On May 3, Zacks Investment Research downgraded business
) to a Zacks Rank #5 (Strong Sell) from a Zacks Rank #4 (Sell)
primarily due to downward estimate revisions and a sharp fall in
the share price following its dismal third-quarter fiscal 2014
Vistaprint's share prices have gone downhill by 26.6% since Apr
29, when its third quarter fiscal 2014 results were declared.
Despite the downtrend, the company still has the potential to
drive the stock up. The stock is currently trading at a forward
P/E of 20.0x and has long-term earnings growth expectation of
Why the Downgrade?
Vistaprint reported unimpressive third-quarter fiscal 2014
results with revenues and earnings declining year over year due
to headwinds in core markets. Net income for the reported quarter
dropped sharply to $1.4 million from $5.9 million in the
year-earlier quarter. On a per-share basis, earnings for
third-quarter fiscal 2014 plummeted to 4 cents from 17 cents in
the year-ago quarter.
Excluding one-time items, adjusted earnings for the reported
quarter halved to $8.3 million or 24 cents per share from $16.9
million or 48 cents per share in the prior-year period. The
quarterly adjusted earnings were way below the Zacks Consensus
Estimate of 46 cents.
Total revenue in third-quarter fiscal 2014 decreased 1% year over
year for the first time in over 14 years to $286.2 million.
Revenues also missed the Zacks Consensus Estimate of $310
Over the last 7 days, most of the earnings estimates for
Vistaprint have been revised downward for fiscal 2014 as well as
for fiscal 2015. This seems to be fallout of a negative earnings
surprise of 84.8%. Moreover, gross margin in the reported quarter
fell to 64.7% from 65.5% in the year-ago period. Operating income
also decreased to $5.2 million from $9.7 million in the
Other Stocks to Consider
Other stocks that look promising and are worth looking into now
Hudson Global, Inc
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), each carrying a Zacks Rank #2 (Buy).
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