Ryan Beck Downgrades Monster

Analyst James Janesky says the online recruiting company's marketing and salary costs will lower first-half 2005 margins

Ryan Beck downgrades Monster (MNST ) to market perform from outperform.

Analyst James Janesky notes his and consensus 19 cents fourth-quarter earnings per share estimates. He says the upside was driven by revenues in the Monster unit and lower-than-expected marketing and promotion costs.

He says although several key business metrics were performing in-line to better-than-expected, he believes near-term investments in marketing costs and higher salaries expenses will serve to bring in first-half 2005 margins below his original expectations.

Combined with Monster's valuation, he prompts a downgrade. Janesky raises 85 cents 2005 earnings per share estimate to 88 cents, but drops his 17.3% operating margin forecast to 16.5%. He believes shares become attractive in the mid-$20s.

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