Coupons.com Inc.’s (NYSE:COUP) price target has been dropped from $18 to $13 by the analysts at RBS Capital Market, while maintaining the neutral rating on the stock. This reiteration is in view of the company’s failure to meet the expectations in terms of revenue that was gathered in the fourth quarter of the financial year 2014.
RBS Capital analysts noted that the revenue growth rate dipped to 14% in Q4, as opposed to its stable figures in the range of 32% to 47% that was seen in the first three quarters. The analysts have further predicted that this dip in trends is expected to continue into the year 2015.
Coupons.com Inc. (NYSE:COUP) has reasoned that the failure to meet revenue expectations as some of the major ‘consumer-packaged goods customers didn’t return for digital print coupon holiday campaigns that also took place in the same quarter last year. This was owing to the fact that these companies couldn’t run the marketing campaign as effectively as in the past due to non-availability of capital. The company however believes that the problem will fix itself in the current year.
Investors shouldn’t expect the company to deliver remarkable results in the first quarter of 2015 because of the reported issues. Wall Street has picked on this and estimated revenue growth to gather at a single digit for the company in 2015. The company may claim that the issue is temporary and will not last long; analysts beg to differ and have suggested that the impact will be longer than anticipated and will have its effects beyond the fourth quarter of 2014.
Coupons.com Inc. (NYSE:COUP) functions in a high-end yet unexploited industry. According to statistics, the consumer-packaged goods industry distributes nearly 315 billion coupons each year. But, a meagre 1% of these are the actual digital coupons. Keeping in view analysts’ consensus of degradations in various figures, the company has gone ahead to lower its revenue forecast for 2015 by 3%, summing it at $282 million.
In addition, earnings estimates have also been lowered to $45 million, which is a 7% dip. These realistic figures suggest that while the company claims that the issues facing its operations are temporary, it does realise the ground realities and wants investors to realise the same.
Hence, revenue for the fiscal 2015 has been reiterated within the range of $52 million to $54 million. Analysts, however, sound a little more hopeful and have estimated the sales to gather at $66.33 million for the duration. The company has set up effective strategies for expansion in 2015 and is quite hopeful on that front. Hence, investors can expect some impressive growth rate in the later part of 2015.
Coupons.com Inc. (NYSE:COUP) has estimated that its adjusted earnings for the current year will sit anywhere between $40 million to $50 million. These figures are compiled before taxes, interest, amortization and depreciation. Coupons.com Inc. (NYSE:COUP) claims that this will be quite significant in reprimanding the damage caused in the last quarter of the fiscal 2014.
