ValueClick Vaults Higher
ValueClick's (VCLK) share price soared more than 15% on Nov. 2, after the online marketer posted a stronger third quarter and forecast better times ahead in its growing industry.
The Westlake Village (Calif.) company said late Nov. 1 that net income for the third quarter of 2006 was $16.8 million, or 17 cents per diluted common share, compared to $11.0 million, or 13 cents per diluted common share, for the third quarter of 2005.
The company had originally forecast earnings of 14 cents per share for the quarter. The third quarter 2006 results include stock-based compensation expense accounting changes adopted Jan. 1, as well as a full quarter of operations from Fastclick, which was acquired on September 29, 2005.
ValueClick hiked its guidance for fiscal year 2006. It now expects to have between $531-$533 million in revenue, or 57-58 cents per share. Previously, ValueClick had forecast between $519-$529 million, or 48-54 cents per share for the year.
The guidance issued includes changes related to stock-based compensation expense and taxes. For fourth quarter 2006, ValueClick expects between $146-$148 million in revenue, or 17-18 cents per share.
James Zarley, chairman and chief executive officer of ValueClick, sees more good times coming. "Our large-scale network solutions enable our advertiser and publisher clients to benefit from the continued fragmentation of online media consumption, and our increased 2006 guidance illustrates our confidence in finishing 2006 on a strong note," he said in a press release.
The market seemed to like what it heard, as the stock rose nearly 15% to $21.65 per share in late afternoon trading on the Nasdaq, touching a 52-week high of 22.33 earlier in the session.
"We continue to believe that company fundamentals are strong," Standard & Poor's Corp. analyst Scott Kessler said in a research note. He raised his 2006 earnings per share estimate, and said he thinks the company is likely to make smart acquisitions over the
But the analyst lowered his opinion on the stock to hold from buy on Nov. 2, citing the sharp rise in the share price on the session, as it brought the share price "relatively close" to his 12-month target price of $23. He noted that the stock had risen about 67% since July 21. (S&P, like BusinessWeek.com, is owned by The McGraw-Hill Companies.)
Piper Jaffray analyst Aaron Kessler kept an outperform rating on the stock, noting factors such as a strong outlook in the media segment. With a $27 target price, the analyst hiked revenue and earnings estimates for 2006 and 2007.