Please ensure Javascript is enabled for purposes of website accessibility

Why Monster Worldwide, Inc. Stock Plummeted

By Daniel Sparks - May 5, 2016 at 5:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Weak guidance has Monster investors skittish. Here are the numbers from the company's earnings report that may have caused the stock to dive.

What: Shares of online employment and recruitment solutions company Monster Worldwide (MWW) fell as much as 15.7% on Thursday. But the loss improved to 9.5% by the time the market closed. The stock's decline followed the company's worse-than-expected revenue, and its underwhelming guidance.

Image source: Monster Worldwide.

So what: Monster reported revenue and non-GAAP EPS of about $158 million and $0.07, respectively. These results compare to revenue and non-GAAP EPS of about $173 million and $0.07 in the year-ago quarter, respectively.

While Monster's EPS was in line with analysts' consensus estimate, revenue was about $2 million lower than expected. But this slight miss may not be the main reason for the sell-off on Thursday: The company's guidance for non-GAAP EPS in the range of breakeven to $0.04 was well below the current consensus analyst estimate for second-quarter non-GAAP EPS of $0.07. This much weaker-than-expected guidance looks like a better contender as the reason for Thursday's sell-off of the stock.

Now what: Going forward, Monster CEO and CFO Tim Yates stated in the company's first-quarter press release that the company will be investing in "a couple of targeted product and marketing areas" aimed at accelerating the company's revenue growth.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Monster Worldwide, Inc. Stock Quote
Monster Worldwide, Inc.
MWW

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.