RetailMeNot ratings roundup


RetailMeNot (SALE +1.5%) closed higher following its analyst initiations earlier today. The common theme of the 3 Buy ratings and 4 Neutral ratings? Enthusiasm about strong growth prospects tempered by concerns about a rosy valuation.

Stifel justifies its Buy rating and $38 PT by declaring "the scale and scarcity of the RetailMeNot platform make it a must-buy for national retailers, much like paid search and performance-based display advertising." The firm observes RetailMeNot's revenue from U.S. retail sites (78% of sales) is growing at a 25% rate.

RBC issued a Neutral rating and a PT of $33 on concerns RetailMeNot's dependence on search engines leaves it vulnerable to search algorithm changes that could "negatively impact RetailMeNot's ability to generate site traffic."

With shares up 56.1% since the company IPO'd last month, Credit Suisse went for a Neutral rating. Though It sees RetailMeNot as the likely winner in the fragmented online coupon space, valuation prevents it from assigning "a more constructive rating.”

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