Despite improvement in fundamentals, and better than expected earnings for Q2'13, the stock has remained extremely weak over the past few days. It had shown a spike after the earnings, but has corrected significantly after that. It needs to bounce back quickly, as a cut below $12 will add to the weakness. In Q2'13, the EPS figure was better than analyst estimates. Company was able to do better than its revenue guidance, and the adjusted EBITDA came in at $7 million, above the guidance of $5-$6 million. The guidance for Q3'13 is for revenue in the range of $130.5 million to $132.5 million, and adjusted EBITDA in the range of $6 million to $7 million. For the full fiscal 2013, revenues is likely to be in the range of $515 million to $520 million, and adjusted EBITDA in the range of $29.5 million to $31.5 million. The revenues have been growing over the last few quarters, though the company is still not net positive on a ttm basis. In the first quarter of 2013, revenues had increased by 17% and the net loss had reduced significantly compared to Q1'12. The net loss had increased sequentially. In Q2'13, there was sequential growth in revenues, and the net loss also declined from $640K to $140K. On a half yearly basis, the revenues increased from $216 million in H1'12 to $249 million in H1'13. The net loss increased from $674K to $776K. It will be difficult for the topline to grow faster as the competition is pretty fierce. Social media sponsorship (SMS) / native advertising is also gaining popularity. IZEA (IZEA), a company in the SMS space, reported record Q2 numbers a few days ago. IZEA is also launching its Native Ad Exchange shortly. However, ReachLocal is close to break even, and it requires a few quarters of good performance to cross that important line.
