King Digital Entertainment (KING), Priceline (PCLN) & Twitter Inc (TWTR): Tech Roundup


King Digital Entertainment PLC (NYSE:KING), an interactive entertainment company, reports its second-quarter 2014 earnings after the bell today. Shares of the company are down 4.47% this year. Mark Mahaney of RBC Capital Markets was on CNBC and discussed the stock ahead of the earnings. He also talked about other tech stocks that have the potential to deliver good results for the investors.

Josh Brown Feels That King Digital Entertainment PLC (KING) is a One Hit Wonder like Crumbs Bake Shop Inc (CRMB)

Some of the tech stocks that featured in the discussion included Priceline Group Inc (NASDAQ:PCLN), which reported earnings that surpassed estimates yesterday, and on which RBC has a target price of $1,500. Others that earned mention by Mahaney were Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB).

Talking about King Digital Entertainment PLC (NYSE:KING) and the upcoming earnings release, Mahaney pointed out that major surprises should not be expected in the earnings. However, he also cited areas that would have a profound impact on the stock in the upcoming report.

“We think the number should be fine. No clear evidence of major upside or downside surprise. This company needs to prove two things; one, that they continue to get diversified away from Candy Crush. […] But they also have to prove that they can do that while still growing the top line sequentially. If they put that package together, the stock is up if they don’t the stock is down,” he stated.

They rate the stock of King Digital Entertainment PLC (NYSE:KING) at “Outperform” at RBC Capital Markets. Their target price on the stock is $24.

He pointed out that Zynga Inc (NASDAQ:ZNGA) isn’t a major concern for KING, except for the fact they are both looking to bring captivating titles to the market.

Concerning Priceline Group Inc (NASDAQ:PCLN)’s earnings, he said the numbers looked good, but investors have to look beyond the revenue figures.

“Here you have to look at not revenue, but gross profit growth because of the different  revenue streams they have and the growth areas is extremely consistent. 35% gross profit growth for four years in a row and when people see that they work through the numbers they continue to buy the stock,” he said about Priceline Group Inc (NASDAQ:PCLN).

He also mentioned Twitter Inc (NYSE:TWTR), on which they have a  $65 target. He said investors interested in social media stock are better off starting with Facebook Inc (NASDAQ:FB) before moving on to Twitter.

Disclosure: none

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