aligned with the 50% Fibonacci retracement, just 3% above the current price – presents a prime short-term buying opportunity for traders to ride the anticipated upswing.
OANDA:XAGUSDLong
by NaranjCapital
1
Dollar's Rise, Gold's Demise◉ Abstract The US Dollar Index (DXY) and gold prices have a historically inverse correlation, with a stronger dollar typically reducing gold demand. Key drivers of this relationship include inflation, geopolitical tensions, and interest rates. With a 73-95% negative correlation observed over time, investors should note the current market outlook: the DXY is poised to break out above 107, potentially surging to 114, while gold prices may drop 5% to 2,400 and then 2,300. Understanding this dynamic is crucial for making informed investment decisions and capitalizing on potential trading opportunities. ◉ Introduction The relationship between the U.S. Dollar Index (DXY) and gold prices is significant and typically characterized by an inverse correlation. Understanding this relationship is crucial for investors and traders in the gold market. ◉ U.S. Dollar Index Overview The U.S. Dollar Index measures the value of the U.S. dollar against a basket of six major foreign currencies, including the euro, Japanese yen, and British pound. It serves as an indicator of the dollar's strength or weakness in global markets. When the index rises, it indicates that the dollar is gaining value relative to these currencies, while a decline suggests a weakening dollar. ◉ Inverse Relationship with Gold Prices Gold is priced in U.S. dollars on international markets, which directly influences its price based on fluctuations in the dollar's value: ● Strengthening Dollar: When the DXY index increases, it generally leads to a decrease in gold prices. This occurs because a stronger dollar makes gold more expensive for investors using other currencies, thereby reducing demand. ● Weakening Dollar: Conversely, when the DXY index falls, gold prices tend to rise. A weaker dollar makes gold cheaper for foreign investors, increasing its demand and driving up prices. Research indicates that this inverse relationship has been consistent over time, particularly in long-term trends. For instance, historical data shows that gold prices often rise when the dollar depreciates, reflecting a negative correlation of approximately 73% to 95% over various time intervals. ◉ Short-Term Deviations While the long-term trend supports this inverse relationship, short-term anomalies can occur under specific market conditions. For example, during periods of extreme volatility or economic uncertainty, gold and the dollar may exhibit a positive correlation temporarily as both assets are sought after as safe havens. This behaviour can confuse investors who expect the typical inverse relationship to hold. ◉ Additional Influencing Factors Several other factors also affect gold prices beyond the dollar's strength: ● Inflation: Rising inflation often leads investors to flock to gold as a hedge against currency devaluation. ➖ E.g. In 2022, as inflation rates surged to 9.1%, demand for gold increased by 12% year-over-year, pushing prices higher. Historical data shows that during periods of high inflation from 1974 to 2008, gold prices rose by an average of 14.9% annually. ● Geopolitical Events: Uncertainty from geopolitical tensions can drive demand for gold regardless of dollar fluctuations. ➖ E.g. In late 2023, escalating conflicts such as the Israel-Palestine situation and the ongoing Russia-Ukraine war contributed to a surge in gold prices, with reports indicating increases of over 3% in a week due to these tensions ● Interest Rates: When the Fed raises interest rates, it typically strengthens the dollar as higher yields attract foreign capital. A stronger dollar makes gold more expensive for holders of other currencies, which can reduce demand. ➖ E.g. During the Federal Reserve's rate hikes from March 2022 to early 2023, many investors moved away from gold as they sought higher returns from bonds and other fixed-income securities. This shift contributed to downward pressure on gold prices during that period. ◉ Technical Standings ● U.S. Dollar Index TVC:DXY The US Dollar Index has been stuck in neutral for two years. But if it clears the 107 hurdle, get ready for a surge to 114. ● Gold Spot/USD OANDA:XAUUSD ➖ Gold prices skyrocketed to 2,790, then plunged. Expect a 5% drop to 2,400. If that support cracks, 2,300 is the next safety net.
