Wachovia Downgrades Dice Holdings (DHX) to Market Perform

July 3, 2008 7:42 AM EDT

Wachovia downgrades Dice Holdings (NYSE: DHX) from Outperform to Market Perform with a $7-$8 valuation range.

The firm said, "While we like DHX's vertical focus for job search, we are lowering our rating due to what we view as accelerating weakness in eFC job postings in key European countries. Since DHX recently updated guidance for '08, we think there is limited risk to our current estimates. However, we lowered our ’09 eFC segment revenue growth to 2.6% (from +5.9%), and we acknowledge significant further pressure on the financial services industry could imply downside to our estimate. That being said, it's difficult to draw a direct correlation between revenue and postings for the business, though directionally, we think the slowdown could be a leading indicator on revenues."

Wachovia also lowers their 2009 EPS estimate from $0.28 to $0.26 as the firm slightly upped sales and marketing expense as a percentage of revenues in 2009. The firm also said that DHX may need to invest in the brand to continue to gain share in an increasingly competitive environment.

Dice Holdings, Inc. provides online recruiting and career development services.

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