XO Group - Aggressive Growth
February 21 2012 - 7:00PM
Zacks
XO Group (XOXO) analysts have given the stock their version
of hugs and kisses by raising estimates which boosted the stock to
a Zacks #1 Rank (Strong Buy).
Company Description
XO Group provides multiplatform media services to the wedding,
newlywed, and pregnancy markets in the United States. The company
provides online and offline services through various media, such as
magazines, books, syndication, television, Web sites, and social
media under the brand names of The Knot, The Nest, and The
Bump.
Estimates have recently moved higher
Future estimate earnings are starting to look better (not
worse), as expectations for 2012 have recently moved from $0.26 to
$0.31 per share. 2013 is also seeing an improvement in its outlook
as analysts have recently bumped estimates from $0.28 to $0.30.
Earnings Surprises Streak
XOXO put up three straight positive earnings surprises, but also
has had two negative earnings surprises over the last seven
earnings reports.
Over the last three positive earnings surprises, the company has
beaten the Zacks Consensus Estimate by $0.04, $0.02 and $0.04
respectively. The reaction of the stock has been mixed, with a
nearly 1% gain, a 6.8% loss and a 9% gain in respective
quarters.
XOXO Reported Earnings
On February 16, 2012 the company reported revenue of $31 million
up from $27 million in the year ago period. In addition, earnings
per share came in at $0.09 up from $0.04 posted a year ago and
$0.05 higher than the Zacks Consensus Estimate.
Valuations
The valuation picture for XOXO is mixed. The stock trades at a
significant premium to the industry average in terms of PE for both
trailing and forward metrics. Price to book, shows the company
trading at a deep discount to the industry average with a 1.8x
multiple vs. a 4x industry average. Finally, while sales growth has
not been anything to get all tied up over, a 2.2x prices to sales
multiple is also trading at a deep discount to the industry average
of 3.5x.
The Chart
The price and consensus chart for XO Group shows that analysts
have begun to moved their estimates and expectations higher. With
an improvement in the economy the wedding industry can look to come
out of recent lows, and XOXO is no different. Having bounced
significantly from December 2011 lows, the stock appears poised for
a solid run through the 2012 wedding season. XOXO is a Zacks #1
Rank (Strong Buy).
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