ValueClick, Inc.
(NDAQ: VCLK) shares rose 4 percent during today’s session and jumped an
additional 6 percent after hours after the company announced both mixed
earnings and the fact that it settled a probe launched by the Federal
Trade Commission (FTC). Despite the poor economic sentiment in the
United States, the company seems to believe that its future remains
bright. Shareholders are hoping that these events will help clear
clouds over the company’s head and pave the way for a long-awaited rise
in share price. So, is it time to buy?
ValueClick announced revenues of $183.1 million on an
adjusted-EBITDA of $45.6 million, which exceeded previously issued
guidance and increased 14 percent from the fourth quarter of 2006.
Meanwhile, diluted net income per share came in at $0.18, which was at
the high end of the previously issued guidance range. The company’s
balance sheet also looks healthy with $287.5 million in cash, cash
equivalents and marketable securities with no long-term debt. Even
better, the company currently has $50.6 million of authorization
remaining on its stock repurchase program.
ValueClick also announced that it paid $2.9 million to settle the
FTC lawsuit that alleged the firm used deceptive marketing practices
that violated the CAN-SPAM Act and FTC Act. This development eliminate
the cloud that has been hanging over the company’s head for some time
and led to an improvement in its marketing practices. The online
marketing firm believes that this development will also help set the
guidelines for the lead generation industry as a whole and will
establish a new set of best-practices.
In the end, this is all good news for ValueClick and its
shareholders. The company’s revenue mix remains favorable and its
operating margins appear to have finally bottomed for the time being.
However, investors should be careful to buy this company for the
long-term as the sector in general continues to suffer from increased
competition that is pressuring margins despite an increasing move to
the Internet for marketing expenditures. Combined, these factors
definitely make VCLK a stock worth watching!
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