Monster Worldwide (NASDAQ:MNST) is scheduled to report third quarter 2008 results after the market closes on Thursday, October 30. Based on our analysis, we at eChristianInvesting are expecting MNST to report disappointing results that fail to meet Wall Street’s consensus expectations.
We are forecasting revenues of $332 million and EPS of $.34. This would represent a slight decrease in revenues from last year’s $337.1 million in the same period. The current analyst consensus calls for revenues of $337.2 million and $.33 EPS. The company no longer gives guidance.
While we do not expect Great Depression-like unemployment rates of 25%, we are expecting unemployment to approach double-digits for the first time since the early 1980s. Monster and the other online recruitment players have not existed in an era of high unemployment and it remains to be seen how big of an impact it will have on their business model. Clearly, customers will be reducing their recruitment spend as they cut back on hiring and even look to reduce their staffing levels.
To date, Monster’s shares have dropped over 68%. Meanwhile, the NASDAQ has only fallen 41%. The company’s share performance has really dropped over the last two months as poor economic news and rising unemployment rates foretell a lack of demand for their services.
Shares are now trading at 7x consensus 2009 EPS estimates. While this valuation appears to be cheap compared to their peer group, we expect analyst estimates to continue to be revised downward as the unemployment rate rises.
Recommendation: Hold with a $10 price target.