TVC:DXYEducation
by NaranjCapital
ALB & GPN's Reversal Breakout Could Spark Significant GainsAlbemarle Corporation NYSE:ALB ● On the monthly chart, the stock is bouncing back from a long-standing trendline support that has held firm over the years. ● The daily chart reveals the emergence of an Inverted Head & Shoulders pattern following a significant decline. ● With a recent breakout, the stock appears poised for a potential trend reversal. ● Traders should keep a close eye on this stock for potential buying opportunities. Global Payments NYSE:GPN ● The stock has formed a Double Bottom pattern after a brief period of consolidation. ● Recently, the price broke out from this formation and has been maintaining its position above the breakout point. ● The price movement suggests a short-term buying opportunity, as the resistance level is quite distant from the current price.
NYSE:ALBLong
by NaranjCapital
1
Vita Coco: Hydrating Investors with Impressive Growth Prospects◉ Abstract The US coconut water market, projected to grow at 18.10% CAGR to $5.12 billion by 2029 from $1.89 billion in 2023, presents significant opportunities. Vita Coco, the market leader, demonstrates resilience amidst supply chain challenges. Notably, industry giants Coca-Cola and PepsiCo, which previously ventured into this space with ZICO and O.N.E., respectively, have since divested their interests, validating Vita Coco's competitive advantage. With a debt-free balance sheet, 15% revenue growth in FY2023, and expanding EBITDA margins, its fundamentals remain strong. This robust growth trajectory, combined with a solid financial foundation, positions the company as an attractive investment opportunity, offering potential for long-term value creation and substantial returns. Investors seeking exposure to the burgeoning natural and organic beverages market may find this growth story compelling. Read full analysis here……….. ◉ Introduction The coconut water beverage market in the United States is experiencing significant growth, driven by increasing health consciousness among consumers and a rising demand for natural and organic beverages. Here are the key insights into the current state and future projections of this market. ◉ Current Market Size and Growth Rate The U.S. coconut water market was valued at USD 1.89 billion in 2023 and is projected to reach USD 5.12 billion by 2029, growing at a CAGR of 18.10% during this period. ◉ Key Growth Drivers ● Health Consciousness: Increasing consumer preference for natural, low-calorie beverages that offer hydration and essential electrolytes. ● Rising Demand for Functional Beverages: Coconut water is popular among athletes and health enthusiasts for its functional benefits, such as electrolyte replenishment. ● Growth of Organic Products: Rising demand for organic coconut water as consumers seek clean-label products free from additives. ● Innovative Product Offerings: Introduction of flavoured coconut water and convenient packaging options, such as cans, enhances appeal and accessibility. ● Increased Availability and Distribution: Wider retail presence in supermarkets, health food stores, and online platforms boosts market accessibility. ● Cultural Acceptance: Traditional significance of coconut water in regions where coconuts are common supports its global popularity. ● Sustainability Trends: Eco-friendly packaging and sustainable sourcing practices attract environmentally conscious consumers. ◉ Major Players in the US Coconut Water Industry 1. Vita Coco ● Market Position: Vita Coco is one of the leading brands in the coconut water segment, known for its wide range of flavours and strong brand recognition. ● Product Offerings: Offers plain and flavoured coconut water in various sizes. ● Market Share: Holds a substantial portion of the market, often cited as the top player. 2. Coca-Cola Company (ZICO) ● Market Position: Previously owned ZICO, a well-known coconut water brand, which Coca-Cola acquired in 2012 but later discontinued in 2020. ● Current Status: While ZICO is no longer on the market, Coca-Cola remains a significant player through its other beverage offerings. 