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What are the "significant updates" that are expected besides this quarter being a seasonally good one?
PERI - 13 days until earnings. Several significant updates expected as well.
Sitting at or near significant support. I think it is going to be up from here and possibly a big move.
I THINK
Hrm, thanks I missed that. Doesn't bode well IMO
They already announced they will report on March 15th bmo. Hope this helps. All is just my opinion, and I could always be wrong though.
PERI will be reporting on the 15th.
The one analyst that covers it has .11 as the estimate. That would be .11 non-gaap and that should result in somewhere around .05 GAAP.
The CEO doesn't give guidance but in the last conference call he did say that the 4th q is the seasonally strongest q and would be again.
3rd q results lead to a move to $1.35 or so and then sold off. 4th q results should be considerably better.
What may be as important as the results reported are the updates on some important developments that were promised to happen during the 1st q of 2018. They are mentioned in here.
https://finance.yahoo.com/news/edited-transcript-peri-earnings-conference-203428551.html
I think PERI is at an inflection point. They made the Undertone acquisition and took on a large amount of debt. The acquisition didn't lead to the huge numbers expected but they remain profitable and have rapidly been paying off the acquisition.
The stock has languished for a couple of years while the revs have decreased but it sounds like the bottom is in and revs have stabilized and could see growth going forward.
I bought it hoping for a short term move leading into and following their seasonally strong 4th q results but I also thought that if that didn't happen immediately this will be the year where the stock stabilizes and the gap between GAAP and NONGAAP eps is closed. With each passing q, the liabilities decrease, the debt from the acquisition becomes less and less of a factor, and investors shld start looking at the future instead of comparing it to what it once was.
I think I will make a separate post later detailing the different developments the company has stated would happen in "early 2018" or in the "1st Q". I think they are currently set up to report strong 4th q results and annual cash flow worthy of a much higher PPS but what they follow that up with might be even more important and they have some irons in the fire.
PERI should be reporting sometime next week. What are your expectations on what they'll post?
I have a small position that I bought in anticipation of a rise in price following year end 2017. Obviously that hasn't happened so now I'm considering if I should hold through earnings.
TIA
HAHA I was in the middle of responding when you changed the post.
Bollie buster is the hope.
PSAR flip is good and hopefully the bottom is in and it is up, up, up from here.
Fwiw, the chart shows the Parabolic-SAR switched back to "buy" a few days ago, the MACD is gently inclining back up. Some mild resistance seems to be there at just a fraction above the 1.01, where the 50dma and 20dma currently converge.
What's fascinating to me when looking at the daily chart is how since at least Sept. PERI has been made (on low volume, but still probably algo-driven or just some manipulative traders) to gently swing up and down, up and down, through the upper and lower channels defined by the Bollinger bands.
Looks like it's time for a gentle swing back up to the upper band. ... and hopefully earnings report in a month will take it up well above that to a return to bullishness for 2018!
It didn't seem to benefit from the last round of fear. I think that helped push it below the 50 day m/a. It had pulled back to the 50 and I thought it would catch support and start another uptrend and then we had the broad market sell off that lasted a few days and Peri wasn't exempt and didn't find any interest from those fleeing the overpriced rockets.
I do believe that as we get closer to the earnings date this will catch some interest and continue following earnings.
So far it hasn't responded the way I thought it would but the earnings and reaction to them are what is important. IMO!
As i've said over at the SavvyTrades board, despite the SPX bounding back up after the 200dma support test, the CNN "Fear-Greed" gauge still shows a lot of "deep red" fear with the gauge still down around 15 at last update (and it's been delayed in recent weeks on updating).
Because of that, the "risk OFF" sentiment still prevails and many small names like PERI are being ignored by buyers. When "risk ON" sentiment returns, we'll likely see more buying interest here... especially as we get closer to earnings date.
All jmo.....
I have noticed that too. It is like someone is trying to hold it down to accumulate.
Could be a good sign. I guess we will find out.
Also it looks like it is being deliberately kept down. Every time I buy few thousand it ticks down with 100 shares. I don't know whether it is good or bad.
I am surprised by the lack of interest. Especially after watching it last year leading into the seasonally strong 4th q.
I guess it is not on many radars. Hopefully that changes following the earnings annc/annual report.
Absolutely no interest here. Maybe the financials next month will change that.
I went back and read the 2015 Form 20F attachments/Exhibits and I suspect this filing has to do with the NDA between PERI and Microsoft Bing.
Whatever the case is it is non material in the sense that the Balance sheet, Statement of Ops and Cash flow statements have the necessary info to determine what it is worth.
