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 thesis.
What: Shares of RetailMeNot (SALE) were looking stronger today, gaining as much as 15% after posting a better-than-expected earnings report.
So what: The digital coupon merchant actually came up short on the bottom line as earnings per share improved from $0.03 to $0.26, but missed estimates of $0.29. Revenue, however, surged 54.5% to $78.5 million, beating expectations of $68.7 million. CEO Cotter Cunningham said earlier investments paid off in the fourth quarter "as a solid e-commerce environment and a shorter holiday season saw heavy retailer promotional activity."
Now what: Subscriber growth was also particularly strong in the quarter, increasing 106% to 17.1 million, and international sales were also up 85%, a promising sign. Expectations are high for RetailMeNot with a forward P/E of 36, but the company seems to have the momentum and leadership position in the fast-growing online coupon industry to justify the high price tag.