3. PepsiCo (O.N.E.) ● Market Position: PepsiCo's O.N.E. brand was a notable competitor in the coconut water space until its divestment in 2021. ● Current Status: PepsiCo has shifted focus away from this segment but retains influence through its broader beverage portfolio. 4. C2O Pure Coconut Water ● Market Position: C2O is recognized for its pure coconut water sourced from Thailand, emphasizing quality and natural ingredients. ● Market Share: It holds a significant share among niche brands. 5. Taste Nirvana ● Market Position: Specializes in high-quality coconut water sourced from Thailand, focusing on authentic taste and premium offerings. ● Product Range: Includes both plain and flavoured varieties. 6. Amy & Brian Naturals ● Market Position: Offers 100% natural coconut water with no additives, appealing to health-conscious consumers. ● Distribution: Available through various retail channels, including health food stores. 7. Other Notable Brands ● Additional brands such as Raw C, Bai, and Harmless Harvest also contribute to the market's competitive landscape, offering unique products that cater to different consumer preferences. In an industry poised for robust growth, we will conduct an in-depth examination of Vita Coco's technical and fundamental aspects. ◉ Company Overview The Vita Coco Company Inc. NASDAQ:COCO is a leading developer, marketer, and distributor of coconut water products and other beverages. Its portfolio includes Vita Coco coconut water, coconut oil, and coconut milk, as well as Runa plant-based energy drinks, Ever & Ever packaged water, and PWR LIFT protein-infused fitness drinks. The company also offers private label coconut water and oil solutions for retailers. With a global presence spanning the United States, Canada, Europe, Middle East, Africa, and Asia Pacific, Vita Coco's products are available through various channels, including club stores, food and drug retailers, convenience stores, e-commerce platforms, and foodservice providers. Founded in 2004 and headquartered in New York, New York, the company formerly operated as All Market Inc. before adopting its current name in September 2021. ◉ Investment Advice 💡 Buy The Vita Coco Company NASDAQ:COCO ● Buy Range - 30.3 - 31.3 ● Sell Target - 43 - 44 ● Potential Return - 37% - 40% ● Approx Holding Period - 12-14 months ◉ Market Capitalization - $2.01 B ◉ Technical Analysis ● Weekly Chart ➖ Since its debut in 2021, the stock has undergone a prolonged consolidation phase, during which it developed a Rounding Bottom pattern. ➖ Following the breakout, the stock price surged initially but quickly transitioned into another consolidation phase, forming a Symmetrical Triangle pattern. ➖ Recently, a strong breakout has set the stage for considerable upward momentum. ● Daily Chart ➖ On the daily chart, an Inverted Head & Shoulders pattern is clearly visible. ➖ After a recent breakout, the stock price is now aiming for new highs. ◉ Relative Strength The stock's performance over the past year has not matched up to the Nasdaq index, achieving a modest return of 22.5%, in contrast to the Nasdaq's impressive 40% return. ◉ Location Wise Revenue Breakdown Total Revenue in 2023: $494 million ● Americas Segment: ➖ Total Revenue from Americas: Approximately $424 million. ➖ Revenue from the United States: Around $401.97 million, reflecting substantial growth from $352.73 million in the previous year. ● International Segment: ➖ Total Revenue from International: Approximately $70 million, indicating a smaller contribution compared to the Americas. ◉ Revenue and Profit Analysis ● Year-over-Year ➖ For the fiscal year 2023, the company reported a revenue of $493.6 million, marking a 15% increase from the $427.8 million recorded in fiscal year 2022. ➖ The EBITDA for FY23 also saw a remarkable rise, reaching $57.5 million, a significant jump from just $12.3 million in FY22. ➖ Additionally, the EBITDA margin expanded to 11.6%, up from a mere 2.9% during the same timeframe. ● Quarter-over-Quarter ➖ In the most recent quarter ending in September, revenue fell to $133 million, down from $144 million in June 2024. This figure also represents a decline from $138 million in the same quarter last year. ➖ The EBITDA for this latest quarter was $20.8 million, a decrease from $30.2 million in June 2024. ➖ In September, the diluted EPS experienced a modest rise, increasing to $1 (LTM) from $0.94 (LTM) in June 2024. ◉ Valuation 1. P/E Ratio ● Current P/E vs. Peer Average P/E ➖ When examining the P/E ratio, COCO is at 33.9x, which suggests a considerable overvaluation compared to the peer average of 22.4x. ● Current P/E vs. Industry Average P/E ➖ In the context of the Global Beverage industry, COCO's P/E ratio of 33.7x is significantly higher than the industry average of 18.8x, indicating that it is relatively expensive. 