Buying Move, Inc. Ahead of Earnings

Move, Inc. (MOVE) is scheduled to report third quarter 2008 results after the market closes on Wednesday, November 5. Based on our analysis, we at eChristianInvesting are expecting Move to report better than expected top-line results that exceed Wall Street’s consensus expectations.

Analyst Expectations

We are forecasting revenues of $63.9 million and EPS of ($.01). This would represent a 15% decline in revenues from last year’s $75.6 million in the same period. The current analyst consensus calls for revenues of $62.3 million and $.00 EPS. The company has given no guidance.

While it’s still too early to say we have hit a bottom in the real estate market, we are certainly getting close. The real estate sector will probably start to turn in late 2009 or early 2010. Traffic to Realtor.com continues to grow even in this difficult market. Inventories of new homes have certainly come down and we expect the existing home inventories to fall in the next few months as the glut of foreclosures works its way through.

Share Performance

To date, Move’s shares have gone down 39% this year – basically inline with the NASDAQ’s 36% drop. At the end of August, Move’s shares were actually showing a gain for the year, before the massive sell-off of the last few weeks sent their shares crashing again.

Valuation

Shares are now trading at 14x consensus 2009 EPS estimates. The company has stated on the last conference call that it was determined to cut costs and to eliminate under-performing and non-core businesses. Move operates the leading online real estate portal and if it is successful in reducing overhead costs and focusing on their core business, investors that buy at current prices will be getting a bargain.  

Recommendation: Buy with a $3 price target.

Disclosure: none

Comments

[micromayvin:]

Your comment about a year over year decline in revenues is inaccurate. 2007 revenues are not comparable as Move has recently put its Welcome Wagon subsidiary up for sale and classified it as discontinued operations. Excluding Welcome Wagon, revenues in the third quarter of 2007 would have been $63.4 million. On this basis, your forecast represents flat revenues year over year and an increase in revenues from second quarter 2008 revenues of $61.4 million, despite the decline in the real estate market and economy in general. Results restated for discontinued operations can be found on Move's 8-K filed with the SEC on August 8, 2008.

2008 Nov 04 12:05 PM