Monster (NYSE:MWW) is an online job search portal that
provides recruitment services to employers and job seekers.
According to Monster, its recruitment service product Power Resume
) based on the 6Sense Semantic search technology continues to gain
traction with its clients. The company also plans to launch another
product named Enterprise Suite based on this technology. We believe
these products will help drive growth against niche players like
careerbuilder.com and jobcentral.com though it will face emerging
challenges from social networks like LinkedIn
(NYSE:LNKD), Facebook and Craigslist.
We currently maintain
a $14 price estimate for Monster stock
, which is about 5% below the market price.
Competition mounting on Monster
We believe that social networks like LinkedIn provide a
long-term threat to Monster. Recently, LinkedIn priced its IPO
around $45 and its stock shot up to more than $100 during the first
day of its shares trading. This shows that investors have huge
faith in LinkedIn's business model. Recruitment solutions account
for about 50% of our
$30 price estimate for LinkedIn stock
, which makes it the most valuable business for LinkedIn. Due to
increased competition from LinkedIn and other niche players, it
might be difficult for Monster to exert its pricing power on
recruiters going forward.
Monster products gaining traction
6Sense technology is much more efficient than the traditional
resume search technology, and helps recruiters to quickly find
suitable candidates (See
Better Resume Search Technology Can Help Monster
Compete with LinkedIn, Facebook
). According to Monster, since the PRS launch in Q4 2009, it
has sold an excess of $100 million of PRS products at an
average premium price in excess of 30% above its other flagship
products. Additionally, it has high hopes from its upcoming product
launch of Enterprise Suite.
In its earnings call, management notes:
Our next product to be launched based on 6Sense technology is
our Enterprise Suite. The suite of products and analytics is
specifically designed to help clients manage a high volume of
candidates regardless of the source of those candidates and to
quickly identify the right candidate. The ongoing trials are
going well, and the overall interest is high. We are on track to
launch the product in the upcoming months.
Monster's innovative resume search technology provides a
catalyst for growth, which could improve it outlook. However it's
ability to challenge LinkedIn and other niche players is still an
open question. You can tweak the above interactive chart and see
for yourself the impact on Monster's stock if Monster exerts
pricing power on its clients through better products.
See our complete analysis for Monster stock