2. P/B Ratio ● Current P/B vs. Peer Average P/B ➖ Looking at the P/B ratio, COCO's current value of 8x is lower than the average of its peers, which stands at 10.5x, suggesting a relative undervaluation. ● Current P/B vs. Industry Average P/B ➖ In comparison to the industry average, COCO's P/B ratio of 8x indicates a significant overvaluation, as the industry average is only 5.1x. 3. PEG Ratio ➖ A PEG ratio of 0.6 suggests that the stock is undervalued relative to its expected earnings growth. ◉ Cash Flow Analysis ➖ In fiscal year 2023, operational cash flow experienced remarkable growth, reaching $107 million, a substantial increase from only just $11 million in fiscal year 2022. ◉ Debt Analysis ➖ The company proudly maintains a completely debt-free status, showcasing its strong financial health. ◉ Earnings per Share (EPS) Growth Forecasts ➖ Experts forecast that the earnings per share (EPS) could increase from $1 to $1.09 by December 2025, and further rise to $1.3 by December 2026. ◉ Top Shareholders ➖ Blackrock has significantly increased its investment in this stock, now holding an impressive 5.55% stake, which marks a 7.4% rise since the end of the June quarter. ➖ On the other hand, The Vanguard Group has a stake of approximately 4.31% in the company, representing a 3% rise from the June quarter. ◉ Conclusion The coconut water market is booming due to health trends, functional beverage demand, innovation, and wider availability. Vita Coco, despite Q3 supply chain woes, is optimistic about the future and is investing in inventory and production capacity. Despite overvaluation, the company's growth potential is significant, driven by the rising demand for organic products.
NASDAQ:COCOLong
by NaranjCapital
Election Volatility Shakes Up US MarketsS&P 500 ● The index retreated from its all-time high of 5,880, initiating a downward trend. ● A breakdown below the Rising Wedge pattern has been confirmed. ● Key support levels to watch: ➖ Immediate support: 5,670 ➖ Strong support: 5,400 Nasdaq Composite ● The index has hit an all-time high near the 18,750 level before beginning to retreat. ● After breaking through the trendline support, the index is currently hovering slightly above the next immediate support level. ● If it dips below this support, we could see a significant drop, potentially driving the index down to the 16,670 level. **This market volatility is consistent with historical trends during US presidential election years. The 2024 election is particularly unpredictable due to conflicting economic indicators and potential delays in results.
SP:SPXShort
by NaranjCapital
UNLOCK PROFITS! 5 Opportunities to Capitalise1. Tesla (Weekly Timeframe) NASDAQ:TSLA ● A symmetrical triangle pattern is clearly visible on the weekly chart. ● Following a recent breakout with strong volume, the price is likely to rise significantly. 2. Lam Research Corporation (Weekly Timeframe) NASDAQ:LRCX ● After breaking out of the cup and handle pattern, the price surged to an all-time high around the 113 level. ● A notable rejection from this peak caused a pullback to the previous breakout level. ● The price is currently consolidating at this level, preparing for a potential upward move. 3. Tapestry (Daily Timeframe) NYSE:TPR ● The stock has been trading within a rectangle pattern for a while. ● Now, following a robust breakout supported by significant volume, the stock price is primed for an upward trajectory. 4. Oppenheimer Holdings (Daily Timeframe) NYSE:OPY ● After breaking out of a bullish pennant pattern, the stock price is targeting higher levels. ● The breakout was accompanied by significantly high trading volume. 5. Deckers Outdoor Corporation (Daily Timeframe) NYSE:DECK ● The stock price has formed a symmetrical triangle pattern. ● A recent breakout could drive the price to higher levels.
