On Mar 8, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Rentrak's earnings estimate moved up following
better-than-expected fiscal third quarter earnings results and
long-term revenue outlook. This business service provider
delivered positive earnings surprises in 2 of the last 3 quarters
with an average beat of 31.2%. The long-term expected earnings
growth rate for this stock is 25%
Rentrak reported fiscal third-quarter (ended Dec 31, 2013)
results on Feb 6. Though loss was incurred at 3 cents per share,
it was narrower than the Zacks Consensus Estimate loss. This
enabled the company to post a positive surprise of 76.9%.
Revenues at Rentrak improved 27% year over year on the strength
of 35% higher contribution from the Advanced Media and
Information (AMI) segment and 17% higher sales from the Home
Cash from operations in the third quarter totaled $5.0 million,
up 67% year over year.
Rentrak expects revenues to improve considerably aiding earnings
improvement going forward. It estimates revenue growth from TV
business to be about 80% over the long term with break-even
operating income in the next quarter. Box Office business
revenues are projected to increase 12% annually while OnDemand
Everywhere business revenues should improve 20% in the next few
years. The company also estimates 7-10% improvement in Home
Entertainment revenues for fiscal 2014.
Following a solid fiscal third quarter, the Zacks Consensus
Estimate loss for fiscal 2014 was trimmed by a cent to a loss of
17 cents over the last 30 days. The Zacks Consensus Estimate for
fiscal 2015, on the other hand, improved by a substantial 200% to
earnings of 96 cents over the same time frame.
Other Stocks to Consider
Other players in the business service industry, which look
attractive at current levels, include
SouFun Holdings Ltd.
ExamWorks Group, Inc
). While SoFoun sports the same Zacks Rank as Rentrak, ExamWorks
and Viad Corp. carry a Zacks Rank #2 (Buy).
EXAMWORKS GROUP (EXAM): Free Stock Analysis
RENTRAK CORP (RENT): Free Stock Analysis
SOUFUN HLDG-ADR (SFUN): Free Stock Analysis
VIAD CORP (VVI): Free Stock Analysis Report
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