Analysts’ calls and estimates
On May 3, 2013, Cantor Fitzgerald upgraded comScore from a “hold” to “buy” rating with a price target of $20.00 (from $16.00), as the analyst believes COMSCORE, Inc. (NASDAQ:SCOR) is gaining traction with new offerings. Goldman Sachs also upgraded comScore to “neutral” from “sell” with a new price target of $17, citing the business has stabilized following rationalization of underperforming segments, and the valuation now better reflects comScore’s growth rate. Analysts, on average, are estimating an EPS of -$0.09 with revenue of $276.67 million for 2013, which is 8.40% higher than 2012.
Fundamentally, despite lower margins and returns, comScore continues to enjoy a higher revenue growth (three-year average) of 25.9, compared to the industry average of 6.5. comScore has a healthy balance sheet with a strong cash position, holding $73.74 million of cash with $18.95 million total debt as of March 31, 2013. comScore also generated a positive levered free cash flow of $41.97 million in the trailing 12 months. At the current valuation, comScore’s Forward P/E of 28.2 (vs. the S&P 500’s average of 14.6) is justified with its higher revenue growth.
As for the share price performance, comScore has been on the long-term uptrend since November 2012 and has broken through its long-term uptrend resistance after the Q1 earnings release. COMSCORE, Inc. (NASDAQ:SCOR) is getting bullish, technically.
The bottom line
With in-demand new product offerings and a strong client base, comScore is working on the right path to maintain its leadership, while expanding margins and boosting its free cash flow. comScore continues to be a solid growth investment target, supported with a healthy balance sheet. Presently, comScore remains technically strong after breaking above its 50-day MA and its long-term uptrend resistance.
Disclaimer: Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.
The article comScore Scores Big With Q1 Earnings originally appeared on Fool.com and is written by Nick Chiu.
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