NASDAQ:TSLALong
by NaranjCapital
Silver’s U-Turn: Head & Shoulder Formation Triggers Sell Signal● After breaking out from the Rounding Bottom formation, the price soared to an impressive peak of $34.87. ● Subsequently, a consolidation phase unfolded, leading to the development of the Head & Shoulder pattern. ● We expect a swift drop once the neckline is breached, potentially retracing the price back to its earlier breakout point. Key levels to watch ● Entry : Below $33.4 ● Potential Target : $32.7 ● Stop-loss : Above 33.7
OANDA:XAGUSDShort
by NaranjCapital
Abbott Labs Shakes Off Downtrend, Sets Sights on $142 milestoneIn December 2021, the stock price hit an all-time high near the 142 mark, after which it experienced a significant drop. Following this decline, the price found support around the 90 level and began to recover. Last week, the stock managed to break through the upper boundary of the descending parallel channel, setting the stage for additional upward momentum. An immediate resistance level is noted at the 122 level, and a substantial movement is expected if this level is surpassed.
NYSE:ABTLong
by NaranjCapital
The Payment Card Titan: Comparing Visa, Mastercard, and Amex◉ Abstract The global credit card market is projected to grow from USD 559.18 billion in 2023 to USD 1,146.62 billion by 2033, driven by advancements in digital payment technologies, e-commerce growth, increased financial literacy, and urbanization, especially in Asia-Pacific. Visa leads the market with a 38.73% share, followed by Mastercard and American Express. Visa and Mastercard operate primarily as payment networks, while American Express both issues cards and offers unique rewards. Financially, all three companies show strong revenue growth, with American Express yielding the highest ROI but also carrying significant debt. Despite this debt, American Express appears undervalued based on financial ratios. Overall, while American Express presents an attractive investment opportunity, Visa and Mastercard also demonstrate solid fundamentals and growth potential for investors in the expanding credit card market. Read the full analysis here . . . ◉ Introduction The Global Credit Card Market Size was Valued at USD 559.18 Billion in 2023 and the Worldwide Credit Card Market Size is Expected to Reach USD 1146.62 Billion by 2033, ◉ Key Growth Drivers ● Digitalization and Technology: Advancements in payment technologies, including mobile wallets and contactless payments, enhance convenience and security. ● E-Commerce Growth: The rise of online shopping increases demand for credit card payments, as consumers prefer their ease and safety. ● Financial Literacy: Improved understanding of financial products encourages more consumers, especially in developing regions, to adopt credit cards. ● Urbanization: Growing urban populations, particularly in Asia-Pacific, lead to greater access to banking services and credit facilities. ● Emerging Markets: Rising disposable incomes in developing countries drive new credit card accounts as financial institutions expand their offerings. ● Consumer Convenience: The preference for quick and easy payment methods boosts credit card usage over cash transactions. ● Rewards Programs: Attractive loyalty programs incentivize consumers to use credit cards for everyday purchases. ● Regulatory Support: Government initiatives promoting cashless transactions foster a favourable environment for credit card adoption. ◉ Market Overview As of 2022, the global credit card market was primarily led by Visa, which held a 38.73% share of the worldwide payment volume. Mastercard followed with a 24% market share, while American Express (Amex) accounted for 4.61%. Notably, China UnionPay is also a major player in this space, surpassing Amex in terms of purchase volume ◉ Key Players in the Payment Card Industry 1. Visa NYSE:V ● Market Cap: $552 B ● Market Share: 38.73% ● Business Model: Payment network facilitating transactions between consumers, businesses, banks, and governments globally. ● Card Issuance: Does not issue cards itself. ● Global Reach: Extensive acceptance network across more than 200 countries. 2. Mastercard NYSE:MA ● Market Cap: $474 B ● Market Share: 24% ● Business Model: Payment processor and network partnering with banks to offer various card products. ● Card Issuance: Does not issue cards itself. ● Global Reach: Broad acceptance worldwide with diverse products catering to different consumer needs. 