The online retailing market is one of the fastest growing in the world, but it's a specialized medium requiring expert help. One of the industry's most successful digital marketing companies is headquartered in Seattle, Washington.
aQuantive Inc. (NASDAQ:AQNT) aims to help clients acquire, retain and grow customers across all digital media. Its Digital Marketing Services segment provides web site development, interactive marketing, creative development and branding. The Digital Marketing Technologies unit offers advertisers online campaign management, search engine marketing and web site optimization tools. The Digital Performance Media branch buys blocks of online media advertising to resell on a targeted basis.
The firm surprised Wall Street last week, when it announced Q4 EPS of 23 cents and revenues of $133.4 million. Analysts
had been looking for 17 cents and $119.7 million. Management also guided Q1 revenues to $118-$123 million ($121.22M consensus) and FY07 revenues to $550-$570 million ($538.67M consensus). Four brokerages subsequently declared the stock a "buy" and boosted their price targets to $32-33. The issue jumped above 30-day moving average support on the news and moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Altogether, the brokerage community recommends the shares with four "strong buys", ten "buys", and eleven "holds". Analysts see a 30% growth rate through the next year. The AQNT Price to Book ratio (3.78), Sales Growth rate (52.53%), EPS Growth rate (53.33%), Operating Margin (18.06%), Net Profit Margin (12.20%), Return on Assets (7.39%) and Return on Investment (10.81%) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 95% of the outstanding shares. Over the past 52 weeks, AQNT has traded between $19.56 and $29.16. A stop-loss of $24.30 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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