Exhibit 4.13 of 2015 Form 20=f.
https://www.sec.gov/Archives/edgar/data/1338940/000117891315001254/exhibit_4-13.htm
It's impossible to know. All this tells you is that there is some information that the SEC normally requires to be included in filings that they do not want to disclose. The reason given is that it's for competitive reasons but who knows for sure. One would think that when the SEC agrees to allow an omission that the SEC agrees that the information is competitive in nature. I seriously doubt that omitting something like a law suit for example would be allowed.
Yep. Your thoughts? The same as the one filed in 2015 or an extension thereof.
My guess is they are doing business with a company from a country that it may not be politically advantageous to publicize.
Maybe even a gov't itself since gov'ts and search engines are so intertwined.
Just a guess.
From the SEC web site...
Perion Network Ltd. submitted an application under Rule 24b-2 requesting an extension of a previous grant of confidential treatment for information it excluded from the Exhibits to a Form 20-F filed on April 16, 2015.
Based on representations by Perion Network Ltd. that this information qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. 552(b)(4), the Division of Corporation Finance has determined not to publicly disclose it. Accordingly, excluded information from the following exhibit(s) will not be released to the public for the time period(s) specified:
Exhibit 4.13 through December 31, 2020
https://www.sec.gov/Archives/edgar/data/1338940/999999999718000421/filename1.pdf
I don't know. It is a continuation of one filed in 2015 so it is nothing new.
As an Israeli co doing business with companies from other countries, some friendly and some not, there may be some sensitive info that is to remain private.
Just a guess but it is not something new. Just a continuation.
What exactly is this? Noticed this on 1/18/2018.
Confidential Treatment Order (ct Order)
PERI: missed the first move off the bottom, stopped out breakeven, but won’t miss the second. See if $1 holds here. Chart is short term bearish having fallen below the 10EMA
Good luck! My money does not clear till Friday.
I am on the bid today too. I thought I was done buying but it looks like one more chance to load before the surge comes.
Going to add more here again tomorrow. This is looking like a no brainer unless I'm totally missing something.
I am hoping for a big move here similar to this time last year.
When you strip away the non cash stuff on the income statement this is a super cash flow generator. That can go unnoticed until they report this q's earnings showing gaap eps of around .05 or .06 and non-gaap of .10 or so. Then people dig deeper and realize just how much cash flow this co is generating.
Cash Flow Statement
Operating Cash Flow (ttm) 40.94M
Levered Free Cash Flow (ttm) 29.78M
The write down of the goodwill and the depreciation and amortization are masking this but when you look at the progress made towards paying down the debt it becomes obvious just how much money is being made.
Hoping we are over 2 bucks again in a couple of months.
Grabbed some shares yesterday. These identified cost savings should benefit the bottom line immediately. Plus the new jv should lead to much improved results.
Press Release titled "Perion Extends and Enhances 3 Years Agreement with Bing" dated October 26, 2017.
I feel we are headed for a 4 bagger. 1.https://orobulletin.com/investor-notebook-focusing-in-on-shares-of-perion-network-ltd-peri/259410/
2. https://www.wallstreetinvestorplace.com/2017/10/perion-network-ltd-peri-spectacular-insider-ownership-of-36-50-and-manhattan-bridge-capital-inc-loan-has-31-70/ I have also seen the focus Google is putting behind digital advertising Perino stands to gain "big league" we is it "biggley". Oh (snap) what ever. Glta
I sold most shares earlier in 2017 at the 2.33 mark, close to its 52-week high. Sold the rest in upper $1s, as i recall.
Haven't had time to research what its prospects are for 2018....
Take a look now. It is time 4 weeks and counting....
https://ih.advfn.com/p.php?pid=nmona&article=75777941
It is Time! Unleash the power of PERI. Big deal in the works. Keep your eyes open.
Time to wake up PERI!
Now is the time to get fully in.
PERI
I've been actively buying PERI in the $1.22-1.24 range the last couple of days. here is what I like.
PERI is a great turn around candidate that is starting to turn profitable on a gaap basis and the way I calculate earnings I would not use the .08, but it is significantly higher then GAAP. more on that later. The next two quarter are seasonally strong and I expect to see huge numbers in q4, mind blowingly good, and q3 I expect to be no slouch either.
Management if anything has been overly conservative on guidence I expect q3 revs to be about 84-85 million versus the 78-81 million they expect. I expect this to lead even to better profits. I expect q4 revs to be in the 92-95 Million range with even better numbers hitting the bottom line. They have started to gain traction, meanwhile the stock is near 52 week lows not reflecting this turnaround. This is the kind of strategy I always try to use find them early, and try not to chase, and I'm clearly not chasing here.
