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Bankrate
is scheduled to report their fourth quarter 2008 results after
the market closes on Thursday, February 5. Based on our
analysis, we at
eChristianInvesting.com are expecting RATE to report
better than expected results that exceed Wall Street’s
expectations.
Analyst
Expectations
We are
forecasting revenues of $41.3 million and EPS of $.37. This
would represent a 64% growth in revenues from last year’s $25.2
million in the same period. The current analyst consensus calls
for revenues of $42.0 million and $.34 EPS. On October 30, the
company indicated that they “expect to be at the mid-to-upper
range” of their full year revenue guidance of $164 – 169
million.
Bankrate
continues to demonstrate their ability to monetize traffic much
better than their peers. The company continues to see strong
growth in their network traffic as consumers become more
diligent about finding good financial resources.
The
company has done an admirable job of demonstrating its prowess
as a diversified financial services company. Despite the fallout
from the real estate markets and weak display advertising, the
company continues to find additional ways to put their product
offerings to the front. Our checks show strong traffic growth as
consumers search for low refinance and high savings rates
While the
company continues to perform well in this recessionary
environment, we would not be surprised for management to be
conservative in giving full year 2009 guidance.
Share
Performance
Bankrate's
shares are down 10% since the beginning of the year. In 2008,
the company stock outperformed the Dow Jones index’s 34% drop by
falling only 21%.
Valuation
Shares are
now trading at 19x consensus 2009 EPS estimates. This is
currently a discount to their peer group, although we believe
that 2009 estimates will continue to be revised downward.
Bankrate continues to be a strong growth story which will likely
attract more investor interest in the coming months.
Recommendation:
Buy with a $36 price target.
At the time this article was published, the author did not have
a financial position in any of the stocks mentioned in this
article.
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