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Why Monster Worldwide, Inc. Shares Got Crushed

By Brian D. Pacampara, CFA – Feb 11, 2016 at 2:06PM

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The job search specialist scares investors away with gloomy guidance.

What: Shares of job search website operator Monster Worldwide (MWW) were down a whopping 33% at 1 p.m. ET on Thursday after its quarterly results and outlook disappointed Wall Street.

So what: Monster's stock has slumped over the past several months on a trend of declining revenue, and today's Q4 results -- EPS of $0.12 on a revenue drop of 9.2% -- coupled with downbeat guidance suggests that its top-line troubles are only accelerating. So while Monster also announced today that it was expanding its social recruitment ad platform beyond Twitter to distribute job ads on Facebook, severe near-term headwinds are forcing analysts to overlook the company's longer-term turnaround initiatives. 

Now what: Management now sees current-quarter adjusted EPS in the range of $0.06 to $0.10, well below the consensus estimate of $0.13. "We underperformed in North America in our transactional business as a result of competitive pressures and seasonality, as well as macro considerations in Canada," said CEO Tim Yates. "We have implemented a number of actions which we believe will improve our performance going forward, remain fully committed to revenue and cash flow growth in 2016." When you couple the company's alarming top-line trend with its still-hefty debt load, however, I'd continue to be fearful about Monster's prospects going forward. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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