Now what are the numbers I would use. I would use about .034 in q1 and about .05 in q2. As earnings were roughly .085 in much weaker q1 and q2. Now how did I calculate that. The company uses non gaap earnings of .17, and I come up with 1/2. How you ask?
Well I don't include stock based compensation, I don't include the accretion for obligation as I think that should be added to earnings as well. I also adjust the profits using a 25% Tax rate which is what they have used in the past when they were profitable on a gaap level.
Now to earnings estimates going foward I see non gaap earnings (adjusted my way to be in the .08-.10 range in q3) and significantly higher in q4. Granted without a doubt their non gaap earnings will be reported as much higher then what I stated. Also Gaap earning if taxed I expect to be in the range of .04-.06. I of course expect even better results in q4.
Also the comps on both non gaap and Gaap with start to become favorable and their bottom line numbers will show improvement y/y from now on, which is another plus. I expected adjusted eps (The way I look at it) to be in the .30-.35 range. Pop a decent pe on this and it could easily double or even triple. I think PERI might be more a 2017 play where it does some of it's running, but the stock is stupidly undervalued and this quarter was very impressive not that anyone cared and the comp sucked which is why, that changes starting q3 and beyond in my opinion. I believe PERI is very undervalued and I will continue to buy on weakness. All is just my opinion, and I could always be wrong though.
Peri is an undervalued gem that will make a lot of money for investors over the next few years. IMO
Perion Network: It Can't Be This Bad
http://seekingalpha.com/article/3985222-perion-network-bad
Summary
It does look like continued pressure from a massive lock-up expiration is artificially depressing PERI shares.
At the same time, there are some concerns about the Search business and early performance from Undertone.
Still, a share price near $1 doesn't make sense, given the price paid for Undertone (an acquisition the market loved) and increasing bond prices.
This remains a risky play, but PERI simply looks too cheap.
After years of being a bear on the stock, I turned bullish on Perion Network (NASDAQ:PERI) after its $180 million acquisition of Undertone in December. Shares were at $2.68 at the time; it would be an understatement to say the call hasn't worked out:
source: finviz.com
Honestly, I've been stunned by the magnitude of the decline. Perion management has pointed to the expiration of a lock-up on shares granted in the company's reverse merger with Conduit as providing pressure, but in a call earlier this year (with shares above $2), CFO Yacov Kaufman told me that six core shareholders would hold their ground and hopefully stem the bleeding.
Clearly, that hasn't happened, but there's still reason to think that the continued declines are not necessarily being driven solely by fundamental revaluation. Indeed, there's a bit of a disconnect at Tuesday's close of $1.12 for a number of reasons. I can see some cause for concern, and I'm somewhat regretting trusting Perion after years of questioning management. But I went long at $1.30, since this stock looks just too cheap, and I still see reason to believe the pressure on the stock isn't related solely to Perion's business.
A Disconnect
The recent trading in PERI shares is a bit illogical, in my opinion, for several reasons. First, Perion's enterprise value (including outstanding consideration due to Undertone's former owners) is at $174 million. The company paid $180 million for Undertone barely six months ago. And the market loved the deal: shares rose 80% in a matter of sessions before beginning their long decline just before the lockup expired January 1st. There was some reason for potential concern in the Q1 report, with Perion already projecting lower-than-expected growth from Undertone in Q2. But the stock gained almost 7% on the day of the Q1 earnings release, and it had already hit $1.50 the day before.
There really hasn't been any fundamental news over the past six months to change the implied valuation of Undertone all that much. To be sure, some of the December gains may not have come solely from the value seen in Undertone; there likely was some relief by investors that Perion had put its cash into a profitable business after some questionable purchases in the past. But early performance appears reasonable, and sector valuations in adtech haven't fallen all that much:
RUBI Chart
RUBI data by YCharts
I can see some reason for bringing Undertone's valuation down; I was a bit concerned after the company pulled down directional guidance for 2016 after Q4. But the magnitude of the decline in PERI shares seems to far outweigh any news over the seven months since the transaction was announced, and the current valuation implies either that Perion overpaid (likely by close to 100%) or that the rest of the business is basically worthless.
Perhaps that's the case. But there's one group of investors that don't appear to think so:
source: Tel Aviv Stock Exchange
That's the chart of Perion's convertible bonds. The conversion feature is of little value, with the conversion price at about $8.61, and the bonds appear subordinated to an Undertone credit facility and another secured by legacy Conduit assets, per the 20-F. While the equity seems to be pricing in some risk of Perion's strategy leading to bankruptcy, the bond market - in Israel, at least - seems much more confident.
