Wednesday, February 13, 2013

Why Bankrate Shares Plummeted

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online financial data publisher Bankrate (NYSE: RATE  ) sank 19% today after its quarterly results and outlook disappointed Wall Street.

So what: Bankrate's fourth-quarter results -- adjusted EPS of $0.06 on revenue of $93.2 million versus the consensus of $0.11 and $106 million, respectively -- and full-year outlook were so dismal that analysts are being forced to recalibrate their growth estimates yet again. Softness in credit cards and weak lead generation continue to weigh heavily on the company, giving investors little hope for a short-term stock price boost.

Now what: Management now expects 2013 revenue to remain pretty much unchanged from 2012's top line of $457 million, well below Wall Street's view of $498.5 million. "In insurance, the�strategic transition to higher quality, high-margin leads is moving even more aggressively forward," CEO Thomas Evans reassured investors. "Encouragingly, in credit cards, we're beginning to see the increased marketing activity across our portfolio of card issuers after a period of marketplace caution." However, given the strong headwinds facing Bankrate and its still-significant debt load, buying into that turnaround talk isn't exactly prudent at this point.

Interested in more info on Bankrate? Add it to your watchlist.

2013 and beyond
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

No comments:

Post a Comment