The Zacks Analyst Blog Highlights:Google, Apple, eBay, Yahoo and Gibraltar Industries

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Sep 19, 2013, 09:30 ET

CHICAGO, Sept. 19, 2013 /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 Google (Nasdaq:GOOG-Free Report), Apple (Nasdaq:AAPL-Free Report), eBay Inc's (Nasdaq:EBAY-Free Report), Yahoo Inc (Nasdaq:YHOO-Free Report) and Gibraltar Industries Inc. (Nasdaq:ROCK-Free Report).

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Here are highlights from Wednesday's Analyst Blog:

Google Updates Digital Wallet

Google (Nasdaq:GOOG-Free Report) recently announced the addition of new and improved features to its digital wallet application. This modification is a step toward making Google Wallet available to a wider spectrum of smartphone users.

Digital wallet refers to a system wherein customers can store payment information like user ids and passwords securely. This information can be used later on for making online payments and shopping at retail outlets.

The updated version of Google's digital wallet will require near field communication or NFC enabled smartphones, of which there aren't many (15 Android phones). But this may not be for long, since Google would like to extend the service to non-Android phones as well. Moreover, Apple (Nasdaq:AAPL-Free Report) in its latest iOS has veered away from NFC, leaving the door open for Google.

Google will now store information related to practically any credit or debit card in a secure cloud, making payments possible wherever Mastercard PayPass is accepted. Additionally, other Android phone users will now be able to send money to others at no cost and also save merchant loyalty cards details.

Recently, eBay Inc's (Nasdaq:EBAY-Free Report) Paypal also updated its payment application. eBay is the forerunner in mobile payments and its PayPal solution has supplemented online payments with offline payment solutions.

Google recorded a profit of $3.23 billion or $9.54 a share in the second quarter of 2013, up from $2.79 billion or $8.42 a share in the year-ago period. Total revenue grew to $14.11 billion, up about 19% year over year. The company has expressed its intention of increasing investment on its core products in the future.

Currently, Google Inc has a Zacks Rank #3 (Hold). Investors can also consider Yahoo Inc (Nasdaq:YHOO-Free Report), which has a Zacks Rank # 2 (Buy).

ROCK Downgraded to Underperform

On Sep 17, 2013, we downgraded our recommendation on Gibraltar Industries Inc. (Nasdaq:ROCK-Free Report) to Underperform from Neutral, based on weak industrial market outlook.

Why the Downgrade?

Gibraltar Industries has been facing a downturn in its industrial end market over the past few quarters. In the second quarter of 2013, the industrial market faced a decline of 10% year over year (excluding acquisitions). This decline pulled down the total revenue as well as margins for the quarter. Gibraltar Industries uses steel as its main raw material. However, as the prices of steel move down, the company is also expected to reduce its prices, which makes it challenging to increase margins.

The residential repair and remodeling activities, that constitute a major portion of the company's revenues, also performed below expectations in the second quarter of 2013. The decline was primarily a result of unfavorable weather conditions and home-owners' reluctance to go for remodeling projects. The revenue generation from the residential repair and remodeling activities for 2013 are now expected to be flat year over year, against an earlier expected hike of 2% to 5%.

Gibraltar Industries derives a major portion of its revenues from only a handful of customers (36% of total revenue in 2012). Moreover, the company does not have long-term contracts with its customers, leading to a possibility of termination of the purchase. The loss of any of these customers may lead to a severe decline in the company's revenues.

Due to Gibraltar Industries' worldwide presence, the company is exposed to various international risks such as foreign currency risks, various environmental and economical laws as well as cultural diversity of the countries.

The Zacks Consensus Estimate for 2013 has dropped 27.4% in the last 60 days to 61 cents per share, reflecting an estimated year-over-year decline of 5.6%. For 2014, the Zacks Consensus Estimate declined 14.6% during the same period to $1.05 per share, reflecting a year-over-year growth of 71.6%.

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