The Knot Inc. is poised to gain from its No. 1 market position in the lucrative wedding market, according to one analyst, who started coverage of the Web site operator at "Buy."
Kaufman Bros analyst Jason Avillo said there are about 2.2 million weddings nationwide per year, with the average wedding costing around $29,000. That translates to $60 billion each year.
Avillo said The Knot, which operates theknot.com, is in the sweet spot by providing an online outlet for consumers to share experiences about their weddings.
"By developing a community of trusted users and editors, The Knot enables advertisers to reach an engaged audience facing significant purchase decisions around particular life events," Avillo wrote in a client note.
Avillo said The Knot, which also owns the WeddingChannel, provides content beyond the wedding date and enables users to stay connected and engaged beyond the main event.
Avillo also expects The Knot to gain from a trend among advertisers to promote their products online.
"Consumers are using the web for a significant portion of their research time and we don't believe current advertising figures represent the relative value Web properties provide for advertisers," Avillo wrote in a client note.
In May, The Knot Inc. posted first-quarter profit and revenue that fell short of Wall Street's expectations, hurt partly by higher expenses for product and content development costs. The company updated technology and took on more employees.
Shares of The Knot have declined 33.1 percent so far this year.
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