The last quarter earnings and guidance for the second quarter indicated that there may be some slowdown in growth of Valueclick. The company reported 13% growth in revenues in the last quarter, and the net income went up by around 22%. However, this was below what the analysts had expected, and the guidance for the next quarter is also not very robust. This has led to a fall in the stock, and it has now corrected by around 10% over the last three months. It has fallen by around 20% from its 52 week high made a month ago. Last few days have shown some recovery, but the confidence is still not there. Despite this, last 12 months have been good for the investors as the stock has appreciated by more than 52%, and is more than 66% above its 52 week low made in August. As mentioned in an article on insidermonkey, the slow growth in the economy may affect the revenues and the net income. Further, the competition in online advertising is immense and increasing. New concepts are emerging and smaller companies like IZEA (IZEA) are bringing innovative ideas to attract advertisers. However, though the growth may be slow, the awareness about the power of online advertising is increasing. More and more companies are allocating additional budget to advertising on the internet. Social media platforms are being preferred for their impact. So the future for Valueclick will depend upon how well it is able to leverage the future growth in the market. The stock can perform well because it scores on the valuations front also. It is trading at 18 times ttm earnings and 12 times forward earnings. The debt is reasonable at $80 million, and the cash of $129 million indicates good liquidity position. The next earnings will be crucial in determining the short term performance of the stock.