There simply doesn't seem to be a fundamental reason for such a steep decline, and recent trading certainly seems to imply that a large stake (or stakes) are being liquidated of late after similar sales at the beginning of the year:
PERI 30-Day Average Daily Volume Chart
PERI 30-Day Average Daily Volume data by YCharts
And Perion itself can't do anything to support its stock: per the Q1 conference call, it is prohibited by Israeli law from buying back shares as long as retained earnings are negative. All told, there appears to be a bit of a "perfect storm" relative to trading that might explain some of the unrelenting pressure on PERI's stock price, and might imply that there's a buying opportunity for investors patient enough to wait out this turmoil.
Real Concerns
I do think the sell-off is overdone, and likely magnified by the lock-up expiration and the inability of Perion to repurchase shares (with the market cap at $86 million, even a $5-$10 million authorization could have a significant impact on demand). But there were some concerns in the Q1 report as well, even if the initial response was bullish. To be sure, Perion did beat analyst estimates and its own guidance rather handily. But it's starting to look like Perion sandbags its guidance somewhat, and the bottom-line beat relative to consensus comes from Perion deciding to shut down part of its Grow Mobile business, moving a loss to discontinued operations (on a GAAP basis, that $0.05 shift exactly matched the delta against the two-estimate EPS number).
In Search, revenue fell 6% sequentially, with Perion guiding on the Q1 call for that figure to stabilize. That number looks a bit of a disappointment, with the company having said on the Q4 call that Q4 levels would be the bottom, plus or minus 5%. Margins fell dramatically, as Search revenue fell 5.6% year-over-year but customer acquisition costs nearly doubled. Some of the CAC gains comes from Undertone media buys, but even excluding that spend, CAC was up over 80%, moving from 36.5% of Search revenue in Q1 2015 to 78% in Q1 2016. And it appears Perion was a bit more aggressive in Search than expected, which drove revenue above expectations - enough to more than offset the top-line loss from Grow Mobile - but also means the company continues to be exposed to what looks like a declining business. Perion's revenue is now concentrated in Microsoft's (NASDAQ:MSFT) Bing, and there's still a fear that changes relating to Windows 10 and Edge - or simple policy changes similar to those from Google (NASDAQ:GOOGL) (NASDAQ:GOOG) that decimated the third-party search business two years ago - could further pressure Search profits. The two other major players in the space - AVG Technologies (NYSE:AVG) and Blucora (NASDAQ:BCOR) - have essentially exited, with Blucora looking to sell its InfoSpace division and AVG's Search business limited basically to its desktop anti-virus programs. The continued declines - even if Q1 may have had some seasonality - raises some worry for what is still a reasonably big part of Perion's business.
In terms of the mobile business, the decision to shut down Grow Mobile had been tipped somewhat on Q4, when Perion fully impaired the intangible assets acquired in 2014. But it's still not entirely clear what went wrong there; Perion is focusing on the "high impact" space with Undertone, trying to avoid the "race to the bottom" in the increasingly commoditized adtech space. But on the Q1 call, CEO Josef Mandelbaum said the drivers of a lower-than-anticipated growth for Undertone in Q2 were "a more pronounced shift of advertising budgets to social and in-app". Perion was supposed to have added those capabilities through the purchases of MakeMeReach (social) and Grow Mobile (in-app), both of which were supposed to complement Undertone's more advanced mobile offerings. Grow Mobile's in-app engineers appear to be staying on, and Mandelbaum cited the revenue synergies of Undertone's high-impact portfolio with MakeMeReach's social offerings, but it appears that the integration is a bit slower than hoped. The fact that the businesses acquired by Perion before Undertone aren't benefiting from this shift in the space (and that Grow Mobile has been a bust) also casts a shadow on Undertone: is Perion once again behind the curve in trying to enter a space in which it doesn't have any real competitive edge?
Valuation
Still, the current price seems just too low, even considering those concerns. Full-year guidance was roughly maintained, with Perion now pointing to the high end of EBITDA guidance, based on previous expectations of 50%+ revenue growth and 10-12% margins. That hike doesn't necessarily imply an improved business outlook; rather, it simply seems to incorporate the benefit of shifting Grow Mobile into discontinued operations.
