4 Horsemen of Tech

Net revenue of US$1.45-billion and adjusted earnings per share of US52¢ per share on stronger-than-expected payments volume and global transactions from Visa Inc. marked the company’s first earnings report as a public company.

But it may not be enough to calm investor fears about the U.S. economy as shares of the world’s largest credit and debit processor were down nearly US$3 in pre-market trading on Tuesday.

Nonetheless, RBC Capital Markets analyst Cynthia Houlton remains bullish on Visa, hiking her price target to US$84 from US$80 after the results. She told clients that while Visa has identified several cost-cutting opportunities, it will also invest in growth.

Visa has more than US$5-billion in cash on its balance sheet, US$40-million in long-term debt and an annual dividend of US42¢ that Ms. Houlton said could increase over time.

Visa shares have risen more than 70% since the IPO at US$44 in March.

Goldman Sachs analyst Elizabeth Grausam, who has a “buy” rating and US$90 price target on the stock, said Visa should continue to command a healthy premium and near-term fluctuations should be used as buying opportunities “while the Street settles into a more consistent view on earnings expectations.”

While Visa has seen its price rise by more 30 points over the last month, looking technically at Visa and Mastercard, both seem to have more potential upside since they are best of breed credit card companies. Visa and Mastercard have essentially the same business and Visa will likely follow Mastercard’s appreciation movement. Below is some technical analysis on each.

NEW YORK, April 24 (Reuters) – Crocs Inc (CROX.O: Quote, Profile, Research), known for its colorful plastic shoes, on Thursday said it is launching a line of shoes and accessories based on Walt Disney Co’s (DIS.N: Quote, Profile, Research) hit shows “Hannah Montana” and “High School Musical.”

The shoemaker also said it will make shoes tied to the upcoming Walt Disney film “Wall-E.”

The Hannah Montana and Wall-E inspired Crocs will come to market in May while High School Musical footwear will debut this summer.

Crocs, whose shoes have evolved from fad to lifestyle items since coming to market in 2002, is aiming to reverse a string of bad news, including reports of slowing business.

The company slashed its earnings outlook earlier this month, citing fewer retail orders and costs from a Canadian factory closure. (Reporting by Justin Grant, editing by Mark Porter and Gerald E. McCormick)

Crox, which has seen its stock take a large hit due to its expected decrease in earnings saw a 7 percent gain after news of its contract with Disney. Crocs is undoubtedly a fad that will not last but in the short future (1-2 ) week horizon, Crocs should be able to retrace a point or two based on its new line.

Tim Boyd, of American Technology Research, this morning advised investors to short Amazon.com (AMZN) shares ahead of the company’s announcement of first quarter results on Wednesday afternoon.

Boyd thinks results will be in line; the Street sees $4.1 billion in revenue, $196 million in operating income and EPS of 32 cents. But he thinks investors are expecting more, and won’t get it. “Given the material deterioration in the U.S. consumer’s balance sheet YTD, we believe that AMZN is unlikely to post the kind of revenue upside to which the market has become accustomed over the last year,” he writes. “In addition, the fact that the Street is modeling operating income at the high end of management’s guidance range leaves little chance of an upside surprise on the bottom line.”

Boyd thinks 2008 updated guidance will be incline with current guidance; he expects $19.3 billion in revenue and $908 million in operating income.

“There is no way other way to explain the valuation disconnect between AMZN and the rest of the tech sector than to suggest that the market wants – and expects – clean beat and raise results every quarter,” he says. “Ironically, AMZN has not deliver the ‘raise’ side of this equation for two consecutive quarters – at least on the operating income side.”

Boyd concludes that Friday’s rally, in which the stock gained $6.06, “has created an opportunity to short the stock into the print.”

AMZN today is up 2 cents at $80.12.

From a technical standpoint, Amazon has a rising level of resistance but seems to be set for a pull back in the near future.