The last earnings had led to a correction in the stock as the company had reported a larger than expected net loss. However, on a yoy basis the net loss had declined substantially. In Q4'12 it had reported a profit of $7.22 million and in Q1'13 the loss was $6.07 million. For the full fiscal 2013, the company expects an EPS of $0.52. This implies that it will be able to report a net profit for the third year in succession. Based on the expected EPS, the valuations are likely to remain stretched, and the net margins are likely to remain low. The Q2'13 earnings are going to be released this week, and if the company can deliver some positive surprises, then the stock can regain momentum on the upside. Despite the recent correction in the stock, it is still up significantly on a 52 week basis. There have been analyst upgrades and downgrades recently. Citigroup increased the price target from $49 to $53, while Thomson Reuters/ Versus downgraded the stock to a sell. The average rating is hold and the average price target is $49, which indicates an upside of 11% from current levels. Growth in revenues is not easy as Lamar faces competition from the likes of Clear Channel Outdoors (CCO). The outdoor advertising segment itself is under pressure, and faces competition from online advertising and other forms of media. Though outdoor advertising will continue to have its place in the world of advertising, threat from concepts like social media sponsorship / native advertising cannot be ignored. IZEA (IZEA) helps advertisers leverage the power of celebrity and peer influence to attract customers. IZEA runs a marketplace wherein advertisers can pay celebrities and other influencers to blog, pin, tweet, YouTube, Instagram, etc. Other forms of advertising are also providing competition, and Lamar has to remain aggressive to continue on the growth path. Earnings will be an important trigger.
