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We are lowering our six-month price target on ValueClick Inc. (VCLK) to $11.00 but maintaining our Neutral rating on the stock.
The company provided disappointing guidance for the coming quarter, which was much below Zacks Consensus Estimates. The unexpected weakness in the Comparison Shopping segment and slower international business, particularly in Europe, will have a negative [...]
We are lowering our six-month price target on ValueClick Inc. (VCLK) to $11.00 but maintaining our Neutral rating on the stock.
The company provided disappointing guidance for the coming quarter, which was much below Zacks Consensus Estimates. The unexpected weakness in the Comparison Shopping segment and slower international business, particularly in Europe, will have a negative impact on revenue growth going forward. Thus we are lowering our revenue estimates for the fourth quarter and full year 2009.
The Comparison shopping segment is expected to decline in the mid-to-high teen percentage range in the coming quarter, affected by Yahoo!'s (YHOO) new ad quality ranking system. Moreover, large Web portals such as Google (GOOG), Yahoo! and MSN will increase competition for ValueClick’s display ad business.
ValueClick’s third quarter earnings were above Zacks Consensus Estimates as well as above management’s expectations, as Comparison Shopping remained strong while Lead Generation performed better than our expectations. The results further demonstrate the company’s focus on driving bottom-line growth.
Moreover, with impressive cash flow, share repurchases and a strong balance sheet, the company is focused on driving shareholder wealth.
A growing Search segment, stabilization in the lead generation business, significant long-term growth opportunities in the Internet advertising industry and increasing display ad trends in the U.S. are other positives to the stock.
Over the long term, we are very positive on online advertising growth. However, current economic conditions and the company’s decreasing revenue growth are creating significant headwinds for ValueClick.
ValueClick Inc. (VCLK) third quarter pro forma (excluding stock-based compensation expenses and tax-impact only) earnings per share were 15 cents, unchanged from the previous quarter but beating the Zacks Consensus Estimate by a penny.
Excluding stock-based compensation expenses, discontinued operations, amortization of intangibles and the tax impact on one-time items, non-GAAP net income from continuing operations [...]
Merriman gave the Advertising Agencies industry some bad news as it announced a downgrade on one of its stocks.
ValueClick Inc. (VCLK) [Chart - News - Analysis] was downgraded from Buy » Neutral on 10/28/2009---a negative sign for the stock that investors will have to endure. FYI, Merriman uses the following rating scale when analyzing stocks: Buy, Neutral, Sell.
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ValueClick Inc. has an average analyst recommendation score of 2.6 and competes for investment dollars with Interpublic Group of Companies Inc. (IPG) [Chart - News - Analysis] and VisionChina Media Inc. (VISN) [Chart - News - Analysis]---two other stocks in the Advertising Agencies industry that have average analyst recommendation scores of 2.1 and 2.6 respectively.
Analyst recommendations are averaged and scored using the following rating scale:
- 1.0 = Strong Buy
- 2.0 = Buy
- 3.0 = Hold
- 4.0 = Sell
- 5.0 = Strong Sell
Why are Upgrades and Initiations Good and Downgrades Bad?
One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.
Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.
Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.
A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.
Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.
ValueClick Inc. (VCLK) is set to announce its third quarter results on Oct 27. We expect the company to report in-line third quarter results, if not higher than the guidance, due to the continued deterioration in the lead generation business.
Headquartered in Westlake Village, California, ValueClick is a diversified provider of Internet advertising solutions and online [...]
BizRadio's Jack Warkenthien interviewed James Altucher, the President of Stockpicker.com about what to buy and what to avoid right now. Among the stocks talked about are Value Click (NASDAQ:VCLK), QLogic (NASDAQ:QLGC), Kellogs (NYSE:K), Lowe's (NYSE:L), Campbell's (NYSE:CPB), Zynex (OTC:ZYXI), Valence (NASDAQ:VLNC), American Airlines (NYSE:AMR), Southwest Airlines (NYSE:LUV), Global Industries (NASDAQ:GLBL), Anadarko (NYSE:APC), Rackspace (NYSE:RAX), Capital Trust (NYSE:CT), Goldman Sachs (NYSE:GS), Service Corp (NYSE:SCI), and The Washington Post (NYSE:WPO). Listen in as Mr. Warkenthien and Mr. Altucher go through the sectors and point out why Internet stocks and storage aren't going anywhere anytime soon, as well as his top pick under $10 and over $100.
ValueClick, Inc. (Public, NASDAQ:VCLK) is one of those stocks that I'm tired of hearing about, everyone is, and after they let the Street down, down it goes 10%. Turns out their sales will be lower than expected for both the third quarter and the full fiscal year due to weakness in its online advertising lead generation business. Boo-Hoo ValueClick.
Now that shares are down a few bucks, it's got this StockMaster interested. For the rest of 2007, ValueClick expects sales of between $635 million and $640 million, down from earlier guidance of $645 million to $660 million. Analysts were expecting $650 million and in all honesty, that's not the end of the world.
Let's face it, no one in their right mind would every pay over $30 a share for this company, you'd be crazy. ValueClick is an online marketing services company making money of people clicking on this and clicking on that. Think you could convince your parents to invest in them, as Whitney says, "Hell to the No."
But now that shares have come to below $25, I think there is room to fall even further thanks to negative Nancy's and analysts bashing the stock for the next few weeks. Will they be bought out now and what's the latest buyout rumor? Buyout Rumors, shmmy-out rumors -- who cares, these clowns are still cashing in on online advertising.
Mark Mahaney from Citi Investment Research downgraded the company to "Hold" from "Buy," back on Oct. 11th but raised his price target to $30 from $25. ValueClick's stock has risen time and time again in the past few months due in part to speculation the company would be acquired (Mahaney said in a client note). While he said he believes the company is a potential buyout candidate, he said he sees no evidence of a deal near-term. Nobody does, but yet Mahaney raised his price target to $30 "to capture ValueClick's takeout potential."
Fellow Masters, now that ValueClick has taken a body blow, let Wall Street give it the ol' 1-2 and knock the stock down even further saying they are overvalued and watch the downgrades start to come in.
Wait for the stock to drop more if you are thinking about buying shares and if you just lost a ton of money in the past few days thanks to ValueClick, hang in there and get back in the ring. Eye of the Tiger man, eye of the tiger.
Article by Frank Lara Jr.
Contributor at TheStockMasters.com
Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication nor does he stuff his shorts.
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