Audible Inc's (NASD:ADBL) stock price has been cut in half this year. The provider of audio entertainment, information, and educational programming on the Internet traded as high as $20.08 last summer and now changes hands at about $10.50. Given the company's market and prospects that price is simply too low.
Audible's revenues have roughly doubled each of the last two years, and revenues rose each quarter-over-previous-quarter in 2005. Total revenue for 2005 was $64.2 million. After a small operating profit of about $1 million in 2004, the company lost $3.5 million last year. The company has roughly $67 million in cash and short term investments.
Audible is a leader in the recording and audio playback of the spoken word over the Internet. The content can be listened to on PCs, CDs, and many portable audio players. The company has 80,000 hours of content from 270 publishers which include a number of major newspapers and book companies The Wall Street Journal, New York Times and Random House. And, the company has distribution deals with Apple (NASD:AAPL), Amazon.com (NASD:AMZN) and others.
The trend is Audible's friend. With MP3 players and related products continuing to grow at a rapid pace, the need for high-end content is not going to go away. As one of the core suppliers of this content, Audible is in the catbird's seat.
ADBL 1-yr Chart
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also president of Switchboard.com when it was the 10th most visited website in the world, according to MediaMetrix. He has been chief executive of FutureSource, LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. McIntyre can be reached at firstname.lastname@example.org.