Facebook Inc (FB), Groupon Inc (GRPN): The Problem with WebMD Health Corp. (WBMD)

Facebook Inc (NASDAQ:FB) has also been taking the mobile bull by the horns.  Facebook Inc (NASDAQ:FB)’s mobile ad revenue doubled in the most recent quarter, and now represents 23% of total ad revenue.  But this is not the case with WebMD.

“…if users access our services through mobile devices as a substitute for access through personal computers…our financial results could be negatively affected.”  The mobile access just isn’t as lucrative for WebMD Health Corp. (NASDAQ:WBMD) as traditional internet access.

The Street Party

However, Wall Street has been celebrating the results from the most recent quarter.  Here are the highlights:

Revenue down 12%

Net loss of $6.1 million (down from $19.2 million profit)

Doesn’t sound like much reason to celebrate.  But to be clear, the Street isn’t celebrating these numbers.  They are celebrating the 2013 guidance.

Revenue $430-$455 million

Net loss of $0.13-$0.45 per share

Both of these guidance numbers are better than what Wall Street had hoped for.  They were predicting revenue of $418 million, and a net loss of $0.29 per share.  While WebMD’s guidance was perhaps better than the Street predictions, I would like to point out that both of these statistics still look pretty bleak.  Revenue for 2012 was $469 million.  So basically, this company issued guidance that revenue would decrease for the year, and this sent shares skyrocketing nearly 50% in a month.  Only on Wall Street…

Final Thoughts

The stock isn’t without its believers.  Most notably Carl Icahn holds a pretty significant amount of shares.  For me, I like the simplicity of Cramer’s argument: this company isn’t making much money.  And what’s more, it plans to keep making less money next year.  With a market cap of nearly 3x next year’s revenue, this isn’t the kind of stock that I want to be carrying around in my portfolio.

The article The Problem with WebMD originally appeared on Fool.com and is written by Jon Quast.

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