in4thelonghaul

NutriSystem Looks Sweet Heading Into Earnings

Interesting that in spite of going into earnings with roughly 70% SI, there was a 24% drop in sh/pr AH...and no significant covering bounce near the end of AH trading.

NTRI guided FY08 adj. EBIDTA at 125-135 mln, but only 18-22 mln adj. EBIDTA for 1Q08 while acknowledging that the economy was a factor influencing consumer discretionary spending. Well, if the economy continues under pressure into 2008, then it is logical to speculate that their projection of FY08 adj. EBIDTA of 125-135 mln may be overly optimistic, again setting up for a further downward revision.

One would assume that the shorts will "need" to cover soon, but should upcoming reports indicate a worsening economy, I'm wondering if they might even redouble their attack...driving this company down towards $12.00 range.

Will be interesting to see if any significant short covering develops within the next few days.

No current position in NTRI.