Investors looking for a way to play online dating and a population boom could also consider investing in Jiayuan.com International Ltd (NASDAQ:DATE). The Chinese leader in online dating was founded in 2003 and went public in the United States in 2011. Jiayuan.com International Ltd (NASDAQ:DATE) has seen its shares drop over 50% since its IPO. However, revenue increased 24% in fiscal 2012 and is expected to increase 20% during fiscal 2013. The company is expanding its global reach and continues to pursue mobile applications. Membership is declining, but the all-important number of paying subscribers continues to increase, as does revenue per subscriber.
Analysts on Yahoo! Finance expect Spark Networks to continue to post a loss in fiscal 2013. This is the likely result of heavy marketing by the company to increase its subscription bases. Analysts expect a loss of $0.37, which would be a large improvement from the $0.72 per share loss posted in fiscal 2012. Analysts expect revenue to increase 20% to $74.0 million in 2013 and 20% to $88.8 million in fiscal 2014. That figure in 2014 should be easily surpassed if the number of paying subscribers increases. The company is expected to post a profit of $0.11 in fiscal 2014.
Shares of Spark Networks saw a bit of a swing this past week, as fund manager Whitney Tilson had positive things to say about the company at an investment conference. Tilson compared Spark Networks to Netflix, citing the company’s subscription-based model, low perceived price to customers, and niche domination. These reasons also led Tilson to triple his position in the company (he has owned shares for three years). Tilson now owns over 1.9% of Spark Networks’ shares.
The opportunity remains the same for the average investor. If you think online dating is here for good and want to get a piece of the action, check out this stock trading under $10. Analysts are sure to start sniffing around this company now that Tilson has put it in the spotlight. Shares are up less than 10% since their public debut in 2006. A one-year period between 2008 and 2009 saw shares trade below $3. Don’t expect shares to stay below the $10 level forever, and don’t miss your chance to buy into this niche leader.
The article Spark Networks: A Strong Investment in Online Dating originally appeared on Fool.com and is written by Chris Katje.
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