Local.com Corp (LOCM) raised its full-year outlook and analysts followed suit. Shares are trading at a nice multiple and at a good entry point.
Company Description
Local.com Corp is a search site for local businesses, products and services. The company has over 70,000 companies listed and over 20 million visitors per month.
Another Surprise
On Apr 22 Local.com reported first-quarter results that included record revenues of $18.6 million, up 14% since the previous quarter. Net income came in at $2.6 million, up 31%.
Earnings broke down to 12 cents per share, beating the Zacks Consensus Estimate by 4 cents. Local.com has now topped or met expectations in each of the past 9 quarters.
Raised Guidance
On Jun 2 Local.com raised its quarterly and full-year guidance. Even with increased investments in expansion efforts, the company is forecasting higher earnings.
The Zacks Consensus Estimate for 2010 is no 59 cents, up 7 cents on the revised guidance and more than double the 25 cents prior to the earnings release.
Next year’s forecasts are averaging 70 cents, up from 31 cents prior to the earnings news. Compare these levels to a 20 cent loss in 2009.
New to the Russell 3000
Shares of LOCM were added to the Russell 3000 index on Jun 28, which will give the stock a lot more investor recognition. The stocks in that index account for about 98% of the investable market according to Local.com’s press release.
The Chart
LOCM is trading at roughly 12 times its forward earnings thanks to the markets recent sell off. However, as you can see in the stochastic below, shares are on the verge of oversold territory.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service Zacks Investment Research
