) earnings for the first quarter of fiscal 2012 were well ahead of
the Zacks Consensus Estimate. However, we believe that the slow
pace of the economic recovery, coupled with huge investments in
2012 and 2013 to attract customers, will restrict improvements in
its top as well as bottom lines.
The new set of initiatives also involves increased risk and lack of
visibility toward return on investments at the current level.
Substantial exposure to international markets also makes the
company vulnerable to currency fluctuation risks. In fact, huge
concentration in the European market remains a cause of concern
owing to the Euro-zone debt crisis.
Our six-month target price of $28.00 equates to 24.6x our earnings
estimate for fiscal 2012. This price target implies an expected
total negative return of 8.1% over that period. Hence, we downgrade
the stock from a Neutral to Underperform recommendation.
VISTAPRINT NV (
): Free Stock Analysis Report
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