3. American Express NYSE:AXP ● Market Cap: $203 B ● Market Share: 4.61% ● Business Model: Card issuer and payment network offering unique benefits and rewards directly to cardholders. ● Card Issuance: Issues its own cards. ● Global Reach: High acceptance rate in the US (99% of merchants), lower in Europe and Asia due to higher transaction fees. ◉ Technical Aspects ● From a technical perspective, there's a notable similarity among the three stocks: each is exhibiting strong bullish momentum, consistently achieving higher highs and higher lows. ● All three stocks have formed a Rounding Bottom pattern, and after breaking out, their prices have climbed to new heights. ● While Mastercard and American Express are currently trading at their all-time highs, Visa is positioned just below its peak. ◉ Relative Strength The chart vividly demonstrates that American Express has excelled remarkably, achieving a return of nearly 85%, whereas Mastercard and Visa have delivered returns of 28% and 20%, respectively. ◉ Revenue & Profit Analysis 1. Visa ● Year-over-Year ➖ In FY23, Visa achieved a remarkable revenue increase of 11.4%, reaching $32.7 billion, up from $29.3 billion in FY22. ➖ The EBITDA for FY23 also saw a significant rise, totalling $22.9 billion compared to $20.6 billion in FY22. ● Quarter-over-Quarter ➖ In the latest June quarter, Visa's revenue rose to $8.9 billion, slightly surpassing the $8.8 billion reported in March 2024. This reflects a year-over-year growth of nearly 9.5% from $8.1 billion in the same quarter last year. ➖ The EBITDA for the most recent June quarter reached $6.2 billion, indicating an almost 9% increase from $5.7 billion in the same quarter last year. ➖ In June, the diluted EPS saw a modest rise, climbing to $9.35 (LTM) from $8.94 (LTM) in March 2024, which represents a notable year-over-year increase of 18.6% from $30.3 (LTM). 2. Mastercard ● Year-over-Year ➖ Mastercard's revenue for FY23 experienced a robust growth of 12.9%, reaching $25.1 billion, up from $22.2 billion in FY22. ➖ The EBITDA for FY23 also increased, reporting $22.9 billion, up from $20.6 billion in FY22. ● Quarter-over-Quarter ➖ In the recent June quarter, Mastercard's revenue climbed to $7.0 billion, compared to $6.3 billion in March 2024. Year-over-year, this marks an increase of nearly 11% from $6.3 billion in the same quarter last year. ➖ The EBITDA for the latest June quarter was $4.4 billion, reflecting an almost 9% rise from $3.9 billion in March 2024. ➖ In June, the diluted EPS saw a slight increase, rising to $13.08 (LTM) from $12.59 (LTM) in March 2024, which is a significant year-over-year increase of 23% from $10.67 (LTM). 3. American Express ● Year-over-Year ➖ For the fiscal year 2023, the company experienced a remarkable revenue growth of 9.7%, reaching an impressive $55.6 billion, compared to $50.7 billion in fiscal year 2022. ➖ Additionally, operating income showed a positive trajectory, with fiscal year 2023 reporting $10.8 billion, an increase from $10 billion in the previous fiscal year. ● Quarter-over-Quarter ➖ In the latest June quarter, revenue continued its upward trend, totalling $15.1 billion, up from $14.5 billion in March 2024. This represents a significant year-over-year growth of nearly 8.7% from $13.9 billion in the June quarter of the previous year. ➖ Furthermore, operating income for the June quarter reached $3.2 billion, marking a substantial increase of almost 19% from $2.7 billion in the same quarter last year. ➖ The diluted earnings per share (EPS) also saw a remarkable rise in June, climbing to $13.39 (LTM) from $12.14 (LTM) in March 2024, which is a significant jump of 36% compared to $9.83 (LTM) in the same quarter last year. ◉ Valuation ● P/E Ratio ➖ Visa stands at a P/E ratio of 29.1x. ➖ Mastercard is at a P/E ratio of 38.7x. ➖ American Express shows a P/E ratio of 20.6x. ➖ When we analyze these figures, it becomes clear that American Express appears significantly undervalued compared to its peers. ● P/B Ratio ➖ Visa has a P/B ratio of 14.3x. ➖ Mastercard's P/B ratio is a staggering 64x. ➖ American Express, however, has a P/B ratio of just 6.8x. This further reinforces the notion that American Express is currently undervalued in the market. ● PEG Ratio ➖ Visa's PEG ratio is 1.56. ➖ Mastercard's PEG stands at 1.71. ➖ American Express shines with a PEG ratio of just 0.56. ➖ This metric also highlights American Express's superior value