AutoWeb Jumps 10% On Lower-Than-Feared 4Q Loss
AutoWeb posted better-than-expected fourth-quarter results pushing shares of the digital marketing company for the automotive industry up 10.5% on March 11. AUTO added another 1.7% in Thursday’s extended trading session.
AutoWeb’s (AUTO) 4Q revenues of $17.3 million beat the consensus estimates by $0.25 million but declined 35.2% year-over-year due to lower lead and click volumes and COVID-19 headwinds.
The company reported a loss of $0.07 per share in 4Q, which narrowed from a loss of $0.24 per share in the prior-year period. Analysts were anticipating a loss of $0.12 per share. The year-over-year improvement came on the back of higher gross profits and lower operating expenses, driven by improved cost management.
The company’s gross profit increased 6% in 4Q, driven by “continued efficiencies in traffic acquisition and focus on higher-margin distribution channels.” (See AutoWeb stock analysis on TipRanks).
Ahead of the results, Barrington analyst Gary Prestopino maintained a Buy rating and a price target of $10 (239% upside potential) on the stock.
In a note to investors, Prestopino said, “We believe that AUTO’s turnaround has been completed and the foundation has been set for transforming the business to exhibit consistently improved financial metrics.”
“We believe that over a three- to five-year basis, the company should be able to attain an adjusted EBITDA margin of close to 10%, which is a level last attained in 2016,” the analyst added.
Overall, the rest of the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy consensus rating based on 2 unanimous Buys. The average analyst price target of $7.13 implies upside potential of about 142% to current levels. Shares have gained by 48.2% over the past year.
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