The correction has run very deep. It is now more than 22% below the recent high of $14.25, and has done much worse if one compares it to the 52 week high of $17.39 made in May. The earnings were better than estimates, but that did not help matters at all. The company beat the EPS estimates and the revenue guidance. Perhaps, a few more quarters of good performance can lead to improvement in sentiments for the stock. It is important to note that 2012 was better than earlier years as the revenues had grown and the loss had reduced. In 2013, going by the guidance, the revenue growth is expected to continue. For 2013, the guidance is for revenues in the range of $515-$520 million and adjusted EBITDA between $29.5-$31.5 million. Currently, the company carries a minor net loss on a ttm basis. For starters, it needs to beat the guidance for Q3'13 (revenue $130.5-$132.5 million, and adjusted EBITDA $6-$7 million). Growth in revenues is difficult as the company faces competition from the bigger players like Google (GOOG), Yahoo (YHOO) and Microsoft (MSFT). Social media sponsorship / native advertising is another fast growing segment with companies like IZEA (IZEA) doing well recently. The company needs to leverage the power of some of the high growth emerging trends. The competition makes it difficult for the margins to improve. So the hard work needs to continue and the new leadership may be expected to do something special to take the company to the next level. The good part is that it is a company close to breaking even. It has zero debt and a $81 million cash. So, after such a big correction, a few more good quarters can have a remarkable positive effect on the stock price. Hopefully, we will see a bounce from the current levels soon.