proposition compared to its peers. ◉ Cash Flow Analysis ➖ Visa's operating cash flow for the fiscal year 2023 has risen to $20.8 billion, marking a notable increase from $18.8 billion in fiscal year 2022. ➖ Similarly, Mastercard has experienced growth in its operating cash flow, which has reached $12 billion in fiscal year 2023, up from $11.2 billion in the previous year. ➖ In contrast, American Express has reported a significant decline in its operating cash flow, decreasing from $21.1 billion in fiscal year 2022 to $18.6 billion in fiscal year 2023. ◉ Debt Analysis 1. Visa ● Debt to Equity Ratio: Approximately 0.52 as of June 2024, indicating a stable financial structure with moderate leverage. ● Total Debt: About $20.6 billion. ● Total Shareholder Equity: $39.7 billion. ● Analysis: Visa's ratio reflects a cautious debt approach, balancing equity and debt financing, with net debt well-supported by operating cash flow, enhancing financial stability. 2. Mastercard ● Debt to Equity Ratio: Approximately 2.10, indicating a higher reliance on debt compared to Visa 5. ● Total Debt: $15.6 billion. ● Total Shareholder Equity: $7.5 billion. ● Analysis: Mastercard’s higher ratio suggests it is more aggressive in leveraging debt for growth initiatives compared to Visa. This strategy may lead to greater volatility in earnings due to interest obligations. 3. American Express ● Debt to Equity Ratio: Approximately 1.80, indicating a significant level of debt relative to equity 5. ● Total Debt: $53.2 billion. ● Total Shareholder Equity: $29.54 billion. ● Analysis: American Express’s ratio shows a strong reliance on debt financing, which can enhance growth but also introduces risks related to interest payments and market conditions. ◉ Top Shareholders 1. Visa ● The Vanguard Group has notably boosted its investment in Visa, now commanding a remarkable 7.52% share, reflecting a 0.62% increase since the close of the March quarter. ● In contrast, Blackrock maintains a stake of approximately 6.7% in the firm. 2. Mastercard ● When it comes to Mastercard, Vanguard has also made strides, raising its ownership to an impressive 8.27%, which is a 1.02% uptick since the end of March. ● Blackrock, on the other hand, has a substantial 7.56% stake, showing a 1.17% growth from the same period. 3. American Express ● As for American Express, Warren Buffet’s Berkshire Hathaway boasts a significant 21.3% stake in the company. ● Meanwhile, Vanguard holds a 6.36% interest, while Blackrock has a 5.89% share. ◉ Conclusion After a thorough analysis of both technical and financial indicators, we find that American Express offers a compelling valuation opportunity that is likely to attract investors. Nonetheless, it is important to recognize the significant debt load the company carries, a concern that also extends to Mastercard. ● From a technical standpoint, the chart for American Express seems to be stretched thin. Investors might want to hold off for a corrective dip to secure a more advantageous entry point. ● Mastercard's financial results reflect solid performance, though it carries a high level of debt. The technical chart indicates a slight overvaluation. Savvy investors might look to build their positions during times of price stabilization. ● Visa presents a well-rounded synergy between its technical and fundamental metrics. Its chart reveals a remarkable rebound, approaching previous all-time highs after a notable decline. The company's valuation and growth potential make it a compelling investment choice.
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The current EBITDA margin stands at an impressive 15.5%. ➖ Additionally, diluted earnings per share (EPS) experienced a substantial year-over-year rise of 28%, reaching $9.71 in FY24, up from $7.58 in FY22. ● Quarter-on-quarter ➖ In terms of quarterly performance, the company reported a decline in sales over the last three quarters, with the most recent quarter showing sales of $1,512 million, down from $1,568 million in March 2024 and $1,934 million in December 2023. ➖ Nevertheless, EBITDA demonstrated significant growth in the June quarter, climbing to $265 million from $176 million in March 2023. ◉ Valuation ● P/E Ratio ➖ Current P/E Ratio vs. Median P/E Ratio The current price-to-earnings ratio for this stock stands at 17.4x, which is notably elevated compared to its four-year median P/E ratio of 5.7x. 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