Bankrate (RATE): Business Update - Needham
- Stocks dip as earnings pour in, consumer discretionary lags
- UPDATE: Alphabet (GOOG) Tops Q3 EPS Views; Revs Strong
- Twitter (TWTR) Tops Q3 EPS by 4c; Announces Restructuring, Workforce Reduction
- Cirrus Logic, Inc. (CRUS) Q2 Results and Guidance Beat Estimates
- Amazon.com (AMZN) Misses Q3 EPS by 26c, Offers Q4 Guidance
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
Needham & Company analyst, Laura Martin, reiterated her Buy rating on shares of Bankrate (NYSE: RATE) after meeting with management to get a business update.
Good news is that Bankrate.com has lived through the shift from $70/1000 CPMs from its direct salesforce ad units to $8/1000 CPMs for programatic, which took its display revenue from $48mm in 2014 to $35mm in 2016E, down 27%. Dynamic pricing at Bankrate.com is now complete, compared to $14/click one year ago every day at all times of day. The analyst believes it sounds like the worst of this pricing headwind is behind RATE.
The bad news is that RATE plans for a $100mm marketing spend over the next 12 months. This suggests that EBITDA margins will remain under pressure, although EBITDA dollars should rise. RATE’s step-up in marketing spending is required to compete with new entrants. This makes the analyst wonder if the marketing spending will be ROI positive, and what happens after the upfront spend.
No change to the price target of $15.
Shares of Bankrate closed at $8.08 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Needham & Company Reiterates Buy on TTM Technologies (TTMI) Following 3Q
- F5 Networks (FFIV) PT Raised to $120 at Jefferies
- UPDATE: Stifel Downgrades Boston Properties Inc. (BXP) to Hold
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Management Comments
Related EntitiesNeedham & Company
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!