RetailMeNot, Inc. (NASDAQ: SALE) is the world’s largest website that consolidates online coupons for different retailers and brands. The website is based in Austin, Texas, but operates subsidiary websites throughout Europe. RetailMeNot released a disappointing Q3 report on Monday, November 3rd just as the current CFO announced his departure from the coupon website to return to his home on the west coast at the end of the month.
Here are the highlights from the Q3 report:
- Earnings per share: $0.05 on a GAAP, compared to $0.06 in the same quarter of last year
- Quarterly revenue: $56.47 million, beating analyst estimates by approximately $0.47 million and posting a 19% year-over-year increase
- Analysts expect that RetailMeNot will post $0.85 EPS for the current fiscal year
Following the release of the substandard report and the CFO’s resignation, share prices plummeted and ultimately reached a 1-year low of $13.65 during trading hours. To make matters worse, RetailMeNot reduced revenue estimates for the fourth quarter.
Although visits to RetailMeNot increased 22% to 161.5 million, some speculate that the site was adversely affected by changes in Google search algorithms. The alteration placed RetailMeNot lower down on the search engine for relevant searches. However, RetailMeNot does not seem too concerned with the impact.
Founder and CEO Cotter Cunningham maintained a positive attitude while commenting on the report. Cunningham is “pleased with the strong user engagement levels” and “especially proud of the release of the redesigned RetailMeNot mobile app.” Revenue from mobile apps was $11.7 million, constituting 21% of overall revenue for the quarter. Cunningham kept his sights on the upcoming holiday season, noting “we look forward to offering retailers new opportunities to help build their brand, increase store traffic and grow sales.”
Shares of RetailMeNot opened at $15.44 on Tuesday, November 4th. The digital coupon site has a 1-year high of $48.73 and a 1-year low of $13.65. The stocks daily moving average is $14.94 and it has a 50-day moving average of $17.32. The market cap for RetailMeNot is $774.54 million and its P/E ratio is 45.85.
On November 4th, Mark Mahaney of RBC Capital reiterated a Sector Perform rating for RetailMeNot and lowered his price target to $19.00 from $24.00. Mahaney noted several negative factors, including, “FX headwinds, weakish International traffic, Mobile monetization challenges, ongoing Google SEO risks, and commission pressures.” Mahaney has a 65% success rate recommending stocks with an average return of +24.9% per recommendation.
Separately on November 4th, Blake Harper from Wunderlich Securities assigned a Buy rating to RetailMeNot but did not provide a price target. Harper has a 40% success rate recommending stocks with a -6.9% average return per recommendation.
Overall, the top analyst consensus for RetailMeNot is Hold.