Zacks Analyst Blog Highlights: eBay, Genesis and DirecTV.

CHICAGO -- 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: eBay (Nasdaq: EBAY), Genesis (Nasdaq: GNSS) and

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Friday's Analyst Blog:

Stubhub to Help eBay

On January 11, eBay (Nasdaq: EBAY) announced that it acquired stubhub.com for $310 million. We think this acquisition will benefit eBay, as its event ticket auctions have not been successful with customers. In addition, we are leaving our estimates unchanged ahead of the company's fourth quarter report.

The company's continued growth has enabled eBay to invest in or acquire businesses outside its core U.S. auction business. By expanding into these new areas, such as payment services (PayPal), foreign markets, or communications (Skype), eBay is working to ensure that it will be able to maintain its growth rates in the years ahead. This is important because eBay's fastest growing segments are its international division, up 24% in the third quarter, and its payments division, up 42% in the third quarter.

GNSS Guidance Disappoints

Genesis (Nasdaq: GNSS) is a fabless OEM of a product line of video display controllers used within flat panel computer monitors and advanced TVs. The third-quarter guidance was very disappointing, with revenue expected to decline 17-25%. Despite the strength in the last quarter, the company faces many issues in the advanced television (ATV) market. We expect this segment to remain troubled, increasing top and bottom line uncertainties for the company as a whole. The risk/return ratio is turning unfavorable, in our opinion.

The company has made a successful transition from flat panel computer displays to advanced flat TVs. Genesis has been shifting resources and product mix from the core commoditized LCD monitor product set to the higher-margin, higher-growth ATV product line. The company is quickly becoming the dominant player in this market, having sold over 18.5 million units over the past four quarters. Management estimated that GNSS products were sold into approximately 4.4 million TVs last quarter.

Mixed DirecTV Outlook

DirecTV (NYSE: DTV) has vigorously grown its free cash flow and earnings over the last two years. In the second quarter of 2006, free cash flow quadrupled to $397 million from $99 million in the year-ago quarter, and we expect vigorous free cash flow growth for the next several years. The company is also cutting churn-related costs by tightening credit standards to raise the quality of its subscriber base.

However, cable's ability to offer video, voice and data (the "triple play") is impeding subscriber growth, and the company's recently tightened credit standards, while improving churn, is worsening the slowdown. In addition, although the rollout of HD currently underway should boost ARPU and help stem decelerating subscriber growth, it will also raise subscriber acquisition costs. The intensifying competition in this maturing industry will, in our opinion, lead to declines in revenue and earnings in a couple years' time.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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