There are no more snake eyes at Dice Holdings
The online jobs specialist may have had a rocky run since going public over the summer, but its fundamentals are acing their job interviews.
This morning's third-quarter report is solid. Revenue soared 76% to $38.2 million. Earnings rose by 33% to $4.2 million, or $0.07 per share. (You can review last quarter's performance here.)The spurts aren't entirely organic, since the company's deal to acquire eFinancialCareers.com last year didn't close until the fourth quarter. But revenue would still have climbed by an impressive 38% on a pro forma basis, if the purchased property had been around in summer 2006.
Dice isn't like Monster Worldwide
The industry-specific bent isn't original. Jupitermedia
So why can't Dice get any love here? The stock went public at $13 back in July. It has now posted two strong quarters since going public. Why can investors buy in today for less than its original IPO price?
You thought I had the answer? Dude, I'm scratching my head, too. As small as Dice may be, it's still pulling in double-digit net profit margins. The third quarter's showing clocked in with net income margins of 11%, and the company is projecting 11% to 12% during the current quarter, on a slight sequential improvement on the top line.
In other words, Dice is looking to earn between $0.07 and $0.08 a share in the current quarter. Analysts aimed too low with their $0.05-per-share target in the latest quarter. They're aiming too low with their $0.06-a-share profit projection for the fourth quarter.
I'm not suggesting that Dice should be hired as the next market darling. It's too small to be a bellwether. Priced at more than 40 times next year's earnings estimates, $13 proved to be an ambitious price tag on the IPO. However, now that Dice has proved itself worthy with two solid quarters, shouldn't it at least be considered for the apprenticeship program to be an eventual market darling? I think so.
Longtime Fool contributor Rick Munarriz is fairly sure that he has never owned a pair of fuzzy dice. He is also proud of himself for avoiding the tempting dice puns that tried to pry their way into this article. He does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy isn't fuzzy at all.