But full-year projections still imply about $39 million in Adjusted EBITDA, a EV/EBITDA multiple of just 4.5x. Interest expense should be about $13 million, capex ~$3 million (adjusted up from the pre-Undertone baseline of ~$2 million), and normalized tax rates should be low, thanks to high amortization and a low Israeli tax rate (25% is the corporate rate, but as a "preferred enterprise" the rate can drop as low as 9%). The free cash flow multiple looks to be in the 4-5x range - which implies outright failure in Search and declines in Undertone, both assumptions which seem far too pessimistic. Even a ~3x EBITDA multiple on Search profits (about $15 million, based on previous guidance relative to Undertone, at a multiple where depressed PERI shares traded before the attempted 'pivot') plus a 6x multiple on Undertone supports the current price, below profitable adtech plays (see the Rubicon Project (NYSE:RUBI) at ~8x 2016 guidance and Criteo (NASDAQ:CRTO) in the mid-teens).
There's risk here: if Undertone gets left behind in mobile and Perion can't develop its 'in-app' capabilities quickly enough, PERI's equity can get to zero down the line. (The outstanding consideration for Undertone isn't based on targets, so there won't be any help there if the acquired company's results turn south.) Perion appears to building in some benefit from political spend, particularly in Q3, which might make 2017 comparisons a bit more difficult by inflating 2016 numbers.
But even with a modestly disappointing performance since the acquisition, a price above $1.50 still seems reasonable (~6x EBITDA, 5-6x free cash flow) and Undertone is still growing, if not at the rate Perion was hoping for in Q2. It does seem likely that a bottom in the stock will come at some point (though I've thought that for some time), and solvency isn't a near-term threat, giving the company some time. And it does seem that the sell-off has been driven at least in part by the lock-up expiration and the inability of Perion, and the lack of interest from other large buyers, to step up in response. The equity market is showing a company with a reasonable chance of imploding; the bond markets aren't. For now, I still think it's equity investors who have the story wrong.
I thought at $1.30 it was a reasonable entrance price also. but, i believe when they settle down and have a positive EBITDA or EBIT, the share price should turn around. i recall in the Earnings CC that they said they would purchase shares at current prices, however, due to laws in ISRAEL, they cannot do that until they have positive EBITDA or reduction of debt.
Josef Mandelbaum
"And when the stock price went below at a certain level obviously you have to take.... we took an attempt, that attempt is of course our return earnings to be negative. When you have negative return earnings according to Israeli court of law we're not allowed to do buybacks until you have positive return on earnings."
Unidentified Analyst
Okay and then regarding the buyback. Just trying to get some more details. What are the hurdles you have to go through in this really quite system for you to get approved all to do buyback?
Yacov Kaufman
Well basically it goes, its start all with dividends. Basically if you do not have positive trade earnings or any distribution dividends is just as limited by they essentially have positive retained earnings. But of course and other regulators being buybacks as being dividends and that's what we restricts about. In order for you to have do it through dividends or do buy back shares to have positive retained earnings.
There is a limited possibility to try to distribute dividends and even if you do not retain earnings. But as you mentioned you have to go through a core process and it is usually limited to companies that are not leveraged. Perion is leveraged and therefore the probability of our scaling such consents through the core system once we've approached all the orders is far-fetched to say the least.
Here's my post to another board about that S.Alpha author & article (need a PRO subscription to read it in its entirety):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=123078898&txt2find=peri
The big seller(s) continues to be relentless in dumping shares, likely a consequence of that acquisition bringing a huge # of shares onto the market, according to the S.Alpha author who identified this months ago as the big factor in the trading weakness for PERI's stock.
Almost two weeks ago i got a very small amount of shares (1k shares) at 1.28 and thought i was getting them "at a steal." Now hitting 1.04 today, making lows well below s/prices hit during the Financial Crash of 2008....
Been waiting to pick up more shares but it looks like the sellers will just keep selling this into the dust, so i'm gonna wait much longer if i have to. But whenever all those shares have been sold, this could be one of the great stock turnaround stories....
Initiated a position in PERI at $1.30, valuation is too compelling at current prices.
PERI is going to have a great year based on their recent conf. call. Yes they have had a down Q1 but the call is still for high end of the yearly call price. Watch them in the next few weeks. The price is soft right now because of the recent conf. call. But the 2nd half of the year is due for good gains.
PERI stock price continues it's slipping and sliding ways down!
PERI stock continues to take a beating! Investors should hold back purchases of PERI for the time being!
PERI stock continues to take a beating. IMO more downside risk ahead!
PERI stock price under significant downward selling pressure looking to find a bottom. With all the shares that have been unlocked it would be hard to estimate when the selling will be over.
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