Thursday, August 16, 2007
'Classmates' meet on United Online
The sell off of United Online (NASDAQ: UNTD) has been overdone," says long-standing technology sector expert Mark Mowrey in his Prudent Speculator TechValue Report.
“Second quarter earnings came in at $0.23 per share, up 28% on the year, on a slight decline in revenue to $131 million. UNTD also is a company in transition. Revenue from Net access service provision (via the NetZero and Juno brands) is heading south as revenue from online content providers grows.
“United Online reported strong earnings growth in the latest quarter as the service provision, though in decline, continues to be a highly profitable provider of cash.
“As UNTD's Classmates social networking service continues to evolve, we think investors will expand their estimates for its inherent value. Likely not to the vast virtual value of Facebook, but far more than currently ascribed.
“As folks from my high school class organize our 17th year reunion they use the Classmates service to schedule the event and forward updates. There are 2.7 million people who currently do pay to use the site, a measurable portion of the 50 million accounts currently registered on the site.
“And that figure is growing, while features added to the site make it a greater draw for a broader audience. Meanwhile, investors pretty much hate the stock, though. It's off 36% from its July peak. That drop leaves the cash-rich company on our current recommended stock list.”
posted at 3:10 PM
