Stock price performance above estimate revisions Internet sector stocks are up 6% YTD, on average, while EPS estimates for profitable companies in our coverage cluster are down 5% YTD. For large-caps over S5bn in market cap., street 2017 EPS estimates are down 8% YTD while the average stock price is up 9% YTD; suggesting macro expectations and stock rotation are having a larger impact on stock movement than earnings estimates. eCommerce leads the group, up 8% YTD with Travel up 6% and Media behind at 5%. Small Caps are lagging Large caps YTD at 4% vs. 9%. Chart 1: YTD Stock Price Performance vs. YTD 2017 Estimate Revisions By Sector 10% 6% : 2% | 0% -2% -4% ! -6% -8% -10% Internet Media eCommerce Travel Large-Cap Small-Cap SP. 500 Group 2017 % Change in Stock Price m YTD % Change in Street 2017 Est Source: Excludes companies with negative earnings, Bloomberg, as of 4/4/2017 Nine of the twelve large caps in our group are up YTD and four of these companies have had positive stock returns despite negative EPS estimate revision (AMZN, EXPE, EBAY & IAC). TRIP is the worst performing large cap YTD, down 12%. Only FB and NFLX have had positive 2017 EPS estimate revisions, with GOOGL, YHOO and PCLN holding flat. Chart 2: YTD Stock Price Performance vs. YTD 2017 EPS Revisions For Larger-Cap Internet Stocks ($5bn+) BIR eee eter 20% . 10% | 0% -10% - COO ances sran san ste ER SR RR _— sca ARERARN scene SPO ce a si -40% AMZN EBAY EXPE FB GOOGL NFLX PCLN TRIP TWIR YHOO IAC ZG SPX Avg mw 2017 % Change in Stock Price m YTD % Change in Street 2017 Est Source: Bloomberg consensus estimates, as of 4/4/2017 waflipa. 2 Internet/e-Commerce | 06 April 2017 5 HOUSE_OVERSIGHT_014891