In the annals of my investment boo-boos, near the top of the list is a shortsighted dumping of stock in a profitable online marketing service. What was I thinking? "Come on, they're just doing click-through ads. How much can that be worth?" Duh.
Web advertising golden child ValueClick
Today's awesome Q4 and full-year 2003 results shot ValueClick up 5% into the $12 turf, a 52-week high. Fourth-quarter revenues were up 61% over last year, fueling earnings of $0.07 per share, a nice 250% increase. For the year, revenues climbed 48% to $92.5 million. Those results include revenue jumps from smart acquisitions, leading the bigger, meaner ValueClick to full-year earnings of $0.13 per share. That's a lot better than last year's $0.14 loss.
Great results, but is there any value left in this click for investors? That depends on what your definition of value is. V-to-the-C has had a spectacular run-up, a four-bagger today, from around three bucks a stub at this time last year. For 2004, the company issued guidance of $145 million to $148 million in revenue, and earnings from $0.21 to $0.27 per share.
If we split the middle on those numbers, ValueClick trades at 50 times estimates. That's doesn't seem crazy considering the near 100% growth baked into the math above, but it makes it pricier than competitor DoubleClick
I wouldn't count anyone out of this game. Web advertising is booming, and there seems to be plenty of room on the Net for smaller outfits. Even gorillas like Yahoo!
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Photojournalist Seth Jayson fell down a rabbit hole and ended up contributing to the Fool, which is investors writing for investors. He has no stake in any firm mentioned above.