LoopNet: Expected to Disappoint Earnings

LoopNet (LOOP) is scheduled to report Q208 results after the market closes on July 30. Based on our analysis, we at eChristianInvesting are expecting LOOP to report disappointing results that fail to meet Wall Street's consensus expectations.

Analyst Expectations

We are forecasting revenues of $20.8M versus analyst consensus of $21.8M. This would represent a 22% increase in revenues from last year's $17.0M in the same period, but would be essentially flat with the previous quarter. Our checks show a decline in both traffic and listings at the LoopNet.com website. In addition, there appears to have been a drop in the listings at BizBuySell.com, which while it represents only a small portion of LOOP's revenues is indicative of the declining market environment in which they operate.

Share Performance

To date, LoopNet's shares have dropped over 25%. Meanwhile, the NASDAQ has only fallen 16%. This big drop is primarily a result of the markets' disfavor of all real estate related stocks despite the fact that LOOP focuses on the much more stable commercial real estate sector.

Valuation

Shares are now trading at 18x consensus 2009 EPS estimates. This is essentially in line with their peer group. With the potential for disappointing quarterly results and the continued bleak outlook for the real estate sector we would not recommend holding LOOP shares in the current market. However, once consumer sentiment starts to improve, we believe that LoopNet will benefit from their leadership position in the online commercial real estate space.

Stock position: None.

Comments

[tazman]

Looks like your sources were wrong. They beat by $.04.