Why Bankrate Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online financial data publisher Bankrate (NYSE: RATE  ) plummeted 26% today after its preliminary quarterly results disappointed Wall Street.

So what: Bankrate's third-quarter outlook was so dismal -- management sees third-quarter adjusted EPS of $0.11 to $0.13 on revenue of $115.5 million to $117.5 million versus the consensus of $0.20 and $132.7 million -- that analysts have no choice but to lower their valuation estimates. Management cited continued adjustments to its insurance leads business for the miss, triggering plenty of investor doubt over its business model going forward.

Now what: Bankrate now expects full-year revenue growth of 8% to 12% from a year earlier and adjusted EBITDA margin in the high-20% range. "We will continue to execute on our strategy to move our insurance leads platform to higher quality, higher converting traffic which we believe will drive higher value and open up new product opportunities to drive growth in 2013," CEO Thomas Evans reassured investors. Of course, when you couple the uncertainty surrounding Bankrate with its still-hefty debt load, buying into that optimism isn't exactly prudent at this point.

Interested in more info on Bankrate? Add it to your watchlist.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2060139, ~/Articles/ArticleHandler.aspx, 10/21/2016 12:41:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,117.61 -44.74 -0.25%
S&P 500 2,137.74 -3.60 -0.17%
NASD 5,251.20 9.37 0.18%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 12:23 PM
RATE $7.83 Up +0.13 +1.62%
Bankrate CAPS Rating: **