On Friday of last week, the stock of Monster Worldwide (MWW), parent company of the popular job board, dropped at one point over 25%. Monster shares closed at $15.95 on Friday, which is approximately where it stood as of a year ago.
A combination of a small miss, slight loss for the year, and weaker 2011 estimates caused investors to sell. Interestingly, Monster has forecast top line growth of 20-25% for 2011 which increased the forecasted rate and actually met their bottom line forecast of $.06 earnings per share. Financially, it appears that it was only the expected future earnings of the company which sent the stock into a tailspin, as past revenues were roughly in line with expectations.
Additionally, Linkedin, the popular social networking platform, filed for IPO recently. This development also represents a new competitor in the market for Monster.
Many analysts, however, believe the sell-off was unwarranted. JPMorgan has a buy recommendation on the stock and has reiterated this opinion. It should also be noted that Monster stock has recently been on a tear, climbing over 50% from its recent lows in the summer of 2010. Increasing corporate recruitment budgets and better employment numbers are expected for 2011, and should contribute to growth for the company.
Investors appear to agree the sell-off was overblown – the stock recovered over 4% on Monday.