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Coinstar Stock Is Cruising for a Bruising

By Rick Munarriz - Apr 18, 2013 at 6:32PM

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It may get ugly when the Redbox parent reports quarterly results.

Coinstar (OUTR) investors think they're braced for the worst. 

Analysts see revenue growing just 2% through the first three months of this year, with profitability taking a big hit. Don't make the mistake of thinking that this is as bad as it can get. Coinstar stock could still be a colossal disappointment when it reports on April 25.

In this video, Rick explores why the company behind the disc-renting fleet of Redbox machines could be in for a choppy quarter. Coinstar's decision to team up with Verizon (VZ 0.28%) to take on Netflix (NFLX 0.58%) is too little, too late, and the venture will ultimately crush margins as it struggles to woo streaming video buffs.

Financially speaking, Rick wouldn't be surprised if Coinstar backs off its full-year guidance issued in February. There's little reason to expect Coinstar to post double-digit growth in the future.

There won't be a Hollywood ending for Coinstar stock, and it could be dangerous to own the shares heading into the report itself.

 

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Stocks Mentioned

Coinstar, LLC Stock Quote
Coinstar, LLC
OUTR
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$49.67 (0.28%) $0.14
Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$187.44 (0.58%) $1.09

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